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Cablegate: Clark Shakes Up Cabinet, Hopes to Refresh Party Face

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RR RUEHNZ
DE RUEHWL #0786/01 3040547
ZNR UUUUU ZZH
R 310547Z OCT 07
FM AMEMBASSY WELLINGTON
TO RUEHC/SECSTATE WASHDC 4847
INFO RUEHNZ/AMCONSUL AUCKLAND 1516
RUEHBY/AMEMBASSY CANBERRA 5009
RUEHDN/AMCONSUL SYDNEY 0590
RHHMUNA/CDR USPACOM HONOLULU HI

UNCLAS SECTION 01 OF 02 WELLINGTON 000786

SIPDIS

SIPDIS
SENSITIVE

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

E.O. 12958: N/A
TAGS: PGOV NZ
SUBJECT: CLARK SHAKES UP CABINET, HOPES TO REFRESH PARTY FACE

1. (SBU) Summary. Prime Minister Helen Clark announced a reshuffle
of her Cabinet on October 31. While the foreign, defence and trade
portfolios remain unchanged, Clark has elevated several newcomers to
important ministerial portfolios. Many observers see this reshuffle
as Clark's last chance to rejuvenate her party before next year's
election. The opposition National Party has criticized the
reshuffle as mere window dressing which essentially left the same
people calling the shots. The announcement avoided any major
changes and is unlikely to boost Labour's weak standing the opinion
polls. End Summary.

Main External Portfolios Remain the Same
----------------------------------------

2. (SBU) Clark has decided not to alter her government's main
external (Defense, Foreign Affairs, Trade) portfolios. New Zealand
First Party Minister Winston Peters remains as Foreign Minister and
Phil Goff retains his Defence, Trade and Trade Negotiations
portfolios. Goff does, however, hand-off Pacific Island Affairs to
Winnie Laban, a former State Department International Visitor (IV)
of Samoan descent and potential future star. This provides Goff
(who is often touted as the next leader of the Labour Party) an
important domestic portfolio and rewards Laban, who has served her
apprenticeship Associate Minister with distinction. Deputy Prime
Minister Dr. Michael Cullen stays as Finance Minister, but takes on
the responsibility for Treaty of Waitangi Negotiations, an often
complex and fraught portfolio dealing with the Government's
historical reparations with Maori.

Clark Looks to Proven Performers
--------------------------------

3. (SBU) Clark has called on two of her most accomplished Cabinet
performers to replace much maligned ministers and bring order their
two important, yet problematic portfolios. Phil Goff takes on
Damien O'Connor's troubled Corrections portfolio. Annette King
retains the Transport and Police portfolios and picks up the hefty
Justice portfolio from the embattled Mark Burton, whose tenure as
Justice Minister was widely panned by political watchers.

Newcomers to Labour's Front Bench
---------------------------------

4. (SBU) There were two newcomers to the front bench. Rising star
David Cunliffe, a former New Zealand diplomat, was elevated to the
front bench and given responsibility for Health, one of the biggest
and most sensitive domestic portfolios. By giving Cunliffe such a
politically sensitive social portfolio in the lead-up to an
election, Clark demonstrated how much confidence she has in him. In
an unexpected move, Chris Carter joins Cunliffe as the other new
entrant on the Front Bench. Carter takes over from the retiring
Steve Maharay as the Minister of Education.

Prominent Minister Demotion After Fracas
----------------------------------------
5. (SBU) As expected, Clark demoted the controversial Trevor
Mallard from the Front Bench and took away most of his existing
portfolios after he punched an opposition National MP the previous
week. The long-serving Mallard will now reside in the second tier
of the bench. However, he does pick up some new and not
insignificant ministries - Environment, Labour and Broadcasting -
and retains his State-Owned Enterprises and Associate Finance
portfolio. It remains unclear whether this is a permanent demotion
or merely a period of penance.
6. (SBU) The other main movers in the reshuffle include Clayton
Cosgrove, another recent IV, into the Immigration portfolio; Ruth
Dyson who takes change of the Ministry of Social Development (read
Social Welfare); David Parker adds State Services (which has
oversight for the bureaucracy) to his responsibilities for New
Zealand's Climate Change Strategy and Energy portfolio, and
28-year-old Darren Hughes as the Minister of Statistics - albeit
outside of Cabinet - and the Deputy Leader of the House.
Cabinet New Entrants
--------------------
7. (SBU) There are three newcomers to Cabinet. It is uncommon for
MPs to make it straight into Cabinet in their first term in
parliament. However, the highly regarded Shane Jones and Maryan
Street now have the chance to demonstrate the potential that many
see in them. Jones, a Maori MP who some regard as future leadership
material, takes on the role of Minister for Building and
Construction, as well as associate roles in Treaty Negotiations,
Immigration and Trade. Street, a former Labour Party President,
takes up weighty roles as Minister for Accident Compensation
Corporation (ACC) and Housing, and also holds associate roles in
economic development, tertiary education. Steve Chadwick rounds off

WELLINGTON 00000786 002 OF 002


the Cabinet freshmen. Although Steve has two terms under her belt,
she has long been thought of as future Cabinet material. She now
takes up roles as Minister of Conservation, Women's Affairs, and
Associate Health.
Opposition Party Labels Reshuffle a Failure
-------------------------------------------

8. (SBU) The Opposition National Party was quick to criticize the
reshuffle as a "failure in leadership" and lacking in the new faces
Clark promised. National leader John Key claimed that Clark failed
the leadership test by rewarding Trevor Mallard instead of punishing
him for his behavior in Parliament. Key regarded Mallard's
influential new responsibilities and retention of his State-Owned
Enterprises and Associate Finance roles as a promotion rather than a
demotion. Key also called the reshuffle "a lame exercise in
recycling, not renewal." He noted that "the same people are still
in charge - Helen Clark and Michael Cullen. They are the same tired
old faces singing the same tired old songs." As the election
approaches, Key will be banking on the new Cabinet needing time to
master their portfolios and therefore unable to impress the
electorate.

9. (SBU) Comment. PM Clark faced two challenges in this prelude to
her fight for a fourth term: to refresh a tired Cabinet and replace
ministers who had stumbled badly. An initial survey suggests that
Clark has met the second challenge. Moving safe and competent hands
such as Goff and King to oversee the two pressing problem areas of
Corrections and Justice is a prudent move. Elevating the
highly-regarded Cunliffe, Cosgrove, Hughes, Jones and Street, while
expected, should help to provide the freshness and sound management
that only talented newcomers can provide. However, Labour's pool of
talent is not very deep. Many of the same faces remain and most of
the changes have been lateral instead of vertical. It is unclear if
the changes will provide the polling boost to Labour that Clark
clearly would like to see. End Comment.

McCormick

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