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Comment: The likelihood of an early election is growing by the day

Prime Minister John Key might be tempted to call an election well in advance of the anticipated Spring poll.

The government does not have to hold an election until the end of the year – indeed, technically, it does not need to hold one until mid-January, although any government which held an election over the summer break would be suffering from the ultimate political death wish.

The G20 meeting in Australia in early November and the Apec meeting in Beijing in late October mean many political observers are picking an election date in either late September or early October.

Several things suggest an earlier poll is highly likely.

One is the sheer intensity of the start of the political year. Election year usually gets very heated but it is very rare for it to happen this early.

It is not just the nastiness over expensive jackets or the continuing silliness of the Kim Dotcom irrelevancy.

Government ministers are pumping out good news releases as though the election is four months away, not eight.

Over the 36 hour period ending at midday yesterday, the government  released:

  • an update which shows $16 billion spent on roads, rail, broadband, electricity and other infrastructure over the past three years;
  • a re-announcement of plans to allow more flexibility of foreign superannuation scheme access
  • a report on progress of the Youth Guarantee scheme to help young people stay in education
  • a new Carers Strategy for those looking after a disabled relative
  • a re-announcement of how carers of children can access extra funding for the start of school
  • the state house warrant of fitness scheme
  • updated forecast figures for dairy exports
  • positive results of a random safety audit of Canterbury building consents
  • ‘eHealth’ ambassadors for the new ‘patient portal’ due later this year.

That list just covers a 36-hour period. What is also noteworthy is a number of those initiatives would not normally be announced by ministers at all but would be rolled out by the government agencies themselves.

Normally, the good news machine of any government cranks up in an election year but it is usually only in first gear in mid-February. This is more like third gear, with a tail wind, and with the hand hovering over the turbo-power button.

Secondly, we know interest rates are going to rise this year – the next official cash rate review is March 13 and Reserve Bank governor Graeme Wheeler would astonish everyone if he does not lift the OCR 0.25% then. Or even 0.5%, which would take it to 3.0%.

Those will bite into household incomes and will also put the thorny housing affordability issue back on the agenda. By the spring, it will be hurting badly. It is another reason for the government to face voters early.

Thirdly the state of the opposition. Labour’s David Cunliffe has been utterly hapless: for all his undoubted brain power he has a polticial tin ear, and with a non-supportive caucus behind him and difficulties attracting, let alone retaining, talented staff, he is increasingly accident-prone.

The gaffe over his “middle of the road” (his words) $2.3 million Herne Bay house, and being filmed discussing this at Auckland’s yachting marina, is the kind of stupidity which ruins election campaigns.

National would rather face Mr Cunliffe than, say Shane Jones, whose jihad against Australian owned supermarkets, launched last week, is connecting with voters over an issue they care about in a way no-one in Labour has managed for years.

Also, one of the big threats, New Zealand First’s Winston Peters, is running into difficulty, with his support base over matters such as the Kim Dotcom visits. There will be more on this, especially as the opposition parties and the bulk of the country’s media cannot, it seems, leave Kim Dotcom alone.

The bulk of the voting public is fed up to the back teeth with the fugitive German fraudster. And they are starting to blame journalists and the opposition parties (in that order) for his omnipresence.  He is not hurting the government – especially after yesterdays judgement declaring the raid on his mansion legal.

Finally, the government’s work programme is partially stalled.

Crucially, the Resource Management Act changes announced by Environment Minister Amy Adams at last year’s National Party conference have gone into the backrooms and have not come out. Neither the Maori Party nor United Future’s Peter Dunne will support them.

National is linking these to the housing affordability issue and cranking up the message you cannot complain about the cost of housing and then refuse to support Resource Management Act changes which are aimed at making it easier to build houses  -and also, of course, businesses.

Mr Key has said he would rather wait until after the election in order to put that legislation in to Parliament – which, if the election is held around the usual time, means no law change until the second half of next year.

Time is marching on.

So it is making increasing sense to go soon after Finance Minister Bill English’s May 15 Budget.

That Budget could outline the bones of a programme for the election, and for a third term.

It could even produce a surplus a year earlier. That is a long shot, but not beyond the realms of possibility. At least one economist calculated, after the Half Yearly Economic and Fiscal Update delivered in December 2013 from the Treasury, that a surplus a year sooner than expected is within the margins of error around the revenue and spending forecasts.

As a springboard into an election, it would not be a bad one.

In summary: an economy which is now growing faster than forecast (Westpac Bank economists are now picking 4.2% growth for the year); an opposition in disarray; interest rate hikes which will really be biting by November; and a work programme that is stalled until after a new Parliament is elected – why wouldn’t Mr Key call an early election?

The risks are greater if he waits.

More by Rob Hosking

Comments and questions
7

Sounds logical and convincing, good article.

I agree, but I'd like to prolong the free entertainment that is Cunliffe making a fool of himself. It's only a matter of time until the majority of Labour voters, and the rest of the moderates in his party get fed up with his far left stance. Those that would vote far left will be voting for the Greens, and those that are reasonable will be asking for a Shane Jones led Labour, but will end up voting National, or NZ First.

This is shaping up to be an interesting election year, and I think we are going to see a similar pattern to the last few elections with Labour's left wing allies taking its voters. I think we can all agree that the worst outcome would be a left wing victory with a strong Greens, and that's a very real possibility.

Good analysis.

Probably a good call for National but a bold one. Has JK got the balls??

If they wait until the end of the year they risk the release of bad news and bad press like Snowden releasing what the Govt and the US NSA were up to - which could be very negative for the Government with our neighbours but also put the Govt in bad light with voters _ john Key and his Ministers might not be as squeeky clean as they promote themselves. There's Dotcom's trial which will be negative for the Govt. Maybe the odd international release like on child poverty in NZ which won't support the Govt's pitch to voters that the country has recovered from the GFC and the economy is in great shape - although that is true for the top 25% of the population. Surplus's are great but are irrelevant if the man is the street is not seeing any follow through.

Also Labour will have time to reinvent themselves in some way that attracts another 5 to 10% of the vote.

A 50/50% call by John Key and his Government but probably a smart one if he does call an early election.

dream on. Key values certainty over stunts.

Agree with Anon, however one does wonder at Shane Jones attack on Countdown. Is he really after Countdown or just trying to take the heat of a poorly performing leader, Garfield Cunliffe?
Mr Jones refers to people to have co-joneses, (cojones; pronounced Co-ho- knees ) and stand up the supermarket may I suggest he has the same, and repeat everything outside parliament.

There's also the John Banks trial in May. Worse case scenario, he's convicted and John Key is one crucial support partner down with no prospect of a Byelection before the General one.