VZCZCXRO4651
RR RUEHDT RUEHPB
DE RUEHWL #0069/01 0690226
ZNR UUUUU ZZH
R 100226Z MAR 09
FM AMEMBASSY WELLINGTON
TO RUEHC/SECSTATE WASHDC 5790
INFO RUEHNZ/AMCONSUL AUCKLAND 1931
RUEHBY/AMEMBASSY CANBERRA 5470
RUEHAP/AMEMBASSY APIA 0547
RUEHDN/AMCONSUL SYDNEY 0810
RUCNARF/ASEAN REGIONAL FORUM COLLECTIVE

UNCLAS SECTION 01 OF 03 WELLINGTON 000069 
 
SIPDIS 
SENSITIVE 
 
STATE FOR STATE FOR EAP/ANP 
PACOM FOR J01E/J2/J233/J5/SJFHQ 
 
E.O. 12958: N/A 
TAGS: PGOV KCRM KDEM NZ
SUBJECT: TAXES, LAW AND ORDER TOP KEY'S LEGISLATIVE PROGRAM 
 
WELLINGTON 00000069  001.2 OF 003 
 
 
¶1. (SBU) Summary.  Prime Minister John Key was quick to enact his 
initial legislative agenda after coming to power following the 2008 
election.  As Key had promised prior to the election, his Government 
swiftly passed a tax cut package and a series of stronger law and 
order measures.  The National-led Government also moved rapidly to 
unwind aspects of the previous Labour administration's more 
unpopular legislative legacy.  Key has been bound by agreements with 
minor support parties to introduce or address some contentious 
legislation, such as the proposed "three strikes" bill and review of 
the Foreshore and Seabed Act.  With its clear parliamentary 
majority, the Government's legislative program in its first 100 days 
progressed comfortably through Parliament.  His legislative program 
over the medium term is unlikely to yield any surprises.  End 
Summary. 
 
First Up: Tax Relief 
-------------------- 
 
¶2. (SBU)  Prime Minister John Key's top legislative objective was to 
quickly pass into law a tax relief package before the Christmas 
recess, in keeping with a  promise made during the election 
campaign.  The tax cut legislation, which also included changes to 
the KiwiSaver pension scheme, was comfortably passed on December 11. 
 The legislation stipulates that the first round of cuts will come 
into effect on April 1 2009, with subsequent rounds in 2010 and 
¶2011.  Despite calls from the opposition Labour Party to suspend the 
2009 round on the grounds that the country cannot afford tax cuts in 
the current economic climate, Key remains committed to his promise. 
Key, however, is unwilling to give a categorical assurance that tax 
cuts promised for 2010 and 2011 will go ahead. (Note:  If the 
Government wishes to defer or abolish future tax cuts it will have 
to change its own legislation.  End Note). 
 
Early Focus on Law and Order Legislation 
---------------------------------------- 
 
¶3. (SBU)  Strengthened law and order measures have featured 
prominently in the Government's first 100 days legislative program. 
Key's pre-election position on introducing tougher law and order 
measures proved extremely popular with voters anxious about the 
rising crime rate under Labour.  The Government quickly introduced 
legislation to remove the right of the worst repeat violent 
offenders to be released on parole.  It toughened the bail laws to 
make it harder for criminals awaiting trial to get bail.  The 
Government also moved quickly to bring in legislation to require DNA 
testing for every person arrested for an imprisonable offence. 
 
Current Draft of Three Strikes Bill Faces Hurdles 
--------------------------------------------- ---- 
 
¶4. (SBU)  Under its obligation in the supply and confidence 
agreement with the hard-right ACT Party, the Government introduced 
the controversial Sentencing and Parole Reform Bill.  The proposed 
legislation, a key ACT Party policy, is a "three strikes and you're 
out" measure.  It would see those convicted of a third serious 
offence sentenced to life imprisonment with a 25-year non-parole 
period.  National has reserved judgment on whether it will support 
the legislation further.  Evidence is mounting that the Bill may not 
proceed as drafted.  Chris Finlayson, in his capacity as 
Attorney-General, has found the three-strikes bill has an "apparent 
inconsistency" with the section of New Zealand's Bill of Rights 
protecting New Zealanders against cruel, degrading or 
"disproportionately severe" punishment.  Additionally, the Maori 
Party, another Government support partner, has come out against the 
bill in the belief that the legislation would lead to 
disproportionate sentencing.  The Maori Party also believes that the 
Bill may have a particularly destructive effect on Maori families, 
many of whom face a greater chance of having a family member 
imprisoned because of the higher rate of Maori criminal recidivism. 
 
 
¶5. (SBU)  In its March 6 editorial, The New Zealand Herald called 
the three-strikes policy flawed as a means of lowering the crime 
rate and called for the legislation's rejection by a parliamentary 
select committee.  The newspaper urged the Government to fine-tune 
its law and order policy to find "the right balance between 
punishing criminals, safeguarding society from those who present too 
great a risk and providing rehabilitation carrots." 
 
Three Strikes Bill Generates Prison Funding Debate 
--------------------------------------------- ----- 
 
¶6. (SBU)  The cost of implementing the three strikes legislation has 
also become a source of debate.   Although the Government has not 
released any figures surrounding the cost of implementing the 
 
WELLINGTON 00000069  002.2 OF 003 
 
 
legislation, the advocacy group Rethinking Crime and Punishment Now 
estimated the cost of implementation (based on its the prediction 
that new prisons will have to be subsequently constructed to house 
greater inmate numbers) at around NZD 7.5 billion over 25 years, and 
an ongoing extra operational cost at NZD 1 billion a year.  Key, 
however, disputed these figures.  He argued that the Bill will not 
necessarily effect a increase in near term prison numbers, as the 
law change would not be retrospective and by the time an offender 
was going to jail for a serious offence for a third time they would 
already be getting a long sentence.  Said Key, "(offenders) can't 
just get put away for stealing chewing gum, they have to have a 
conviction for a serious offence."  The Government is, however, 
presently considering allowing private-sector operational management 
of some New Zealand prisons. 
 
GNZ to Review Controversial Foreshore Law 
---------------------------------------- 
 
¶7. (SBU)  As part of National's confidence and supply agreement with 
the Maori Party, Key will establish a three-person panel to complete 
a ministerial review of the controversial Foreshore and Seabed Act 
by July 2009.  For the Maori Party, the Foreshore and Seabed Act is 
critical.  The Act was passed by the Labour Government in 2004 and 
confirmed Crown ownership of New Zealand's foreshore and seabed in 
perpetuity.  As a result, tens of thousands of Maori marched on 
parliament in protest against the law which was viewed by many as a 
"land grab," taking away private land and customary rights from 
Maori.  Then-Labour MP Tariana Turia left the party in protest at 
the legislation and formed the Maori Party.  The Maori Party will 
not be satisfied unless the Foreshore and Seabed Act is repealed. 
Even before coming power, Key recognized the Maori Party's concerns 
over the Act and had promised to undertake a review of law.  The 
National Party, however, remains committed to its position that it 
would only agree to the Act's repeal if there were appropriate 
protection in place to ensure all New Zealanders enjoy access to the 
foreshore and seabed, either through existing and potentially new 
legislation. 
 
Unwinding Controversial Labour Legislation 
------------------------------------------ 
 
¶8. (SBU)  The Key administration has moved quickly to address some 
controversial laws enacted or strengthened under the previous Labour 
government.  National swiftly repealed the highly controversial 
Electoral Finance Act (EFA) passed in 2007 to establish strict laws 
governing financial contributions to politics.  The EFA prompted the 
most acrimonious debate in modern New Zealand politics with 
then-Labour Prime Minister Helen Clark accused of advancing the 
legislation for her party's own narrow political purposes. 
Paradoxically, Clark's successor as Labour Party leader and early 
backer of the EFA, Phil Goff, expressed regret for the law's 
enactment and ordered his MPs to vote for its repeal.  Out of the 
122 MPs, only the nine Green Party members voted against the repeal. 
 
 
¶9. (SBU)  National also moved promptly to address an existing law 
which was controversially strengthened under the Clark 
administration, the Resource Management Act (RMA).  The RMA was 
introduced in 1991 to oversee building and development projects from 
those of national significance down to local council plans and small 
scale building on individual properties.  Under Clark, the law was 
extended to increase regulation which, inadvertently, invited a rash 
of frivolous objections to developments.  Prior to the election, Key 
had called the RMA a "handbrake on growth."  He quickly introduced 
legislation to reform the RMA to create greater certainty around 
developments and stalled projects, and to "unlock that lost growth 
potential and untangle the red tape suffocating everyone from 
homeowners to business."  Part of the newly proposed legislation to 
reform the RMA involves the establishment of a new Environmental 
Protection Authority to expedite consents for major building and 
infrastructure projects. 
 
Comment 
------- 
 
¶10. (SBU)  The Key administration's legislative agenda in its first 
100 days progressed through parliament with little disruption.  This 
was largely due to its clear voting majority provided by National's 
support parties and popular public support for the proposed 
legislation, all of which was well-telegraphed in advance.  However, 
having exhausted his campaign legislative promises Key has not 
clearly stated what his legislative program will look like in the 
near term.  Differences over the three-strikes legislation will test 
the National's relationship with ACT and the Maori Party, but it 
will not derail the Government's hard-hitting law and order program. 
 
WELLINGTON 00000069  003.2 OF 003 
 
 
 Additionally, the Foreshore and Seabed Act review may further test 
the National-Maori Party relationship, but not likely to the extent 
of causing it significant harm.  Key has proved to be a pragmatic 
consensus-builder and looks fully capable of weathering encroaching 
legislative storms.  End Comment. 
 
Keegan