The 1996 election result gave New Zealand First the balance of power and therefore the choice between putting Labour or National into office. On 10 December, after protracted negotiations with both parties, Peters informed the country that NZ First had chosen National. The gamble to go with National was based upon policy concessions, leadership ambition, and protecting the NZ First brand. But because the party had been so adamant about their refusal to work with National after the election, the decision to then go with National damaged both the party and the electoral system. It also confirmed that the basic ideological flavour of the NZ First was indeed conservative and not – as commentators and voters had perceived it to be – left-of-centre. Moreover it indicated that the party was not founded upon a coherent and stable philosophy. [Read more below]
According to Colin James, the decision ‘was presented as a party decision but to the extent that it was that, it was by ingenuous newcomers acting on his advice. At 5:30pm on decision day they were tending towards Labour. An hour later they bought his assertion that "stability" required coalition with National' (James, Dec 1997). According to Boston and McLeay, 'no formal vote was taken by either the caucus or council. Instead, Peters indicated to those gathering that National appeared to be offering the best deal, and there was no dissent' (Boston and McLeay, 1998: p.231).
Concessions to NZ First
The decision was also understandable, from the point of view that 'National made significant concessions to secure NZ First's support in a variety of areas' (Boston, Levine et al, 1997: p.11). These concessions were mainly in ‘in the areas of immigration, overseas investment, compulsory superannuation (by leaving it to referendum), and aspects of its social policy’ (Boston and McLeay, 1998: p.230). Significantly, National also, at the last minute, agreed to give a newly created position of Treasurer to Winston Peters.
In return NZ First had to give way in their ‘demands for new restrictions on overseas investment and immigration, and the idea of repurchasing the Crown's recently sold forestry assets’ (Boston, Levine et al, 1997: p.11).
The policy similarities and differences
NZ First had a number of policy similarities and differences with both National and Labour:
In policy terms, the party was closer to Labour than National across a wide range of policy dimensions, especially in the areas of monetary policy, asset sales, education, health, social welfare, immigration and Treaty of Waitangi issues; it was, however, spatially closer to National on industrial relations and fiscal policy, and eqidistant from the two parties on the controversial issues of compulsory superannuation and the re-purchase of the Crown's recently sold forestry assets (Boston and McLeay, 1998: p.218).
Although NZ First was closer to Labour on more policy issues than it was to National,
there were some important issues where NZ First and National had a reasonable amount in common, especially in relation to tax policy (where both parties supported further tax reductions), housing (where NZ First preferred only minor modification to National's market-orientated housing reforms) and industrial relations (where NZ First supported most of the provisions of the Employment Contracts Act which National had introduced in 1991) (Boston and McLeay, 1998: p.228).
The political backgrounds of the various members of the party caucus was also likely to have played a role in affecting which party NZ First chose as their partner:
It was also apparent that a reasonable number of NZ First's 17 MPs had National-leaning sympathies, or at least former associations with the National Party. For instance, at least seven of the MPs had been members of National: Peters, Doug Woolerton (the party's President), Peter Brown, John Delamere, Neil Kirton, Peter McCardle and Rana Waitai. Both Peters and McCardle had served as National MPs. A somewhat smaller number had Labour Party connections, notably Jenny Bloxham (the vice-president), Ann Batten, Jack Elder (a former Labour MP) and Ron Mark (Boston and McLeay, 1998: p.219).
Protecting the NZ First brand
The decision to go with National was largely based on the perceived need for the party to retain a valuable and distinctive “brand”. It was feared by the party that if they went with Labour then NZ First would be subsumed as the junior coalition partner and ‘would be seen as having a me-too bit-player role in a government led by a Labour party bent on even more social spending than NZ First was proposing' (James, Dec 1997). Basically Labour and NZ First’s social policies were so similar that the likely results would mean that NZ First would have to share the credit for changes. Going with National meant that NZ First might, by contrast, be able to present itself positively as having hauled National back towards the centre – modifying its extremes. Also, NZ First would be seen as having an influence in social policy with National – and there would be distinguishable achievements that NZ First could present to their constituency of support.
The idea that National was the most likely governing partner to bring about political stability and economic growth was a theme that NZ First MPs continually used to defend their coalition decision (Boston, Levine et al, AQ 1997: p.10).
The coalition decision was also damaging because it smudged and blurred NZ First’s core principles by supporting what had appeared to be NZ First’s main rival. After all, NZ First ‘had set up the National Government as the rhetorical target: their social policies panned for a lack of focus and integration; their economic policies slammed for their dependence on the Reserve Bank. It was clear from these speeches, and from the party's election manifesto, that NZ First regarded Labour as a closer political cousin than the incumbent administration' (Laws, 1998: p.363).
However, there was a certain ambivalence which became a matter of strong public interest when Peters continued to refuse to clarify NZ First’s likely coalition partner. According to Laws, 'It had long been Peters' intention that such political ambivalence should remain a key part of NZ First's campaigning strategem' (Laws, 1998: p.360).
The gamble to go with National
However the decision to go with National was always an obvious gamble, as an election night poll showed that three quarters of NZ First voters preferred a coalition with Labour over National (Kirk, 26 Oct 1996: p.23). Also, according to Vowles' research, ‘two thirds of those who voted for NZ First expected Peters to throw in his lot with Labour and the Alliance' (Trotter, 21 Nov 1997: pp.14-15). Therefore, NZ First could only expect a negative reaction from the voters which had put NZ First into this position of power. This was especially the case with the party’s ‘large Maori following, [which] had more in common with Labour than National’ (Boston and McLeay, 1998: p.218).
There seems to be good reason to believe that the decision about a coalition partner for NZ First was in fact made up prior to the coalition negotiations. Laws later alleged: 'The truth was that Peters was always going to lie down with National. Every fragment of conversation, of body language, of facial expression displayed distaste for the Labour option' (Laws, 1998: p.373). This was because, Laws believed, ‘Peters had come to loathe Labour more than National, if only because he had hoped that NZ First might supplant that party as the Government's prime opposition' (Laws, 1998: p.369).
There was an overwhelming sense in which NZ First and Peters were returning to their real roots. As Peters purportedly said to Laws: "This government isn't just about getting to 1998 or even the next election. We'll carry on past that – we're going to be a real coalition" (Laws, 1998: p.391). Laws understood this to mean that Peters was interested in ‘the kind of coalition in which parties merged forever but appealed to differing voter segments, the Liberal/Country accommodation of Australia being the obvious example’ (Laws, 1998: p.391). This new intention was, according to Laws, an ‘abandonment of the German Free Democrat prototype that had [previously] been our model’ (Laws, 1998: p.391).
The credibility of NZ First was open for ridicule due to the fact that both the NZ First leader and deputy had in the past been so adamant about their refusal to work with National. In July 1996 Henare said, in a speech endorsed by Peters, and which clearly enunciated his view of coalitions, that he would not be part of a government ‘in which Jim Bolger is the prime minister, in which Bill Birch controls finance, or in which Jenny Shipley is in any ministry which gave her responsibility for social policy’ (quoted in Laugesen and Speden, 15 Oct 1996: p.2).
Later, in both September, and on election night Henare declared and that he would not serve in a NZ First-National government. Following the election, however, Henare changed tact on coalitions, and on the question of a place in a NZ First-National cabinet he said, ‘I'm guided by my caucus. I'll do whatever I'm told if it's a caucus decision' (quoted in Laugesen and Speden, 15 Oct 1996: p.2). Likewise, in August 1996, Peters stated his position on coalition by saying that he was not interested in talking to Mr Bolger after the election.
Peters was also justified in chosing National over Labour due to the fact that 'The Centre-Left had performed poorly in the general election – Labour had shed over a fifth of its 1993 support, the Alliance nearly half' (Laws, 1998: p.374). This meant that Labour and NZ First together would not have a majority of votes in the House, and would therefore have to rely on the Alliance’s conditional support for the potential Labour-NZ First government programme – an unattractive situation for NZ First.
In a sense, the decision to go with National was also quite a natural one for NZ First – and confirmed that the basic ideological flavour of the party was indeed conservative and not – as commentators and voters had perceived it to be – left-of-centre in ideology. But the fact that NZ First was considering both National and Labour, and could have easily gone either way, also indicates that the party was not founded upon a coherent and stable philosophy.
[This blog post is part of a series about the history of the New Zealand First party. These posts are being published following the recent decline and then defeat of the party at the 2008 general election. Little academic research has been published on the Winston Peters phenomenon, despite the fact that he and his party have been central to parliamentary politics in New Zealand since the 1980s. Although this series focuses on the early years of New Zealand First, the later years will be dealt with in the future. Considered feedback from readers is very welcome.]