New Zealand's PM fights for survival as opposition rises spectacularly in polls

DAVID BARBER

Wellington

New Zealand moved into the final stage of a historic election campaign at the weekend with the Prime Minister, Jim Bolger, and his conservative National Party, who have governed for the last six years, fighting for survival.

With the latest opinion polls showing support for Helen Clark and the main opposition Labour Party rising spectacularly, Mr Bolger's party was hoping for an Oscar-winning performance in last night's nationwide television leaders' debate to put him back in the running for a third three-year term.

Ms Clark dominated the first debate 11 days ago and has gone from strength to strength since with leading analysts and commentators tipping her to lead a centre-left coalition after next Saturday's election.

Mr Bolger has conducted a lacklustre campaign and although the National Party easily heads the polls, an absolute majority seems out of reach and its potential coalition partners are struggling to reach the 5 per cent voting threshold needed to guarantee seats in Parliament.

The election will be New Zealand's first under the German-style mixed- member proportional (MMP) system which will end 140 years of Westminster- style first-past-the-post voting and the National and Labour parties' 58-year stranglehold on power. The system will give minor parties more MPs in the expanded 120-seat House of Representatives and almost certainly produce a coalition government.

Ms Clark's future as New Zealand's first female prime minister is not, however, assured. She will have to reach a coalition agreement with the nationalist New Zealand First party and govern with the support of the left-wing NZ Alliance. Two major opinion polls at the weekend showed the three parties sharing 73 seats in the next Parliament, against 46 for National and one for its coalition partners United NZ. Labour would be the dominant partner with 33 to 37 seats.

The Alliance has ruled out joining any formal coalition after the election but its leader, Jim Anderton, has said it would give Labour conditional support in exchange for adapting some Alliance policies.

The three parties have major policy differences, and have bitterly attacked each other on the hustings but they share one common objective - ousting the National Party government.

Ms Clark's credibility as potential leader of this disparate group was undermined last week by former Labour prime minister David Lange, who has retired from politics. He said there was no way the three parties could work together: "There's too much hatred, there's too much baggage and ill-will, there's too much history and there's too much madness." Ms Clark dubbed him "irrelevant", but his comments were seen as hurting Labour, which is trying to position itself as a united party, fit to lead a consensus government.

Mr Bolger's best chance of hanging on would be as leader of a minority National government if the others could not reach a coalition agreement. This would almost certainly be a caretaker arrangement, pending another election early next year.

The kingmaker after next Saturday is likely to be Winston Peters, a former National Party cabinet minister sacked by Mr Bolger, who now leads NZ First. Polls indicate that a National-NZ First coalition would have a majority, but Mr Peters has stepped up his attacks on the National Party and would not work with Mr Bolger.

With polls indicating that health and education are the main issues for voters, following widespread dissatisfaction with the government's policies, Mr Bolger has campaigned on the need for continuity to maintain New Zealand's economic recovery. He has increasingly used scare tactics, predicting that a centre-left coalition would raise taxes, push up interest rates and inflation, drive off foreign investors and provoke "the crash of '97". "If it happens, you'll wake up the morning after, put your head in your hands and weep 'Sunday, bloody Sunday'," he said last week.

The tactic backfired when the stock market rose, some banks dropped interest rates and the New York-based agency Standard and Poors said that it was relaxed about a Labour-led government and would not downgrade New Zealand's credit rating.