Putting off campaigning until after Cup no longer an option for Nats

Talk about the money shot. Can't you just picture it? John Key having a fair suck of the saveloy with the Mad Butcher at the NRL grand final while we wonder what's in store for us after the credit rating agencies pooped on our party.

Our admirably happy-clappy Prime Minister will not want to pass up the chance to cheer on the Vodafone Warriors at the ANZ Stadium in Sydney tomorrow night.

But I can just hear Sir Peter Leitch saying in his delightfully down-to-Earth manner, "Mate, I'd understand it if you have to get back to Wellington to deal with the hangover before we start this party."

Advertisement

After all the fuss Key has made about the All Blacks and the Rugby World Cup, he knows that failing to champion the team which has actually made it to a final won't win him any favours in the less rarefied part of voting land.

But what Standard & Poor's and Fitch Ratings have done with their separate decisions to drop New Zealand by one credit rating notch is hand Key's political opponents a useful weapon to challenge his Government's economic management.

The Rugby World Cup has been brilliant sport. Mike Tindall's night out drinking with the dwarfs and a gorgeous blonde was right up there with the Irish compadres upsetting Australia and the All Blacks trouncing the French.

We've celebrated our innovative companies and showed off our prowess in areas like yacht building to some of the world's biggest hitters.

But this wonderful six-week interlude of bread and circuses does not disguise the fact that New Zealand is now facing some very big challenges which cry out for concerted Government leadership.

The Key Government is doing very little in a concerted way to tackle youth unemployment, which is back at the heights which shamefully damaged the confidence of an earlier generation in the early 1990s.

The Government remains in stalemate with the international insurers while Christchurch business leaders such as Peter Townsend warn they are getting increasingly worried about the risk of capital and talent flying out of the stricken city. There is little real urgency.

And it is too pussy-footed to make the harder policy choices that will get the country's finances back into the black faster, raise national savings at a faster clip and shore up New Zealand for the longer term.

Advertisement

Even Bill English - who stressed yesterday that ratings downgrades demonstrated New Zealand is not immune to the global backdrop - has a difficult time puncturing Key's Pollyanna-ish armour.

English points to figures which showed New Zealand's net international liabilities were 70 per cent of GDP in the year to June - down from almost 86 per cent two years ago and Budget 2009 forecasts of more than 100 per cent. But the world economy is turning down.

And with the global market goalposts changing when it comes to debt assessment, we may well end up paying quite a bit more for the international debt we use to fund our lifestyles.

The Prime Minister had wanted to hang off until after the world cup final before staking out National's election policies.

But he now runs a very strong risk that Labour will paint him as "fiddling while Rome burns" if he does not get some some urgent focus on realities at Monday's Cabinet.

Even though Phil Goff is deeply unpopular, Labour is homing in on some major issues. For instance, it has flagged a capital gains tax and plans to further reduce tax incentives for property speculation.

It also plans to introduce compulsory superannuation through a bigger and better KiwiSaver to lift the country's savings rate faster.

Labour has also indicated it is prepared to take a much more active role in Christchurch by intervening in the insurance market and buying sections and on-selling them at cost.

There is still an aura of fiscal surrealism about some of Labour's open-ended chequebook policies, particularly on the taxation front.

But you could not accuse Labour of not wanting to do anything.

It is now increasingly important that public focus does go on both National and Labour not to try to sugar-coat the fiscal realities as they each did before the 2008 election.

Both Helen Clark and Key failed to say anything meaningful, let alone outline brave responses as many of us experienced sleepless nights while waiting for the the US Congress to vote in a credible scheme to avert another Great Depression.

Three years on, and the world is on the verge of a double-dip recession.

But this time round Key can't duck shove Governmental responsibility for our finances on to Clark.