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Cablegate: Nz Labour Forms Government: Coalition of The

This record is a partial extract of the original cable. The full text of the original cable is not available.

C O N F I D E N T I A L WELLINGTON 000807

SIPDIS

NOFORN

STATE FOR D (FRITZ), EAP/ANP, EAP/EP, EAP/RSP, INR/EAP
NSC FOR VICTOR CHA AND MICHAEL GREEN
SECDEF FOR OSD/ISA LIZ PHU
PACOM FOR J2/J233/J5/SJFHQ

E.O. 12958: DECL: 10/16/2015
TAGS: PGOV PREL NZ
SUBJECT: NZ LABOUR FORMS GOVERNMENT: COALITION OF THE
UNWILLING

(U) Classified by: Charge d'Affaires David R. Burnett, for
reasons 1.4(b) and (d).

1. (U) New Zealand Labour Prime Minister Helen Clark
announced October 17 the formation of a new government,
involving a Labour coalition with the one-seat Progressive
Party and confidence-and-supply arrangements with New Zealand
First and United Future. Jim Anderton of the Progressive
Party will continue to serve as a Cabinet minister, but his
portfolio was not announced. Outside of Cabinet, New
Zealander First leader Winston Peters will be Minister of
Foreign Affairs, Minster of Racing and Associate Minister for
Senior Citizens. United Future leader Peter Dunne will be
Minister of Revenue and Associate Minister of Health. Peters
and Dunne will be subject to "collective responsibility"
(i.e., required to support government policies) only in areas
covered by their respective portfolios.

2. (U) The arrangements yield a 61-seat majority for Labour,
one month after it won 50 seats to the opposition National
Party's 48 seats in the September 17 elections. The Green
Party has agreed to abstain on votes of confidence and supply
and gets no ministerial portfolios. National, ACT and the
Maori Party are in opposition.

3. (SBU) Labour was unable to ally with the Maori Party
without undermining its own Maori supporters. This forced it
to court the center-leaning parties, New Zealand First and
United Future, which were unwilling to enter into government
with the Green Party. The price of the alliance is steep,
with New Zealand First winning policy concessions on raising
social security, or superannuation, payments; increasing the
size of the police force; raising the minimum wage; and
securing a review of the company tax rate and the carbon tax.
United Future has secured a review of the prostitution
reform law, and Dunne's revenue portfolio may indicate an
opportunity to implement "income-splitting," a policy that
equalizes the marginal tax rate for couples.

4. (U) The Green Party asserted that Labour had been
blackmailed by other parties, with co-leader Jeanette
Fitzsimons adding that the party could not support a
government "held hostage to the policies of New Zealand First
and United Future." Fitzsimons said, in exchange for the
party's abstaining on confidence and supply, the Greens have
won policy concessions on energy efficiency, solar heating
and a buy Kiwi campaign.

5. (C) Comment: Keeping the influential foreign affairs
portfolio outside of Cabinet is unprecedented for this
trade-dependent nation and will make it hard for Labour to
show much initiative in foreign affairs during this term.
While personally appearing favorably disposed to the United
States, Peters' position outside of government may yield him
little true influence over foreign policy. The convention of
collective responsibility will further restrain Peters'
criticism on matters of foreign policy. However, he will be
far more willing than the previous foreign minister, Phil
Goff, to report frankly to Cabinet on U.S. concerns.

6. (U) Post will report septel as other cabinet positions are
announced.
Burnett

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