PM ELECT JOHN KEY'S CROWDED FIRST 100 DAYS

UNCLAS SECTION 01 OF 02 WELLINGTON 000381 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: PM ELECT JOHN KEY'S CROWDED FIRST 100 DAYS WELLINGTON 00000381 001.2 OF 002 ¶1. (SBU) Summary. National Party leader and Prime Minister-elect John Key, victorious in New Zealand's November 8 General Election, has announced an ambitious 100-day plan. Key plans to quickly formalize governing arrangements with support parties ACT and United Future. In past elections, this process has been a drawn-out affair often lasting weeks. As a result of pre-election deals, however, Key could complete it within a week. Once he is sworn in Key plans to call the new Parliament to session to launch an ambitious and rigorous legislative agenda. Although the next hundred days may not be smooth sailing, there are no obvious hurdles to thwart Key's immediate goals. End Summary. First Act: Formalize a Coalition Government -------------- ¶2. (SBU) The first task facing Prime Minister-elect John Key of the National Party is to install his new government, and confer a sense of certainty, stability, and effect a smooth transition from the outgoing Labour government. Key will seek to formalize the governing relationship with National's established support parties, ACT and United Future, in order to confirm his governing majority of sixty one seats in Parliament. [Note. On election night National won fifty-nine of the one hundred twenty-two seats in parliament and in order to govern must therefore obtain the support of other parties. End Note]. Once Key is able to secure a formal governing majority, he will request that the Governor-General of New Zealand announce the formation of the new National-led Government. ¶3. (SBU) The formation of the new government has, however, been prearranged. The ACT Party, which won five seats, will be formally invited to form a coalition government with National by virtue of a pre- election deal between the two parties. In return for this guaranteed support, Key will offer ACT's leader Rodney Hide, and possibly his deputy Heather Roy, a cabinet position. Although Key does not need the one seat United Future's leader Peter Dunne won in order to form a government, Dunne is nonetheless assured a cabinet position per another pre-election deal with National. Once Key has established a formal governing majority, he is expected to talk with the Maori Party, with five seats, about a possible role in government. Key does need the support of the Maori Party to govern, but has expressed a desire to broaden his governing mandate by involving the Maori Party. Cabinet Announcement Expected Soon -------------- ¶4. (SBU) In past elections, forming a government took weeks as various minor parties negotiated deals with a major party over the terms of their support. Given that Key secured deals with the ACT and United Future parties before the election, the process of formalizing the new government is expected to be completed quickly. It is possible that this process could be completed by November 11 when Key will gather his caucus and possibly announce his new cabinet. However, a disagreement over portfolio allocation or differences over policy with the support parties could stall the naming of the cabinet and thus the installation of the new government. One possible stumbling block could be Key's public insistence that he will not include in his cabinet ACT's Sir Roger Douglas, the architect of New Zealand's early 1990?s economic reforms. Then a Labour MP, Douglas is now regarded as extremely right wing, and this could damage Key?s efforts to be seen as a centrist. Full & Dismal Fiscal Briefing -------------- ¶5. (SBU) One of the first appointments Key will have as Prime Minister-elect is a briefing by Treasury officials where he is expected to receive a full account of New Zealand's fiscal position. As leader of the opposition, Key was privy to some Treasury data, but not all. Some analysts believe that Key will only then be confronted with the full extent of the New WELLINGTON 00000381 002.2 OF 002 Zealand's fiscal situation. Key will also receive briefings from other government agencies. Key's Crowded 100-Day Agenda -------------- ¶6. (SBU) One reason Key wants to move swiftly to establish his new government is to expeditiously pass certain legislation before the end of the year. Key has already laid out an ambitious 100-day legislative agenda. This will require that the new Parliament resume soon, possibly within weeks. The agenda was first unveiled in the election campaign, and Key is determined that it will be followed in government. Key's first ambition is to legislate his tax cut program so it can take effect on April 1, 2009. Key's second agenda item is to prune government spending in the public sector, particular in the health bureaucracy. ¶7. (SBU) Other objectives include passing tougher legislation to address violent crime, organized gangs, and parole decisions. Establishing a transitional relief package for workers made redundant is also high on Key's agenda, together with establishing national education standards in literacy and numeracy. Key hopes to quickly amend the controversial Resource Management Act to facilitate development for housing and infrastructure. Growing the economy through infrastructure development was one of Key's main promises during the campaign. Key will likely create a new cabinet position to deal specifically with improving New Zealand infrastructure capacity. Comment: Path Clear for Key to Move Quickly -------------- ¶8. (U) Although Key's immediate plans are ambitious, there appears to be little that could block Key's capacity to establish his new government and implement his legislative agenda. His pre-election deals with ACT and United Future mean that the broad terms of support have already been established which should translate into a swift and smooth transition to establishing the new government. The large number National seats meant that Key did not need to make any compromises, for example with the Maori party, which might hobble his agenda. Key's comfortable parliamentary majority will mean that the passage of his 100-day legislative agenda should proceed without opposition, especially given that the agenda items are supported by both ACT and United Future. End Summary. McCormick