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Fran O'Sullivan: Big problem for both Cunliffes

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Labour leader is on top of his game, but the selling job is getting harder

David Cunliffe wants to focus Labour's election campaign on inequality, but he has other policies for more conservative voters. Photo / APN
David Cunliffe wants to focus Labour's election campaign on inequality, but he has other policies for more conservative voters. Photo / APN

Labour's David Cunliffe faces a conundrum - how to convince New Zealand voters it's time to break away from the "old economic orthodoxies" when the data shows the country is poised for a relative boom?

It is an oddly disjunctive period for Cunliffe.

He is probably the most complex person to head a main New Zealand political party in many years. His is a singular character. He is a loner. Watch him at a political gathering and he can switch almost in an instant, from lapping up being the centre of attention to becoming a watchful and skilful observer of the political game.

Cunliffe perplexes many political commentators. He is not the sort of political leader to easily cosy-up over a beer as John Key did when he was courting then television political editors Guyon Espiner and Duncan Garner as he positioned himself to dislodge Helen Clark as Prime Minister.

If anything the same television players appeared much more in sync this year with Cunliffe's competitors for the top Labour job, particularly Shane Jones who was televised enjoying a barbecue with Espiner during the leadership primary.

Cunliffe also uses an essential duality - which has been accurately pin-pointed as "talking out of both sides of his mouth" - to try to assuage middle-class and politically adept New Zealanders that he doesn't really mean all the tosh he threw as bait to Labour's bedrock base to garner voting support during his leadership campaign.

What fascinates and frustrates is that it is difficult to work out which side of Cunliffe's mouth will triumph if he ends up this time next year as Prime Minister.

Will it be the crusading politician who wants to bring down bloated plutocrats, raise the underclass up and cut the ground out from under particular corporates through legislative intervention?

Or will it be the more considered politician - an experienced former cabinet minister who is prepared to take advice and feedback from affected players instead of ramming decisions down their throats with a damn the consequences mentality?

Talk to him face to face, and it is easy to capture Cunliffe's excitement as he fleshes out his mantra on why it is time for a significant change in economic direction.

Cunliffe wants to focus the political debate on inequality. The "many versus the few" slogan that is redolent of Labour's 2011 election campaign will be brought back in a big way in 2014 with a renewed focus on living wages.

But to capture the middle-ground and some centre-right voters who want a shift away from an over-reliance on agriculture as the basis of national wealth, Cunliffe is spruiking an over-arching vision of a more innovative economy with policies to assist the move towards more high-technology and "value over volume" industries.

Around the traps he has also been talking to select audiences about cutting Kiwibank loose to enter the business banking market. This would mean recapitalising Kiwibank so it has a larger balance sheet to write off business loans.

This might seem absurd given the dominance of Australian-owned trading banks. But Cunliffe says smaller New Zealand businesses suffer from market failure because the Australian banks are risk-averse and usually demand small business owners guarantee their loans with hard assets.

His plans to move the state further into the banking market is not the end of this interventionist scenario. Labour is also wedded to intervening in the electricity market to bring power prices down and plans to start KiwiAssure to give greater insurance cover for lower premiums.

The problem is that when Cunliffe began to road-test Labour's developing policies a couple of months back he was riding high. Then he was signalling that it was time to make a strong shift towards putting the state into a "partnership" role in particular markets.

The "old orthodoxies" had run their course. It was time to throw out policies that had enjoyed bipartisan support, such as leaving the Reserve Bank free to run monetary policy with a sole focus on keeping inflation within a narrow band, and support for free-trade deals including the Trans-Pacific Partnership.

But at year's end, Labour under its new leadership is no further ahead in the political polls than it was at the start of the year.

The pendulum has swung back again towards National, with the optimism indexes showing much of the country in good heart and the Government poised to post a return to Budget surplus next year.

The problem facing Cunliffe is how he can convince enough voters the country is on the wrong track given the resurgence in economic growth. This growth will continue into next year as a result of a range of factors including Auckland's housing boom, big demand for dairy exports, the Christchurch post-earthquake rebuild, immigration and the favourable terms of trade.

Overcoming this is no easy feat for any politician even one as experienced and competent as Labour's leader.

There is room for much more contestability in politics. But John Key also has the power of incumbency. It is Key who can set the election date, bring in the royal circus and delight New Zealanders with the presence of Prince George and his parents, post a Budget surplus, crank up the Canterbury rebuild and much more.

Debate on this article is now closed.

Against this, Cunliffe has sharpness of wit and a cutting focus. He will need all of it.

- NZ Herald

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