Hints at National’s tax cuts and digs at Labour’s capital gains plan in often heated second leaders’ debate

National leader John Key condemned Whale Oil blogger Cameron Slater for the first time during last night's leaders' debate, and confirmed that the blogger's emails will form part of an inquiry into Judith Collins' conduct.

And Mr Key hinted that his plan for tax cuts for low to middle income earners, to be announced next week, would not be more than $30 a week.

He also claimed Labour's capital gains tax would capture 300,000 family homes held in trusts, which David Cunliffe left unanswered in the debate, and the party scrambled later to discredit.

The Christchurch Press debate became quite heated at times, as the leaders traversed topics from poverty, the Canterbury recovery and the fallout from Nicky Hager's book Dirty Politics.


Mr Cunliffe criticised the inquiry into Judith Collins, saying it was so narrow that it would not even look into Mr Slater's emails, which sparked her ministerial resignation.

"And that is a joke. If we want to move on, then we have to clean up the mess."

Mr Key responded: "They will take into account those emails."

When questioned, he condemned Mr Slater for his role in what appeared to be a smear campaign on the Serious Fraud Office.

And he took a swipe at Labour's failed attempts to dig dirt on him, and at the "three or four" staffers in Mr Cunliffe's office that wrote in the left-wing blogosphere.

"It's a known fact that Jason Ede in my office talked to a blogger. There are people in your office who have written on blogs.

"It happens on your side and you know it ... and I can name them if you want me to."

Mr Key said he would announce his tax cuts plan next week.

"Even if it's a small amount, we want to reward New Zealanders for working hard, whether it's $10 or $20 or $30 bucks [a week], it adds up to $500 or $1000 for an individual or a couple [a year]."

He lambasted Labour's capital gains tax, asking repeatedly whether it would apply to the 300,000 family homes held in family trusts.

In a moment reminiscent of the "show me the money" moment in last election's leaders' debate, where then-Labour leader Phil Goff was caught out not knowing policy details, Mr Cunliffe avoided the question.

Mr Key said: "The answer is you will, because you are not the owner/occupier."

Mr Cunliffe focused on Labour's wider tax policy, saying Labour would raise $1 billion more revenue than National and still pay down debt faster.

He defended Labour's proposal of a new top tax rate of 36 per cent on income of more than $150,000.

"I'm happy to pay a little more tax as long as I can leave to my children a country that we think is fair and decent."

He also pointed to forecast growth falling in coming years, saying that New Zealanders were asking: "If that was the recovery, how come I never got a slice of it?"

The debate became heated during a discussion about the Canterbury rebuild, and Mr Cunliffe called Mr Key a "school-yard larrikin" at his repeated interjections of "whatever".

Earlier the leaders discussed the standard of living and approaches to lifting people out of poverty.

Mr Cunliffe pointed to Government assistance, including Labour's Best Start payment for parents, while Mr Key said employment was the best path out of poverty.

Mr Cunliffe retorted: "There are 100,000 children growing up below the poverty line where parents are working. It's not just about work."

Mr Key said the minimum wage promises from Labour and the Greens would cost jobs.

"You want to send 16,500 people to the dole queue, David."

Our views

John Armstrong, political correspondent

Winner: John Key

Slaughter-time. Unfortunately for David Cunliffe, lightning does strike twice in the same place. For the second time in successive elections, the Labour leader has come a cropper at the hands of John Key during the Christchurch Press leaders' debate. For Phil Goff, it was being unable to say where the money was coming from; for Cunliffe it was detail about how Labour's capital gains tax would apply to homes in family trusts. Cunliffe could not provide an answer. He should have known. He froze. He bore the demeanour of a freshly-killed sheep hanging from a hook at the local freezing works. Worse for Cunliffe, unlike last week's TVNZ debate, the real Key actually turned up last night - and with some welcome mea culpa on Dirty Politics. As a contest, it was all over by half-time.

Audrey Young, political editor
Winner: John Key
Lightning does strike twice. John Key won the Press debate three years ago when Phil Goff didn't know the answer to a question, the "show me the money" moment. It happened again in last night's debate when David Cunliffe didn't know the answer to a question on his own capital gains tax and trusts. Key answered the question himself. It was a calculated ambush and it wounded Cunliffe. You felt embarrassed for him. You could say it was Key at his best, if it weren't for the fact he was wrong. Hard to imagine, but capital gains tax gazumped talking Dirty Politics.

Toby Manhire, columnist
Winner: John Key

It wasn't quite a repeat of "show me the money" from 2011, but when John Key challenged David Cunliffe on trusts and capital gains, he rattled him. A palpable hit. Cunliffe needed an ad break. Key then grew too cocky, but still won the first half comfortably. The second part was Cunliffe's. Key had calmed, but as questions centred on post-quake Christchurch, Cunliffe won the crowd.
Technically it was messy, the livestream out of sync like a cheaply dubbed foreign film. But most disappointingly, when they were trying to out-tribute each other on mothers, no one heckled, "Show me the mummy".
Overall? Key by a whisker.

Fran O'Sullivan, columnist
Winner: John Key

John Key was pumped with all the energy of a barrow boy, ramping up the fear factor about Labour's "five new taxes" and catching David Cunliffe out when it came to the detail on Labour's capital gains tax. The Prime Minister neutralised the Kim Dotcom threat and distanced himself from Cameron Slater. Cunliffe emphasised the people factor and scored points on Christchurch, notably with his line accusing Key of playing the "schoolyard larrikin" when people's families were suffering, but his tone was oddly discordant with Labour's "Vote Positive" slogan.