VZCZCXRO1271
RR RUEHDT RUEHPB
DE RUEHWL #0408/01 3432054
ZNR UUUUU ZZH
R 082054Z DEC 08
FM AMEMBASSY WELLINGTON
TO RUEHC/SECSTATE WASHDC 5568
INFO RUEHNZ/AMCONSUL AUCKLAND 1807
RUEHBY/AMEMBASSY CANBERRA 5343
RUEHDN/AMCONSUL SYDNEY 0773
RUCNARF/ASEAN REGIONAL FORUM COLLECTIVE

UNCLAS SECTION 01 OF 03 WELLINGTON 000408 
 
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 GOVERNMENT'S EVENTFUL FIRST WEEKS 
 
WELLINGTON 00000408  001.2 OF 003 
 
 
¶1. (SBU) Summary.  In his first weeks as Prime Minister John Key has 
addressed, in quick succession, many challenges:  the APEC Leaders' 
Meeting in Peru; a national aviation tragedy; and having hundreds of 
New Zealand travelers stranded in Bangkok.   On the whole, observers 
judge that Key has performed reasonably well.  Although he attracted 
some criticism for his handling of the Bangkok episode, Key still 
appears to be enjoying a honeymoon period with the media and the 
public.  With the new Parliament due to open for business December 
9, Key will now return to his legislative priorities, many of which 
already well-known from the campaign.  The new Government's specific 
long-term priorities, however, are not so well known and it will 
take a while for the public to fully indentify them.  End Summary. 
 
New PM's APEC Visit Viewed Positively 
------------------------------------- 
¶2. (SBU)  Just over 24 hours after being sworn in as Prime Minister, 
John Key arrived in Peru for the APEC Leaders' Summit.  Before 
arriving in Lima, Key accepted former Prime Minister Helen Clark's 
offer to provide any help he wanted in foreign affairs.  In a 45 
minute phone conversation just prior to his departure from New 
Zealand, Key heard Clark's personal observations on participating 
leaders and on how to best handle the two leaders' meetings. 
¶3. (SBU)  Key made it clear he saw the APEC Leaders Meeting as an 
opportunity to establish himself as New Zealand's new leader on the 
international stage.  Key also wanted to specifically address the 
international financial crisis and the impact a global recession 
will have on New Zealand's economy.  As such, his first 
international mission after becoming Prime Minister was generally 
treated positively by New Zealand observers who considered that Key 
effectively advanced New Zealand positions and his own message. 
They concluded that Key delivered his formal remarks with authority 
and expertise, as was expected given his background in international 
finance and high level of comfort talking about it. 
¶4. (SBU)  Key delivered his first formal address as Prime Minister 
to APEC's Business Advisory Council.  The core message was bold and 
decisive for a newcomer to the world stage: that the Leaders Meeting 
was not acting as strongly as it should in promoting trade 
liberalization as a means to counter the effects of economic 
problems countries are facing.  He bluntly blamed banks and other 
financial institutions for plunging the world into crisis.  Key said 
in many cases there had been a "recklessly complacent attitude to 
risk" and credit had become out of proportion to real economies. 
But his main point was that APEC's founding principle of free trade 
was the most important way to get out of the crisis." [Note.  Key 
dismissed the original text of the speech written by his Ministry of 
Foreign Affairs and Trade (MFAT) officials as not bold enough, only 
to write his own. End Note]. 
¶5. (SBU)  Key's arrival in Peru was buoyed by a decision by the US, 
Australia and Peru to look at forming a free trade agreement with 
New Zealand, Singapore, Brunei and Chile.  Said Key, "Now that 
Australia has joined in - obviously our closest friend, ally and 
trading partner - we are creating momentum across the Pacific."  New 
Trade Minister Tim Groser, in Peru with Key, stated that the 
emerging trading bloc would be part of the answer to working through 
the current economic turmoil. 
¶6. (SBU)  In Lima, Key bolstered his leadership credentials when he 
Key met President Bush and China's President Hu Jintao.  Key also 
held formal bilateral meetings with Australian Prime Minister Kevin 
Rudd, Chilean President Michelle Bachelet, OECD Secretary-General 
Angel Gurria and Singapore's Prime Minister Lee Hsien Loong. 
Immediately after the meeting, Key flew to London to meet the Queen 
and Prime Minister Gordon Brown. 
Condemns Mumbai Attacks 
----------------------- 
 
¶7. (SBU)  The Government acted immediately to condemn the November 
26 terrorist attacks in Mumbai, India.  New Foreign Minister Murray 
McCully, without delay, instructed the New Zealand High Commission 
in New Delhi to urgently seek information on any New Zealanders that 
may have been caught up in the attacks.  At this point, there have 
been no reports of any New Zealand casualties. 
 
Plane Crash Shocks Nation 
------------------------- 
 
¶8. (SBU)  On November 28 Key had to soothe the frayed nerves of the 
nation after a leased Air New Zealand Airbus A320 aircraft crashed 
in the Mediterranean seas off the coast of France killing five New 
Zealanders aboard.  Key immediately offered any and all assistance 
required in the immediate aftermath of the tragedy.  The crash 
occurred on the 29th anniversary of New Zealand's biggest single 
tragedy, when an Air New Zealand DC-10 crashed into Antarctica's 
Mount Erebus on a sight-seeing flight on November 28, 1979, killing 
all 257 people aboard. 
 
Reaction to Thai Crisis Criticized 
 
WELLINGTON 00000408  002.2 OF 003 
 
 
---------------------------------- 
¶9. (SBU)  The Government's response to the crisis in Thailand, where 
approximately 250 New Zealanders were stranded, attracted criticism 
from Labour, the media and sections of public alike.  Although 
tensions in Thailand have since eased and Suvarnabhumi international 
airport is now reopened for business, questions were asked whether 
the new Government acted soon enough when New Zealand lives could 
have been at risk. 
¶10. (SBU)  In response to the crisis, PM Key initially wanted to 
dispatch to Thailand one of the two New Zealand Defence Force (NZDF) 
Boeing 757s to evacuate stranded NZ travelers.  However, much to his 
chagrin, Key discovered that both planes, purchased by the previous 
Labour-led government for exactly these sorts of evacuation 
scenarios, are currently under maintenance in the US.  McCully said 
questions would be asked about NZDF's decision to allow both its 757 
aircraft out of the country at the same time and asserted that 
efforts would be made to ensure a better response capability in 
future.  Key was forced to turn to the considerably slower option of 
sending a NZDF C-130h Hercules to Malaysia where it remains on 
stand-by in case it is needed. 
¶12. (SBU)  Labour leader Phil Goff chided the government for its 
handling of the crisis.  Goff said the government knew well in 
advance that both 757s were out of commission.  Further, he 
questioned why faster action wasn't taken, why Key did not appear to 
have a contingency plan and a why planeloads of Australians were 
quickly evacuated yet New Zealanders remained seemingly abandoned. 
Goff also questioned why a joint effort by Australia and New Zealand 
was not sought by the New Zealand government.  Goff noted that while 
the Australian government talked to the Australian national carrier 
Qantas, which agreed to put on more flights, the New Zealand 
government had not sought to charter a plane from the its national 
carrier Air New Zealand, of which the Government has a majority 
holding, with rights to fly in Thailand.  McCully responded by 
reminding Goff that it was he, as Defense Minister in the previous 
government, who presided over the equipment program in the NZDF over 
the last eight years.  Said McCully, "any responsibility for the 
inability of the two 757s to fly, to be in service at the same time 
comes to rest on [Goff's] door step." 
MFAT Performance in Thai Crisis Scrutinized 
------------------------------------------- 
¶13. (SBU)  Despite public assertions from Key, McCully and Goff that 
the New Zealand Embassy in Bangkok have worked extremely hard to 
handle the situation, some stranded New Zealand travelers have been 
critical.  There have been some reports by marooned New Zealanders 
in Bangkok that they had only minimal contact with Embassy officials 
there and any information distributed by the officials were 
frequently outdated and unreliable. 
¶14. (SBU)  The Wellington-based political publication, TransTasman, 
reported on December 4 that political leaders have expressed 
"considerable disappointment with the flow of information from 
[MFAT], the lack of its ability to report consistently, and the 
tardiness in offering workable solutions.  Foreign Minister Murray 
McCully is insisting on a review of MFAT's operational capability." 
TransTasman suggested that under the previous government, 
Wellington's bureaucracy lacked the capacity to act creatively.  It 
further implied that dissatisfaction with MFAT's muddled response to 
the Thai crisis showed that the bureaucracy has yet to adapt to the 
new government's desire to have an innovative and high-performing 
public sector.  Fran O'Sullivan of the New Zealand Herald newspaper 
wrote on December 6 that, although Key was the subject of criticism 
over the sluggish response to Bangkok crisis, the "real question 
surely should have been what has gone so wrong at the Ministry of 
Foreign Affairs that [New Zealand's] Thai embassy didn't have 
contingency plans in place to cover any evacuation need?"  She 
asserted that the inaction was essentially "the product of an 
environment where officials have got so used to second-guessing 
Cabinet ministers that their capacity for independent action has 
been stymied." 
Voters More Confident under New Government 
------------------------------------------ 
¶15. (SBU)  The first poll since the November 8 election hinted that 
Key is still experiencing a honeymoon period with voters.  The 
December 4 Roy Morgan Poll found that Key's National Party (44 
percent) maintains a large lead over Labour (32.5 percent).  More 
significantly, confidence is beginning to return: after the election 
a record 66 percent of New Zealanders (up 12 percent) now say New 
Zealand is "heading in the right direction" compared to a record low 
19 percent (down 12 percent) that say New Zealand is "heading in the 
wrong direction." 
Media Coverage Mostly Positive 
------------------------------ 
¶16. (SBU)  Media reporting and analysis on how Key is handling his 
new job as prime minister has largely been positive.  On most fronts 
- his APEC appearance, the speed and efficiency by which he formed 
his government and his transition into government - the media have 
generally held an affirmative position on Key.  The Dec 4 
 
WELLINGTON 00000408  003.2 OF 003 
 
 
TransTasman reported that the Parliamentary Press Gallery gave Key a 
"thumbs up" after his first post-Cabinet press conference for being 
knowledgeable about the main issues and willing to accept that he 
did not know all the details at this early stage. 
¶17. (SBU)  Key has also attracted some media criticism since 
becoming PM, though as the New Zealand Herald's O'Sullivan observed 
"much of it directed at stylistic matter" (i.e., the manner in which 
Key has presented himself in his new role, in contrast to his 
polished and experienced predecessor, Helen Clark).  However, the 
media have mostly allowed for a period of grace as Key establishes 
himself in his new role.  Indeed O'Sullivan noted that "Clark's own 
authority and gravitas developed over her period as Deputy Prime 
Minister in the late 1980s and her latter nine years in the top job. 
 And that she too displayed an almost frisky delight in her initial 
weeks as PM." 
Immediate Legislative Priorities Well Signaled 
--------------------------------------------- - 
 
¶18. (SBU)  On December 9, in a speech to the new Parliament on 
behalf of the government, the Governor-General will spell out the 
legislative program for next three years.  Details surrounding the 
likely near-term legislative objectives have been signaled well in 
advance by National during its election campaign.  The first act 
will be to address the deteriorating economic position of many New 
Zealanders and stimulate the faltering economy.  To this end, Key 
will announce a tax cut package to take effect on April 1, 2009 and 
a provision of financial relief for the jobless. 
 
Longer-Term Plans More Vague 
---------------------------- 
¶19. (SBU)  Although Key's near-term plans for the country are 
well-known, it is not clear what his government plans to do in the 
longer-term or even if any determination has be made around policy 
beyond the immediate legislative priorities.  Public sector reform, 
particularly public spending, could feature prominently in early 
¶2009.  In opposition, Key was highly critical of the explosion of 
bureaucratic staffing levels under the Labour government and 
evidence of wasteful public spending.  In government, he is expected 
to curb the expansion of the public sector and instruct public 
sector chiefs to conduct line-by-line review of their spending. 
Also in the wings is the possible establishment of a Cabinet 
expenditure control committee to oversee the spending review and 
create task forces headed by private sector representatives to focus 
on public spending in a particular area. 
Comment: Key Survives Rough Weather 
----------------------------------- 
¶20. Unexpected crises and the continuing economic downturn have 
confronted the new Prime Minister with far more severe initial 
challenges than he could have anticipated.  His tenure was supposed 
to begin with the opening of Parliament tomorrow.  Instead, he may 
find it a welcome respite from the rough weather he has already 
survived.  End Comment. 
McCormick