VZCZCXRO6435
RR RUEHDT RUEHPB
DE RUEHWL #0141/01 1150532
ZNR UUUUU ZZH
R 240532Z APR 08
FM AMEMBASSY WELLINGTON
TO RUEHC/SECSTATE WASHDC 5201
INFO RUEHNZ/AMCONSUL AUCKLAND 1655
RUEHBY/AMEMBASSY CANBERRA 5160
RUEHDN/AMCONSUL SYDNEY 0664
RHHMUNA/CDR USPACOM HONOLULU HI
RUCNARF/ASEAN REGIONAL FORUM COLLECTIVE

UNCLAS SECTION 01 OF 03 WELLINGTON 000141 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
STATE FOR STATE FOR EAP/ANP 
PACOM FOR J01E/J2/J233/J5/SJFHQ 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM KDEM NEW ZEALAND
SUBJECT: PETERS REVEALS MAJOR EFFORT TO EXPAND NZ DIPLOMACY 
 
 
WELLINGTON 00000141  001.2 OF 003 
 
 
¶1. (SBU)  Summary.  On April 16, New Zealand Foreign Minister 
Winston Peters announced an ambitious funding and staffing boost for 
MFAT which will pave the way for a significant expansion of New 
Zealand's presence around the world.  The new funding come after 
decades of under-resourcing of New Zealand's foreign policy 
apparatus and will enable its Foreign Service to be more effective 
in opening new markets, supporting expanded security commitments, 
and as an international actor.  However, the new funding did not 
receive opposition endorsement and its future could be subject to 
doubt if there is a change of government at the election later this 
year, as some expect.  End Summary. 
 
Peters Unveils Major Step Up in NZ's Foreign Policy 
--------------------------------------------- ------ 
 
¶2. (SBU)  On April 16, Foreign Minister Winston Peters  addressed 
the New Zealand Institute of International Affairs, with a speech 
titled Stepping Up: New Zealand's Foreign Policy Footprint, and 
announced that MFAT needed more resources to meet the growth of 
international challenges confronting New Zealand.  As such, Peters 
announced that in the next Government budget, due to be presented on 
May 22, MFAT's budget baseline will be increased by NZ$523 million 
in new operating funding and a capital injection of NZ$98 million 
over the five years 2008-12.  That amounts to a cumulative figure of 
NZ$621 million over five years.  The current annual MFAT operating 
budget is currently NZ$278 million and its annual capital 
expenditure budget is NZ$35 million. 
 
More Diplomats 
-------------- 
 
¶3. (SBU)  The new funding will allow MFAT to increase diplomatic and 
support staffing at New Zealand's diplomatic posts and headquarters 
in Wellington from 212 now to around 320 over five years.  This 
amounts to total increase of around 50 percent, or an average of 
roughly 20 people per year.  The total number of MFAT diplomats and 
support personnel is expected to grow from 613 now to about 850 in 
2012, an increase of around 40 percent. 
 
The Purpose behind the Numbers 
------------------------------ 
 
¶4. (SBU)  Peters cited a number of policy imperatives driving MFAT's 
expansion: 
 
--THE PACIFIC. 
 
* To strengthen New Zealand posts in Port Moresby, Honiara and Suva. 
 
* To contribute more to the Pacific Security Fund. 
 
--ASIAN REGIONALISM. 
 
* To create an ambassadorship to ASEAN. 
* To contribute more to the Asia Security Fund. 
--TRADE. 
* To provide more resources to New Zealand embassies in Tokyo, 
Beijing, New Delhi, and Riyadh to increase momentum towards FTAs 
either being negotiated or considered. 
* To enlarge the MFAT Americas Division in Wellington to increase 
momentum for an FTA with the United States. 
 
--SCANDANAVIA. 
 
* To open a new embassy in Stockholm to coordinate foreign policy 
and human rights with the like-minded Nordics. 
 
--AFGHANISTAN. 
 
* To strengthen the New Zealand Embassy in Tehran to allow better 
coverage of security issues in Pakistan and in Afghanistan, where 
New Zealand has a major deployment. 
 
--ENVIRONMENT. 
 
* To develop specialized climate change negotiation roles within 
MFAT. 
* To develop a greater number of specialists in the areas of 
sustainability, biodiversity, fisheries and international law. 
 
--CONSULAR. 
 
* To increase capacity to serve and protect New Zealanders overseas 
in times of crisis. 
 
 
WELLINGTON 00000141  002.2 OF 003 
 
 
Reason: Fear of Being Ignored 
----------------------------- 
 
¶5. (SBU)  One obvious driver for this funding increase appears to be 
one born of necessity.  Peters reminded the audience that during the 
1990s "the government took the pruning shears to New Zealand's 
Foreign Service, forcing on it a decade-long decline in funding, in 
real terms, of more than 30 per cent."  Peters also noted that MFAT 
"still has fewer staff today than 20 years ago, and those staff seem 
to be working permanently in overdrive." 
 
¶6. (SBU)  An even more important driver behind the funding increase 
would appear to be the fear of New Zealand becoming a marginal actor 
in international affairs should it not expand its international 
presence.  Peters talked about renewing and expanding New Zealand's 
"strong international reputation" in the years ahead.  More 
revealing, Peters asserted in response to a question after his 
formal remarks that New Zealand faced a clear choice of whether "to 
engage more effectively or risk becoming a country with third world 
status." 
 
¶7. (SBU)  MP Peter Dunne, former Chair of the Parliamentary Foreign 
Affairs, Defence and Trade Select Committee, and now Minister of 
Revenue, told post that he believes that this budget announcement 
signalled that New Zealand is looking to play a more active role in 
international affairs.  Dunne thinks that New Zealand is "thin on 
the ground" particularly outside the Pacific.  Peter Cozens, the 
Director of the Centre for Strategic Studies, told post that he 
believes that the desire to expand diplomatic presence reflects 
Prime Minister Helen Clark's own internationalist aspirations. 
 
Long-Term Political Future of New Funding Uncertain 
--------------------------------------------- ------ 
 
¶8. (SBU)  The opposition National Party's reaction to the budget 
announcement was far from an endorsement and Dunne believes that 
there is no guarantee that a National-led Government will adopt the 
MFAT funding program.   Even though the convention of 
bi-partisanship in foreign policy is generally uniformly embraced by 
New Zealand political parties, Opposition leader John Key has made 
it clear that a National-led Government - the party is consistently 
well ahead of Labour in the polls - will cap the number of 
bureaucrats at the current 36,000.  Dunne believes National leader 
John Key's commitment to capping the core public sector could rule 
out even a partial adoption of the new budget. 
 
Timing Allows Peters a Sole Political Glory 
 ------------------------------------------ 
 
¶9. (SBU)  It is customary that budget announcements of this scale 
are made on Budget day itself by the Finance Minister, Dr. Michael 
Cullen.  Dunne believes that there are two reasons why the Clark and 
Cullen consented to allow Peters to make this advance announcement. 
Firstly, it mollifies Peters, a key political ally of Labour who 
disapproves of the quality of the FTA with China, by allowing him to 
take the full credit himself and package the funding increases as 
his own.  Dunne thinks that there is another reason behind the 
timing of the budget announcement.  He believes that the advanced 
announcement will mitigate the risk of attention been taken away 
from the expected centrepiece of Cullen's May Budget - the 
long-awaited tax cuts, which Labour considers important to its 
re-election prospects.   In terms of budget process, the details of 
the new budget are required to be disclosed to the cross-party 
Foreign Affairs, Defence and Trade Select Committee where it 
examines the estimates immediately following the May Budget's 
introduction to Parliament.  Dunne believes that the Budget will 
pass scrutiny without any problems. 
 
Increased Operations a Challenge for MFAT 
----------------------------------------- 
 
¶10. (SBU)  Dunne suspects that the driving force behind the budget 
increase was MFAT CEO Simon Murdoch and not Peters.  He believes 
that Murdoch energetically, yet quietly, lobbied his minister to 
boost the budget and the result shows that Peters is, in the words 
of Dunne, "well house trained" by his officials. Nonetheless, Paul 
Willis, the MFAT official charged identifying where the new 
resources should be allocated, believes that the goal of training 
and implementing the extra MFAT staff is a "significant challenge" 
as a major, and difficult,  re-vamp of existing support 
infrastructure must first be made. 
 
COMMENT 
------- 
 
 
WELLINGTON 00000141  003.2 OF 003 
 
 
¶11. (SBU)  This budget is a sizable for New Zealand's tightly-formed 
Foreign Service.  Its ambition seems to track the current frame of 
mind of Clark, who is eager for her country to blaze a trail in many 
different fields - from the goal of becoming the world's first 
carbon-neutral nation to being the first development country to sign 
a FTA with China.  Although National has a number of reasons not to 
endorse the expanded MFAT budget, Key's foreign affairs inner circle 
is dominated by former diplomats and internationalists who would 
likely endorse an expanded diplomatic presence of the kind. 
Moreover, given the Peters has stated that the funding will be part 
of his party's negotiation strategy post-election, Key will more 
than likely adopt it if he needs to court Peters' support in order 
to govern.  End Comment 
 
Keegan