September 17, 2005

Early counting puts NZ National opposition ahead

By Paul Tait

WELLINGTON (Reuters) - Former central bank governor Don
Brash appeared on course to upset New Zealand Prime Minister
Helen Clark's Labor-led government on Saturday after a
hard-fought election campaign.

The promise of personal income tax cuts appeared to have
swayed New Zealand's 2.9 million voters despite Clark's track
record of strong economic growth during her two terms in power
stretching back to 1999.

With 20 percent of the vote counted, official election
figures showed conservative National ahead with 45 percent
compared with 36 percent for Labor.

Those figures would translate into 57 seats for National in
an expanded 122-seat parliament, short of an overall majority
but with sufficient center-right minor party partners to form a
coalition. Labor was on course for 46 seats.

Party officials from both sides said it was still too early
to call a definitive result.

"It will be a nose-to-nose, head-to-head result between the
two major parties," Deputy Prime Minister and Finance Minister
Michael Cullen told National Radio.

Volatile opinion polls in the final week of campaigning had
pointed to a race that was too close to call.

A victory would mark a stunning turnaround for 64-year-old
Brash, a political novice who had trailed Clark by as much as
10 percentage points in opinion polls before the budget in May.

Clark had warned voters the election was a choice between
stable government and the economic gains of the past six years,
and the likelihood of increased debt and cuts in social
spending under National.

But she looked set to lose power even though New Zealand
has averaged 4 percent growth over the past five years -- the
longest period of economic growth in half a century -- and
unemployment at a near 19-year low.

Clark disappointed many voters after the May budget with
her promise for only small tax cuts to begin in three years.

Brash in contrast campaigned strongly on the promise of tax
cuts worth more than NZ$9 billion over three years.


"I think probably how people felt they were being
over-taxed and there was a lot of waste in the system, I think
that's probably the biggest issue," National campaign manager
Steven Joyce told TV One.

Some voters said they had not made up their mind until they
entered polling booths and went with their gut instincts. Early
counting suggested the promise of tax cuts won out.

"There's definitely a philosophical split between what's in
it for me and what's in it for the country," said one voter in
the suburb of Porirua in the capital Wellington.

The promise of a close race in the closing days had
suggested that some of the 17 minor parties contesting the
election were shaping up as potential kingmakers.

Under New Zealand's German-style proportional
representation system, parties must win either a local district
seat or 5 percent of the nationwide vote to get a seat in the
single-chamber parliament.

Although the last parliament had 120 seats, minor parties
were winning more seats than expected under the system, which
could result in the chamber being expanded by two seats.

Of the leading minor parties, nationalist New Zealand First
and the Green Party, a natural Labor ally, had both attracted
about 6 percent of the vote.

New Zealand First has vowed not to form a formal coalition
with either of the major parties but has promised to support
whichever party wins a majority on issues of supply and