Hive News Wednesday: Coleman talks down tax cuts and Collins talks up her toughness in 3-way fight for PM vs English; TOP's tax policy

The three contenders for the National Party leadership (Judith Collins, Jonathan Coleman, Bill English) as they announce their bids to reporters on 6 December 2016. Copyright Lynn Grieveson / Hive News

It's game on, as they say in sports commentating, now that Bill English faces a real contest for the Prime Minister's job from Jonathan Coleman and Judith Collins.

English is still favoured to win and already has the public backing of fellow ministers Michael Woodhouse, Louise Upston, Hekia Parata, Nikki Kaye and Nathan Guy. He is also the most popular candidate among the public.

A Fairfax-Nielsen online random poll of 1,016 people of voting age found 37% preferred English as the next Prime Minister. Joyce was the next most popular on 6% and Judith Collins on 4%. Not a single respondent in the poll mentioned Coleman as a preferred leader, although the poll was taken on Monday evening before Coleman declared his candidacy.

But the day-long delay in English putting his hand up and the rapidly open talk among back-benchers about the need for "generational change" has added doubt into the process, along with the first open signs in a decade of unhappiness within caucus about the direction of the Government.

No only is it game on, but it seems to be open season for a debate within National's parliamentary party about that direction and some of the key choices. Questions are now being raised about the need for tax cuts, whether to change the New Zealand Superannuation settings and how much more to spend on health. It's as if the lid on a pressure cooker has been unscrewed a few notches by the removal of Key's heavy weight and dominance over the caucus and cabinet, and now there's a whistle of steam escaping.

That was clear in early comments from Coleman and Collins.

"I sense an appetite within caucus for a change from the status quo and for a moment of generational change to be seized," Coleman said as he emerged from a two hour-plus Caucus meeting that Key left shortly after it started to give MPs space to debate the leadership without him.

"I was not a career politician. I've been a doctor, I'm in touch with everyday New Zealanders every week," he later told reporters before Question Time.

"I do electorate clinics most weeks. I live my life in the community, my kids go to state primary schools, so I think I have a deep connection with the concerns of ordinary New Zealanders, but also have professional expertise through my time in medicine and business as well as politics across the full gamut of portfolios to be able to do an excellent job leading the party and delivering what New Zealanders really need."

Debate over tax cuts

Coleman later told Duncan Garner on Radio Live he preferred extra social spending to tax cuts.

"We've got to not only focus on continuing to grow the economy, but we've got to make sure that those social services continue to be there," he said, adding he had support from over half the caucus. "People definitely want a contest. There's an appetite for a new generation and for renewal," he said.

Judith Collins was similarly bullish in declaring her candidacy shortly before Question Time.

"I would not be putting my name forward if I did not believe I had a very good chance at leading us into a victory in 2017 and that's what this is all about," Collins said.

"it's about who can deliver a National led government, do whatever deals that are needed in terms of MMP to deliver that, and I believe I am that person," she said.

Challenged over the controversies around her husband's involvement in Oravida and the departure of Adam Feeley from the Serious Fraud Office, Collins said she had been exonerated and was happy to move on having "learned an awful lot."

"And I know this: we are going to go into the toughest campaign ever that we have fought and I know that we need to win and the only way we can do that is if we have some of the toughest people running it," she said.

In a thinly veiled swipe at English's 2002 election loss and his longevity, Collins said: "This is all about who can win, not just once, but who can keep us going after that."

English calls for unity in his bid

Bill English for his part formally announced his bid shortly before 1 pm yesterday, after the two hour Caucus meeting and after Coleman had announced he would be running.

English said he was not particularly surprised that Coleman had decided to contest the leadership.

"I know Jonathan well. He manages the biggest, hardest public agency in Government and that's the health system. He does that very competently. I have always known he was ambitious, so he is welcome to have a go," he told reporters in a scrum on the black and white tiles in foyer of Parliament.

Asked if he was worried it would divide the party, English said: "It can do, we've seen that in the past. But I think there is a strong commitment from the caucus to make sure they have a process to make sure they get the leader they really want at the same time as maintaining the kind of stability and cohesion they have got used to. They understand how effective it is."

"One the reasons we have been a well-supported government is because it has been such a disciplined caucus and they know that any signs of loss of that discipline are not going to help. Unity is everything."

Reasons for the 2002 loss

One surprising aspect of the English announcement was his answer to the 2002 question: what's different between now and the loss in 2002?

"The circumstances are quite different than in 2002. I was 39 years old then with 6 children under 13 so, if nothing else, I have got the opportunity to focus on the job much more now than was the case then," he said, adding later that his youngest child was now 17.

"I had a lot of obligations and that does effect your job. I have significantly less family obligations now," he said.

The lid is off the NZ Super debate

Meanwhile, English declined to repeat John Key's commitment to resign if the age of eligibility for New Zealand Superannuation or its indexation to 66% of the average wage.

"There's always options there to change super, but we haven't considered them," he said.

He later declined when ask to repeat Key's commitment to resign if these settings were ever changed.

"No, I won't be making that commitment. But equally we haven't considered any of the options. But in any case that is an issue for the duly elected leader of the National Party and Prime Minister next week."

English hinted in July 2014 that the policy might change with a change of leadership.

"I've got nothing new to say about the pension age. We made a commitment. It's now become a matter of trust, as much as policy. The Prime Minister said he would resign if the age changes. If the age changes and he doesn't resign, no one would trust him ever again, even if they support the policy," English said back in July 2014.

"We're not changing it. A future Government may well do that (increase the retirement age)," he said then.

A change of heart

One curious aspect of English's leadership bid is his self-acknowledged lack of desire for the top job as recently as February, although there was of course no suggestion then that John Key would step down. English told Jarrod Gilbert in this New Zealand Herald interview published in March that he had no desire any more for the top job.

He was challenged directly at yesterday's news conference about how much he wanted the job.

"Yes, I do want the job. I have been in the position of strongly supporting John Key and found myself in the unexpected position where there's the opportunity to lead the National Party, but lead the country and I am very keen to do that," he said.

"I'm certainly older, certainly wiser and I have been learning a lot from my colleagues. The whole experience of going through the earthquakes, going through the recession, seeing the growth that is coming in the economy, I think we are all much better decision makers and politicians for it. But I think most importantly in that team there is the energy to go forward. I've been in a previous third term government and this has been, as fostered by John Key, a team with a lot of energy," he said.

"And this leadership discussion is all about looking out for the next 5 to ten years."

That question of which candidate can 'do a John Key' and last as Prime Minister for multiple terms is set to be a factor in the Caucus debate, given English has been in Parliament since 1990, although he will only turn 55 on December 30.

Elsewhere on the leadership bid, Amy Adams and Simon Bridges said they would not stand for the leadership, but said they were open for Deputy Prime Minister roles, while Paula Bennett was cagey about what she would do. She is seen as a potential Deputy for Bill English.

Little highlights impression of disunity

Andrew Little's gracious comments about John Key's departure and his service to the nation on Monday afternoon were quickly replaced yesterday with a highlighting of the tensions emerging from the National caucus room over the leadership.

"What is happening this week is the top has been ripped off tensions that have been simmering away there for some considerable amount of time," Little said.

"We know there are tensions around Collins, Bennett and also Coleman, and Amy Adams to an extent," he said.

"The bigger the caucus the more effort it takes to manage it. The lid's been blown off that now. So a lot of that stuff will bubble to the surface. I take no pleasure in that whatsoever, it's an unsightly thing we are just going to have to get through as a nation."

Check out the quote of the day below for the interplay after that comment.

Hindsight also emerged in Little's news conference yesterday.

"I certainly long had the view that when he saw his popularity starting to fall, he would not stick around. He would not lead National to defeat and I think that is part of what's been played out yesterday," he said.

There are no comprehensive new polls yet on what Key's departure means for next year's election result, but the Fairfax-Nielsen poll found 9% said they were now more likely to vote National and 16% said they were slightly or much less likely to vote National now Key was gone.

In other economic and financial news...

The Property Institute published the results of an opinion poll by David Farrar's Curia on which were the driving factors in house prices. It found foreign investors were seen as the biggest driver with an impact rating of 7, followed by Banks (6.2) and Domestic Investors (6). Central and Local Government were perceived to have the least impact on property prices at (5.3) and immigrants were second to lowest (5.6).

JB Were published its annual survey on foreign ownership. It found foreign ownership of the New Zealand equity market increased to a four-year high of 36.3% from 32.6% in 2015. This is the highest level since 2011. New Zealand retail investment fell the most in the year, dropping to 23% from 27%.

Treasury reported on the eve of Thursday's HYEFU that the Government's surplus track is looking rosy. It reported an operating balance before gains and losses (OBEGAL) deficit of NZ$131 million for the first four months of the year, which was $934 million better than forecast, largely due to higher than forecast tax revenues.

Gareth Morgan's The Opportunities Party announced its flagship tax policy this morning, including that TOP would assume a deemed rate of return on all productive assets, including housing and land, and then redistribute the income in a revenue-neutral way that would see 80% of voters either unaffected or better off, with 20% worse off.

"At TOP, we acknowledge that all productive assets generate income (either in cash or kind) and by deeming that they produce a minimum level of assessable income, such capital will be deployed in the most efficient manner. This is critical for maximising jobs and incomes. Those that already declare at least that level of income will be unaffected. Those that don’t, will pay more," Morgan said.

Quote of the day:

Katie Bradford after Andrew Little said he took no pleasure in National's leadership fight:

"Couldn't you have tried to take the grin off your face while you said that?"

Tweet of the day:

Toby Manhire:

So we've got the battle of the mustards, Coleman vs English; and the battle of the dictionaries, English vs Collins.

Have a great day

cheers

Bernard