The Letter

The Haps

The specials favour the left who now have 925 more party votes than the right. National loses a seat. Brash concedes. Coalition talks continue. Speculation mounts over cabinet roles and who the next Speaker will be. The Reserve Bank is expected to lift interest rates.

We picked it

The Letter accurately predicted the most likely change would be the Maori Party gaining enough party votes for another MP, but because they already had four constituency MPs they did not get a list MP and the overhang reduces by one. As we predicted the MP to lose out is National's Katrina Shanks.

Jobs for votes

Its just spin that Clark wants to lead a minority government relying on deals for every bill. It's too hard and so unstable. Clark knows that with just 51 votes, (Anderton is really a Labour MP), she will have to get agreements to support the government's programme, votes for Speakers and committee chairs and then those procedural motions needed to get legislation out of committee and bring issues for a vote. Peter Dunne will not give such support again without office.

The Greens

This election is a bitter disappointment to the party. The Greens' poor performance on the specials illustrates the party's problem. The young see them as middle-aged professional politicians. Nandor's fellow MPs are disappointed about losing the funding he would have brought but relieved to have lost the forty year old skate board rider whose only speech was on decriminalising drugs. The Greens were saved by their performance in the Maori seats. Green MP Metiria Turei is a more militant Maori Nationalist than Hone Harawira. (She split the vote in Southern Maori and let Labour back in). With no new MPs, and all parties having sensible environmental policies, the future looks grim. The Greens in the last parliament refused to give Labour support on procedural motions without office. Rod Donald correctly does not want to settle for ministerial positions outside of cabinet. Eddie Isbey, a minister out of cabinet, famously observed he had to read The Dominion to find out what government was doing.

New Zealand First

Winston Peters is in deep depression. Tauranga was his power base, saved him twice, first when he fell out with Bolger and then in 1999 when his party fell under 5%. He knows it will be hard to win it back. (Bob Clarkson will be one of parliaments most colourful and popular MPs). It would be smart for Clark to offer Peters the Justice and Attorney-General position. There is no lawyer in cabinet which is the reason Cullen has the Attorney-General office. Peters is a reasonable lawyer, see his court wins. The position would appeal to his pride. Peters also knows he needs Labour voters if he is ever to be MP for Tauranga again.

New Landscape

The Maori Party's emergence as a party rather than a single MP is very significant. They established an electorate organisation; Labour Maori electorate organisation is almost nonexistent. The new party will receive significant funding, could become a permanent feature and an important centre party. If they were to acquire sophisticated political organisational advice from professionals like Ian Kortlang, who helped ACT win Epsom, they could win all seven Maori seats.

Speakership

Margaret Wilson is keen to drop the Speakership. She knows she did not do well. Clark moved her because of her unpopularity. If she does not give the Attorney-General position to Peters, then reappointing Wilson must appeal. Promoting "Spot" Ross Robinson to Speaker, who does know Standing Orders and is universally popular would be a shrewd move. National are lobbying for Clem Simich, whom Brash owes, having persuaded Clem to stand down in Tamaki in return for the party's support for Speaker.

ACT's loss, National's gain

When MPs lose elections their staff also lose their jobs. National, who have always been envious of ACT's team, have already signed five former staffers and two others are in the interviewing stages. We predict a distinct improvement in National's performance.

ACT strategy

Rodney Hide has decided on an ambitious two front strategy, to hold Epsom and rebuild the party. He and Heather Roy have decided to pool all their staff in Wellington and to create a new large office in Epsom. As the party has always had its head office in Epsom, this makes sense. ACT's ability to put up candidates in every general seat and its strong representation on campus demonstrates the party's countrywide strength and ensures its future. We are skeptical that Brash will lead the National Party into the next election. We expect their next leader to create more space for ACT by running a more centralist campaign - while 39% of the vote was much better than last time, it is still one of National's worst performances ever.

The Economy

An interest rise may prove a tipping point. The high kiwi dollar is punishing exports and encouraging imports. A glut of new apartments and continuing migration is dramatically reducing the demand for housing. We think the much predicted slow down is coming without the need for any intervention by the Reserve Bank.

Those Dodgy Polls

David Stone has pointed out if the pollster's excuse of volatility is correct, how come the lead in any of the major polls never changed? AC Neilson and Colmar Brunton always had National leading, Digipoll and TNS always Labour? Something is fundamentally wrong with the methodology.

This week's poll

Should Brash have given up trying to form a centre right government or should he seek to put together a Nat/ACT/NZ1/United/Maori government? (64 seats). We will send your answer to Brash. Vote at http://www.act.org.nz/poll

ENDS

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