Fran O'Sullivan: Ferrari v Honda? It's no contest

Finance Minister Michael Cullen is a dab hand with political metaphors.

At yesterday's launch of the Herald's Mood of the Boardroom election survey, Cullen painstakingly laid out the strategies he had employed over six years in office to underpin economic growth.

His political rival for the finance minister's job - former international foreign exchange trader John Key - has put in front of voters tax cuts which will cost National $3.9 billion in 2008-09, as the impact of a package which will ensure 85 per cent of workers pay no more than 19c in the dollar kicks in, as well as a lift in the threshold for the top 39c rate from $60,000 to $100,000, and a drop in the company tax rate to 30c in the dollar.

Cullen said: "I appreciate alongside John's simple and elegant Ferrari of a tax cut [Labour's strategy] looks rather like a plain Honda Accord, but it's the Accord that's got us to where we are.

"The Ferrari looks good ... but it guzzles gas, requires borrowing well beyond our capacity to sustain and, of course, worst of all from the Government's perspective, it can't fit in all the family."

Cullen asked the assembled chief executives to ponder what was better for New Zealand - a Honda Accord costing $35,000-$40,000 with "well-proven reliability" or a $500,000 Ferrari which would "spend most of its time getting fixed up as it comes to pieces".

Key's quick retort - "I've gone off Ferraris because they look best in red" - caused a ripple of laughter. But it also provoked some admiration from those CEOs who think it's time for politicians to set a much more ambitious agenda that incentivises people to strive to increase their earnings capabilities.

Yesterday, Cullen's Honda analogy played against him.

After years of Budget surpluses - and the big expansion of the Working for Families tax relief package promoted by Labour at this election - many people are now asking "what's in it for me?" if Helen Clark and Cullen get to occupy the Treasury benches for another three years. The polls (including Labour's own internal polling) are consistently showing that National is again in front of the governing party at this election. Yesterday, Cullen's customary sangfroid was relentlessly pricked by Key as he sought to portray the Finance Minister as a prisoner of outdated dogma. One not prepared to give business a tax cut to make New Zealand's regime competitive with other regional centres with lower topline rates.

Cullen reminded the audience that "business could have a 20 per cent company rate" if it was prepared to take on board other imposts like payroll taxes which Australia imposes. But the Finance Minister's words fell on deaf ears.

Not one of the many chief executives present was prepared to explore that offer with him when it came to question time. It is probably too late now for Cullen to pull together such a programme 10 days out from an election and retain credibility, if indeed he would be able to convince his colleagues to go along with it in the first place.

It almost didn't appear to matter to the audience that Key did gloss over some major questions over the fiscal sustainability of National's promises. They were happy enough with his assurance that the pledges had been costed on a "static" basis, and that his plan to take $500 million out of government spending was achievable. Particularly when he drew the analogy with corporate life where "daily, weekly ... cost-cutting" reviews were de rigueur.

Cullen rolled his eyes at Key's refusal to connect all the dots.

But this election is not going to be settled at the detail level as far as business is concerned. What came through yesterday was a strong sense that National was starting to pick up traction again as the "natural party of business" - a slot on the spectrum it has not really occupied since former Finance Minister Ruth Richardson was ousted by National PM Jim Bolger.

Key's freshness - and ability to fit seamlessly into the corporate world - was a drawing point.

Some chief executives I spoke with after Cullen and Key debated fiscal issues, said the Finance Minister was starting to look a "bit too much like a Honda himself" - reliable but a tad on the boring side. (A lot of senior business people have been subjected to car analogy "tests" in the past, either when comparing their own companies to various brands - or themselves).

"Why not a Ferrari?" questioned one merchant banker.

Personally, I've always preferred the slogan "if this lady was a car she'd mow you down".

But I'll put that analogy aside until next Wednesday when this column will assess how Helen Clark and Don Brash have positioned themselves just three days out from election day.