As the parties commence talks to form a coalition government, former NZ First MP Deborah Morris-Travers, writing for The Spinoff, looks back at the 1996 coalition talks and the lessons today's players can learn from NZ's first MMP coalition agreement.

The long 1996 coalition talks are remembered today mainly for the political theatre created by NZ First leader Winston Peters. But along with the daily media stake-outs and efforts to anticipate which way the talks would go, there was detailed policy work and political maneuvering that ran right up until final deal was sealed.

Looking back as someone who was there, there are definitely lessons to be learned from the 1996 coalition talks and the resulting agreement.

I joined the New Zealand First parliamentary office as a policy advisor after spending my university years studying political science and immersed in political activity: marching against student loans, campaigning for MMP, supporting the republican movement, and getting involved in local Labour Party activity. In 1996, at the age of 26, I was elected as a NZ First list MP.

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For many people, the first MMP election brought hopes of shifting power away from the two dominant political parties, increasing diversity, ensuring checks and balances on the system, and including the smaller parties disadvantaged under the First-Past-the-Post electoral system. NZ First spoke to public disaffection with the power of the larger parties and the neoliberal reforms of the 1980s and early 1990s.

NZ First's response to public concern about the effect of reforms was typically conservative. Winston Peters, the popular rebel ejected from the National Party, ran a strong campaign which included tapping into worries about foreign investment and immigration.

In the 1996 election NZ First made a clean sweep of the five Māori seats and got 13% of the vote. The party had a lot to celebrate; it was just three years old and the caucus had grown from two MPs to 17. Along with the newly elected team were defecting MPs Jack Elder from Labour and Peter McCardle from National.

Coalition talks were necessary with National holding just 44 seats, and Labour 37. Also in the mix was The Alliance, with 13 seats, necessary if Labour was going to lead the government. NZ First faced the prospect of forming a government with National alone, or forming a three-way deal that would include Labour and The Alliance.

Given that all the NZ First MPs had previous involvements with either National or Labour, there was genuine potential for either of those parties to lead the first MMP government - although Winston's own preference was always likely to dominate.

Winston Peters, masterful in his management of the political and media opportunity before him, set about shaping coalition talks that would enable maximum leverage.

11th December 1996: Prime Minister Jim Bolger and his deputy Winston Peters share a laugh as they sign the new coalition agreement in the Legislative Chamber. Photo / File
11th December 1996: Prime Minister Jim Bolger and his deputy Winston Peters share a laugh as they sign the new coalition agreement in the Legislative Chamber. Photo / File

He was smart about his negotiating team. His best friend and lawyer, Brian Henry, and his brother, Wayne Peters, were involved at different times, along with former MP and trusted advisor Michael Laws and a small group of MPs.

As we know, one of Winston's strengths is his ability to anticipate future moves, and this was evident in the way he assigned tasks to his team. He had already assessed what would be needed for the caucus to make its final decision - whenever that would be. And time really was no issue. The nation would have to wait while we negotiated the intricacies of our excessively detailed coalition agreement, and secured positions that would enable its implementation.

Anticipating the caucus meeting that would make the final decision, I was assigned to the policy negotiations with the National Party: keeping an eye on the details, scoping up the priorities and policy costings, and helping to write the coalition agreement. My colleague, Tuariki John Delamere did the same on the Labour side. We were both present in all of the talks so we could compare and contrast.

At the time, this was perplexing for me. Given my inherent preference for a Labour-led government, having to deal with National was a challenge. Later, Winston said he had mixed things up like this to ensure our advice to caucus wasn't overly influenced by existing perceptions of the parties; he wanted us to negotiate policy with the party we had the least in common with. Perhaps also the party we would demand the most from.

Initial talks focused on the process: who was to be in the room, who held which lines of communication, neutral meeting spaces, confidentiality. Obviously there was need to be open to what the negotiations required in terms of relationship building, broad policy discussions, budget briefings, and conflict resolution, but it felt like we got into policy detail pretty quickly.

For the most part, talks were respectful and constructive but there were uncomfortable moments too, when someone dropped a clanger or we were trying to resolve final points.

There were sexist comments from senior National MPs, and strident advocacy for Labour to lead the government to deliver a woman prime minister.

In between the meetings with each of the parties were discussions among NZ First MPs about progress and perceptions of those we were negotiating with. These were extraordinary events to be a part of and we took the responsibility seriously. We were less attuned to the risks: how we'd ensure profile for the party while in coalition with others, how we'd sell our successes so people knew what we'd achieved, how we'd maintain discipline as a caucus amidst the pressures of government.

I don't recall any decent conversation about the values and vision we were bringing to government, or the kind of government we wanted to be. This became a risk once the government was formed, we felt the impact of the Asian economic crisis, and National insisted on further welfare reforms and asset sales.

Eventually, after multiple versions of policy agreements had been drafted and the wording tweaked, two versions of draft coalition policy agreements evolved; one for National and one for Labour. Along with the policies, were some basic agreements about ministerial portfolios.

Two months after the election, caucus settled in for a long day of discussions about our options. Our considerations included the practicalities of governing with three parties, and the extent to which Labour could guarantee the support of The Alliance.

As we sat in that room in Bowen House, Winston was continuing to negotiate with National and Labour. In the end, the highest bidder in the portfolio auction would determine the outcome of eight weeks of talks.

Eventually, Winston Peters announced that National had agreed to make him deputy prime minister and treasurer. This was a significant concession and tipped the decision their way. Caucus was unanimous in its support of a National-New Zealand First government. In total, five MPs would hold portfolios, rising to eight in the second year.

While it appeared that the coalition agreement contained significant concessions by National - including the important agreement to free healthcare for under six year olds - National's wily finance minister Bill Birch wrote a caveat into every page of the agreement, one that essentially made the agreement meaningless.

1996: Winston Peters taking time out with a yacht trip to Matakana Island in Tauranga. Photo / File
1996: Winston Peters taking time out with a yacht trip to Matakana Island in Tauranga. Photo / File

Everything in the agreement would be subject to fiscal constraints. This meant that on a daily basis we had to negotiate the implementation of the coalition agreement and in the face of the Asian economic crisis, National seemed to have every reason to resist progress on the policies we had agreed to.

The detailed agreement we prepared was evidence of our collective caution about forming a coalition government. We had tried to anticipate what we would need to progress in government, in detail. Ultimately, however, history has shown that the more important agreements are those that relate to process and no surprises clauses, rather than policy.

In today's environment, given there is currently no national consensus about the role of governments in relation to the most urgent issues, I also think there's a need to agree vision, the outcomes sought, and what kind of governance parties want to provide.

After forming the government, NZ First worked constructively with National for more than a year and delivered some important policies, but the polls slumped and caucus discipline was non-existent. Winston was busy as treasurer so he had less time to lead his caucus and maintain a cohesive team.

Of course, there were significant disagreements along the way and Winston didn't always stick by his own MPs. Neil Kirton was sacked from the associate health portfolio, in favour of Bill English's position on the issue at stake.

At the same time as we were dealing with internal conflicts, Labour was fierce in opposition and seemed to redouble their efforts after NZ First chose National over them.

However, the coalition really started to founder when Jenny Shipley rolled Jim Bolger and took the leadership of National. The relationship between National and NZ First became tense as Shipley started to rein in Winston Peters.

To me, this was further evidence that our detailed coalition agreement meant little when relationships were low-trust and the partners weren't prepared to work together.

In the end, the government collapsed in August 1998 over disagreements about asset sales. The sale of Wellington Airport provided the excuse that NZ First MPs were looking for. The coalition came to an end and so did Winston's 17-strong caucus.

For many, the long talks of 1996 and the instability of the government brought MMP into disrepute. However, the electoral system has delivered a more diverse parliament, a different set of checks and balances, and allowed smaller parties to take their place in the house.

MMP is not to blame for extended talks. Responsibility for timely formation of governments and the delivery of stable government sits solely with party leaders and their MPs. So, let the talks commence!

Postscript: Following the collapse of the National-NZ First government, Deborah Morris-Travers was one of the first MPs to leave the party and remained an independent until her resignation from parliament in 1999. She was the Green Party's chief of staff during the 2017 election campaign.

- The Spinoff