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Key points on New Zealand's new political landscape

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10 November 2008 15:20

Guest blogger: Robert Ayson is Director of Studies, Graduate Studies in Strategy and Defence, ANU.

The centre-right National Party’s unambiguous triumph in New Zealand’s general election leaves Prime Minister-elect John Key (pictured) with a strong political hand. Like all governments since the adoption of New Zealand’s proportional voting system (see this post for a quick explanation) Key and his National colleagues (who hold 59 seats) will need the support of other parties to hold a majority in the 120 seat House.

But the pre-arranged assistance of the very free market ACT Party (5 seats) and the one-man-band called United Future gives Key all the parliamentary votes he needs. Reaching out to the Maori Party, which also won 5 seats (although little more than 2% of the popular vote) is therefore not a requirement of political mathematics, but it shows that Key is already thinking about prevailing in the 2011 election as well.

Labour, in government under Helen Clark’s leadership for 9 years, has been soundly beaten (43 seats), and will take some years to recover. But perhaps even better news for Key is that he will be the first New Zealand Prime Minister in years who will not have to bargain with Winston Peters and his populist New Zealand First party. The ultimate political survivor, Peters became an unlikely Foreign Affairs Minister when Helen Clark’s tiring government needed support from the most unusual quarters. But Peters is a political suvivor no more. And even the prominent Greens (8 seats) did not poll quite as well as some thought they might.

While Key has a strong mandate and few obvious political obstacles in his way, he lacks a correspondingly free hand in the economic realm. Rather like Barack Obama, he inherits an economy in recession, with unemployment rising and house prices falling. While Key has promised tax cuts, delivering them would probably require deficit financing, although he has said that one of his first priorities is to go through public expenditure line by line for each department.

Getting New Zealand out of the economic mire will take all of Key’s talents as a former foreign exchange dealer. And this only adds to the chances that foreign and defence policy – barely an issue during the campaign – will not be a major preoccupation. In any case, as my earlier post explained, Key’s team had decided to neutralise the chances of being weighed down by foreign policy differences with Labour by settling on a bipartisan approach. So the non-nuclear policy remains unaffected, as does the equipping of New Zealand’s defence force with South Pacific requirements largely in mind. Australia should expect continuity rather than change.

But the serious economic challenges of the global downturn will undoubtedly affect the resources available to New Zealand’s diplomats and defence planners. Unlike its Australian counterpart, which under the Rudd Government has been required to cut external affairs expenditure, New Zealand’s Ministry of Foreign Affairs has been busy spending the first part of a A$500 million windfall which Mr Peters was able to procure like a hare from a magician’s hat. But it would be unwise to assume that the larger parts of this budget boost will survive Mr Key’s single-line veto.

And New Zealand’s defence officials were already finding it a challenging exercise to meet the costs of refurbishing New Zealand’s already modest but carefully chosen array of capabilities. Heading towards the country’s first completely all-new defence white paper since National last entered office in the early 1990s, any further budget tightening could require some especially hard choices. Australian officials, long used to seeing their cousins across the Tasman trying to buy a force structure out of a smaller percent of a much smaller GDP, may come to find the comparisons and contrasts even more compelling.

Staring across at Key from the opposition benches is likely to be Phil Goff, the most probable replacement for Clark as Labour’s leader. Goff’s policy strength is not going to be Key’s focus. As a long-serving Labour Foreign Minister, Goff has most recently held the Trade and Defence portfolios. So Mr Key might want to think a while about who holds these positions in his Cabinet, and think twice if tempted to share them out amongst the smaller parties supporting his government. After all, he doesn’t have too many immediate political obligations, having won so handsomely on the weekend.

Photo by Flickr user nznationalparty, used under a Creative Commons license.

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