New Zealand Votes For Freer Spending Leader

Voters have dumped New Zealand's first female prime minister, Jenny Shipley, despite her promises of income and corporate tax cuts. Preliminary results from the Nov. 27 election clearly put the Labor Party's Helen Clark in the position to head a new government in coalition with the smaller, left-wing Alliance. Clark is promising more social spending, especially on health and education, to be financed by scrapping income tax cuts planned for next year by the Shipley administration, and by raising the rate on annual income exceeding NZ$60,000 from 33% to 39%. Critics say many taxpayers will easily avoid this higher levy, but Clark has committed herself to fiscal responsibility, saying she will trim spending plans rather than running into deficit. Labor should also be sufficiently dominant in its coalition partner's more free-spending policies. Up to 10% of votes, from New Zealanders living overseas and those who were outside their electoral districts on polling day, could yet complicate the balance of power by giving the environmentalist Greens a handful of seats in Parliament, but they, too, have pledged to back a Labor-led administration.