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Dunne's Weekly: What Chance A Grand Coalition?

In the wake of last week's election some have asked why no consideration has been given to a grand coalition between National and Labour to limit the influence of ACT and New Zealand First. After all, they say, grand coalitions have worked in other countries, so why not in New Zealand, given that the differences between the two major parties often appear so wafer thin?

The best current example of a grand coalition is in Ireland where the two main parties, Fianna Fail and Fine Gael, came together in 2020. But this is Ireland's first grand coalition and the reasons behind it are specific to Ireland’s history and circumstances which are not readily applicable to New Zealand.

Fianna Fail (the Soldiers of Destiny) and Fine Gael (Sons of Ireland) were formed in the early 1930s following Ireland's 1919-1921 civil war, and the country’s partition in 1922. Fianna Fail was formed by Eamon de Valera after he broke with Sinn Fein (the political wing of the outlawed Irish Republican Army). It favoured a united Irish state, whereas Fine Gael supported the Treaty with Britain that Michael Collins negotiated, and which had led to the establishment of the Irish Free State and Northern Ireland.

Since 1932 Fianna Fail has been the dominant party of government. Whenever Fine Gael has been in power it has usually been in coalition with Labour, or more recently, the Greens. Between them, Fianna Fail and Fine Gael have followed a remarkably consistent policy approach. For example, both Fianna Fail and Fine Gael-led governments oversaw Ireland's rise as the economic Celtic Tiger in the 1980s, and then its recovery from the 2008 Global Financial Crisis. The differences between them are far less ideological than existential, and are still primarily based on the events of 1922. Their common enemy throughout has been Sinn Fein.

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But Sinn Fein has been on the rise in recent years, winning 36 of 160 seats in the Irish Parliament at the last election and becoming the largest party in this year's local Northern Ireland elections. The 2020 election left neither Fianna Fail nor Fine Gael able to form a government without including Sinn Fein, a step, given their history, that was too extreme for either to consider. It was therefore easier for them both to set aside a century's division over what happened in 1922 to form the grand coalition, than to contemplate letting Sinn Fein anywhere near power.

The history of National and Labour in New Zealand has been quite different, based on ideology, despite the wafer thin differences between them both today. National was formed in 1936 as an amalgamation of the conservative, rural Reform Party and the more liberal United Party to oppose what both then regarded as the socialist Labour government.

But over the years, a more comfortable pattern has developed, whereby Labour governments propose, National Oppositions oppose, and then modify once in government. Christopher Luxon's incoming government is likely to be no different in that regard. That pattern, despite reasonably frequent changes of government (there have been more changes of government here in the last 40 years than in Britain, Australia, or Canada) has left us in a generally stable situation.

That means there has so far been no reason for National and Labour to seriously consider working together, and every reason for them to keep on pretending their ideological differences are too great for them to ever think about doing so. (A War Cabinet formed between the two in 1940 to deal solely with war issues had lasted barely two years before National walked out in 1942.) While the move to MMP in 1996 introduced more diversity into New Zealand politics – over 100 parties have been formed under MMP but only 6 have made it to Parliament – the dominance of National and Labour has remained. Although their combined vote share at last week’s election was the lowest for over 20 years, none of the other parties in Parliament currently poses a numerical, let alone existential, threat to their duopoly. So there is no reason for National and Labour to consider working together in a grand coalition.

A grand coalition only became an issue in Ireland when a small party with a policy agenda neither of the major parties could accept won nearly a quarter of the seats in Parliament, and it seemed impossible to form a government without them. It would take a similar turn of events in New Zealand to make a grand coalition a possibility. But it is hard to see that happening any time soon. Although they are both parties on the rise, neither the Greens (10.6% of the party vote) nor Te Pati Maori (2.5% of the party vote) look likely to be winning around a quarter of the seats in Parliament in the foreseeable future. So long as they, or ACT and New Zealand First, continue to secure vote shares at around their current levels, there will be no shortage of potential coalition partners for National or Labour.

Therefore, like the Tweeedledum and Tweedledee of New Zealand politics they have become, National and Labour will happily carry on their own separate ways as they have done for nearly 80 years. Their staunch belief the differences between them are insurmountable and the lack of any real threat to the system they have established over the years give neither of them the incentive to ever consider a grand coalition.

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