Quotes of the Day

It's not yet lunch time, and helen Clark is on to her second silly hat of the day. Here she is, at a suburban park in Auckland, turning the first sod of a motorway extension project in a fluoro-orange hard hat. This tableau of rent-a-crowd suits, marquee, hybrid cars, uptight minders, waiters, photographers and TV cameras can mean only one thing: New Zealand is midway through an election campaign. That's why, a few hours earlier, Clark put on a hair net and white coat for a tour of a biscuit factory on the city's southern fringe. The net, accompanied by a faint scowl, made Clark seem severe; the hard hat, by comparison, gives her a jolly air. But through all the costume changes dictated by her image makers, Clark's reputation as a decisive and intelligent leader is holding firm. The P.M. may not always be loved, but she is respected - and there's little doubt about what she stands for.

If Clark can lead her Labour party to victory on Sept. 17 in a general election, she will be free to continue the frugal economic management and progressive social makeover that have been the hallmark of her winning ways since 1999. After the country's stagnation in the '90s, and the reform shocks of the preceding decade, the Clark era has been a prosperous one. "There is no mood for radical change in our country," Clark declared at her campaign launch in Auckland on Aug. 21. Economic output has grown by an average of 4% a year; the country's unemployment rate has dropped to 3.7%, the lowest in the developed world. Dairy, meat and horticultural export earnings have soared. House prices have boomed, encouraging property owners to borrow - to buy consumer goods or even bigger homes. Since 9/11, the isolated country has been seen as a safe haven; expats have returned home and the spectacular vistas of Peter Jackson's Lord of the Rings franchise have attracted tourists. Clark has worked relentlessly to rebrand the nation - to itself and the world - as "clean and green," creative, energetic and independent.

In 2002, Labour won two votes for every one that its traditional rival National was able to secure. Amid national affluence, and with such a large electoral buffer, Clark should be unassailable. But she's not. Far from it. Labour finds itself neck and neck in the polls in a two-horse race with a revitalized National, under the leadership of political novice Don Brash, a former governor of the country's Reserve Bank. Are people ungrateful, or has Labour reached its use-by date? It may simply be that New Zealand politics is becoming a more unpredictable game or, as Deputy P.M. and Finance Minister Michael Cullen argues, that Kiwis now expect a larger pay-off after the hard years of restructuring: "'Where's my dividend?' people say. Well, we need to move along a steady path and not blow it all at once. We will target our Budget surplus toward spending on public services and investment in infrastructure."

Cullen has been sounding like a scrooge during the campaign, trying to protect the surplus at all costs, worrying about rising oil prices, a strong dollar and a scary current account deficit. But Brash is feeding the instinct for immediate gratification, although he is using the language of incentive, hard work and aspiration to sell it. National is promising large tax cuts across the board, with a plan that would see 85% of taxpayers charged a marginal rate of 19¢ in the dollar or less. Despite the output and jobs growth, real earnings have remained flat for the past five years. It's opened up a 30% income gap between Australia and New Zealand - and sent a large number of skilled Kiwis across the Tasman for good in search of career opportunities and higher earnings. But there's another dimension to Brash's ascendancy: race. His party is tapping into resentment of what some see as special treatment for Maori people under Labour's interpretations of the Treaty of Waitangi, signed in 1840 by the colonial governor and Maori chiefs. In a speech early last year, Brash outlined a systematic dismantling of the modern Treaty apparatus and argued that the funding of education and health should be based on need, not race. Was it a wedge tactic by a newish leader struggling for recognition? Or an attack on 15% of the population? "I did not divide the country," says Brash. "I simply said in public what many people were feeling - that everyone, Maori and non-Maori, should be treated equally. We are one nation with many peoples." National's subsequent popularity surge was unprecedented, and whenever Brash revisits the Treaty issue, even without upping the ante, his poll numbers improve. So this is a values election, a contest over what governments should and should not do, and a fight about the country's racial and cultural future. Brash foreshadows "a momentous choice" this Saturday; Clark calls it "high noon" for New Zealand.

In a country of four million people, Clark, 55, is the tallest poppy. She is expected to have answers on everything from dog laws to the war in Iraq, and to be the face and voice of the country abroad. She must, however, never be too pleased with herself, forget that she is a farmer's daughter, or say, as she has done, that she is "a victim of my own success as a popular and competent Prime Minister." Clark has found herself caught up in scandals that would not make it past breakfast in other countries. In a quiet country where genuine news is often lacking, the media are forever rushing to attach the "-gate" suffix to relatively minor incidents. Clark can be a ferocious politician, intellectually arrogant and, by many accounts, a control freak. But she is not estranged from Labour's support base, which in New Zealand is broad: unionized low-skilled workers, Maori and Pacific Islanders, public servants, gay men and lesbians, recent migrants, artists and performers, the poor, and students.

At a stop-work meeting in the canteen of the Griffin's biscuit factory in Papakura, Clark is showing her humble side. She's enjoying the company of the kinds of workers who have benefited most from the economy's appetite for cheap labor. Once Were Jobless. She appears to relish rolling around words like "chippies" and "sparkies" as, in perfect pitch, she tells the five dozen mainly Maori and Islander workers about Labour's plans for new apprentices and the importance of education and skills. Sure, 21 years of being an M.P. has prepared her for moments like this. But she's clearly up for this off-the-cuff tutorial and employment relations policy launch, happy to pose for snaps with the non-smokers inside the canteen. Clark even has a small gift for the handful of journalists who've ventured so far out of town, so early. "Will you be legislating for lunch time?" one of them asks Clark, referring to employment conditions. She doesn't kill the idea, and a smiling scribe has just scored tomorrow's front page. And then the P.M. is off to see the machines with the bosses. The hair net goes on and the morning's lightness goes out. In the broader community, Clark has become vulnerable to charges of social engineering and political correctness; even those closest to the P.M. worry that she is too p.c. The term might be dated and woolly, but the government's opponents - from libertarians to conservatives - have managed to pin the tag on Labour. Legislation allowing same-sex civil unions, banning smoking in bars, flaky tertiary courses (twilight golf, anyone?), anti-discrimination laws and funding of tours by hip-hop musical acts are cited, rightly or wrongly, as examples of a creeping p.c. crisis. Throw in the $NZ15 per ton carbon tax to be introduced from April 2007 to comply with the Kyoto treaty, Labour's continued opposition to nuclear power, the costs of social welfare, and the tensions caused by immigration and Maori land rights - and, say the critics, it's clear that the radical and obsessive Clark wants to remake their country.

Brash, 65 this month, is trying to reclaim the center. National's policies, he says, represent a middle path, reflecting the concerns of mainstream New Zealanders. "I sense quite a strong desire for a change," says Brash of his first experience on the hustings as party leader. "New Zealand is a fantastic country. I worry that some of the trends I see around me - in the economy, education, welfare and race relations - are putting that at risk, and I am committed to delivering something better for my fellow countrymen." As central bank chief for 14 years before entering politics at the previous election, Brash bases his credibility largely on financial savvy. His ideas sit comfortably within economic orthodoxy: small government, low inflation, fiscal balance, competition, free trade. "Labour has been the lucky beneficiary of the reforms of the '80s and '90s," he says. "They've done little to improve productivity. We would put a much stronger emphasis on increasing the trend economic growth rate."

Amiable and old-school, Brash has not been able to shake off his boffin tendencies. A career in the rarefied world of charts, spreadsheets, statistics and jargon has not prepared him for the brutal encounters of political life. His gentle, sometimes goofy manner often leaves him looking clueless, remote or insincere. It's kind of endearing in an uncle, but politics requires consistency. "Don often tries to explain too much," says a National M.P. "And he doesn't play the media game well. He can polarize voters without realizing he is doing so." Brash is also prone to Mr. Magoo-like stumbles: comments that are seen as sexist, changes of mind ("flip-flops," as Labour puts it) and moments of indecision. He may have come a long way in three years, but Brash - unlike Clark - is not a natural politician.

Entering the race debate, however, marked Brash as both decisive and a risk-taker. "The idea that the Treaty is a living document, like a Constitution, is not a valid one," he says. He believes the Treaty process is out of control and is dividing the country along racial lines. National proposes to abolish the country's seven Maori electorates, remove race-based funding of government services, remove references to "Treaty principles" in laws, and end the obligation to consult with Maori on a range of issues. Maori leaders have warned of civil unrest that would go well beyond what occurred after Labour legislated last year to return ownership of the foreshore and seabed - claimed by Maori - to the Crown. Brash says some people will feel threatened by National's changes. "But a great many Maori will be comfortable with them, particularly if we make it clear that we want to deal with the issues that are causing Maori social deprivation." As well, he argues, speeding up the Treaty claims process so all cases are settled by 2010 will bring greater racial harmony: non-Maori resentment will dissipate, while Maori expectations will be more realistic. "It sounds great that nobody should be treated differently," says writer Oscar Kightley of the Brash prescription. "But (in the past year) I'm also hearing a lot more things, racist stuff, on the street from ordinary people. That talk used to be confined to extremists on talkback radio." Kightley, of Samoan heritage, is one of the creators of bro'Town, a satirical animated sitcom set in Auckland. The show's characters are mainly Pacific Islanders and Maori - who together make up 22% of the population and growing. "As any parent says, you're only as happy as your saddest child," says Kightley. "If you look at the statistics, the saddest kids in New Zealand are the brown ones. They are at the wrong end of too many indicators. That tells me we need to improve things from the bottom up. Doesn't that lift everyone?" Despite strong job growth, unemployment rates for Maori and Pacific Islanders are way above national averages; one-third of Maori children live in families that rely on welfare. Clark says education and acquiring skills will get them out of poverty. "Labour's always got an Achilles heel around issues such as race," says Cullen, who claims his party straddles all of New Zealand's ethnic communities.

Cullen questions National's commitment to improving the lives of the poor and whether it will be able to afford the increased costs that are inevitable if Treaty claims are to be settled by 2010 without reneging on its tax cuts or blowing the Budget. Cullen believes Labour is well on track, with its "little bit of stick, a lot of carrot" approach moving people off unemployment and sickness benefits. Brash says that's not enough. At a time when businesses are finding it hard to fill job vacancies, 15% of the working-age population are being paid not to work, he says. It's costing $NZ14 million a day. National wants tougher work tests for the unemployed, tighter controls on those claiming they are too ill to work, and welfare mothers to participate in work or training when their youngest child is of school age. Brash's message of personal responsibility and hard work is striking a chord with taxpayers. But, as one government social worker from Auckland (who asked not to be identified) has found, shifting the attitudes and behavior of younger people and residents of some geographic regions that have had little experience of paid work is an awesome challenge. If there is a model for aspiration and self-reliance that would get two ticks from Brash it would undoubtedly be 44-year-old John Key, M.P. and National Finance spokesman. The millionaire Key, a former financial markets wizard, grew up in public housing in Christchurch, went to university, found a place as a money trader and made a pile as he jumped from job to job and city to city. He returned to New Zealand to take a shot at winning the seat of Helensville, west of Auckland, in 2002. Behind the wheel of a musty camper van emblazoned with his smiling face, the personable Key is talking about the quirks of his rural electorate by the sea, with its mix of farmers, retirees, Auckland workers and alternative lifestylers - and about the main contest. "We have to create a bigger economy, not just change the way we slice it up." Yes, the tax package he designed is offering big tax cuts. No, the government won't have to borrow to pay for them. "Sure someone might be $50 better off per week, but at the end of the day we are trying to appeal to something more primal - to reach into the heart of people's beliefs and ideas."

Key parks the van near Muriwai Beach at 2 p.m. on a Monday; a letter-box drop in the area has urged voters to come and meet him. Key is wearing dark suit pants and a salmon-colored shirt (no tie), suggesting work and energy; the people here, in shorts and light dresses, look like they're on holiday. Several locals stop by with donations or to pick up on a previous conversation, as the smell of frying vegetable oil from a snack bar wafts by. A young mother, carrying a child, identifies as a Labour voter but she wants to be persuaded to change her vote this time. Key zeroes in on National's tax cuts and a reduction in the high effective marginal tax rates she faces as a part-time social services worker. Key finds common ground with her on the problems in the welfare sector. As well, Key knows that staying nuclear-free is of immense importance to women aged 25 to 45; he calms her fears. After she is gone, Key says "I think we'll get her. She'll definitely vote for me and I think she'll go for the party as well."

Not nearly so easy for Key is battling the formidable Cullen. (Facing the Finance Minister in Parliament, says Key, "is like playing Andre Agassi at tennis every week. It improves your game enormously.") In a TVNZ studio, during a debate between eight economics spokesmen, Cullen is itching to get involved, like a burly rugby breakaway hoping to crunch a small ball carrier if he would only dare to come his side of the ruck. Perky, motor-mouthed Cullen hints at Key's hidden agenda to cut public services and reprise the scorched-earth policies of former financial warriors Roger Douglas and Ruth Richardson; he scoffs when Key claims his tax plan will stop the 600 Kiwis a week heading for "Aussie." Cullen pulls a stream of numbers out of his head to build a picture of stability, progress and the job ahead. Earlier in the day, Cullen outlines a difficult global outlook for the tiny nation, with no room for policy adventures; economic reform is by rights now incremental. Cutting spending on services is very difficult - and politically hazardous. "Government is like running an aircraft carrier," he tells Time. "You can only change direction very gently - otherwise the planes fall off the deck." Voters have only a few days left to decide whether Helen Clark or Don Brash should be trusted as captain.

• Tom Dusevic
• Can Helen Clark pull off a third straight election win?