If - as the participants keep insisting - this election is really about "the things that matter", then the question of which of the two major parties has the economic agenda with the most foresight would be dominating the campaign.

That question should, in fact, be dominating the campaign. But it is not the case. The campaign has instead been consumed with the Dirty Politics farrago. Just about everything else has been shut out.

That has hindered Labour by drawing attention away from its policy releases. But it has also forced National to delay what it must surely have been planning - an all-out assault on Labour's planned capital gains tax.

It might surprise some voters, but Labour has no intention of relaunching that policy which first appeared in its 2011 manifesto. Labour is not stupid. It can claim to be winning the theoretical argument for such a tax. But that could easily unravel if the argument shifts to the detail of how the tax will be applied in practice - and to what extent dollars-wise.


Labour is highly vulnerable on that score as John Key briefly demonstrated during last Thursday night's televised leaders' debate when he noted that farms would be subject to a capital gains tax. Cunliffe's rejoinder that farm-houses would still be exempt was one of his few weak moments.

The concentration on Dirty Politics ironically might also have helped National this week. It obscured the tangle the party nearly got itself into over tax cuts.

The Prime Minister was at serious risk of talking them up too much, whereas his Finance Minister has been emphasising there are other things which a surplus in the Government's books may need to feed - such as debt repayment, extra spending or resuming contributions to the Cullen superannuation. That means any tax cuts will be "modest".

English will be acutely conscious that National cannot have it both ways. It cannot pat itself on the back for exercising fiscal restraint, then claim its opponents will go on a spending binge if they get anywhere near the Government benches in Parliament, and then suddenly start hyping generous tax cuts. That is even more the case following the release of the Treasury-produced pre-election fiscal update which had lower growth forecasts than those in May's Budget.

English's caution will be reflected in the "fiscal announcement" expected on Monday which will lay out the fiscal criteria and conditions required to be in place before tax cuts can be implemented in the next term of Parliament.

The trick will be to sound definite that they will go ahead without being absolutely definitive that they will happen.

With the Treasury warning a slump in dairy prices, slower growth in incomes and a drop in private consumption could see the country not getting back into surplus before 2018, English will be reluctant to commit himself to tax cuts he cannot deliver.

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