Key Points:

Cue the balalaika music. Cue the dancing cossacks. Let's electioneer like it's 1975 in reverse.

When the Greens start backing parts of National's economic policy, you've got to pinch yourself this election is real.

The campaign certainly got a little weird yesterday with National - the supposed friend of the free market - saying it would direct the NZ Superannuation Fund to invest at least 40 per cent of its booty locally.

This policy comes from the same party that ran the infamous 1975 election advertisement warning that Labour's then super fund (it was subsequently abolished) would buy up all of the country's farms and factories - at which point the voiceover declared "and you know what that is called".

The cartoon countryside turned communist red - at least for those who could afford a colour television - and little dancing cossacks came bouncing across the screen.

Sir Robert Muldoon should be rolling in his grave. But he would probably have admired John Key's gall.

National's current leader may have offended the economic purists, but his announcement cleverly outflanks Labour, which will merely consult the current fund's guardians about "facilitating" increased investment in New Zealand.

National's bolder move has given it back some of the initiative on economic policy it lost after the less-than-rapturous reception accorded its tax policy. The move significantly fleshes out National's wider economic policy, which had been looking rather thin.

Setting a 40 per cent target for New Zealand investment - only a quarter of the fund is currently invested locally - will be popular.

It will be viewed by many ordinary voters as the right call in worsening economic conditions. The policy has unstated patriotic overtones. It might be pulling up the drawbridge on Fortress New Zealand, but many will be asking why tax revenue is currently being sent overseas, given the fund's recent losses and the expected difficulties in raising capital for investment in local enterprises.

The question is whether the policy is feasible, given the small size of the New Zealand sharemarket. The market currently has a capitalisation of around $42 billion. The fund is currently valued at around $14 billion, but is expected to ultimately grow to close to $100 billion.

However, National is seeking to avoid such problems by some of the fund's cash being drawn into planned infrastructure bonds, thereby getting taxpayers to fund major capital projects without them realising.

The policy steals from Winston Peters by increasing New Zealand ownership of larger companies.

Key's plan also adds major insult to injury for Michael Cullen, coming on top of National's intention to restructure KiwiSaver.

It is also revenge for Labour outflanking National over student loans last election. This time National has trumped Labour, fair and square.