VZCZCXRO2365
RR RUEHDT RUEHPB
DE RUEHWL #0388/01 3220441
ZNR UUUUU ZZH
R 170441Z NOV 08
FM AMEMBASSY WELLINGTON
TO RUEHC/SECSTATE WASHDC 5538
INFO RUEHNZ/AMCONSUL AUCKLAND 1791
RUEHBY/AMEMBASSY CANBERRA 5320
RUEHAP/AMEMBASSY APIA 0509
RUEHDN/AMCONSUL SYDNEY 0757
RUCNARF/ASEAN REGIONAL FORUM COLLECTIVE
UNCLAS SECTION 01 OF 04 WELLINGTON 000388
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: WHY THE LABOUR PARTY LOST THE NZ ELECTION
WELLINGTON 00000388 001.2 OF 004
1. (SBU) Summary. Ever since John Key took the helm of
the National Party in December 2006, Helen Clark and
the Labour Party seemed flat, out of step, and headed
for defeat in the 2008 election. Economic issues were
at the forefront of voters' minds and National
convinced the electorate that it was better placed to
steer New Zealand forward in poor economic times as
well as adopt more pragmatic fiscal policies for the
majority of Kiwis. Voters questioned whether Labour's
legislative priorities mirrored public concerns. New
Zealand's growing law and order problems largely went
unaddressed by the Labour Government. Helen Clark's
continued support for embattled Foreign Minister
Winston Peters appeared more desperate than principled,
and the Labour Party's dirty tricks campaign also
signaled a party more interested in discrediting the
opposition than running on its record. Finally,
Labour's much-vaunted grassroots network in Auckland
failed to get out the vote, which had helped Labour win
the election in 2005. As the first step towards
recovery, new Labour leader Phil Goff has acknowledged
some of the party's missteps and promised to address
them. End Summary.
Pulled Down by the Faltering Economy
------------------------------------
2. (SBU) While Labour had made a number of policy
missteps in the lead up to the election, the economy
emerged as the most important issue for voters as
commodity prices rose and the international financial
crisis arrived at New Zealand's doorstep. Despite
presiding over the longest period of growth in a
generation, Labour went into the election with the
economy in recession and years of government debt ahead
for the foreseeable future. The Labour Government's
rollout of economic enticements just before the
election was ill-timed as voters wondered how the
government could pay for everything while the world
economy was in free fall (and also why the government
had not been generous earlier when budget surpluses
were plentiful). In a surprise move, the Government
announced that it would buy back the national rail
system at a cost of over NZD 1 billion, without any
public discussion or study period. The decision
appeared to many observers to be the Labour Party's way
of spending down any surplus discretionary funds so
that National would find an empty Treasury on coming
into office. National's long-standing platform of tax
cuts and greater fiscal prudence won voters over as
polls showed that the public trusted National more than
Labour to rebuild the economy and recalibrate the
government's tax and revenue base to move the country
forward.
3. (SBU) Deputy PM and Finance Minister Michael
Cullen resisted tax cuts for years, and this turned out
to be a key factor behind Labour's loss. As rising
commodity prices ate into household budgets over the
past year, Cullen danced around the issue of tax cuts
and criticized National's early call for tax cuts as
imprudent. With the economy in recession and families
strapped for cash, Cullen's belated tax cut
announcement was viewed as too little, too late. Many
voters saw it for the short-term bribe that it was --
and many remembered that Cullen had promised a tax cut
on the eve of the 2005 election, but then cancelled the
tax cut after Labour won the election. They suspected
this too would be a benefit that could easily evaporate
once Labour was assured of three more years in office.
Disconnect with the Public
--------------------------
4. (SBU) A central explanation behind Labour's loss of
support was a perceived disconnect with the greater
part of New Zealanders. Many of Labour's policy
decisions and its legislative agenda over the past
several years did not line up with the priorities of
most New Zealanders. Consequently, a good portion of
the electorate believed that Labour no longer
represented the interests of "ordinary" New Zealanders.
This perception was underscored by the Labour Party's
refusal to acknowledge New Zealanders' growing unease
over the rise in violent crime in the country. One of
WELLINGTON 00000388 002.2 OF 004
John Key's first major policy announcements in 2008
centered on National's proposals to address law and
order issues, and law enforcement groups welcomed the
policy proposals. In contrast, the Labour Government
argued that there was no problem to begin with, and
suggested that the media were simply reporting more
crime. Justice Minister Annette King also downplayed
any increase in crime in late 2007/early 2008, blaming
it on the hot weather.
Questionable Legislative Priorities
-----------------------------------
5. (SBU) A number of Labour policy decisions
underpinned Labour's disconnect with voters. Two
controversial pieces of legislation that the Labour-led
Government passed into law in 2007 stand out: the
'anti-smacking' (spanking) law and the deeply divisive
Electoral Finance Act. In response to growing concerns
regarding child abuse in New Zealand, Labour pushed
forward a bill promoted by its support partner, the
Green Party, which effectively banned parents from
spanking their children. The National Party gave
lukewarm backing to the bill, qualifying their support
by noting that if good parents were unduly targeted for
administering occasional corporal punishment, National
would rethink the law. However, many in the New
Zealand public viewed it as Labour taking away parental
rights and unnecessarily interfering in a family's
right to discipline its children. The law remains very
controversial, and a petition to overturn the law was
presented to Parliament before the election.
6. (SBU) The Electoral Finance Act (EFA) sparked one
of the biggest controversies in New Zealand politics in
2007. The purpose of the Act is to increase state
oversight of political activity and to restrict
unhealthy influence of wealthy interests. However, the
law received almost universal disapproval from New
Zealand's media and legal experts alike for being
unworkable, poor drafted, anti-democratic and conceived
to advantage Labour. Ironically, the political party
that was deemed to violate the EFA the most during the
recent election campaign was the Labour Party -- a
factoid gleefully proclaimed by the media.
Nanny State Under Labour
------------------------
7. (SBU) Throughout its nine years in power, Labour
was often criticized as having a 'Nanny State'
mentality - moving public policy into the realm of
legislating social behavior. The anti-spanking and
electoral finance laws were both perceived by much of
the population as government overreach in areas where
the government should stay out, e.g., parenting and
political expression. Labour reinforced this
perception in the weeks before the election when it
considered regulatory measures that would limit how
much water pressure New Zealanders could use in the
shower as a means to control energy costs. Call-in
radio show commentary indicated that the public viewed
it differently and PM Clark was forced to announce a
policy retreat.
Controversial Bedfellows
------------------------
8. (SBU) Although not part of the Labour-led
coalition government formed in 2005, the Green Party's
polling numbers in the lead up to the 2008 elections
increased the party's political profile as an
attractive post-election partner for Labour. To
attract Green Party support, Labour changed its
Emissions Trading Scheme legislation to accommodate
Green Party concerns. National accused Labour of
placing political expediency and Clark's desire for a
fourth term in office above the interests of the
country by passing ideologically-driven legislation.
Business leaders railed against the ETS as too costly
for a country the size of New Zealand, particularly as
the economy was already contracting. Amending the ETS
remains one of the priorities of the new National-led
government.
WELLINGTON 00000388 003.2 OF 004
9. (SBU) Clark's reluctance to distance herself from
scandal-ridden Foreign Minister Winston Peters when he
was engulfed in a political funding controversy
undoubtedly hurt her politically and served to
undermine a central theme of her election campaign:
trust. Only when Parliament censured Peters for
providing misleading statements did Clark direct him to
step down temporarily from his ministerial portfolios.
New Zealand voters recognized that Clark needed Peters'
New Zealand First party support, assuming his party
returned to Parliament, to govern. Revelations that
Clark knew more about the funding controversy than she
had admitted undermined her efforts to promote trust as
a central theme for the election. Prior incidents,
such as her signing a painting she herself did not
paint for a charity auction and misuse of taxpayers
money to fund advertising in the 2005 election, meant
that Clark and the Labour Party were seen by some
voters as not entirely honest.
Dirty Tricks
------------
10. (SBU) National's campaign throughout the election
period remained forward looking and geared to the
issues. Labour, on the other hand, ran negative
television and radio advertisements accusing National
of a secret agenda and hiding its real policies from
voters -- a tactic that had helped Labour in its 2005
campaign. While it may have swung a few percentage
points for Labour within the electorate this time, the
negativity may also have backfired as the
scaremongering had little impact on voters. Moreover,
the media lambasted Labour Party President Mike
Williams when he flew to Australia at taxpayer expense
to dig up dirt on National leader John Key over a
finance scandal dating back two decades -- for which
Key had already been cleared.
11. (SBU) A youth activist, while never linked
explicitly to the Labour Party, also made headlines
during the campaign for secretly taping conversations
with National Party senior leaders at a National Party
convention earlier in 2008 and then leaking them to the
media months later during the campaign for maximum
potential damage to National. Although mildly
embarrassing, none of the conversations convincingly
showed that National had a radical right-wing or secret
agenda that it was shielding from voters, and Labour's
continued references to the tapes looked increasingly
desperate.
Winds of Change
---------------
12. (SBU) After nine years of a Labour-led government,
the desire for change was strong among voters who had
witnessed the historic U.S. election just days earlier.
Many Labour MPs have been on the political scene for a
long time and despite attempts to rejuvenate its ranks,
Labour's senior, and most visible, cadre remains
essentially the same. In contrast, National Party
leader John Key is a relatively recent arrival in
Parliament and was not associated with previous
National governments or unpopular policies of the past.
National also introduced a number of fresh faces among
its rank and file, including women and ethnic
minorities. Labour, by comparison, was seen as tired
and old.
13 . (SBU) It could be argued that Labour's previous
election victories - 2002 and 2005 - were largely due
to the relative weakness of the opposition National
Party at those times. The 2008 version of the National
Party is considerably stronger and more unified than in
recent election years. Key has moved a sometimes
fractious party into the political center and presented
Clark's most formidable opponent since she become Prime
Minister in 1999. In the three head-to-head debates
between the two leaders it was Key who on balance came
out on top. Debating has been a particular strength of
Clark and her inability to best Key in this arena
damaged Labour in the lead up to the election.
Where Was South Auckland?
WELLINGTON 00000388 004.2 OF 004
-------------------------
14. (SBU) On election night, National Party
supporters resisted the urge to celebrate as the poll
results came in and remained largely unchanged
throughout the evening. As National had learned in
2005, the South Auckland vote (a traditional Labour
stronghold) could tip the balance for Labour and give
Clark a last-minute victory. However, even as the
Auckland votes were counted, the poll results and
overall party vote did not change. Media analysts
noted that the overall percentage of voter turnout was
the lowest in thirty years, and the South Auckland vote
was not nearly as strong in 2008 as in 2005. Labour
Party supporters had a much more difficult time
motivating voters to get out this year -- the reasons
for which are still not entirely clear.
Comment
-------
15. (SBU) In the year before the election, the polls,
call-in radio shows, and the media continually said
that the once formidable Labour Party machine, the
Government, and even PM Helen Clark seemed tired and
out of touch. That may explain, in part, why Labour
seemed inflexible in going against public will in
pursuit of policies that lacked broad public support.
The issues of greatest importance to voters -- the
economy and law and order -- were at the top of
National's list but largely ignored by Labour. Since
the election, the new Labour Party leadership has
acknowledged that Labour had lost the pulse of the
public, and new Labour Party leader Phil Goff has
promised a review of how there came to be a disconnect
with a significant proportion of the electorate.
McCormick