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Labour Boss Talks About Debt, Factions and 90ths

Politics: Labour's President Talks To Scoop About Debt, Factionalism, And Becoming The Party Of Choice For New Zealanders

By Selwyn Manning - Scoop co-editor
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Scoop Audio.Scoop Audio (click here to listen): Selwyn Manning and Noelle McCarthy discuss on 95bFM: Labour's 90th birthday celebrations, challenges, and an interview with its president Mike Williams on claims of debt, factionalism, and distance.


graphic by Scoop Lyndon HoodIf some Labour Party loyalists are to be believed, financial and factional challenges are confronting members as the party moves toward celebrating its 90th birthday. Insiders cite post-election debt, fears of defeat to National in 2008, and talk of a dwindling membership as three factors that lie at the centre of a pesty mood overhanging many party faithful.

Is this talk accurate? Is it as some critics suggest symptomatic of a party that is charged to rule for nine years, running out of steam, ideas, confidence? A party exhausted of talent, high profile future candidates, facing the daunting task of making history again desperate to return a fourth-term Labour government to the treasury benches?

Labour Party president Mike Williams says no to all these accusations and talks to Scoop about the claims and other accusations, and his vision for a progressive Labour Party that he says can carry its supporters and the nation beyond its 90 years to be entrenched as the governing party of choice.


Insiders say the New Zealand Labour Party is facing mounting debt in excess of $100,000.00. They say support from business is beginning to ebb and costs of holding brand-Labour together are mounting. The gossip it appears is being spread.

But Labour Party president Mike Williams says there is no substance in the claims: "We always finish election year with a debt and we erode that over the next year, and then we build up money for the election year. It is a strange cycle for a business, you do have one year where you borrow a lot of money, a year where you pay it back, and another two years where you accumulate. I wont tell you what the debt is, I don't know what it is on a daily basis. But it is considerably less than $100,000.00."

"I get it (the debt levels) signalled to me every Friday. I get the bank accounts sent to me and I can tell you that that is not correct. It is slightly less than $50,000.00 I would imagine. It depends, there are rhythms for example we get a lot of memberships in in March and at that point the debt was zero. If you set it against assets - we have about two and a half million dollars worth of assets and Labour Party properties - our debt to asset ratio is microscopic."

So what exactly was the Labour Party's ceiling debt after the 2005 election? Did it reach a ceiling of $400,000.00?

Mike Williams: "No, no we didn't go anywhere near that amount."

But over the 100 at one time?

"Yeah. And that $400,000 in 2002 was driven by the fact that we had an early General Election and we had not got all the corporate money in," Mike Williams says.

Some are angered that the Labour Party plans to seek "a tithe" from the pockets of those living within Labour strongholds: south Auckland, west Auckland, from loyal Labourites through the cities and provinces who will be asked to contribute to the Labour Century Fund by way of renewing membership commitments, raffles, donations.

Local LECs (Labour Electorate Committees) will be required at this weekend's celebrations to forgo raffle money to fork this out to the Party, and, levies set by the party and retrieved from the LECs will be increased above inflationary levels, as will the levies gathered in from sitting MPs, to help the Party reform toward match-fitness, toward being capable of fighting off the National Party again in 2008.

Mike Williams says this is true: "That is part of it. We are reintroducing a pledge programme - we had a thing in the 1980s called VFL where we had people give us ten bucks a month or something. We have dusted that off, renamed it the Labour Century Fund and 50 percent of the contributions go to the electorate organisations and 50 percent goes to head office and is used by the (Labour Party's) New Zealand Council.

"After every election we review all income and expenditure, and we increase our levy on members of Parliament. We are increasing levies on our electorates, slightly ahead of inflation. I have adopted a slightly more ambitious corporate fundraising target than normal.

"I am a businessman and run a very tight ship. And we will be in surplus by the end of the year," Mike Williams says.

So where do the claims of deep indebtedness come from, Mike Williams does not know: "Our budget aims us to be out of debt completely by the end of the year. It is a trivial amount now. It is a publicly known fact that in the 2002 election we went $400,000.00 overdrawn and we cleaned that up within a year."

The corporate environment in New Zealand, Mike Williams says, is healthy with feedback from the "captains of business" being strong. It is, he says, "very positive. The companies I have visited I say to them 'tell me this, have your last five years been the most profitable of your business life?' And virtually all of them say 'Hmmm, yes!'

"And that means dollars for the Labour Party. That's what drives them, these hard-heads - I am not talking about the Business Roundtable or lunar ticks like that, but the actual captains of industry have had it good. You only have to consult the sharemarket you will see rising share values since 1999 when we were elected. You are looking at sustained profitability. When was there a big corporate bankruptcy in New Zealand? I can't remember one."

Others say the Labour-led Cabinet has stopped listening to its friends. That blue-collar workers and business people alike are noticing a distance. That member numbers are dwindling, that a malaise is setting in and that Labour List MPs are chomping at the bit to replace incumbent Labour electorate MPs - particularly those who have built up strong majorities in recent elections.

"No that is nonsense," he says. But what of the Labour Party membership? "It is rising. And a report at the last New Zealand Council meeting showed it is building again." And with respect to the provincial membership dwindling, and talk that the Mt Roskill electorate membership has sunk to double figures? "No that is utter nonsense. I don't know offhand but if the claim it is less than 99? I very much doubt that.," Mike Williams says.

The Labour president says the party is in good health, considering it is recouping from a hard fought election where it beat off the strongest push for government from the National centre-right opposition in recent years.

By mid-2005, Labour pollsters became well aware that the National Party was set to retake large pockets of vote in the provincial seats and some marginal city seats. The prediction proved accurate in Northcote, Hamilton East, Mahia (East Coast), Napier, Tukituki, Whanganui, Wairarapa, Aoraki, Invercargill, Otago, and came within a thousand votes in Rotorua and Hamilton West, and a sliver of a vote away from winning Otaki.

Where in 1996 the National Party lost seats throughout its heartland that it previously thought safe, in 2005 the pendulum began to swing back.

Many other Labour held seats saw a significant reduction in the majority for the sitting member. Party list votes dropped. A handful of south Auckland seats bucked the trend and returned strong support for Labour.

This oscillation of party list vote proportion is what is concerning Labour faithful. Should it continue to swing National's way, most of the 'new blood' brought into Labour in 2005 via the party list will be spent blood should current trends continue.

A Scoop contact inside the Labour Party said: "The NZLP is a mile wide but an inch deep in many places right now. The hiding we took in regional and rural New Zealand has left us dangerously exposed, very similar to what happened to National after 1996.

"Rather than exploring ways to win back party votes and retake seats, many list MPs seem content to either tread water or worse still try and retrench to retained safer seats. Totally pathetic."

So what is to be done?

There's a 'sniffing strategy' underway where Labour list MPs are circling strong Labour electorates with an intent to replace incumbents and stand as electorate candidates. Problem is, the old Labour dog, factionalism, is raising its head within Labour and incumbents are refusing to budge - irrespective of how historic their use-by-date may be.

Some say the strategy has moved from "ease the squeeze" to (as former ALP leader Mark Latham put it) "grease the squeeze".

Consequently, pressure is beginning to tell on the Labour Electorate Committees. The LECs are made up of members who have loyally served their local MPs, in some cases for years. They feel the stress when 'outsiders' begin pressuring to have the incumbent replaced. It appears that pressure is in places palpable. Inside these communities, 'membership stacking' (a form of candidacy insurance) is faired as a likely step toward eroding not only support for incumbents but also the balance of the LEC leadership and memberships. The affect is a shift in grass-roots power. And that leads to resignations.

Is this what lies behind member claims that supporters are switching off the party?

Scoop again raised the claims with Labour's Mike Williams.

In the 2005 General Election voters saw the National Party make inroads into provincial New Zealand. Some Labour contacts believe the consequential effect of National's run has caused an erosion of Labour Party memberships in the provinces. Let's pluck out a few examples: Napier, Tukituki and the two Hamilton electorates.

Mike Williams: "Well we held one of the Hamilton seats. It provides a bit of a bounce-back I think. Earlier this year I went to the Annual General Meeting of the Hamilton East LEC, and an entirely new crew of young people took over. We now have a Labour Youth branch at Waikato University. And affiliated to the Hamilton East LEC. My impression is a lot of the things that happened in the last election were good for the long-term future of the Labour Party. In particular was the abolition of interest on student loans. That got us a tidal wave of votes from young people. We saw all the young people coming onto the roll in the campaign period and it has also resulted in the strengthening of our youth area.

"We certainly have work to do in some provincial towns. But you know, a nasty shock does not always hurt. We lost Napier for the first time since 1951. Whanganui for the first time since 1975. They will bounce back."

Some say the Labour Party candidate talent is poor - are saying the quality of candidates needs to improve.

"No body knows who they (the new candidates) are yet, do they. It is an impossibility, we haven't called for nominations. We haven't called for statements of retirement. What I can tell you is that I have been approached by some very promising people who want to be Labour Party candidates - members and non-members. I think you will be surprised to see some of the names that go forward," Mike Williams says.

Labour List MPs have been eyeing strong electorates, like the south Auckland electorates, Wellington Central and others as vehicles for political longevity. The problem is, some incumbents particularly those in the south Auckland electorates are reluctant to move on.

There's a conundrum here. How can Labour show a fresh face when incumbents passed their use-by-date and refuse to budge?

"There are a whole lot of questions there. Number one, you can take it as read that list MPs are always looking around for electorates to run in. We absolutely encourage that. We are not that fond of list only candidates. We are happy if it is someone like Michael Cullen. But we actually prefer that our candidates are both on the list and in electorates. And of course the results of the last election make it a nonsense of what you just said. It was in fact much safer to be just on the list than on a provincial seat."

But surely the question becomes more relevant should one see that the National Party's creep into the provinces, and the results of the last election, result in a drop in the Labour Party list proportion percentages at the next election.

"Yes, but you have to be very careful about that because for example, Diane Yates in Hamilton East was defeated on 1000 more votes than she was elected on. What happened in many of these places like TukiTuki and Hamilton East is that instead of the candidate vote being spread among a group of right wing parties it coalesced around National. So Labour did no worse in the electorate vote but tended to lose the seat. And that happened in the party vote in a lot of places too."

Could it be this reform of the Labour Party, this modernization that Mike Williams speaks of, may be the cause of some insiders losing confidence in the Labour machine? Where they say factions must stop jostling among the faithful before damage to the Party is done.

The suggestion is: internal party pressures are aggravated by factionalized sections of the Parliamentary wing: electorate MPs v Labour List MPs, unionites v what remains of the backboners v neoconservatives.


The New Zealand Labour Party may be rebirthing as it prepares to celebrate its 90th birthday. But it is clear it will need to reform, wake up to its internal strains, and attract new blood if it is to win the next General Election in 2008. In the absence of a natural centre-left coalition partner of size and influence, Labour is in danger of losing touch with its worker, blue collar supporter and voting base. Those who desire strong industrial policy, progressive regional development, a party in government that is in touch with the nations grassroots people, representing socially and justly principled policy, it is theorised are becoming disenchanted with the direction of the party.

Political pragmatism has become the Labour way, certainly evidenced by its loosely arranged association of 'friends' that provide Labour with a pair of stilts upon which to govern. The arrangement has distanced the party from those it intended to represent. It led to associations with people not of the Labour cloth. Those of a left persuasion do not find New Zealand First leader, Winston Peters (and his extreme account of New Zealand conservatism) nor United Future leader, Peter Dunne (and his slow considered brand of conservatism) friends at all!

The cause of political pragmatism was a tight General Election vote. It may also be the single remaining reason behind a slide in Labour Party support.

So is Labour's salvation to be found within List MPs replacing the aging and tired electorate MPs?

As one Labour insider puts it: "It's simply too risky to risk an open seat selection at this time. There is no such thing as "easing the squeeze". As list MPs watch the party vote decline, they start to become desperate. So it becomes a bit of a "grease the squeeze" situation, self preservation as opposed to leading a government."

Other critics suggest that Labour is stretched between keeping National away from the centre and a void on the political centre-left - and that Labour is now not harnessed, not held back from stealing the centre, centre-right ground that National once held.

Mike Williams: "My view is that the National Party in order to galvanise its own troops, moved dramatically to the right under Don Brash. You only have to read the Orewa speech to know that. You only have to read the economic policy. You only have to read the revival of market rents for state house tenants policy - that shows the National Party moved dramatically to the right. Now that scared a lot of people and really enabled us to occupy that centre ground. I think they have a difficult conundrum. In order to get that loyalty from its own troops, National has to have these hard-right nostrums. And that actually turns a lot of people off."

Does the Labour Party president see the New Zealand political landscape transforming over the next five years toward a two party race, in particular a domination between the National Party and the Labour Party?

"It is very hard to say that one, I wrote an article for a Victoria University publication after the 2002 election. What I raised there was you have a number of parties on the right of centre, United Future did well, New Zealand First recovered, ACT, remember it used to have seven MPs.

"Three years later that rightwing vote occluded all around National. It could happen that it returns to a two party situation, it may not. The only experience we have to rely on is Germany. What happened there was a plethora of parties shook down to about four within three or four elections and had the Social Democrats versus the Christian Democrats, later on they had the Greens and earlier on the Free Democrats (a centrist party) emerge. And if that same pattern happens here then it will become more of a two-horse race. But it is just impossible to know.

"Our strategy is simply to maximise our party vote, because it is clear the party that wins the most votes, will get first and the best chance at forming a government. That is what happened (in 2005) we beat National by around 50,000 votes in the party vote, and we are now the government."

Is the Labour Party, on the eve of its 90th Birthday celebrations, still the centre-left party of choice?

Mike Williams: "Absolutely, and we have the Labour Party's 90th Birthday celebrations in Wellington on Friday night, and the one in Auckland on Saturday and I feel we have stayed pretty true to our roots and reflect the basic values of Kiwis fairly strongly. "


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