New Zealand Prime Minister John Key forced Justice Minister Judith Collins to resign on Saturday, three weeks before the September 20 election.

The country’s major newspapers, the New Zealand Herald and Dominion Post, had called for Collins to step down over her links to right-wing Whale Oil blogger Cameron Slater. Investigative journalist Nicky Hager’s book Dirty Politics, published on August 13, revealed Slater’s collusion with Collins and with Key’s staff to smear their political opponents.

Since the book’s release some of the hacked emails on which it is based have been released anonymously online and the scandal has dominated the media’s coverage of the election campaign. The conservative National Party government has come under sustained attack, including from media commentators who had supported National for the past six years. The party, which was previously expected to be re-elected by a landslide, has fallen in the most recent polls, putting it on a par with the opposition Labour Party and its allies the Greens, the Internet-Mana Party and NZ First.

The immediate pretext for Collins’ forced resignation was an email from Slater, leaked to Key’s office, which did not feature in Hager’s book. Slater indicated that Collins supported his 2011 campaign against then-Serious Fraud Office (SFO) chief executive Adam Feeley. Slater was apparently hired to discredit Feeley by multi-millionaire investment banker Mark Hotchin, who was under investigation by the SFO over the collapse of his company Hanover Finance following the 2008 financial crash.

While Prime Minister Key has attempted to dismiss the allegations in Dirty Politics, he declared that the matter raised in the email was “very serious” and initiated an inquiry into whether Collins was involved.

Collins’ resignation points to divisions within New Zealand’s ruling class that have little to do with her links to Slater. Media commentators have argued that Key was forced to sack Collins to boost National’s public support, but this does not explain why most of the media turned against Collins and the government over Hager’s book. After all, Collins’ and Key’s links to Slater were already well-known, and the media had promoted Slater as a legitimate journalist.

Sections of the ruling elite appear to be shifting their support behind Labour and its allies, in the first instance, as a more effective means of imposing the next round of austerity measures on the working class. With the economy weakening, a spate of media commentaries has praised the “fiscally responsible” policies of Labour and the Greens—including Labour’s plan to raise the retirement age to 67 and both parties’ promises to maintain National’s spending cuts and keep the budget in surplus.

In addition, NZ’s election takes place amid increasing geo-political instability in the Asia-Pacific region. The Obama administration has inflamed tensions between China and its neighbours as part of its “pivot” to Asia, a strategy aimed at containing China and ensuring US domination over the region. Washington has built up its military presence in Asia, while encouraging Japan, the Philippines and Vietnam to boost their armed forces and press their territorial disputes against China.

The National government has sought to balance New Zealand’s long-standing strategic ties with Washington with its close economic ties to China, NZ’s number one export market. Labour, on the other hand, represents sections of the ruling elite who favour a much firmer alignment with the US “pivot” and less economic dependence on China.

The Previous Labor government was instrumental in mending military ties with the US that were frayed by a ban on nuclear-armed US warships in NZ ports. It was responsible for committing NZ troops to the US invasions of Afghanistan and Iraq. As the Obama administration has wound up tensions with China, the opposition parties—Labour, the Greens, Mana and New Zealand First—have increasingly resorted to whipping up anti-Chinese sentiment.

Labour and its allies, as well as much of the media, have declared that Collins should have resigned “months ago” because of her links with Chinese business. Collins was accused earlier this year of using her position to help dairy export company Oravida in China. Her husband, Chinese New Zealander David Wong Tung, is a director of the company.

In April, building and construction minister Maurice Williamson also resigned after coming under pressure from the opposition and the media over his advocacy for Chinese property developer Donghua Liu, who had been arrested on domestic violence charges.

For the past two years, the opposition parties have mounted a racist campaign against the sale of farmland to Chinese investors. Labour, Mana and NZ First have also called for cuts to immigration, which is largely from China and India, and scapegoated migrants for the lack of jobs and high cost of housing. At a public debate on immigration in Auckland last Friday, Labour MP Trevor Mallard ranted that New Zealand was “getting a reputation for attracting fat, rich, lazy, unintelligent Chinese students.”

Labour leader David Cunliffe has repeatedly stressed that Labour has “a lot in common” with NZ First, which Labour is courting as a potential coalition partner. NZ First is an openly xenophobic party which has campaigned against Asian immigrants since it was founded two decades ago.

In an August 27 speech in Katikati, NZ First leader Winston Peters ludicrously declared that the recent sale of a handful of farms to Chinese company Shanghai Pengxin was part of a “takeover” of New Zealand by “an arm of the Chinese state... It’s called colonisation!”

Collins’ resignation prompted an outpouring of feigned outrage and grandstanding from the opposition parties, who are all promising to “clean up” politics if elected. Cunliffe told the media that if Collins had “undermine[d] her own chief executive on behalf of a commercial interest” then this “would show corruption that goes to the heart of the government.” He called for a police investigation into the matter, while the Greens and NZ First demanded a Royal Commission of inquiry into all the claims in Dirty Politics. Mana Party leader Hone Harawira described Collins’ actions as “evil.”

Green co-leader Metiria Turei told TV3: “New Zealanders need to choose: do they want the dirty politics of John Key and Judith Collins, or do they want clean politics from a new progressive government?”

What a fraud! The reality is that if Labour and its allies are elected they will aggressively impose the economic crisis on working people through further cuts to social services. The parties will carry out attacks on Asian immigrants and will deepen NZ’s military alliance with the United States, in preparation for war.