There appears to be a division within the National Party as to whether the party should do a deal with NZ First at all.

MPs have been told not to speak to the media over the next week, even on background, over the forthcoming Government-formation talks.

But party officials are talking.

They want the caucus to understand that the party is not prepared to give the Cabinet carte blanche to negotiate any sort of deal with NZ First.

There is a fear that senior MPs, particularly Bill English and Steven Joyce, might feel that they have only another three years of political life left in them and they would prefer to spend that time in Government.

“But if that means we’re in Opposition for nine years after the next election then it won’t have been worth it,” one party official told POLITIK.

One consequence of this chain of thinking is that there will be pressure on the party President, Peter Goodfellow, to have the party’s board sign off any deal that National might do.

POLITIK understands that though the party’s rules require this; it hasn’t actually happened with previous supply and confidence deals reached by National.

What concerns the party is that any deal with NZ First is likely to see National agree to policy it has previously opposed and that the deal could end in tears anyway.

National’s pollster, David Farrar, who is an influential voice within the party, has publicly supported National going into Opposition rather than doing a deal with Peters.


A  hint of how difficult the policy agreement with NZ First might be, and where surrender would be opposed by many party members,   came yesterday with Winston Peters issuing a press statement questioning the Reserve Bank’s decision to hold the Official Cash Rate at 1.75%.

Today’s announcement that the Official Cash Rate (OCR) will be left unchanged at 1.75 per cent maintains the tone of complacency on New Zealand’s economic outlook,’ he said.

“Beneath the veneer of stability large risks are lurking in the global economy,” says New Zealand First Leader Rt Hon Winston Peters.

“Irrational exuberance rules.       

“It is impossible to predict when, but something will go wrong, and New Zealand should be prepared,” says Mr Peters.

Peters advocates changes to the Reserve Bank Act and the way the Official Cash rate is set which would allow external voices to become part of the process and which critics believe risks politicising the process.

And he also issued a statement attacking Bill English over his decision in 2014 to tax the Cullen F und which yesterday announced a 20.7% return for the year ended June 30.

It is also NZ First policy to resume contributions to the fund which National says it will not do until 2020 when it has got Government debt down to 20% of gdp. 

Perhaps because of these policy differences — and there are many more — there is also an argument within the National party that maybe Peters ought to be offered an electorate deal to “bind NZ First closer to us”, as one party official put it and that could avoid having to do too many compromises with him over policy.

Whangarei and Wairarapa electorates are considered potential places where a deal could be done.

If it were to be Wairarapa, Such a deal would bring Ron Mark, the NZ First list MP and former Mayor of Carterton, into the seat.

Mark has been an advocate of NZ First becoming a de facto “country” party focussing on regional issues.

He promoted this idea within the party in the wake of the success in the Northland by-election in March 2015.

That also would have some attraction to National as its vote share comes increasingly from the big cities.

Peters offered some revealing insights into his thinking in an interview on Sky News Australia on Wednesday night in which he said National had won the election largely because of two blunders by Labour during the campaign – presumably the water tax and capital gains tax issues.

He dismissed the idea that National was a conservative party.

“They have gone down the path of Maori parallel Government, of a separate social and statutory system,” he said.

On the campaign trail, he has been warning that National plans to include Maori in the water allocation regime that it has a working party investigating.

“National publicly says water ownership is off the table, but in private meetings, it has held with Iwi, ownership of water is very much what the discussion has been about,” he told a meeting in Whitianga on September 13.

The fact that he highlighted the issue in the Australian interview suggests it may be one he takes into any Government formation talks.

Ironically National’s party membership might find a compromise with Peters on that issue much easier than compromises on his economic or trade policies. It might also be easier for National to agree to than Labour with its rejuvenated Maori caucus.

And what is clear is that the National party membership will not want to see too much given away in the government formation talks even if it means going into opposition.