Alternative coalition scenarios to consider

Winston Peters seems to be faced with a fairly straightforward choice when it comes to forming a coalition government – he needs to decide between Labour or National. And we’re expecting those parties to throw everything at Peters in the hope he will pick them.

At least that’s the assumption most have been working under. But are there other credible options available to Peters and the major parties? Below are three broad government formation possibilities worth considering. 

1) New Zealand First to go on the cross benches
Increasingly commentators are talking about Winston Peters deciding to stay out of the next government, and instead position his party on the cross benches. This would allow others to govern, with New Zealand First having day-by-day leverage in determining whether legislation is passed. 

Vernon Small has best canvassed this idea in his column, Winston Peters' crossbench option would have National sitting uncomfortably in seat of power. Small explains, with input from public law specialist Andrew Geddis, that New Zealand hasn’t really seen this option properly used under MMP yet, and the most likely version would see New Zealand First abstaining on all votes of confidence and supply, allowing another party – probably National – to govern. 

According to Small, “The option is seen as ‘live’ because Peters has left himself only four to five days between October 7 and October 12 to negotiate a deal with the other parties. That is seen as a very tight timetable for Peters to negotiate with at least two parties especially if he wants to nail down specific policy concessions.”

David Farrar outlines the benefits of this arrangement for New Zealand First: “It is all power and no responsibility. You have the swing vote on every piece of legislation and you might bring the government down at any stage, so they will come grovelling to you to ensure the Budget passes etc. But you have no formal agreement for policies or ministerial positions…. So in one sense, this is a safe option for NZ First. They are not part of the government, they are not responsible for anything the government does, and hence won’t be blamed if the government is unpopular” – see: Could Winston sit on the cross benches?

The major downside to this “independent” cross bench scenario is that it could result in less stability and hamper a government’s ability to proceed with a clear agenda. For New Zealand First, the major downside would be that it would play no part in governing and have no portfolios or daily input into cabinet decisions and appointments. However, in legislative terms, they would have a strong impact on what the government could or couldn’t do, and they could leverage that for non-legislative gains. 

But is that really what New Zealand First wants? Quite possibly, according to former deputy leader, Tau Henare, who says “he expects his old boss to side with no one, and opt for the cross benches” – see Newshub’s What Winston Peters will do, according to those who know him. 

And National might even be keen on that option, too. According to Politik’s Richard Harman, “There were a number of sources inside both the National Party and caucus who acknowledged this and picked up on a suggestion made earlier in the year privately to some National MPs by Sir John Key that the best arrangement might be to have Peters abstain on confidence and supply and vote on a case by case basis on legislation” – see: English faces uphill battle. 

Harman says “The downside of that is that he could end up holding the whole Parliamentary process hostage which might only be able to be resolved by a snap election. Politik understands this scenario has been discussed at the highest level within the National Party where officials are wary of the idea because they believe any government calling a snap election risks alienating the electorate.”

There’s also a related – but highly unlikely - scenario that Andrew Geddis raises: “If NZ First actively cast its votes against both National and Labour, no party could reach a governing majority and New Zealand would need to have a new election” – see Emma Hurley’s What if Winston Peters doesn't go with Labour or National? 

2) National walks away from a deal
Numerous commentators and partisans on the political right have been talking up the idea of National choosing to go into opposition rather than yield to a difficult and possibly damaging deal with New Zealand First. 

For example, National Party blogger David Farrar has raised the issue quite frequently recently. In his blog post, How does NZ First survive?, he says: “I’m quite keen to have Winston go with Labour and Greens. It will be sad for the country, but good for National in the long term as they’d ride a wave of discontent in 2020 and only need to pick up two more seats to govern."

Similarly, see his post, Rating the election nights, in which Farrar says, “I’d prefer National to form the Government as I think Bill English is a great Prime Minister and would achieve a lot in another three years. But you have to go into opposition at some stage."

Conservative political commentator Liam Hehir also urges the National Party leader to: Walk away, Bill. Hehir says: “Bill English needs to be willing to walk away from Winston Peters. And, after watching Mr Peters’ press conference, I’m starting to think he should be ready for it. One can understand why Peters wishes to play his cards close to his chest. You can’t negotiate in public. He played the Sphinx all throughout the campaign — he’s hardly going to abandon that approach now. But his irascible performance is a reminder about governing with New Zealand First. Under the scrutiny that comes with power, the party’s dysfunction and internal contradictions will come to the fore.”

Political journalists have discussed this option, too. Tracy Watkins reports on “rumblings from within National that maybe they should sit this one out” – see: Winston Peters is in the box seat, and don't we know it. The logic is: “Better to let Labour have Peters and return in three years, credibility intact, is the logic.”

There is division within National about walking away, according to Richard Harman, who says “what is clear is that the National party membership will not want to see too much given away in the government formation talks even if it means going into opposition” – see: Party to English – Hold the line. 

Harman also reports senior party officials are worried some of the parliamentary leadership “might feel they have only another three years of political life left in them and they would prefer to spend that time in government” and are therefore likely to give too much away to Peters to ensure this happens. He quotes a party official: “But if that means we’re in Opposition for nine years after the next election then it won’t have been worth it."

The Herald’s Fran O'Sullivan also urges National to turn away from Winston Peters and look for other options. As well as looking to the Greens, “English could talk with Labour's Jacinda Ardern about some cross-party initiatives that the two main parties could develop” – see: Hail Caesar - calling the tune with just 7.5%. 

3) Labour walks away from a deal
There are plenty of good reasons for the Labour Party to avoid going into a coalition government with New Zealand First. And although Wayne Mapp might be a former National cabinet minister, he persuasively puts these reasons forward in his Herald article, Four reasons why Labour could be better off in opposition.

It mostly boils down to the belief that Jacinda Ardern and Labour are likely to be in a much better position to form a government in 2020. But the argument is unique because Mapp draws on the lessons he and National learnt from being in a similar position in 1996, which went badly for National. 

Also coming from the right, Mike Hosking asks: Is opposition better for Jacinda Ardern than grovelling to Winston Peters? And here’s Hosking’s advice if negotiations with New Zealand First don’t go well: “I'd call a press conference, I'd tell the world what Winston asked for, tell them why I wasn't going to agree to it – and tell them the destruction of my party and government simply aren't worth it... and I'll see when it all implodes. And I bet you anything you want ... the party's popularity would go through the roof. You see it's all about the balance of power – by grovelling to a bloke with nine seats, by looking like you're desperate, but not genuinely having the belief you don't need this. You start out on the back foot. And that rarely ends well.”

This advice isn’t just coming from Labour’s opponents. Chris Trotter also believes the differences between Labour/Greens and New Zealand First are just too big to bridge: “It would be an enormous error for New Zealand’s progressive community to convince itself the deep contradictions embedded in the manifestos of Labour, NZ First and the Greens can somehow be overcome.

"Far better for Labour and the Greens, the two parties who are, at least theoretically, ideologically compatible, to spend the next three years developing a suite of progressive policies capable of making a real difference to the lives of the many – not the few” – see: The last thing progressive New Zealand needs is a coalition of contradictions. 

Pushing New Zealand First towards National might allow Labour to claim the high moral ground according to Alex Tarrant, who writes that Labour could argue “that it wasn’t prepared for Peters to run up expenditure and government debt beyond ‘prudent’ levels. It will also allow Labour to imply that National must have offered more to Peters on big-spending policies than Labour was prepared to. The hope for Ardern and Grant Robertson would be that National suddenly finds itself being attacked on throwing fiscal responsibility out the window with a set of coalition bribes” – see: The battle for the fiscal high ground remains politically relevant. 

And in terms of finance, it’s possible that New Zealand First could make some difficult demands of Labour. Audrey Young writes “There have been some whispers that he could try to get former Labour finance spokesman David Parker appointed Finance Minister over Grant Robertson, Ardern's political soul mate” – see: Winston Peters: 7 per cent of the vote, 100 per cent of the power.

Finally, for the best political satire about the coalition negotiations so far, see Toby Manhire’s Will Winston reel in blue cod or a red snapper?, Andrew Gunn’s Winston and the ill-behooving menu, and Steve Braunias’ Secret Diary of Winston Peters.