Heather Roy's Diary

The old adage that the political Party that holds the middle ground of public opinion will hold power continues to be true but, in the battle to stake out that turf, National and Labour risk becoming indistinguishable.



In the great game of winning votes, Prime Minister Helen Clark has repeatedly outwitted National by forming alliances with Parties whose supporters would be unlikely to vote for her. In policy terms, Labour has shown such remarkable flexibility that a political novice would be unaware of its socialist roots.



The best recent example of such flexibility was that, after 20 years of opposing them, Finance Minister Dr Michael Cullen this week embraced tax cuts. We could say "better late than never" but, I suspect, he is simply borrowing from America's Cup yachting tactics and 'covering' his opponents to keep the wind out of their sails.



As Labour tacks right, however, National tacks left: while John Key described global warming as a "complete and utter hoax" in Parliament on May 10 2005, National - under his leadership - has affirmed its intention to renew Labour's Kyoto obligations. In fact, Mr Key has gone further and announced plans to reduce our 1990 level of carbon emissions by 50 percent by 2050.



Somewhat more to my surprise, Mr Key has adopted a Left wing foreign policy and was quoted last October saying:


"What we are saying is post-1987 and the breakdown of ANZUS, New Zealand has charted largely an independent foreign policy. That's a position National will continue to adopt."



A comment like that would normally be associated with the Labour Party - and the Left wing of Labour at that. To help us get our bearings, Norman Kirk was a firm supporter of ANZUS.



Add to the mix National's U-turns on market rents for State house tenants; announcements that the Air Combat Strike Wing won't be resurrected; no intention to change the law preventing nuclear-powered ships into New Zealand waters; the hugely surprising about face on the anti-smacking Bill; and last week's turn-around on interest free student loans, and the Labour red and National blue seem to merge into a strange shade of purple.



Most disturbing, however, are this year's most recent announcements by both old Parties signalling big government spending. Keeping kids in school until they're 18 and Boot Camps cost money. Neither policy has been properly thought out or costed, and the outcomes for our young people merely guessed at - and there's plenty more to come; the tacking, jibbing and 'coming around' has just begun.



After years of saying we can't afford tax cuts, and telling of their wickedly inflationary potential while nurturing ever larger surpluses, Michael Cullen has suddenly had a 'road to Damascus' conversion regarding the virtues of a neutral fiscal policy.



The simple fact is that Kiwis DO need lower taxes: in order to stem the outflow of New Zealanders, we require a more vibrant economy - which can only come from the private sector. Lower taxes would revitalise the private sector and, with the current surplus, could be had with little pain.



But tax cuts shouldn't be introduced as just another means of voter bribery - and certainly not in Michael Cullen's myopic, cynical way. New Zealand needs smaller government, not bigger - as currently proposed by every Party except ACT. New Zealand needs to contain government spending and ACT proposes capping government expenditure at present levels, adjusting only for population growth and inflation - that's how taxes can be responsibly cut.



The role of government should be a limited range of core functions; those things people are unable to provide for themselves - such as defence and policing. Once the role of government has been established we can begin to think about taxation sensibly. Taxation is merely an enabler - the tool we use to determine how much we need to operate the country. Taxation is not a means in itself - it is the means to an end, the means to achieve the vision we have for our country. When money leads the debate, values and priorities get left behind. That's what has happened under nine years of Labour, and that's what National is currently promising.



Promise, tax and spend - if that's all that the two old Parties have on their agenda's for election year, the weekly exodus of Kiwis to Australia will continue to rise at roughly the same rate as government spending. Yes, it's election year without a doubt.



One of ACT's advantages is that we have no aspirations to capture all of the murky middle ground, and are not driven to slavishly follow the opinion polls. We can - and do - point out that, sooner or later, government spending comes out of the people's pockets and that the bidding war we're already witnessing is being played with other people's money: yours and mine. Being generous with one's own money is a great quality, but with other people's money it is frugality that is the virtue.