Reading the tea leaves from 1996

Winston Peters may again end up in the kingmaker's role - so what can we learn from the last time he held the balance of power? Photo composite: Lynn Grieveson.

The 2017 election is starting to bear striking similarities to the 1996 campaign, with NZ First poised to again take up a kingmaker role after polling day. So what can we learn from the events of 21 years ago, and what may happen this time around? Sam Sachdeva reports.

A late-term National government battling to hold onto power, a Labour opposition trying to win over voters despite an unpopular leader - and between them, NZ First, riding high in the polls with the spotlight on immigration and primed to hold the balance of power.

That’s the state of the 2017 election so far, but that same sentence could easily apply to 1996.

While there are no guarantees Winston Peters will hold the same kingmaker role this time around, it’s a very real possibility.

They say those who can’t learn from history are doomed to repeat it - so what could the events of 21 years ago mean for the parties today?


NZ First’s decision in 1996 to go into coalition with National was neither quick nor easy.

After National reached 34 per cent and Labour 28 per cent on October 12, Peters’ party took its time extracting concessions from each party.

One participant in the 1996 negotiations from NZ First’s side said Peters was mindful of managing the personal predilections within his caucus, assigning those with liberal leanings to handle negotiations with National, and conservatives with Labour.

“He wasn't just thinking about how the talks were going on with each of the parties, he was thinking ahead to how would he get his caucus across the line.”

The negotiations themselves were minutely detailed; the eventual $5 billion coalition agreement with National was 18 pages long, covering policy concessions in a microscopic manner that has not been repeated in subsequent elections.

Yet Peters’ tendency to occasionally leave his caucus in the dark did crop up; as the caucus sat down to discuss the policy offerings from each party and make a decision, they were unaware that negotiations were still underway over specific Cabinet roles which were up for grabs.

“At that very time that we were in the caucus room and we were talking it all through, all the policy details, there were still negotiations going on with National and Labour around ministerial portfolios,” the participant said.

In a recent interview with RNZ for its 9th Floor series, then-Labour leader Helen Clark revealed the idea of Peters as Prime Minister had been floated in negotiations, with the NZ Herald recently revealing it was also seriously discussed with National.

In the end, Peters had to settle for the Deputy Prime Minister’s job, along with the newly created Treasurer position.

He did not announce NZ First was going into coalition with National until December 10, nearly two months after the election - a protracted process which attracted criticism at the time.

"There was a feeling at the time that it was all a bit of kabuki, that it wasn’t really as competitive as Peters pretended.”

The decision also came as a surprise to some, given NZ First’s attacks on Prime Minister Jim Bolger’s National government and an election survey suggesting two-thirds of the party’s voters expected it to back Labour and the Alliance.

Yet some have argued National was an inevitability, given Peters’ enduring ties to the party despite his expulsion from Cabinet in 1991 and subsequent resignation.

In his 1998 biography, former NZ First candidate Michael Laws said Peters “was always going to lie down with National”, while former Labour Party staffer Phil Quin, who was working in Mike Moore’s office in 1996, says he and others within the party never believed they were in the hunt.

“Certainly in our little neck of the woods, which was around Mike...there was a feeling at the time that it was all a bit of kabuki, that it wasn’t really as competitive as Peters pretended.”

Yet the participant in negotiations believes Peters and the party was genuinely swayed by the best deal.

“I do think he probably started out with a preference for National, but that said, I think that for the most part the negotiations were in good faith, and I do think that a key influence in the negotiations came down to ministerial portfolios and issues of status.”

Leaning left or right?

So what will influence Peters and his party this time around?

Political commentator Bryce Edwards does not profess to be a Winston whisperer, but thinks he is genuinely open to both sides, with the policies and portfolios on offer the most likely basis for the final decision.

However, Edwards points to a couple of factors which suggest NZ First may end up with Labour and the Greens, should the numbers make it a possibility.

Foremost is the greater leverage the party would have, compared with an “inferior place” under National.

“I’m not saying that’s inevitable in any way, I’m just saying he’d be more comfortable in grouping with Labour because they’ll be weaker, so he’ll be a bigger fish against a smaller coalition partnership, whereas in National he’s clearly going to be the junior partner.”

While both Labour and National will be open to negotiations, Edwards believes Labour may prove more desperate to trump National and avoid a fourth term in opposition.

“Andrew Little will be feeling that this is the early part of his political career and by not being Prime Minister, not being in government, his time will be over, whereas Bill English will be much more willing to accept that occurring because he’s already reached the peak of being Finance Minister and Prime Minister.”

The “Shane Jones factor” could also prove influential. The former Labour MP and likely successor to Peters may have taken an ambassadorial role under National, but Edwards believes he would still be more comfortable in a Labour-led government.

“He is still more tribally Labour than he is National...I think he could handle that [the ambassador role] but going into a National-led government I think would still be quite hard for him.”

Some on the left also argue that Peters’ increasing interest in areas like inequality may make a deal with Labour and the Greens more likely.

Third wheel tension

On the other hand, there are reasons to think the current scenario, and the experience of 1996, could lead him to side with National.

Publicly, Peters has said his main reason for rejecting Labour back then was Clark’s inability to guarantee the support of the Alliance, a necessity to give her the numbers to govern.

This time around, the Greens are filling the role of third wheel, with co-leader Metiria Turei calling NZ First a racist and MP Barry Coates suggesting the party could force a new election instead of accepting a Labour-NZ First government.

While Coates was slapped down by his leaders, that sense of instability could give Peters cause to plump for National.

Then there are the raw numbers: Stuff’s latest poll of polls has National at 46 per cent, far ahead of the 34 per cent it polled in 1996, while Labour is identical (at 28 per cent).

The numbers will undoubtedly shift around, but Quin says National’s dominance will make it harder for Peters to generate suspense given Labour’s struggles.

“I can’t see anything in the pipeline that’s going to rescue Labour from a late 20s result.”

The participant in the 1996 negotiations believes Peters will be primarily motivated by policy wins in “highly symbolic, clearly NZ First-branded” areas, such as regional development.

Winston not big on reflection

For his part, Peters is not in the mood for reflection, judging by his response when asked for comment.

“We’ve moved on - why are you going back again?”

Does he see any similarities between 1996 and 2017? “No - every election’s different.”

What makes this one different? “21 years.”

Has he learned anything from the 1996 experience? “Well, there’s a stack of lessons, but lessons are always a private thing, have you noticed?”

The NZ First leader does eventually concede, however begrudgingly, that he and his party have made some changes following their first experience with MMP.

Peters argues today that the 1996 coalition negotiations took an appropriate amount of time, and “intolerance” from the media was to blame for tainting the public’s perception.

Yet during the 2005 campaign, Peters said NZ First had “learned the hard lessons of 1996” and would make its decision public upon the return of the writs - roughly three weeks after election day.

As already reported by Newsroom, he has made the same promise this time around, setting up October 12 as the moment of truth for Labour and National - provided NZ First is in a position to call the shots after September 23.

Unsurprisingly, Peters takes issue with the public accounts of others involved in discussions at the time.

“Somebody has said that...I can’t answer those questions because I don’t know, but anyone who says I did [ask to be Prime Minister] and carries on is just talking balderdash.”

He says Laws “couldn’t be further wrong” in suggesting the coalition with National was a fait accompli, also brushing off the suggestion that it was simply a matter of which party put forward the best deal.

“None of my colleagues will tell you that I tried to persuade anyone to go anywhere in 1996, other to discuss it properly as a caucus what all the ramifications were.”

As for the suggestion that the idea of Peters as Prime Minister was floated?

“It was never floated by me.” How about anyone else connected to NZ First?

“Well somebody has said that [the suggestion was made] right, that’s all I can say, that somebody has said that...I can’t answer those questions because I don’t know, but anyone who says I did and carries on is just talking balderdash.”

Not exactly an unequivocal denial.

Peters stands by his previous statements about the Alliance’s role in torpedoing a possible deal with Labour.

“That was a really dramatic moment where we all looked at each other and thought, this is unbelievable - we’ve been negotiating and believing one set of facts to be the case and this is a letter [from the Alliance] fresh off the press, only an hour old, which says something else.

“That’s when the caucus said, ‘Holy tamole, we are in a different ballgame here’ - and the rest of it will be in my book.”

Don’t expect it in your local Whitcoulls any time soon though - instead, those hoping to win over Peters must try to read his inscrutable features if they are to get a sense of which way he’s leaning before election day.