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Molesworth & Featherston (Weekend) – 14 Oct. 2005

Molesworth & Featherston - Weekend Update edition

Business and Political News
14 October 2005

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Government talks
It’s still a bit of a state.

It looks like its time to sack some pundits, promote others (yes, okay sunshine! the cheque is in the mail) and rewrite the shape of the incoming Government.

Setting aside for now the possibility that National will get Act, United Future, NZ First and the Maori Party all inside the tent (and if they do someone will spill the billy and rip the flaps off in no time at all) we seem to be witnessing a sudden change of direction within the caretaker Government.

The main catalysts have been the Maori Party’s naive dallying with National (Tariana Turia should be aware that utu can destroy the whanau as well as the enemy), the long delays in completeing its hui, and Prime Minister Helen Clark’s stubborn and (almost) self-destructive refusal to send emissaries to the Maori party till it was too late. (An odd fear revealed in this morning’s Dominion Post – that the Exclusive Brethren will also fund the cente-right to some unspecified end – a new election? – also seems to be spreading panic in Labour ranks).

On Monday Helen Clark was poised to form her desired minority coalition with Jim Anderton and a range of support parties, but we did warn you it was far from clear where the last piece of the jigsaw puzzle - the elusive 58th vote – was coming from. (Labour plus Jim Anderton and the Greens only add up to 57 and with NZ First abstention Helen Clark would not have been able to pass a budget.)

As we warned earlier in the week in our Governor’s edition: “Of course there is another option: Winston Peters comes on board, his extra MP taking Labour to the crucial 58, and possibly United Future joins the game taking the numbers to 61 and a magic majority. Labour tells its best ally, the Greens, to go hang and dare to do anything other than abstain.

Strategically it makes sense for Helen Clark to strike arrangements to her right, across the centre line of politics, to weaken the combined opposition and leave her options to left and right to pass legislation. That would also allow Labour to present a more moderate face of Government to the electorate in 2008.” It seems to be coming to pass.

The window of opportunity presented by the stand-off between Labour and the Maori Party has been ruthlessly exploited by the other parties ho immediately saw that without the certain backing of the Maori party, or at least its abstention, Labour was desperately vulnerable.

Winston Peters was the first to grasp the present under the tree, although it is not clear how closely he is cooperating with United Future yet. On Wednesday he jumped off the fence into the same position he occupied in 1996 – negotiating with both sides exploiting their need for power to get the best deal for himself.

Our sources tell us his price has steadily ratcheted up (with some pressure from Labour helping him along – they now need his positive, not just passive support) and at time of writing it seems he will not only get major policy concessions but also a senior role outside Cabinet, thus fulfilling his promise not to go into full coalition but equally gaining a whole lot of influence. The crown car speeding him to and from meetings with Helen Clark was a potent symbol of his new power and reminiscent – for those who care to remember it – of 1996 when a state limo was humming outside the door waiting to whisk him away once he made public his decision to back National.

Insiders in Labour say nothing short of the foreign affairs or attorney general role will fulfill his ambitions this time, and Helen Clark has ruled out the latter.

The upshot of Labour acquiescing to him getting a ministerial role, while he objects to the Greens getting even a squeak of power outside Cabinet - is that Labour has all but abandoned hope of keeping the Greens' support. A very angry meeting of that party's negotiators on Thursday morning must have canvassed several dummyspitting options.

The next step will likely be NZ First pressing for even more baubles, as it languidly looks at what National can offer on the other side. Look next for a move by Labour to bring United Future in close too, as a backstop. If that includes ministerial positions as well– and who knows how far Labour will head down the centrist track now it is underway – then the Greens will surely not stick around to back a Government they see as in thrall to xenophobes, racists, homophobes and their own tormenters.

It will be interesting to see how the CTU, meeting in Wellington on Monday for its biennial conference, and the left of Labour with its feminist and gay strain, will react to Labour dealing with Mr Peters and Mr Dunne at the expense of a more left-leaning option. (Who got no ticks at all in the CTU's propaganda in the run-up to the election, then?)

We expect a Government to be formed over the weekend, and certainly not later than Tuesday, which will see Mr Peters and Mr Dunne in ministerial roles, the Greens as close to no confidence as they can get without breaking their commitment not to bring down a Labour-led Government and a tax-cutting policy plan in place that will humiliate Michael Cullen to the point where you wonder why he would bother to stick around.

And as for long term predictions? Well, its goodbye the Maori party in 2008. Labour's campaign cry that a vote for them would be a vote for National has almost come true – and in the current environment only the very brave would completely rule it out.

Certainly the Maori party-Labour animus has delivered a very centrist Labour-led administration with the Maori party and the Greens on the left-wing sideline. And it has consigned to the trash the alternative centre-left Government that the election clearly provided. It is all very strange. We may have to start a lifestyle or gardening newsletter just to get a bit of sanity back into our lives.

Also in the Weekend Update…


The Maori Party’s refusal to give Labour a vote means much more power lies with NZ First and United Future - and they’re extracting plenty.


Treasury’s latest economic advice to the government says the economy is doing better than it said before the election.


Australia is set to adopt new employment laws that replace centralised collective bargaining and substantially weaken unions.


The Weekend Update is a complimentary, condensed edition of the paid-subscription only Governor’s Edition published last Tuesday.

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