NEW GOVERNMENT PROMISES AMBITION

UNCLAS SECTION 01 OF 02 WELLINGTON 000409 SIPDIS SENSITIVE STATE FOR STATE FOR EAP/ANP PACOM FOR J01E/J2/J233/J5/SJFHQ E.O. 12958: N/A TAGS: PGOV ECON PHUM KDEM NZ SUBJECT: NEW GOVERNMENT PROMISES AMBITION WELLINGTON 00000409 001.2 OF 002 ¶1. (SBU) Summary. As the new Parliament opened December 9, the new National-led Government laid out its program for the next three years along lines familiar from its election campaign. Prime Minister John Key's immediate priorities are to address the pressing economic challenges facing New Zealand; in the longer term he will seek to rebuild infrastructure and productivity to enable growth and prosperity in the future. It reflects many of the traits that voters found so attractive in Key at the election: moderation, ambition, compassion and understanding. It will be hard for the opposition Labour Party to successfully attack this program. End Summary. Government Program Outlined -------------- ¶2. (SBU) On December 9, Governor-General Anand Satyanand opened the 49th New Zealand Parliament with the traditional 'Speech from the Throne' by where he outlined the program of the new Government under Prime Minister John Key. The government divided its objectives into two parts: fixing the immediate economic problems facing New Zealand; and rebuilding infrastructure and increasing productivity in the longer term to make New Zealanders more prosperous. Foreign Policy Features Only Lightly -------------- ¶3. (SBU) The Government reaffirmed it will essentially continue the foreign and trade policy of the previous government. In the speech it was stated that the "Government will ensure that New Zealand exercises a free, independent foreign policy that reflects the best interests of New Zealand. It will have a bipartisan approach to foreign policy and it will be driven by a considered evaluation of New Zealand's evolving international interests. This will include an ongoing commitment to trade liberalization and the pursuit of bilateral, regional and world-wide free trade agreements." (Comment: commentators will likely jump on the Government's promise of an "independent foreign policy" since that was Labour's code word for a policy which stayed at arms length from the U.S. End Comment.) No More Missed Opportunities -------------- ¶4. (SBU) In a dig at the previous Labour-led government, Key asserted that "if New Zealand's past ten years were to be described as the decade of missed opportunities, then the next ten years must be the decade of maximized opportunities." He warned that the Government will run an operating deficit certainly in the short-term and most likely in the long-term as well. To provide much-needed fiscal stimulus to the flagging economy, the Government will reduce personal taxes. To increase productivity and growth investment in infrastructure will be increased. This will include an accelerated roll-out of an ultra-fast broadband network across New Zealand. In a conscious gesture to Labour's constituency, the Government emphasized that New Zealand is a country built on a sense of fairness and thus it will duly provide an assistance package to those worst hit by redundancy. Tightening Government Spending -------------- ¶5. (SBU) In a drive for efficiency and fiscal discipline in the public sector, which PM Key believes the previous government failed to exercise, the new Government will carefully examine public spending and halt the growth in government bureaucracy ( Note. The MFAT briefing paper for Foreign Minister McCully, also released December 9, made it clear that this will freezing include the planned expansion in the Ministry of Foreign Affairs and Trade. End Note). Climate Change -------------- ¶6. (SBU) The Government promised to honor New Zealand's existing Kyoto Protocol obligations and to work toward further global alliances to advance the Kyoto agenda. In approaching future international climate change negotiations the Government intends to work with other countries to find a pragmatic way to include large emitters, of which the Government signaled out China, India, Brazil and the United States. However, the government has pledged to review the Emissions Trading Scheme (ETS) to "ensure the reduction of emissions in ways that result in the least cost to New Zealand's society and economy." Additionally, the Government intends to advocate firmly in international negotiations for the appropriate recognition of New Zealand's unique agricultural-emissions-profile. Comment: Ambition, Pragmatism, Compassion Hold Forth -------------- -------------- ¶7. (SBU) The Government's program was a compilation of National's campaign promises combined with its response to the worsening economic downturn. The speech blended ambition as to the possibilities that lay ahead and sobriety as to the challenges confronting the country. A central message in the speech was that the new Government will drive an ambitious agenda. WELLINGTON 00000409 002.2 OF 002 ¶8. (SBU) As one might expect, Key's program contained more specifics on the near-term plans to revive the economy and fewer details on the longer-term goals. It epitomized the personal politics of John Key: pragmatic and moderate. The call for individual responsibility and the promise to help the most vulnerable citizens is a typical Key balancing act. It will be difficult for Labour to challenge Key's ambitions, so they will be left to watch eagerly for the Government's performance to fall short. End Comment. McCormick