UNCLAS SECTION 01 OF 03 WELLINGTON 000765

SIPDIS

SIPDIS
SENSITIVE

STATE FOR STATE FOR EAP/ANP
PACOM FOR J01E/J2/J233/J5/SJFHQ

E.O. 12958: N/A
TAGS: PGOV NZ
SUBJECT: NATIONAL MAINTAINS POLLING LEAD OVER LABOUR

REFTEL: Wellington 538


1. (SBU) Summary. Some recent polls show the gap closing between
the ruling Labour Party and the opposition National Party, but the
double digit National lead continues, despite several recent highly
publicized political fumbles by National Party officials. National
Party officials privately admit that the party needs to improve its
public messages and not open the door to easy Labour attacks that
undermine voter confidence. Experts believe that although Labour
continues to stubbornly lag behind in the polls, a fourth term for
PM Helen Clark cannot be ruled out. End Summary.
National Lead Over Labour Continues
--------------

2. (SBU) Recent political polls, while differing in the lead
attributed to the National Party, indicate that the opposition party
continues to outpoll the ruling Labour Party (reftel). Some recent
polling shows that the opposition National Party has maintained its
comfortable double-digit lead over the ruling Labour Party.
However, other polls indicate Labour has gained some ground on
National, reducing National's lead to a narrower margin.

3. (SBU) In keeping with an established voter trend against Labour
that began at the end of first quarter 2007, the September Fairfax
Media/Nielsen poll showed National at 50% and Labour at 36%. The
same poll found that a staggering 62% of those surveyed believe that
National will lead the next government, with Labour support recorded
at 26%. Further reinforcing the trend, the Roy Morgan polls of
August and October had National leading Labour by an average of
15.5%.


4. (SBU) Other polling in August and September indicates that Labour
was gaining ground on National. The September findings of the One
News-Colmar Brunton poll showed that National had dropped 4 points
since the last poll in August to 49% with Labour picking up 3 points
to finish at 39%. The August Herald Digipoll was in line with the
prevailing trend when it found National ahead of Labour by 15
points. By the end of September, however, this same poll found the
gap had narrowed to barely 5 points. The September One News-Colmar
Brunton and Herald Digipoll both came in a month when National's
leader, John Key, was not in the media spotlight nearly as much as
Clark. During this period Clark rece

ived good press for voicing the
argument against nuclear power at the APEC Leaders' summit and the
government's climate change announcements.(Note: Sources within the
National Party have told us that they routinely discounted those
polls that placed National 12-15 percentage points ahead of Labour.
National's own polling has shown an 8-10 point lead, which they
consider more realistic. End Note.)

Despite Recent National Mistakes Gap Fails To Narrow
-------------- --------------

5. (SBU) The polls that showed a slight upswing in support for
Labour were paradoxically all conducted before a series of National
Party blunders which threatened to further close the gap between the
two parties. National Party leadership recently floated several
half-formulated policies that recalled former National failures.
Labour has tried to capitalize on such remarks to question whether
National has abandoned its more unpopular economic policies of the
past.

6. (SBU) The first blunder was made by National's shadow Finance
Minister Bill English, when he floated the idea of selling up to 50%
of selected state-owned companies to help finance improvements to
New Zealand's public infrastructure. Labour seized on his
announcement as favoring privatization and assets sale - both
concepts that instill apprehension in many New Zealand voters who
still remember widespread job losses that resulted from the last
major round of asset sales in the 1980s. Key then talked about
having schools built and operated by private enterprise. After
receiving flak from both the media and Labour, Key tried to reassure
voters that these ideas were not policy decisions but rather options
"seriously under consideration" by his party.

7. (SBU) The third blunder was committed by National Health
spokesman Tony Ryall, who announced a controversial proposal that
would lift the ceiling on doctors' fees; Ryall also omitted the
policy from the party's health policy paper, leading critics to
charge that National was unwilling to come clean on its real
policies. All three statements played into Labour's long-held
assertion that National, even under the supposedly moderate
leadership of Key, has a hidden, right-wing policy agenda that will
only emerge once National is in power. In all three instances,
National Party officials - sensitive to media and Labour demands
that they provide greater specificity to their party platform - had
prematurely speculated about potential policies without having a
well-thought-out justification in the face of almost-certain Labour
criticism. National spokesmen have shrugged off the recent
missteps, acknowledging that mistakes have been made and that
National cannot afford to look so inept in the future. Yet despite
Labour's best efforts to capitalize on National's errors the latest
poll, from One News-Colmar Brunton, on October 14 showed that

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National had held steady at 49% with Labour itself dropping two
points to 37%.
Don't Write Off Labour Yet
--------------


8. (SBU) Political analysts say that despite National's lead, Labour
is still a political force and there remains considerable time
before Clark must call for an election. Even one of Clark's
fiercest critics, former National Party leader Don Brash, has spoken
of her ability to steer Labour to victory at the next election.
Brash, who came close to unseating Clark at the last election in
2005, said that Labour under Clark's leadership can never be ruled
out because of her renowned political survival skills and the
ability, as the Prime Minister, not only to "promise things, but to
actually do things." National sources also indicate that the PM is
determined to achieve what no New Zealand PM since the Second World
War has attained - a fourth term.


9. (SBU) Prominent Auckland-based political scientists, Raymond
Miller and Barry Gustafson, both echoed Brash's observation noting
that Clark can take control in election year from her "privileged
position in government". Miller believes that Clark's greatest
success as leader has been "her ability to reach across political
parties and forge deals, a vital political skill under New Zealand's
proportional representation electoral system." Former Labour leader
Mike Moore has also predicted that Labour could form a government
even by polling less than National, because the minor parties would
rather work with Labour than with National.

What Should Labour Do?
--------------


10. (SBU) Political analysts argue that the Government cannot rely
on capitalizing on National Party gaffes if Labour is to defeat
National in 2008. The October One News-Colmar Brunton poll
reinforces this argument. Indications are that Labour is likely to
take several steps in the near future to win back some momentum from
National. One area that has been subject to intense media
speculation for some weeks has been a shakeup in the Labour Cabinet.
Labour's front bench is much the same as it was when it came to
power eight years ago. If the party wants to give a reinvigorated
look to the public, so the logic goes, it is past time for a Cabinet
shuffle. Clark, on the other hand, is very loyal to her Ministers,
and is not likely to make radical changes for fear of internal party
dissension in the run up to the Labour Party Conference, scheduled
for early November. Political analysts believe that whatever
reshuffle takes place will be modest, with a likely announcement
before the break for summer holidays in early December. There is
also speculation that those most likely to advance are more to the
Right side of the Labour party than the Left. But, most analysts
doubt voters will give Labour any credit for such a modest
reshuffle.


11. (SBU) Another area where Labour must address public concerns is
tax reform. The government recently announced significant budgetary
surpluses, which have reinforced National's calls for tax cuts.
Finance Minister Michael Cullen has been coy in responding to such
calls, noting that much of the surplus is already slated for
infrastructure upgrades. Media analysts believe that Labour will
hold off in announcing any cuts until the budget is released at the
end of the first quarter in 2008, thereby giving voters some extra
cash just before the election is called. Some journalists are
already warning voters not to take the bait, as the following year
could see their taxes go up again if Labour is returned to power.


12. (SBU) A third area is to refocus the government on the
business of governing rather than trying to discredit John Key and
National over old speeches and newspaper quotes - which have not
worked with voters nor impacted National in polling results. Labour
of late has tried to shift the focus back to governance but several
badly drafted bills, including one on campaign finance, have left
many wondering if the Labour Government has lost its way. Clark's
recent climate change policy (which had National's support) shows
that Labour still has a knack for articulating a vision that has
broad appeal across the political spectrum. On the other hand, some
media critics have argued that voters want more than lofty idealism
- they are concerned with rising prices and shrinking purchasing
power.

Comment
--------------


13. (SBU) At this early stage, the polls are an interesting
barometer for gauging public opinion, but the election remains
nearly a year away. Both sides need to rethink, or at least
refurbish, their respective game plans. National needs to up its

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game and defend its policy choices rather than running for cover at
the first volley of Labour criticism. Labour needs to address the
classic third-term blues, and find ways to reconnect with the
voters. More specifically, Labour should realize that New
Zealanders are more likely to vote with their wallets in 2008 rather
than according to their ideals. End Comment.

Keegan