KEY POINTS:
"I had to sit down and pinch myself."
Listener political columnist Jane Clifton wasn't alone in her astonishment when National announced that, as the Government, it would require 40 per cent of the New Zealand Superannuation Fund to be invested right here at home.
This wasn't Mr Populism
himself, Winston Peters, or some nationalistic, interventionist, left-wing faction of the Labour Party speaking. This was from true blue, centre-right National Party leader John Key.
The Cullen Fund policy came hard on the heels of the announcement that National would abolish the new tax credit encouraging businesses to invest in research and development. "I still can't make head nor tail of that, I don't know where that came from," sputters political scientist Barry Gustafson. "I found [it] quite astounding, when they're talking about growth built on productivity and technological development."
Yet it's not surprising.
Both National and Labour have criss-crossed the political centre line so many times on business and economic policy this election campaign that blue and red have blended to the point of becoming purple.
Perhaps the most bewildering inversion of policy came last week with the two parties' plans to support those made redundant in these troubled economic times.
National's offer is directed towards lower-income households, with help that builds on existing Working For Families and accommodation supplement assistance - traditional Labour territory.
But Labour unveiled a plan aimed at homes with two incomes - including higher income earners or people who have a spouse who is still earning a good wage.
It's effectively offering a hand to the middle-class couple who've committed themselves to the bach and the school fees and who probably vote National, Gustafson says.
On the same side of the ledger, Labour is also the author of reduced corporate tax, a free-trade agreement with China, the KiwiSaver and PIE (portfolio investment entity) regimes to address New Zealanders' parlous saving habits, and a $200 million investment in venture capital.
The Listener's Clifton says business, with its tribal allegiance to National, may overlook the fact that Finance Minister Michael Cullen is actually a Tory sort of a figure.
"He's very small 'c' conservative in the way he handles the finance portfolio."
But National leader John Key, on the other hand, is a pragmatist. "He's a dealer. He's really got no hang ups at all about what the ideology is behind doing certain things.
"His test seems to be, 'would it achieve a good result, is it a good deal?'"
Clifton says National announced plans to trim the KiwiSaver tax credits and scrap the R&D incentive as a means of paying for tax cuts because it got "totally spooked" by Labour's taunts that it would do so via expanded Government borrowing.
She also believes in the current liquidity crisis we will see a lot more practical policymaking, with adherence to political dogma becoming something of a luxury.
Gustafson says Key has very deliberately veered towards the political mid-ground, anxious not to be painted as any kind of right-wing monetarist.
But Labour was already hogging the centre, and "somehow in an attempt to compete for the centre vote on some policies I think they've crossed over". He says National has adopted the Barack Obama philosophy of looking after the 95 per cent and letting the Exxon Mobils look after themselves.
Certainly it would appear National already has the big business vote in hand. In the Herald's Mood of the Boardroom survey last week, 90 per cent of chief executives preferred John Key as Prime Minister.
And small business people are concerned about the cost of an extra week's holiday and threats of a rise in the minimum wage, not things like the R&D tax credit which they wouldn't qualify for anyway, Gustafson says.
"I think National has recognised that the real resentment and burden and votes are in those small businesses who need some kind of help, and certainly don't want any more red tape, levies or costs imposed on them."
In this area National has stayed truer to its roots, offering policies such as a simplification of the Resource Management Act and a potential return to private providers of accident compensation insurance.
On the king-hit issues though, it does have business perplexed.
Dropping the R&D tax credit was met with almost universal derision.
"It didn't make any sense at all," says Peter Fennessy, chairman of biotechnology industry group NZBio.
"Things that will increase business investment in R&D, and converting R&D into technology and products is absolutely fundamental to the economy."
National has to realise R&D is an international market, and business will simply invest in friendlier regimes if New Zealand can't compete, Fennessy says.
On the Cullen Fund policy, the investment industry is wary. Peter Lynn, head of strategy at fund manager Tyndall Investment Management, says he always gets concerned at any whiff of constraints.
While making the fund invest such a big proportion in the domestic market might be good for the economy and the ailing NZ sharemarket, it's not ideal for achieving its ultimate aim - producing the best return to finance the nation's superannuation needs.
"[Investment] strategy should be as open and free-flowing as you can get, or the constraints should be put on it by the strategists, rather than the politicians."
And then there is the question of what do you invest in? The NZ sharemarket is so small that Australian corporates BHP Billiton, Rio Tinto and Telstra all have market capitalisations larger than the entire NZX. "We then likely end up with the New Zealand Super Fund owning or controlling large portions of some companies."
Ironically this lack of depth in our capital markets, and the fear that the NZX may become a branch office of the Australian bourse, is something now being addressed by a Labour Government taskforce.
It is looking at ideas such as partially publicly listing some state-owned enterprises - hardly grassroots left-wing thinking.
But after this election campaign, no business policy dosey-do would surprise.
