VZCZCXRO1562
RR RUEHDT RUEHPB
DE RUEHWL #0174/01 1570141
ZNR UUUUU ZZH
R 050141Z JUN 08
FM AMEMBASSY WELLINGTON
TO RUEHC/SECSTATE WASHDC 5247
INFO RUEHNZ/AMCONSUL AUCKLAND 1676
RUEHBY/AMEMBASSY CANBERRA 5182
RUEHDN/AMCONSUL SYDNEY 0680
RHHMUNA/CDR USPACOM HONOLULU HI
RUCNARF/ASEAN REGIONAL FORUM COLLECTIVE

UNCLAS SECTION 01 OF 02 WELLINGTON 000174 
 
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: NO POLLING DIVIDEND FOR LABOUR FROM 2008 BUDGET 
 
REF: WELLINGTON 168 
 
WELLINGTON 00000174  001.2 OF 002 
 
 
¶1. (SBU)  Summary.  Recent polling showed that the Labour 
Government's 2008 budget failed to provide any boost to its flagging 
popularity.  In fact, Labour lost ground in all three post-budget 
polls as the opposition National Party gained support.  PM Helen 
Clark also lost ground to National Party leader John Key in 
preferred Prime Minister polling.  Although some of the Government's 
support parties, the Greens and New Zealand First, received a 
post-budget bounce, Labour's anticipated tax cut program was not 
enough to appeal to voters.  With the economy foremost in voters' 
minds in 2008 and National delaying presentation of its own economic 
package, the election outcome is by no means decided, but 
increasingly Labour's prospects and options are narrowing.  End 
Summary. 
 
Labour Gets No Bounce for Budget 2008 
------------------------------------- 
 
¶2. (SBU)  The results of three separate polls, the first after the 
Government's free-spending, tax-cutting May 20 budget, were a 
disappointment for the governing Labour Party (Reftel).  Contrary to 
previous elections, the polls all show that Labour failed to receive 
any bounce from its election year budget goodies.  In fact, Labour 
actually lost ground to the opposition National Party.  In 
minimizing the bad news, Prime Minister Clark predicted that voters 
will not make up their minds until just before the election, when 
they realize that National will not be able to afford its economic 
policies. 
 
Labour More Popular Before the Budget 
------------------------------------- 
 
¶3. (SBU)  In the May 30 Herald Digi-Poll, where two-thirds of 
respondents were polled before the budget and almost one-third 
afterwards, the overall party vote showed that Labour dropped one 
point to trail National 51.5 percent to 36.2 percent.  In this poll, 
Labour was actually more popular pre-budget than it was post-budget, 
dropping 1.2 percent in that period.  PM Clark even dropped 3.6 
points in the wake of the budget and continued to trail National 
Party leader John Key in the Preferred Prime Minister stakes. 
 
¶4. (SBU)  The June 1 Colmar Brunton poll, the country's most 
prominent political survey, also found that the plethora of new 
spending programs and long-waited tax relief in the Budget did 
nothing to arrest Labour's downward trend, as it crashed six points 
to a very low 29 percent.  National, on the other hand, ticked up 
one point to 55 percent.  This 26-point gap is the biggest between 
the parties in the last seven years.  Clark also suffered in 
personal polling dropping one point to 28 percent where Key gained a 
point to grow his lead over her to 8 points. 
 
¶5. (SBU)  The 3 News - TNS poll, also released on June 1, echoed the 
previous two surveys in recording a drop in support for Labour. 
This poll showed Labour registered a drop of three points to 38 
percent, while National gained two points to 50 percent.  Asked 
their choice of PM, 35 percent of respondents choose Key (up six 
points) with 29 percent preferring Clark (down three points). 
 
Support Parties are Budget Beneficiaries 
---------------------------------------- 
 
¶6. (SBU)  Although Labour did not get any post-budget bounce, two of 
its support parties did better.  The polls showed that Foreign 
Minister Winston Peters' party, New Zealand First, was rewarded with 
an increase in post-budget voter support after it took credit for 
extra spending for the national superannuation scheme and law 
enforcement.  The Green Party was also the recipient of some 
post-budget support after it claimed success for new environmental 
spending. 
 
Comment 
------- 
 
¶7. (SBU)  Labour's poor polling in the post-budget period, where 
past governments have traditionally recorded a bounce, is one more 
worrying sign for the struggling Labour Party.  This is especially 
troubling as polls consistently show that the economy is the 
electorate's most important issue in this election year.  The 
National Party has not yet divulged details of its economic policy 
and the size of its much anticipated tax cut program (Senior 
National MPs have told us, they will only be released closer to the 
election scheduled for October/November).  National's challenge will 
be to convince the public that they can manage the economy better 
than Labour by providing more tax cuts while not cutting back on 
 
WELLINGTON 00000174  002.2 OF 002 
 
 
popular government social programs or borrowing.  At the moment, 
however, National is not feeling too pressed for details and 
continues to benefit from the Labour Party's inability to do 
anything to captivate the public's imagination.  One pundit recently 
quipped that Helen Clark could announce a cure for cancer and it 
still would not push Labour up in the polls.  With five months left 
before the election deadline, the outcome is by no means decided, 
but increasingly Labour's prospects and options are narrowing.  End 
Comment. 
 
McCormick