Coalition options a pain for Labour

21:07, Jun 19 2013

The decision by the Greens to dump their money- printing policy - sorry, "discussion document" - has brought to the surface again the tensions within a potential three-headed alternative government.

The four-party manufacturing inquiry compromise report (including Mana), released on Monday, set the scene for the Green U-turn.

When the inquiry was conceived, Labour and the Greens saw it as a signal about the shape of their next government. NZ First leader Winston Peters had been coaxed on board. So much the better. Seen as in "their" camp, it boosted the likelihood of a Labour-Green government.

Back then, Mr Peters was still feeling bruised, Prime Minister John Key had ruled him out of a coalition and NZ First had little option. But now the political scene has a very different look.

ACT and UnitedFuture are near- fatally wounded, the Maori Party is struggling for air and Mr Key is searching for a viable partner.

He has thrown the door open and the old fox has seen the light. Mr Peters has backed away from suggestions the manufacturing inquiry was a template for an alternative government - or even that it should be politicised.


It is still arguable which Mr Peters would enjoy more - booting the Key-led National Government out of office or holding it in thrall.

The simple view is that a clean two- way deal with a strong National Party - as he did in 1996 - is more appealing to him than playing third fiddle in a deal with Labour and a strong Green Party.

In 1996 one of the reasons he gave for rejecting a deal with Labour was the Alliance's refusal to give its unequivocal support. It is easy to see the same scenario unfolding again next year.

But there is history in the mix, too. Mr Peters has propped up a waning three-term government twice before and it has ended badly both times. He was also defended - and treated with respect - by Labour during and after the Owen Glenn donations saga when National was really putting the slipper into him.

There is also the suggestion that, as MPs with Northland bolt-holes, he and Labour leader David Shearer rub shoulders more often than some realise.

Also, he is on good terms with the conservative end of the Labour caucus and those less enamoured of the Greens - think Trevor Mallard, Shane Jones and the economic team, including David Parker.

On the Labour side, apart from any discomfort with Green policies, there are those who see the Greens as - in political science terms - a captive party trapped between Labour and the Left edge of the political chess board.

The Greens have tried to manoeuvre themselves away from that position, by talking up an outside chance of a deal with National. But that is gone. That, the thinking goes, means they have little bargaining power and no option but to support Labour, even if they are dialled out of cabinet. On that basis, a deal with NZ First - to keep it out of National's clutches - is the way to go.

But if views are divided on that in the caucus, Labour voters lean more to the Greens than NZ First, so Labour needs to tread carefully if it plans to yet again jilt the Greens in favour of NZ First.

But government-forming and confidence and supply votes are just the start. Whoever is on the Treasury benches also needs the numbers to pass its legislative programme. The ideal is to have support parties on your Left and Right, providing the numbers for Centrist as well as Left-leaning or Right- leaning laws. Former Labour prime minister Helen Clark had that in 2005, as Mr Key does now. So alienating the Greens completely is not a serious option for Labour.

But what of the Greens in all this?

The quantitative easing (QE) "policy" was always ill-conceived. Promising to print money to buy other countries' assets to top up the Earthquake Commission fund was beyond the pale.

Also, while there was room to cut the 2.5 per cent official cash rate further - an option not open to many countries - it simply was not needed, even though it has become orthodox internationally and is far from the "wacky" policy Mr Key successfully labelled it.

But, embarrassment at a U-turn aside, dumping it has its advantages.

It blunts the knives of both NZ First and Green-sceptic Labour MPs by showing the Greens can back away from radical and unpopular policies when required. It also gives the Opposition more clear air to argue for an alternative monetary policy without allowing Mr Key and National a free hit on "printing money" every time it is raised.

But it begs several questions.

If QE can be dumped because it is not politically feasible, then what about other distinctive Green policy? Is being a credible partner in government now the most important driver? Are six Cabinet posts more important than six purist policies? The answer, for now, is yes.

The Dominion Post