KEY POINTS:
It was the image of Michael Cullen in the yellow Lamborghini that did it. In a bit of verbal jousting - just before Cullen made his first major speech to Auckland's business community on Friday - the Finance Minister was having a chuckle over an allusion in his upcoming address to those who equate the pursuit of wealth and success in owing a red Ferrari.
I'd suggested to him he might look good behind the wheel of a Ferrari - and that many in business would be delighted if he displayed such dangerous tendencies himself.
Quick as a flash came his riposte: "maybe a yellow Lamborghini" - Labour does after all have to get along with the "bike-peddling" Greens.
Cullen's Ferrari metaphor - when delivered 10 minutes later - sailed over the heads of many.
It was clearly directed at National leader John Key, with whom he had a bit of sport before the last election, when he slagged off National's tax-cut package as like a Ferrari - "looks good but guzzles gas, requires borrowing well beyond our capacity to sustain, and, of course, it can't fit in all the family."
He'd had an audience of chief executives in stitches as he asked them to think what was better for New Zealand - a $40,000 Honda with "well-proven reliability" or a $500,000 Ferrari which would "spend most of its time getting fixed up as it comes to pieces."
But it was not until Cullen delivered his punchline on Friday - taking a crack at "those who believe we can solve social problems be taking the odd poor child for a ride in a red Ferrari" - that business folk joined the dots.
Cullen's yellow Lamborghini will be a long time coming. He has not absolutely ruled out large-scale personal tax cuts. But he makes the point it would be counter-productive to provide a cut that is simply taken back in the form of higher interest rates.
But it is possible he will raise thresholds at which the various personal tax rates cut in. He won't confirm this outright - an indication it may be being considered as a budget issue.
A corporate tax cut is on the agenda. There will also be write-offs of up to 15 per cent for new companies getting into exporting, for exporters to develop new markets, and measures to boost research and development.
Cullen's first major outing had been billed as a significant indication of Labour's economic direction. It lived up to expectations.
He signalled an important shift. Labour is now prepared to "get its hands dirty" by biasing some economic and tax policies when the government "can make a difference". He suggested policy could be skewed to help New Zealand carve out a niche in biotechnology. "That doesn't mean we should back every biotech horse - it does mean taking some well-judged risks."
Cullen knows this approach will be attacked by free-marketeers, who will simply label it a return to "interventionism" or "picking winners." But he does have a point.
He said New Zealand had the best international tax system in the world - if only the world followed. "Unfortunately we did a kind of reverse Star Trek: we went where no man followed."
Cullen later made the point that he had been strongly in favour of the clear shift New Zealand made in the 1980s towards adopting "neutral" policies - moving away from the preferential deals that were common under Muldoon.
He has free-market credentials himself and had voted for neutral policies as a member of the Lange Government. He justified the bias towards those of "modest means" in his KiwiSaver scheme as helping to tackle inequalities in income that translate into greater inequalities of wealth overtime, but appeared less inclined to make a trade-off around tax cuts and compulsory saving.
Business leaders are increasingly arguing that if New Zealand is to build a pool of savings for investment here then compulsory superannuation is necessary. There is strong support for moving towards this incrementally, like Australia.
But the Government currently seems to be a bit gun-shy when it comes to making big policy "step changes" if there is a prospect of a negative electoral backlash.
Cullen's speech was over-shadowed by controversy caused by his concession on Morning Report that putting a levy on mortgages might be one way to assist the Reserve Bank get inflation under control and perhaps stop the inexorable rise of house prices.
Commentators labelled it a political gaffe - a move that would be deeply unpopular. But Finance Ministers should be able to float such ideas without all hell breaking loose.
The Reserve Bank is having extreme difficulty using the cash rate as its sole weapon to tame inflation, as 83 per cent of mortgages are at fixed rates.
Governments are elected to lead and sometimes must take politically unpopular steps in favour of the greater good.
That's after all what the Lange and Douglas regime - in which Cullen, Clark and Trade Minister Phil Goff held Ministerial posts - had to tackle.
There are now distortions in the economy - particularly around the property market - which could be addressed if the Government was prepared to "dirty its hands" further, such as a capital gains take on investment property. But the debate needs to move away from emotionalism. This would also require a shift in emphasis also from the top floor of the Beehive.
Instead of Friday's reactive stories claiming the Prime Minister had quickly hosed down Cullen's mortgage levy gaffe - there should have been stories quoting Helen Clark saying the Reserve Bank faces serious issues. That she believed it was important her Finance Minister examined options in a courageous fashion in all our best interests. But politics on the day won out.
Cullen's new speechwriter, John Pagani, is working with him to get his shift in emphasis across. But all the combined efforts will fail if debate remains conditioned by slogans that have long passed their use-by-date.
