VZCZCXYZ0004
RR RUEHWEB

DE RUEHWL #0935/01 3311830
ZNY CCCCC ZZH
R 271830Z NOV 06
FM AMEMBASSY WELLINGTON
TO RUEHC/SECSTATE WASHDC 3540
INFO RHHMUNA/CDR USPACOM HONOLULU HI
RUEHBY/AMEMBASSY CANBERRA 4627
RHHJJAA/JICPAC HONOLULU HI
RUEKJCS/SECDEF WASHINGTON DC
RHEHAAA/NATIONAL SECURITY COUNCIL WASHDC

C O N F I D E N T I A L WELLINGTON 000935 
 
SIPDIS 
 
SIPDIS 
 
NOFORN 
 
STATE FOR D (FRITZ), EAP/FO, AND EAP/ANP 
NSC FOR VICTOR CHA 
SECDEF FOR OSD/ISD LIZ PHU 
PACOM FOR J01E/J2/J233/J5/SJFHQ 
 
E.O. 12958: DECL: 11/27/2016 
TAGS: PGOV NZ
SUBJECT:  JOHN KEY ELECTED NEW OPPOSITION LEADER 
 
Ref A) Wellington 928     B) Wellington 923 
 
Classified by DCM David J. Keegan, reasons 1.4 (B) and (D). 
 
Summary 
------- 
 
¶1. (SBU) SUMMARY: John Key has won the leadership of New Zealand's 
main opposition party, the National Party.  In an uncontested 
election, Key replaced Dr. Don Brash who resigned last week after 
three turbulent years at the helm.  National also elected a new 
Deputy Leader and Finance spokesman:  the influential Bill English, a 
former party leader himself.  Labour may well find the National Party 
a more difficult adversary now, as this new leadership is less likely 
to commit the gaffes of its predecessor.  Ultimately, however, it's 
National's new message that will determine its support among voters, 
and while a Key-led National will likely be more moderate than 
Brash's party, it has yet to articulate its vision.  End Summary 
 
Key chosen to led National in uncontested ballot 
--------------------------------------------- --- 
 
¶2. (SBU) On Monday November 27, the National Party caucus officially 
chose John Key as its new leader, three days after Dr. Don Brash 
resigned the leadership to take responsibility for his latest 
political gaffe - a failed effort to block a muck-raking journalist 
from publishing a book based in part on his leaked personal emails. 
Although some commentators had predicted a contested leadership 
battle, Key emerged unscathed from what was a relative bloodless 
transition of power.  The former party leader and Education spokesman 
Bill English will serve as National's Deputy Leader. 
 
English decides against challenge, becomes Deputy Leader 
--------------------------------------------- -------- 
 
¶3. (SBU) English reportedly thought about challenging Key, but in the 
end decided not to contest the leadership.  Although he had 
previously intimated that he was not interested in serving as Key's 
second in command, English endorsed Key in return for securing the 
Deputy Leadership.  Key apparently convinced incumbent Deputy Leader 
Gerry Brownlee not to fight to retain his position.  As part of this 
negotiated deal, English asked Key for the finance portfolio as well, 
and Key granted the request.  (Reportedly, in addition to wanting the 
powerful finance slot for its own sake, English desired the extra 
position because it makes his portfolio exactly equivalent to that of 
Deputy PM and Finance Minister Cullen.)  Brownlee's ceding of the 
slot was orchestrated to dispel suggestions that there were divisions 
within National's caucus over who would get the Deputy's job. 
Another major factor behind Key's decision to force Brownlee to make 
way for English is that Key needed the backing of English's own 
faction of supporters, most of whom are influential frontbenchers. 
 
What the new leadership means for National 
------------------------------------------ 
 
¶4. (SBU) National's new leadership team is considered the dream 
ticket by many political observers.  It brings together arguably the 
two top performers in the National Party:  the media-genic Key and 
the strategically savvy English.  Moreover, the new leadership will 
likely bring a more moderate tone to National's politics, in contrast 
with what many voters (and some in the party's caucus) saw as Brash's 
Far Right radicalism.  The uncontested leadership transition has 
enabled National to display unity in a time of change.  National has 
had four leaders since Prime Minister Helen Clark took office in 
1999, creating an impression of instability that has dogged the 
party.  English has already stated that this new leadership is likely 
to be in place for several elections. 
 
What the new leadership means for Labour 
---------------------------------------- 
 
¶5. (SBU) The Key/English ticket is the one combination Labour fears 
the most.  Gone now are the vulnerabilities in National's leadership 
that Labour so adroitly, and effortlessly, exploited.  Key is more 
politically astute and disciplined than Brash.  English has the 
gravitas and political and intellectual acumen that Brownlee lacks. 
Unlike most of their caucus colleagues, both Key and English have 
frequently bested their Labour opponents head-to-head in political 
debate.  Moreover, both men are more likely to appeal to the much 
coveted centrist vote, especially women, than their predecessors. 
Labour is fully aware of the combined threat it now faces.  Some 
months ago, an advisor in the Prime Minister's Office confessed to 
Post that a Key-English ticket is Labour's "worst nightmare." 
 
What the new leadership means for the US-NZ relationship 
--------------------------------------------- --------- 
 
¶6. (C/NF) Key has not yet fully articulated his personal positions on 
matters of foreign policy, but will reportedly deliver a speech on 
defense later in the week, which is expected to come shortly before 
he announces who will be National's spokesmen for Foreign Affairs, 
Defence and Trade.  Key has worked in the United States and speaks 
favorably of the U.S.  He has been friendly to Mission New Zealand 
and was scheduled to travel to Washington on the Voluntary Visitor 
Program earlier this year until he had to cancel to help deal with 
(or take advantage of) a political crisis involving Dr. Brash.  We 
expect we will continue to have a good working relationship with 
National under his leadership. 
 
Brash's future still undecided 
------------------------------ 
 
¶7. (SBU) Brash's political fate is uncertain.  On resigning his 
leadership he stated that unless the new leader offers him a 
portfolio of significant weight, he is unlikely to hang around.  Key 
is expected to start allocating portfolios later in the week, and 
Brash is by no means guaranteed of acquiring the sort of significant 
portfolio which would tempt him to stay in parliament.  Before he was 
made leader in 2003, Brash, a former Central Banker, said that he 
entered politics to be Finance Minister in a National Government. 
With English now in finance, this goal will almost certainly go 
unrealized.  A problem for Key is that Brash's continued presence in 
Parliament at the time when a book scathing of him has just been 
launched (ref B), would hamper Key's aim of marketing National as new 
and improved under his leadership.  If Brash does decide to leave, 
the number of National's parliamentary seats will remain unchanged. 
As a List MP, Brash will simply be replaced by the next person on the 
party list, Wellington accountant Katrina Shanks. 
 
McCormick