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FM AMEMBASSY WELLINGTON
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C O N F I D E N T I A L SECTION 01 OF 02 WELLINGTON 000928 
 
SIPDIS 
 
SIPDIS 
NOFORN 
 
STATE FOR D (FRITZ), EAP/FO, AND EAP/ANP 
NSC FOR VICTOR CHA 
SECDEF FOR OSD/ISD JESSICA POWERS 
PACOM FOR J01E/J2/J233/J5/SJFHQ 
 
E.O. 12958: DECL: 11/24/2016 
TAGS: PGOV PREL NZ
SUBJECT: OPPOSITION LEADER BRASH RESIGNS; KEY TIPPED TO 
TAKE CHARGE 
 
REF: WELLINGTON 924 
 
Classified By: DCM David J. Keegan, 
for reasons 1.4 (b) and (d) 
 
Summary 
------- 
 
¶1. (C) SUMMARY:  New Zealand's main opposition party leader, 
Dr. Don Brash, has resigned after weeks of speculation over 
his leadership. Dogged by a series of gaffes and missteps 
that raised questions over his political judgment, Brash 
announced that the National Party will caucus on Monday to 
pick a new leader. The charismatic John Key is the likely 
contender. A former investment banker with Merrill Lynch, Key 
remains an admirer of the United States.  He rates high with 
the NZ media and in polling, but many caucus members remain 
uncomfortable with his lack of political experience. 
Meanwhile, the gag order has just been lifted on the book 
reportedly containing allegations of National Party campaign 
malfeasance, which served as catalyst to Brash,s departure. 
The author claims it also contains information damaging to 
Key.  End Summary. 
 
Brash,s often turbulent leadership comes to an end 
--------------------------------------------- ----- 
 
¶2. (SBU) Thursday afternoon, November 23, Brash announced his 
resignation as National Party Leader. Brash,s decision 
follows months of missteps, and there have long been rumors 
he would be removed by his caucus. But the speed of his 
departure was something of a surprise.  In a hastily called 
press conference, Brash said he could no longer continue as 
leader because of continuing speculation about his future. 
Although he claimed to have been considering his future for 
some time, it is probable he knew his caucus would not 
support him following his latest political misstep over a 
soon to be published damaging book (reftel) . Brash declined 
to commit to staying in Parliament, saying it would be up to 
the new leader to decide if he had a future within the party. 
Brash,s resignation is effective from Monday November 27 
when National,s caucus will meet to decide who among its MPs 
will become its next leader. 
And that leader is likely to be John Key 
---------------------------------------- 
¶3. (SBU) Even though anything could happen behind the closed 
caucus doors, Monday,s meeting to pick Brash,s successor is 
likely to be a straightforward transition to a John Key 
leadership. Soon after Brash,s resignation announcement 
Key, National,s Finance spokesman who has long been 
considered a potential leader, officially threw his hat in 
the leadership ring.  Although former Party leader Bill 
English has refused to rule out a leadership bid he will 
probably not mount a challenge to Key as he is unlikely to 
win. On the day Brash resigned, Key got endorsements from two 
senior National MPs:  Deputy Leader Gerry Brownlee and 
Industrial Relations Spokesman Wayne Mapp.  National will 
want a smooth transition to the next leader, as a divisive 
contest could damage the party,s political fortunes going 
forward (particularly at a time when it is outstripping 
Labour in the polls). National Front bencher and shadow Trade 
Minister Tim Goser told DCM Thursday evening that National 
will move quickly to endorse Key and prepare to challenge 
Labour. 
¶4.  (C) Although the top slot is essentially secured, the 
Deputyship is wide open. Incumbent Brownlee refuses to say 
whether he will seek to retain his position. Other contenders 
are:  Law and Order Spokesman Simon Power, Economic 
Development Spokesman Katherine Rich and Welfare Spokesman 
Judith Collins.  Brownlee has the edge as an experienced 
street fighter, but National may wish to improve its 
currently poor standing with female voters by selecting a 
woman for the slot.  English is not believed to be interested 
in serving as Key,s deputy, and he may expect to be offered 
the coveted finance portfolio in return for his support. 
Labour will be nervous about Key 
-------------------------------- 
¶4. (C) Deputy Prime Minister Michael Cullen claims to be 
bullish at the prospect of facing a potential Key leadership, 
 
WELLINGTON 00000928  002 OF 002 
 
 
but its probable both he and Prime Minister Clark would have 
preferred the status quo.  Labour has often easily exploited 
Brash,s lack of political savvy, his struggle to perform 
within the adversarial bear pit of the Parliamentary debating 
chamber and his tendency towards embarrassing gaffes. Key has 
none of these weaknesses. In the 2005 campaign Key bested 
Cullen on the critical tax reform debate, scoring valuable 
political points for National. Additionally, a former very 
successful investment banker raised by his Austrian-Jewish 
widowed mother in NZ state housing, Key is a rags-to-riches 
story who appeals to New Zealanders.  He also offers a more 
modern, fresh and dynamic leadership which could contrast 
with Labour, widely viewed as becoming stale and staid after 
7 years in power. Clark and co. will try to exploit Key,s 
relative political inexperience: he entered parliament in 
¶2002. However, Key has learnt the political game fast and 
will likely prove to be a more dangerous opponent for Labour 
than Brash. 
COMMENT:  U.S.-National Ties Will Remain Solid 
--------------------------------------------- - 
 
¶5. (C) Amid the swirl of speculation surrounding National,s 
next leader, the looming presence of Hager,s book, "The 
Hollow Men", remains (reftel). Among the allegations 
reportedly contained in the book are ones concerning a 
clandestine relationship between the National Party and some 
US neo-conservatives during the 2005 election campaign. Post 
has not seen an advanced copy of the book but understands 
that this section will essentially take the form of  name 
and shame, exercise. If the public reaction to this 
allegation is found to be politically damaging for the 
National Party, it may seek to publically place some distance 
between it and the US.  But as reported reftel, we have heard 
the U.S. portion of the book is not prominent.  In any case, 
Key is an admirer of the United States and friendly to 
Mission New Zealand, and other National contenders are the 
same.  We anticipate continued good relations with the party 
no matter who takes up the reins. 
McCormick