Key Points:

It looked like a typical day on the campaign trail. Jeanette Fitzsimons making her first bungy-jump, Maurice Williamson in trouble for another blue over road tolls and National objecting to Labour MPs distributing a taxpayer-funded "information kit" for the elderly which looks suspiciously like an election advertisement in drag.

For a brief period yesterday, it was almost possible to believe that this is a normal election.


That it isn't could be judged from the surprising lack of attention paid to the release of figures showing inflation at an 18-year high of 5.1 per cent.

The news drew relatively little comment, possibly because the rise has been caused largely by international food and petrol price rises, rather than domestic factors.

More pertinent is that inflationary pressures are subsiding and deflation beckons if the international credit crunch really starts to bite on the New Zealand economy.

That recessionary scenario now dominates the election. Voters want solutions. Thus the parties' sudden scramble to cobble together policies which at least pay lip service to doing something. Largely, this entails spending like Lotto winners.

Take the Greens. On Sunday, they issued an economic policy which barely mentioned the crisis.

Yesterday, they promised a green investment plan which would stimulate demand in the economy and keep workers in the building and construction industry, which is already having a downturn, in jobs.

National, meanwhile, was promising to complete the 95km Waikato expressway within 10 years, citing it as an example of the kind of infrastructure spending which would stimulate economic activity.

Winston Peters is devoting many of his speeches to economic matters, repeating his call for the Reserve Bank's objectives to be far more flexible than just curbing inflation.

Labour was the first party to wake up to the fact that the election campaign has been turned on its head.

The crisis gave Helen Clark a heaven-sent opportunity to reinforce her "no change-trust us" theme.

Labour says it will bring forward construction projects to keep "real people in real jobs" and is already working on a stimulus package which it will reveal in December if it wins the election.

But there is no point in preparing a package if it is never going to see the light of day.

The party will therefore probably foreshadow as much of its contents as possible before election day.

Act is the one party not joining the spending splurge. It believes it won't work.

Clark's answer to such critics is to point them in the direction of an article in the New York Times by Nobel prize-winning American economist Paul Krugman.

It makes sobering reading. All the signs, he says, point to an economic slump which will be nasty, brutish - and long. Infrastructure spending is therefore the responsible thing to do right now.