VZCZCXRO2379
RR RUEHDT RUEHPB
DE RUEHWL #0389/01 3220512
ZNR UUUUU ZZH
R 170512Z NOV 08
FM AMEMBASSY WELLINGTON
TO RUEHC/SECSTATE WASHDC 5542
INFO RUEHNZ/AMCONSUL AUCKLAND 1795
RUEHBY/AMEMBASSY CANBERRA 5324
RUEHAP/AMEMBASSY APIA 0513
RUEHDN/AMCONSUL SYDNEY 0761
RUCNARF/ASEAN REGIONAL FORUM COLLECTIVE

UNCLAS SECTION 01 OF 03 WELLINGTON 000389 
 
SIPDIS 
SENSITIVE 
 
STATE FOR STATE FOR EAP/ANP 
PACOM FOR J01E/J2/J233/J5/SJFHQ 
 
E.O. 12958: N/A 
TAGS: PGOV PHUM KDEM NZ
SUBJECT: NEW NZ GOVT ANNOUNCED 
 
WELLINGTON 00000389  001.2 OF 003 
 
 
¶1. (SBU) Summary.  On November 16, a mere eight days 
after election day, New Zealander's Prime Minister- 
elect John Key announced that a new center-right 
government has been formed after he secured the support 
of three smaller parties.  A new National-led minority 
government will include the ACT, United Future and the 
Maori Party.  On November 17, Key announced his 
incoming government's ministerial lineup, which 
included the leaders of the three support parties that 
will sit outside of cabinet.  The new Foreign Minister 
is Murray McCully; Tim Groser is the new Trade Minister 
with Dr. Wayne Mapp as the incoming Defence Minister. 
Key and his Cabinet are expected to be sworn-in on 
November 19 before he departs for the APEC Leaders 
Summit in Peru.  Key has gotten over his first 
governance challenge - forming a government faster than 
most expected.  End Summary. 
 
New Government Formed 
--------------------- 
¶2. (SBU)  On November 16, Prime Minister-elect John Key 
announced the formation of a National-led minority 
center-right government after he had signed separate 
agreements with the ACT Party, United Future and the 
Maori Party to secure their respective support.  The 
governing arrangement with the three parties is not a 
formal coalition.  Rather, each party negotiated with 
National an agreement that will enable National to 
survive no-confidence votes in Parliament.  This 
support will also preserve the supply of critical 
government funding.  National now has 70 votes on 
confidence and supply issues of the 122 seats in 
parliament. 
¶3. (SBU)  All three separate confidence and supply 
agreements negotiated with National placed greater 
emphasis on relations between the respective smaller 
party and National rather than specific policies or 
legislation.  A hallmark of Helen Clark's governments 
was the number of significant policy concessions she 
made to her support parties during negotiations. 
Although Key has made some concessions of policy and 
position, they are relatively minor by comparison.  All 
three support parties have agreed to support 
legislation which works towards confidence and supply 
measures with all other legislation to be reviewed on a 
case-by-case basis. 
New PM and Cabinet to be Sworn in Shortly 
----------------------------------------- 
 
¶4. (SBU)  It is expected that John Key and his new 
Cabinet will be sworn in by New Zealand Governor 
General, the Honorable Anand Satyanand, on November 19. 
On November 22, Key is expected to attend the APEC 
Leaders Summit in Peru, accompanied by his new Foreign 
Affairs Minister Murray McCully, Trade Minister Tim 
Groser, the Chief Executive of the New Zealand Ministry 
of Foreign Affairs and Trade, Simon Murdoch and the 
Chief Executive of the Treasury, John Whitehead. 
 
The New Cabinet 
--------------- 
¶5. (SBU)  On November 17, Key announced his Cabinet of 
twenty-eight ministers - inside and outside the cabinet 
- the same number as the outgoing Labour 
administration.  John Key will assume the traditional 
Prime Ministerial portfolio responsibilities - Minister 
in Charge of the NZ Security Intelligence Service and 
the Minister Responsible for the Government 
Communications Security Bureau (GCSB).  Key has also 
chosen to be the new Tourism Minister.  Key's deputy 
Bill English will be Deputy Prime Minister and will 
also take the heavyweight Finance portfolio and the 
newly minted Infrastructure portfolio.  Murray McCully 
will become the Minister of Foreign Affairs, with 
former WTO negotiator Tim Groser the Minister of Trade, 
Associate Minister of Foreign Affairs and Associate 
Minister for Climate Change Issues (International 
Negotiations).  Dr. Wayne Mapp will become Minister of 
Defence.  Senior National Party MP Gerry Brownlee 
becomes Minister for Economic Development and the 
Minister of Energy and Resources.  Simon Power will be 
the new Minister of Justice, Minister for State Owned 
Enterprises and the Minister of Commerce.  Dr. Nick 
Smith will look after the Environment portfolio, in 
addition to becoming the Minister for Climate Change 
 
WELLINGTON 00000389  002.2 OF 003 
 
 
Issues.  The National Party's most senior Maori MP, 
Georgina te Heuheu, will be the Minister of Pacific 
Island Affairs and the Minister for Disarmament and 
Arms Control. 
Support Party Ministers Outside of Cabinet 
------------------------------------------ 
¶6. (SBU)  Under the terms of the respective agreements 
with National, leaders from National's support parties 
will be appointed to ministerial positions.  Although 
all will be outside of cabinet, these ministers will 
nevertheless be "part of the government" in relation to 
their responsibilities.  This means that each support 
party leader is not bound by the convention of 
collective responsibility on issues not directly 
related to their respective portfolios.  (Note:  A 
similar arrangement in the previous Labour-led 
government allowed former Foreign Affairs Minister 
Winston Peters to publicly speak out against the 
signing of the NZ-China FTA on the basis that the deal 
was a trade matter and thus outside of his Foreign 
Affairs portfolio.  Key and National criticized the 
arrangement at the time but since the election, Key 
said that in retrospect he had been wrong.  End Note). 
¶7. (SBU)  ACT's Leader Rodney Hide and deputy leader 
Heather Roy are to be ministers outside of Cabinet with 
Hide the Minister of Local Government, Minister for 
Regulatory Reform and Associate Minister of Commerce. 
Roy will be Minister of Consumer Affairs, Associate 
Minister of Defence and Associate Minister of 
Education.  United Future leader Peter Dunne retains 
the Revenue portfolio he held under the previous 
Labour-led Government.  The co-leader of the Maori 
Party, Dr. Pita Sharples, will become Minister of Maori 
Affairs, Associate Education and Corrections Minister. 
The other Maori Party co-leader, Tariana Turia, will 
become Minister for the Community and Voluntary Sector 
and will be Associate Minister for Health and Social 
Development. 
The Deal with ACT 
----------------- 
¶8. (SBU)  Much of the confidence and supply agreement 
National negotiated with the right-wing ACT reflects 
their mutual objective to curb government expenditure 
and cut business regulation.  Specific terms include a 
commitment to freeze the current Emissions Trading 
Scheme (ETS), to establish a special committee to re- 
examine the current ETS legislation and examine 
alternatives and to repeal the ban on thermal 
generation.  National will also support ACT's hard-line 
'Three Strikes You're Out' on crime within the select 
committee. 
The Deal with United Future 
--------------------------- 
 
¶9. (SBU)  The core of the United Future agreement with 
National is similar to that negotiated by ACT and the 
Mario party:  a commitment for the Government to 
consult with United Future on issues including the 
broad outline of the legislative program, key 
legislative measures, major policy issues and broad 
budget parameters.  Specifically, United Future has 
negotiated to maintain the policy, research and 
advocacy role of the Families Commission, which the 
party helped establish in the previous Labour-led 
government.   Another central element is a commitment 
to progress a long-term medicines strategy for quality 
use of pharmaceuticals in the health sector. 
 
The Deal with the Maori Party 
----------------------------- 
¶10. (SBU)  Even though National did not need the five 
Maori votes to form a government, Key went to great 
lengths to court this traditional Labour-leaning party. 
Under the terms of the deal with the Maori Party, 
National will not seek to remove the Maori seats 
without the consent of Maori, effectively scrapping its 
policy to repeal the electoral seats specifically 
designated for voters on a separate roll for the 
indigenous Maori.  Before the election, Key's stated 
position was to move over time to abolish the Maori 
seats.  The National-led Government will also undertake 
a review of the controversial Foreshore and Seabed Act, 
a law which served as the catalyst for the formation of 
the Maori Party, which opposed it. 
Government Formed in Record Time 
 
WELLINGTON 00000389  003.2 OF 003 
 
 
-------------------------------- 
¶11. (SBU)  It only took Key eight days to form his 
government, the quickest for any government since New 
Zealand's first election under New Zealand's 
proportional representation MMP electoral system in 
¶1996.  (Note.  The 1996 National Party-New Zealand 
First coalition government took eight weeks to form. 
Helen Clark took thirty-two days to negotiate support 
and co-operation deals with three parties following the 
2005 election.  End Note).  Few expected he could form 
a government in time to attend this week's APEC Leaders 
meeting, but John Key has sped past this first 
governance hurdle. 
McCormick