What New Zealand would look like under a Labour-Greens-Progressives coalition

What impact would the Greens have on a fourth-term Labour-led government? And the truth about the difference between the right and left in this election

If Labour, the Greens and the Progressives are able to pull enough votes together between them to form, or at least be the basis of, a centre-left coalition, what policy direction can we expect them to take? Given that Labour and Jim Anderton have been in power for three terms now, the past is the best indication of what the future would hold. But the Greens would add a new flavour to the current stew.

We know that the current Labour-led government has already signed into law a second and third stages of tax cuts to take effect in April 2010 and 2011, and we have the promise of a mini-budget come December that will advance public spending on roads, rail, schools and broadband. None of those plans will be in jeopardy from post-election negotiations.

Looking deeper into the policy positions taken by those three parties, I'm struck my the lack of tension. Despite John Key's warnings of a "five-headed monster" – should a centre-left coalition also include New Zealand First and the Maori Party – this core trio has more policy in common than the centre-right hub if National, ACT and United Future.

To Michael Cullen's horror, the most significant policy push from Labour's potential coalition partners would potentially be the desire to reform the Reserve Bank Act. Both the Greens and Progressives want to expand the Bank's inflation-focus to include growth and employment targets, possibly along the lines of the US Federal Reserve. What's especially telling is that New Zealand First and the Maori Party agree, so Labour could find itself staring at four partners all demanding change. While none of the parties are uncomfortable with the planned tax rates and existing government spending, they are all intent on lifting the financial burden carried by New Zealand's poorest, so any future tax cuts would almost certainly be aimed at the bottom income bracket.

Cullen may also find himself under pressure to focus the Superannuation Fund that bears his name on higher levels of New Zealand investment. Despite the finance minister's criticism of National's plan to instruct the Fund to boost its local investments, he has also indicated a desire to see the Fund move in that direction, and so he may be open to the Greens agenda as long as it doesn't require him to tell the Fund guardians what to do.

Greater tension may arise over transport spending. Labour has repeatedly mentioned increased road building as central to its stimulus package. The Greens, already critical that transport spending runs 6:1 in favour of roads over public transport, would seek to re-allocate some of the government's transport budget.

There would be conflict too, over prisons. Unlike the centre-right grouping, these parties oppose privatising prisons. But they still have very different policies – Labour pushing a tough sentencing approach, the Greens advocating more restorative justice and rehabilitation, and the Progressives sitting somewhere in between. Should Labour decide it likes South Australia's gang-banning legislation, it can expect resistance from its partners. But it would only need to reach across the aisle to National and ACT to get its agenda through the House.

The differences, however, end there. None of these parties want to lift restrictions on Easter trading, revisit section 59, or hold a referendum on MMP. All of them oppose a three month probation period for new workers and undermining unions and collective bargaining. Significantly, they all support raising the minimum wage, so we could expect that to move to $15 as soon as economic conditions permit.

They all want to increase foreign aid spending, and acting as Labour's conscience, the Greens and Progressives might actually get movement on that issue. They all live and die on their opposition to state asset sales.

All three parties, like the three on the centre-right, are of one mind over health-care and ACC reform. Whereas National, ACT, and United Future all support part-privatisation as a way of cutting waiting lists and, they claim, cutting ACC costs, this trio are strictly opposed to any competition in the public health and compensation sector. They oppose public-private partnerships. The biggest change to health-care would likely be support of a policy that Jim Anderton has put at the top of his party's wish-list – extending the public health system to cover dental-care. That would likely be his reward for another three years' loyalty.

What would the Greens demand? Apart from some Cabinet posts, they would probably focus their attention on environmental and food issues. They could reasonably expect to extract promises from Labour on more detailed food labelling and their campaign to get unhealthy – ie high sugar or fatty – foods out of schools and off after-school television.

These parties all supported the EmissionsTrading Scheme legislation, but it's an open question as to whether the Greens, especially if Russel Norman or Jeanette Fitzsimmons are given the environmental or climate change portfolios, may try to win amendments. If given the task of managing the scheme's staggered introduction, they would reasonably want to see it reflect more of their core values. Maybe falling petrol prices could give political cover for transport to included in the scheme earlier, as originally planned.

What if New Zealand First survives to carry these parties over the 60 seat threshold? Winston Peters would probably gain a sympathetic hearing on his policy to extend the free doctors' visits for children under six to all children of primary school age. More controversially, he would find an ally in the Greens if he wanted to demand stricter rules around foreign investment and foreign ownership of New Zealand assets and land. For different reasons, both parties take a nationalistic stance on that issue. Peters would likely regain the foreign affairs portfolio and would probably negotiate hard for an increase in superannuation.

And what about the Maori Party? If they are needed to form a government, what could we expect Labour and its partners to agree to? The Maori seats would be entrenched, we can be confident of that much. Treaty settlements, all five parties agree, could be allowed to take another 12 years, rather than just six. The Maori Party will look to represent Treaty partners, rather than merely being a coalition partner. With Greens support, that could mean, for example, Pita Sharples as associate minister of education for Maori, with his own staff and budget separate to some degree from the Ministry of Education. Because such structures would be unprecedented, it's hard to predict their shape. But it's fair to say that the Greens' involvement in negotiations on this side of the ledger would offer support for Maori aspirations, quite different from the resistance the Maori Party would meet from United Future at negotiations with the right of centre parties.

The Maori Party would support the Greens' in their advocacy for restorative justice and in turn the Greens and Progressives would support extending the 20 hours free early childcare programme to Kohanga Reo.

The Greens' involvement would certainly tilt a new Labour-led government to the left, but it would hardly be extreme as some are claiming. Continuity would be at the heart of a new coalition.

But after a close look at policy, the striking impression is that, in contrast to what some commentators have been saying and much public perception, a Labour-led coalition featuring the Greens and Progressives would lead the country in a very different direction than a National-led coalition featuring ACT and United Future. In health, prisons, resource management, education, transport, and industrial relations, very real differences between the left and right remain, as they always have.

While the major parties cling to the centre for political gain, there are significant differences to be voting for on Saturday, whatever your political view.