10 Nov 2023

The Week in Politics: Coalition negotiations could be near the endgame

5:03 pm on 10 November 2023
NZ First's Shane Jones leaves Wellington as negotiations to form the next government continue.

NZ First's Shane Jones leaves Wellington as negotiations to form the next government continue. Photo: RNZ / Angus Dreaver

Analysis: After a slow start, the coalition negotiations may be approaching the point where an announcement is imminent, while Chris Hipkins keeps his job as Labour leader and could face another tax policy conundrum.

The media was really fizzing on Saturday after the final election results were announced the previous day.

Christopher Luxon said he was "going to get cracking", there were reports that he was about to "hit the phones" and negotiate coalition deals with ACT and NZ First.

There were headlines crying out "let the deal-making begin" and "Luxon readies to hammer out a deal".

ACT's David Seymour was widely reported as saying a coalition agreement could be achieved "within days".

On Tuesday, NBR published an interview with Peters in which he said he thought negotiations could be wrapped up in less than two weeks. That was a bit more realistic.

By Wednesday, the fizz was starting to go flat.

"It seems increasingly unlikely that a triumphant and beaming Christopher Luxon will on Sunday announce that he has defied detractors and nailed down coalition agreements with NZ First and ACT," said.

It wasn't known how much progress there had been in the discussions between Luxon and Peters - beyond the "getting to know each other" contacts.

They've had dinner at least twice and Luxon seemed to have adopted a charm offensive as a way of getting along with Peters.

They were both at the Diwali Festival in Auckland on Saturday, with Luxon acknowledging in his speech the attendance of "the Right Honourable Winston Peters" and saying "It's good to see you here too, sir".

Perhaps someone told Luxon that Peters likes to be shown respect.

The man himself was being less than charming, telling one reporter to "naff off" (definition: rudely telling someone to go away because they are annoying you).

He's been using the term recently, apparently as an acceptable alternative to the more common way of telling someone to get lost which Damien O'Connor recently employed when he was questioned outside a caucus meeting.

One thing that was clear this week was that more progress had been made between National and ACT than between National and NZ First, and there were reports that discussions with ACT had been paused while National focused on NZ First.

National Party leader Christopher Luxon speaks to media after the announcement of the final count of the 2023 election results, 3 November, 2023.

Christopher Luxon. Photo: RNZ/ Angus Dreaver

That was to be expected. National and ACT started talking well before the election, when they were hoping they would be the only ones doing it.

By now Luxon must know what Seymour expects from a coalition agreement, which portfolio positions he would like and what his most important policy priorities are.

At the beginning of the week Seymour said on Morning Report negotiations were getting to the point where National and ACT could start to lay out a deal on paper.

"It's getting very close to that… we've had several weeks of really productive discussions."

The media was having a trying time, with reporters staking out likely venues for meetings in and around the Parliamentary precinct.

An example of just how difficult it was to find out anything was Newshub's experience when National's Chris Bishop and NZ First's Shane Jones were spotted at the nearby Bolton Hotel.

"I was just catching up with someone in there," said Bishop, questioned as he came out. Was it Shane Jones? "Not going to comment on any of that".

A key moment in the process happened on Wednesday, when RNZ reported: "Talks have edged forward with representatives of New Zealand First and the ACT Party meeting today for the first time since the election."

The report said the chiefs of staff from both parties met in Wellington - Darroch Ball for New Zealand First and Andrew Ketels from ACT. The intention of the meeting was "to start establishing relationships" between the two parties.

Seymour tried to arrange a meeting before final results were announced, but Peters said he thought the email was a fake and didn't respond.

On Thursday there was definitely something up. Seymour flew in from Auckland and all three leaders were in Wellington. Peters and Seymour met for about 10 minutes at Parliament.

"In a significant development just before 4.40pm, Winston Peters and chief of staff Darroch Ball were seen entering the ACT Party's temporary offices at Parliament's library, RNZ reported. "Peters refused to comment on the nature of the meeting."

Earlier that day Peters did speak briefly to reporters, saying "speed is of the essence, we are not wasting time here".

Luxon appears to be working towards draft agreements separately, and a crunch point is going to be when ACT is shown the deal with NZ First and Peters gets to see what ACT has been given.

That could have been what Peters was referring to when he told reporters on Thursday: "It takes a lot of time to get to the detail because the detail has to be cross-matched with other details."

What Peters wants isn't known, but it's widely expected he'll ask to be foreign minister again, or has already asked. That wouldn't be difficult for Luxon to give away and, conceivably, Peters could be off to San Francisco for the APEC summit next week.

Luxon is also reported to be keen to go as New Zealand's brand new prime minister.

They'll really have to do some "cracking on" to get there.

As for any bottom lines NZ First may be setting out, the Herald's Audrey Young had some thoughts on that.

"If there is one bottom line for New Zealand First, it is likely to be stopping any increase in the age of entitlement to superannuation, funding for aged care, and some enhancement of the SuperGold card that leader Winston Peters introduced in 2005," she said.

Labour leader Chris Hipkins and deputy leader Carmel Sepuloni

Chris Hipkins and Carmel Sepuloni. Photo: RNZ / Angus Dreaver

Chris Hipkins was settling in as the Leader of the Opposition this week after Labour's much-diminished caucus confirmed him in the position.

Carmel Sepuloni was voted in as deputy leader after Kelvin Davis said he didn't want the job any longer and was thinking about whether he would stand for Parliament again in 2026.

There had been some half-hearted speculation about a challenge by David Parker but that didn't happen at Tuesday's caucus meeting, and Newshub reported him as saying he didn't intend to run for the leadership later in the Parliamentary term.

So Hipkins looks set to take Labour into the 2026 election, again running against Luxon.

The day after he was confirmed as party leader, Hipkins told Morning Report Labour would be revisiting all its policy positions and nothing could be ruled in or out.

That raised the interesting possibility of Labour supporting a capital gains tax, or a wealth tax, which Hipkins controversially ruled out in his captain's call before the campaign began.

Labour's poll rating, already falling, plunged even further after that and the Greens, who definitely wanted a capital gains tax, went up. Despite that, Hipkins said he didn't regret making the call.

"I don't think that that (capital gains tax) was going to win or lose us the election," he said. "After an election loss you need to go back to the drawing board and we need to accept the election in 2026 will be fought on very different territory to the election in 2023."

Newsroom's political editor Jo Moir saw a problem for Hipkins if Labour decided it wanted to campaign on a wealth tax or a capital gains tax - he wouldn't be able to stay on as leader.

"Bear in mind it was only in July Hipkins stated, unequivocally, 'under a government I lead there will be no wealth or capital gains tax after the election'," Moir said.

"There is no scenario in which Hipkins can seriously sell a wealth or capital gains tax to voters in just a couple of years' time without looking like a leader devoid of any political principles."

Stuff's Tova O'Brien said Hipkins had made a triumphant return - "a kind of winning loser or winner of the losers".

"Congratulations Chippy! Your prize? Inheriting a broken party devoid - in the words of some disillusioned Labour supporters - of a soul," she said.

"He's re-opening the door to all those policies he killed off - and then some. The wealth tax and capital gains tax are potentially back on, GST off fruit and veg could be killed off. Anything and everything is up for grabs."

ACT leader David Seymour and NZ First leader Winston Peters.

David Seymour and Winston Peters. Photo: RNZ

Former United Future leader Peter Dunne, speaking on Newshub's AM the day before the caucus meeting, said he would be astounded if Hipkins wasn't confirmed as leader.

"He'll survive for as long as he wants until Labour decides what it wants to do long-term with leadership."

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Peter Dunne. Photo: RNZ/Rebekah Parsons-King

He believed the party had time on its side to build back for the 2026 election.

"They just need to work their way through what went wrong, what they need to do and who's best equipped to take them there. I think this process just needs to be a steady one rather than a dramatic drama, which just looks like, yet again, the wheels are falling off the chariot."

And there were some wise words from the man who was in Parliament from 1984 to 2017: "The reality is no one's going to be interested in what the opposition says for possibly the next 18 months to two years, so they don't have to rush into this."

*Peter Wilson is a life member of Parliament's press gallery, and spent 22 years as NZPA's political editor and seven as Parliamentary bureau chief for NZ Newswire.

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