Nats 'won't rule out' talks with Peters

19:44, Jan 21 2014

Peter Dunne is refusing to say whether he would work with NZ First leader Winston Peters, in the event both parties were needed by National to form a government.

Prime Minister John Key threw the door open to all his potential allies yesterday, including a surprise about-face over NZ First, when he announced the parties he would be prepared to work with to form a government after the election.

Although Key said it was "unlikely" he'd work with Peters, he would not rule out holding discussions with him.

Peters has remained defiant, saying the move by the prime minister was a cynical attempt at influencing the outcome of the election by making "backroom deals".

He refused to say whether he would engage with Key, vowing to hold coalition talks only after the election.

But there is no love lost between Peters and UnitedFuture leader Dunne, with the former taking aim at the latter, this morning calling him a "serial leaker", a reference to the furore last year over the leaking of the Kitteridge report on the Government Communications Security Bureau. Dunne denied leaking the report.

Responding to Peters' jab on Morning Report, Dunne said he had moved on from the events of last year but would not be drawn on hypothetical scenarios of working with Peters, saying it would be "premature".

"It's not a question of saying, if you do a deal with so and so, then I'm not prepared to enter into an accommodation with you - it doesn't quite work that way," he said.

"We've always taken the position that you work with people with whom you've got policy compatibility. It's utterly pointless to do otherwise.

In announcement yesterday, Key said that "given the right electoral circumstances" his preference after the election would be to work with National's present support parties ACT, UnitedFuture and the Maori Party.

He backed that up by reinstating Dunne as a minister outside Cabinet in a minor reshuffle.

Key said it would be possible to add Colin Craig's Conservatives to that group of support parties, despite policy differences.

But in a major shift from 2008 and 2011, when he ruled out any deal with NZ First, he said talks after the election with Peters' party would be possible, though they remained unlikely.

"In 2008 we ruled them out because we were unable to reconcile some of their statements on the Glenn donation matter," Key said.

"Six years has passed and, should NZ First be returned to Parliament, we would not rule out a discussion after the election.

"Bluntly there will be some National voters and some other voters who will be of the view that they would rather see National form a government with NZ First than see a Labour-Greens government formed in this country."

He said that if Peters was returned he would have twice been re-elected by the voters so it would be logical to at least talk to him. It was also possible Peters could abstain on confidence and supply votes to allow a minority National government to rule.

Peters yesterday ruled out any deals before the election but also ruled out abstaining on "crucial votes" in the House.

Labour leader David Cunliffe described Key's move as "the dance of the desperate".

Key ruled out working with Labour, the Greens and Mana on the basis that there was insufficient common ground and were promoting a far-Left agenda.

"I know that post the 2014 election, National will almost certainly need to work constructively with other political parties to form a stable Government," the prime minister said.

"MMP makes it likely that every election will be a tight contest."

Key said he would reveal later how he would work with other parties, including any electorate deals to help support parties win crucial seats. He intended to be clearer than when he used a "symbolic" cup of tea with ACT leader John Banks in 2011.

He said he trusted Dunne, despite his resignation in June for refusing to release his emails to a leak inquiry - something Key suggested at the time did not meet his standards for a minister.

The prime minister said he was now looking forward, not back and he had found Dunne to be an effective minister.

Other ministerial changes will see list MP Michael Woodhouse promoted to Cabinet to replace Napier MP Chris Tremain, who will retire at the election.

Maungakiekie MP Sam Lotu-Iiga becomes a minister outside Cabinet with responsibility for Pacific Island affairs.

The next big shots in the election year fight will be fired on Thursday with Key's state of the nation speech, flagged as focusing on education, followed by Cunliffe's speech on Monday, before the House resumes on Tuesday.