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Cablegate: New Nz Govt Announced

VZCZCXRO2379
RR RUEHDT RUEHPB
DE RUEHWL #0389/01 3220512
ZNR UUUUU ZZH
R 170512Z NOV 08
FM AMEMBASSY WELLINGTON
TO RUEHC/SECSTATE WASHDC 5542
INFO RUEHNZ/AMCONSUL AUCKLAND 1795
RUEHBY/AMEMBASSY CANBERRA 5324
RUEHAP/AMEMBASSY APIA 0513
RUEHDN/AMCONSUL SYDNEY 0761
RUCNARF/ASEAN REGIONAL FORUM COLLECTIVE

UNCLAS SECTION 01 OF 03 WELLINGTON 000389

SIPDIS
SENSITIVE

STATE FOR STATE FOR EAP/ANP
PACOM FOR J01E/J2/J233/J5/SJFHQ

E.O. 12958: N/A
TAGS: PGOV PHUM KDEM NZ
SUBJECT: NEW NZ GOVT ANNOUNCED

WELLINGTON 00000389 001.2 OF 003


1. (SBU) Summary. On November 16, a mere eight days
after election day, New Zealander's Prime Minister-
elect John Key announced that a new center-right
government has been formed after he secured the support
of three smaller parties. A new National-led minority
government will include the ACT, United Future and the
Maori Party. On November 17, Key announced his
incoming government's ministerial lineup, which
included the leaders of the three support parties that
will sit outside of cabinet. The new Foreign Minister
is Murray McCully; Tim Groser is the new Trade Minister
with Dr. Wayne Mapp as the incoming Defence Minister.
Key and his Cabinet are expected to be sworn-in on
November 19 before he departs for the APEC Leaders
Summit in Peru. Key has gotten over his first
governance challenge - forming a government faster than
most expected. End Summary.

New Government Formed
---------------------
2. (SBU) On November 16, Prime Minister-elect John Key
announced the formation of a National-led minority
center-right government after he had signed separate
agreements with the ACT Party, United Future and the
Maori Party to secure their respective support. The
governing arrangement with the three parties is not a
formal coalition. Rather, each party negotiated with
National an agreement that will enable National to
survive no-confidence votes in Parliament. This
support will also preserve the supply of critical
government funding. National now has 70 votes on
confidence and supply issues of the 122 seats in
parliament.
3. (SBU) All three separate confidence and supply
agreements negotiated with National placed greater
emphasis on relations between the respective smaller
party and National rather than specific policies or
legislation. A hallmark of Helen Clark's governments
was the number of significant policy concessions she
made to her support parties during negotiations.
Although Key has made some concessions of policy and
position, they are relatively minor by comparison. All
three support parties have agreed to support
legislation which works towards confidence and supply
measures with all other legislation to be reviewed on a
case-by-case basis.
New PM and Cabinet to be Sworn in Shortly
-----------------------------------------

4. (SBU) It is expected that John Key and his new
Cabinet will be sworn in by New Zealand Governor
General, the Honorable Anand Satyanand, on November 19.
On November 22, Key is expected to attend the APEC
Leaders Summit in Peru, accompanied by his new Foreign
Affairs Minister Murray McCully, Trade Minister Tim
Groser, the Chief Executive of the New Zealand Ministry
of Foreign Affairs and Trade, Simon Murdoch and the
Chief Executive of the Treasury, John Whitehead.

The New Cabinet
---------------
5. (SBU) On November 17, Key announced his Cabinet of
twenty-eight ministers - inside and outside the cabinet
- the same number as the outgoing Labour
administration. John Key will assume the traditional
Prime Ministerial portfolio responsibilities - Minister
in Charge of the NZ Security Intelligence Service and
the Minister Responsible for the Government
Communications Security Bureau (GCSB). Key has also
chosen to be the new Tourism Minister. Key's deputy
Bill English will be Deputy Prime Minister and will
also take the heavyweight Finance portfolio and the
newly minted Infrastructure portfolio. Murray McCully
will become the Minister of Foreign Affairs, with
former WTO negotiator Tim Groser the Minister of Trade,
Associate Minister of Foreign Affairs and Associate
Minister for Climate Change Issues (International
Negotiations). Dr. Wayne Mapp will become Minister of
Defence. Senior National Party MP Gerry Brownlee
becomes Minister for Economic Development and the
Minister of Energy and Resources. Simon Power will be
the new Minister of Justice, Minister for State Owned
Enterprises and the Minister of Commerce. Dr. Nick
Smith will look after the Environment portfolio, in
addition to becoming the Minister for Climate Change

WELLINGTON 00000389 002.2 OF 003


Issues. The National Party's most senior Maori MP,
Georgina te Heuheu, will be the Minister of Pacific
Island Affairs and the Minister for Disarmament and
Arms Control.
Support Party Ministers Outside of Cabinet
------------------------------------------
6. (SBU) Under the terms of the respective agreements
with National, leaders from National's support parties
will be appointed to ministerial positions. Although
all will be outside of cabinet, these ministers will
nevertheless be "part of the government" in relation to
their responsibilities. This means that each support
party leader is not bound by the convention of
collective responsibility on issues not directly
related to their respective portfolios. (Note: A
similar arrangement in the previous Labour-led
government allowed former Foreign Affairs Minister
Winston Peters to publicly speak out against the
signing of the NZ-China FTA on the basis that the deal
was a trade matter and thus outside of his Foreign
Affairs portfolio. Key and National criticized the
arrangement at the time but since the election, Key
said that in retrospect he had been wrong. End Note).
7. (SBU) ACT's Leader Rodney Hide and deputy leader
Heather Roy are to be ministers outside of Cabinet with
Hide the Minister of Local Government, Minister for
Regulatory Reform and Associate Minister of Commerce.
Roy will be Minister of Consumer Affairs, Associate
Minister of Defence and Associate Minister of
Education. United Future leader Peter Dunne retains
the Revenue portfolio he held under the previous
Labour-led Government. The co-leader of the Maori
Party, Dr. Pita Sharples, will become Minister of Maori
Affairs, Associate Education and Corrections Minister.
The other Maori Party co-leader, Tariana Turia, will
become Minister for the Community and Voluntary Sector
and will be Associate Minister for Health and Social
Development.
The Deal with ACT
-----------------
8. (SBU) Much of the confidence and supply agreement
National negotiated with the right-wing ACT reflects
their mutual objective to curb government expenditure
and cut business regulation. Specific terms include a
commitment to freeze the current Emissions Trading
Scheme (ETS), to establish a special committee to re-
examine the current ETS legislation and examine
alternatives and to repeal the ban on thermal
generation. National will also support ACT's hard-line
'Three Strikes You're Out' on crime within the select
committee.
The Deal with United Future
---------------------------

9. (SBU) The core of the United Future agreement with
National is similar to that negotiated by ACT and the
Mario party: a commitment for the Government to
consult with United Future on issues including the
broad outline of the legislative program, key
legislative measures, major policy issues and broad
budget parameters. Specifically, United Future has
negotiated to maintain the policy, research and
advocacy role of the Families Commission, which the
party helped establish in the previous Labour-led
government. Another central element is a commitment
to progress a long-term medicines strategy for quality
use of pharmaceuticals in the health sector.

The Deal with the Maori Party
-----------------------------
10. (SBU) Even though National did not need the five
Maori votes to form a government, Key went to great
lengths to court this traditional Labour-leaning party.
Under the terms of the deal with the Maori Party,
National will not seek to remove the Maori seats
without the consent of Maori, effectively scrapping its
policy to repeal the electoral seats specifically
designated for voters on a separate roll for the
indigenous Maori. Before the election, Key's stated
position was to move over time to abolish the Maori
seats. The National-led Government will also undertake
a review of the controversial Foreshore and Seabed Act,
a law which served as the catalyst for the formation of
the Maori Party, which opposed it.
Government Formed in Record Time

WELLINGTON 00000389 003.2 OF 003


--------------------------------
11. (SBU) It only took Key eight days to form his
government, the quickest for any government since New
Zealand's first election under New Zealand's
proportional representation MMP electoral system in
1996. (Note. The 1996 National Party-New Zealand
First coalition government took eight weeks to form.
Helen Clark took thirty-two days to negotiate support
and co-operation deals with three parties following the
2005 election. End Note). Few expected he could form
a government in time to attend this week's APEC Leaders
meeting, but John Key has sped past this first
governance hurdle.
McCormick

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