Column: National all bark, but no bite

Longer ago than this writer cares to remember, he worked on a farm which had a bright young cattle dog.

Barely out of it s puppy-hood, this young canine – try to image a younger and more hyper version of Dog on Footrot Flats and you’ll get the picture – used to spend all his spare time and not-inconsiderable spare energy tormenting a gnarled old ginger tom which had adopted the cowshed as his home and dining hall.

At least, he thought he was tormenting the cat. The cat itself would stretch itself out on the concrete, apparently relaxed and oblivious and looking decidedly untormented. The dog would dance around it, getting ever closer. Eventually he would get close enough and the cat would spring menacingly to life and land one claw-filled paw right across the dog’s nose.

The dog would always come back, but after a while with increasing wariness. He was actually a particularly bright farm dog, but he had a blind spot where this cat was concerned. Some primeval inner compunction drew him back to the cat, even though he knew he was probably going to wind up, yet again, with a bleeding nose.

It’s a bit like that with the National Party and superannuation now – although it is probably the only resemblance the party has to a bright and energetic young puppy these days.

But the party is now drawn back, forced in this case by the government’s latest initiatives in this area, to the whole issue which has earned it, and its leaders, many metaphorical scars across the nose over the years. The same balance of hope and experience permeates the party’s statements on the issue.

Obviously, the party dearly hopes it will be Finance Minister Michael Cullen who ends up with a shredded snout this time. The frustrating thing for National is that although in the past it is oppositions which have garnered votes out of superannuation – and ruling parties which have lost them - whenever a government tried to alter the pension scheme, this time, thus far anyway, that is not happening.

The government’s scheme also steals the ground National should be staking out for itself in a post-economic reform political marketplace. Historically the party has been conservative without being particularly right wing – the emphasis has been on security rather than reform. That has been less so over the past decade, but much of that break was confined to Ruth Richardson’s period as Minister of Finance, and, more latterly, in Jenny Shipley’s brief prime ministership. The party is now slowly returning to its roots.

But in that sense, the government is appealing to sentiments which National has always tried - and usually succeeded - to draw on: a need for security.

Which is only one of the reasons why the sense of frustration from National on this issue is almost palpable. There is also much sotto voce teeth-gnashing among senior members about how the funds management and financial services industry – for some very good business reasons – is broadly supportive of the government’s scheme.

"You can almost hear them salivating over it," is how one senior MP put it privately a few weeks ago.

National’s attack on the government plan seems to have two main prongs: that it is highly risky to put what could be 80-90% of such a fund onto offshore sharemarkets, and also that it does not address the main problem, which is private savings – the so called second and third tier savings.

This second criticism – which has not been played as hard as the first – is probably the most valid, but it also goes to the heart of the political appeal of the government’s policy. The main reason the so-called "Cullen Fund" has gone down well with the public is that it seems to "solve" the problem of superannuation, and there is not doubt whatsoever that voters are fed up with politicians squabbling about the issue. The fact that it does not do so is, however, a difficult one to get across to the public.

National has also been highly critical of the process the government has adopted – a standard criticism by any opposition about any government measure, and not one which usually gets the wider electorate worked up.

A recent additional theme since the Budget is that the government is going to have to borrow to cover the costs of the super fund – "using the mortgage to play the sharemarket" is how this has been characterised.

Thus far though the party has not put forward any alternatives. Senior members are currently evaluating a number of other options, but it would be foolish for an opposition party to put forward too much new policy too soon.

However the party’s opposition finance spokesman Bill English this week hinted that one of the possible options is some sort of compulsory scheme similar to that used in Australia.

The difficulty with this, and other alternatives, is to come up with a policy which is not susceptible to the same criticisms as the government scheme. That - and demonstrating that the government’s scheme will not solve the superannuation issue and has considerable risks attached to it - is National’s political problem right now.

Stand by with the bandages. I think I see a nose bleed ahead.

Rob Hosking is a Wellington-based freelance writer specialising in political, economic and IT related issues.

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