John Armstrong is the Herald's chief political commentator

John Armstrong: Parker's brazen Budget ray of hope for Labour

Deputy leader's innovative plans chance to steer economic debate

Parker passed a major test this week in presenting an alternative Budget which is both visionary and responsible. Photo / Sarah Ivey
Parker passed a major test this week in presenting an alternative Budget which is both visionary and responsible. Photo / Sarah Ivey

Amidst the energy-sapping and morale-draining bouts of bedlam afflicting the New Zealand Labour Party at increasingly frequent intervals, one senior caucus figure gives every impression of being a veritable rock of calm and stability in the face of this seemingly never-ending maelstrom.

David Parker's authority and influence as Labour's deputy leader and finance spokesman has been on the rise as much as David Cunliffe's has been on the wane.

Parker's standing was further boosted this week by the release of Labour's alternative Budget, a document which manages somehow to be both cautious and audacious — and is all the better in political terms for being so.

The figures and forecasts have been worked, reworked and worked again to ensure they survive the intense scrutiny that National will no doubt subject them to. Labour simply no longer has any latitude for error on that front.

That constraint has not stopped Parker inserting a major surprise in the package. He has taken the battle over economic policy into what National views as very much its own territory by flagging the possibility of income tax cuts. Admittedly, such cuts would have to wait until Labour's second term in Government due to the lengthy period before Labour's biggest gamble in a very long time — a capital gains tax — really starts cranking out revenue in big dollops.

Even so, when was the last time a Labour finance spokesman mentioned tax cuts while still ensconced on the Opposition benches?

Parker's innovative thinking and hard work is likely to go unrewarded for now. One day — presuming he sticks around Parliament for long enough — he will be Minister of Finance. Judging from his record so far in Opposition, he will likely be a very good one.

Parker is now tooled with an array
of policies which while not necessarily
popular — the capital gains tax being
the obvious example — have the long-
term national interest at heart.

Unless there is something of a miracle in the next three months, however, he will not get his mitts on the portfolio before 2017 at the earliest. He will be able to blame a combination of factors for that, ranging from the current pick-up in economic growth being of huge electoral benefit to National to Cunliffe's string of mistakes.

But knowing the Presbyterian streak which runs through Parker like lettering through a stick of rock, he will more likely blame himself.

He shouldn't.

True, at times he seems to disappear from public view, seemingly abducted by aliens who re-programme him to issue continual warnings of pending economic catastrophe just around the corner as the inevitable result of New Zealand's shocking current account deficit.

Parker is one of a long list of politicians ranging from Jim Anderton in the 1990s to the latest recruit, the Greens' Russel Norman, who are members of this Doomsday Cult and whose forebodings of disaster are about as accurate as the predictions of the end of the world made by the Jehovah's Witnesses.

Parker can also be more than a touch pointy-headed at times. There is little point in winning arguments your target audience cannot understand or has little interest in.

As Labour's economic reform agenda has begun to crystallise, however, Parker has come out of his shell and started to confront National directly on the crucial question of whether the ruling party is simply sitting back and basking in the current surge in economic growth, but doing little to prolong it, whereas Labour is unquestionably looking long-term as to ways and means of sustaining the upturn at consistently higher levels.

Parker is now tooled with an array of policies which while not necessarily popular — the capital gains tax being the obvious example — have the long-term national interest at heart.

On that score, Parker passed a major test this week in presenting an alternative Budget which is both visionary and responsible in addressing matters such as national savings through KiwiSaver and an early resumption of contributions to the Cullen super fund.

National's response was utterly predictable. Interviewed on Morning Report, Steven Joyce was castigating Labour within seconds for producing yet another "tax and spend" package.

Joyce was technically correct. Labour is flagging higher levels of government spending in some areas. But these will be met with a compensating mixture of savings in other areas and increases in revenue, in part by hiking the top tax rate.

These are spelled out in detail in the alternative Budget, which Parker claims is the most comprehensive set of costings and forecasts of the fiscal impact of various policies produced by a political party.

Parker's boasting does himself and others working for his party a disservice. A similar "fiscal strategy" report issued just before the last election was arguably even more detailed in some respects.

The trouble was that document was a hurried response to Phil Goff being hammered by John Key during a debate in Christchurch between the leaders of the two major parties in what was the early stage of the election campaign.

The Prime Minister's reference to a $14 billion hole in Labour's economic plan and his repeated demand that Goff "show me the money" was the defining moment of that campaign until it was blown out of the water by the infamous cup of tea between Key and Act Epsom candidate John Banks.

Caught up in the shambles over Labour's 2011 costings and the far too belated attempt to remedy it, Parker is determined to avoid a repeat of that disaster.

He deliberately timed the release of his version at a far earlier stage to pre-empt National's inevitable attempt to paint the document as another example of Labour's fiscal laxness.

It is vital for Labour that it steers the economic debate rather than ending up being a victim of it. Somehow Parker has to silence National's "tax and spend" jibe.

Given Parker's caution has resulted in there being only a modest difference between National's and Labour's respective spending tracks when overall government spending is taken into account, Joyce's "tax and spend" line becomes slightly ludicrous.

In fact, Labour's tight allowance for new spending may make potential coalition talks between Labour, the Greens and other parties even more tricky. In addition, Parker has insisted that the Labour caucus not reverse Labour's intention to raise the age of eligibility for superannuation. Raising the age — something which John Key refuses to address — provides Parker with solid proof that Labour is serious about fiscal rectitude.

But that will not stop the likes of Joyce from pinging Labour.

He and Bill English will likely shift the argument by suggesting that though Labour is promising to keep the lid on spending, the party's record in the last years of its previous term in Government offers no guarantee that Labour would not stray from any self-imposed limits on spending.

And as long as voters believe that, National will keep hammering that theme.

- NZ Herald

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John Armstrong is the Herald's chief political commentator

Herald political correspondent John Armstrong has been covering politics at a national level for nearly 30 years. Based in the Press Gallery at Parliament in Wellington, John has worked for the Herald since 1987. John was named Best Columnist at the 2013 Canon Media Awards and was a previous winner of Qantas media awards as best political columnist. Prior to joining the Herald, John worked at Parliament for the New Zealand Press Association. A graduate of Canterbury University's journalism school, John began his career in journalism in 1981 on the Christchurch Star. John has a Masters of Arts degree in political science from Canterbury.

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