A friend in need is negotiable

By ANDREW LAXON

Talks to form the next government have started between Labour and its prospective partners, the Greens and United Future.

Officially nothing is ruled in or out at this stage - coalitions, minority government, formal agreements between parties or no agreements at all.

But based on Labour leader Helen Clark's comments, it looks likely that Labour will form a minority government with Jim Anderton's Progressive Coalition and rely on the Greens, United Future or both for support in Parliament.

These are some of the factors that could make up her mind - with the policy shifts that could result from Labour choosing to go left with the Greens or right with United Future.

OPTION 1: GREENS

Leaders: Jeanette Fitzsimons, Rod 1 Donald

MPs: 8

Outlook: Left-wing environmentalist

Big issue: GM

Advantages: Keeps the Government firmly centre-left, which would please many of Labour's core supporters. Positions Labour in the centre, as the moderate party representing average New Zealanders - possibly crucial for Labour's long-term prospects. The Greens have a philosophical overlap with Labour's left wing on social justice issues, especially more spending on health, education and welfare programmes. They backed Labour solidly on most issues in the last parliament.

Disadvantages: The Greens' threat to bring Labour down in October next year if it lifts the moratorium on the commercial release of GM organisms. Strong opposition to Labour's superannuation fund and other key policies such as free trade agreements. Mutual distrust caused by the strong attacks both sides made on each other during the campaign. Relationships were already poor between the Greens and Labour's drier ministers, such as Michael Cullen, Jim Sutton and Pete Hodgson. Now Helen Clark shares this antagonism.

Policy wins and losses:

GM - The Greens cannot afford to back down on their ultimatum, which they have insisted is an absolute bottom line. If they did, the party would risk going the way of the Alliance.

So if Labour wants to govern with Green support, it has to find a way to fudge the issue and extend the deadline past the next election. The most likely method for Labour is to wait until next year and then discover growing "scientific uncertainty" about the effect of GM organisms on the environment.

The Greens would have to refrain from claiming any backdown when the decision is made. Whether this would work is debatable - but it would allow a Green-backed government to survive for more than 15 months.

Superannuation - The Greens strongly oppose Labour's pension fund, which puts aside $2 billion a year to pay some of New Zealand's growing superannuation bills. They want more of the money invested in New Zealand and complain that the money could be better used on social spending programmes such as attacking child poverty. Co-leader Rod Donald has suggested freezing contributions as a compromise.

But Labour will not budge on such a core policy, and the Greens can block it only by refusing to vote for money in the Budget - which would bring down the Government. It has ruled out doing this on any existing issues except GM.

Free trade - A sticking point, but the Greens have admitted they will lose the broad argument on this one. They are hoping for some trade-offs - cost-benefit analyses of any new agreements, including consideration of labour and environmental issues, and possibly a "Buy New Zealand-made" campaign to convince consumers that local products are better for everyone.

Renationalising rail - This looked a strong possibility before the election, as NZ First has a similar policy to the Greens and it appeared Labour could depend on either or both parties. Buying back the tracks from Tranz Rail could also solve some transport planning headaches for the Government.

But the Greens' relatively poor showing on election night means they will have little leverage here. Clark and Cullen have expressed scepticism about the need to buy back the network. Labour worries that it could pay too much and then have to pay even more for long overdue maintenance.

Taxes - The Greens want a range of "eco-taxes", including a $300 million carbon tax, to help pay for their policy of no tax on the first $5000 of personal income. They are handicapped by the weakness of their calculations on this - opponents ridiculed their costings in the campaign economic debates.

But Labour may see the opportunity for some horse trading. Cullen said last year that the Government would look carefully at carbon tax in response to a tax review. Labour has ruled out increasing income, GST or company tax, which still leaves other possibilities open. Treasury is also keen on the idea.

OPTION 2: UNITED FUTURE

Leader: Peter Dunne

MPs: 9

Outlook: Socially conservative Christian

Big issue: Families

Advantages: No obvious threat to the Government's existence like the Greens' GM ultimatum. Unlike the erratic NZ First, United Future is a genuinely centrist party which has many policies broadly compatible with Labour's. Supports the super fund.

Swinging voters seem to have chosen United Future as a suitable middle-of-the-road partner for Labour. Clark has already noticed that its inexperienced team of MPs could prove easier to push around than the prickly Greens.

Disadvantages: United Future is much closer to National than Labour, especially on economic policy. Most of the nine new MPs are conservative Christians, whose moral views - especially on the role of women and the family - are likely to clash with Labour and its supporters.

Floating voters seem to have swung in behind United Future to moderate Labour's influence, but many traditional Labour voters would prefer the Greens.

Peter Dunne also gives Helen Clark a strategic problem. His supposedly "common sense" (ie socially conservative) approach could make Labour look even more politically correct and extreme in the eyes of uncommitted voters.

In the longer term, a successful centre party poses problems for Labour and National, who want this political territory for themselves.

Policy wins and losses:

Cannabis - The nearest thing United Future has to a bottom line. It is resolutely opposed to any relaxation of cannabis laws, especially decriminalisation.

Compared with GM, though, this should be easy for Clark. The issue is a conscience vote for Labour MPs, but she can make sure it never gets on to the Government's agenda. A select committee is still ploughing its way through the arguments, so there is no immediate pressure for change. And Clark's coalition partner, Jim Anderton, who supplies two votes, is equally against decriminalisation.

Commission for the Family - United Future promotes itself relentlessly as a party for families, and this is one of its key policies. It would probably push for the establishment of a commission as the price of any formal agreement with Labour - which might even agree as the idea looks harmless.

Sceptics will see the commission as a Trojan horse for a return to the two-parent family model through a clampdown on divorce (one of its aims is to "develop the provision of marriage and relationship counselling services").

But it would be difficult, if not impossible, for United to control this body's aims once it began work - as the Greens discovered with the Royal Commission on genetic modification.

Tax changes - Dunne, Inland Revenue Minister at the tail end of the 1993-1996 National-led Government, wants lower personal taxes and corporate tax down to 30c in the dollar. His family-friendly policies include "examining" income splitting between husbands and wives for tax purposes and bigger rebates for childcare costs.

None of these policies are likely to have much influence on Michael Cullen, although the childcare rebates may fit with Steve Maharey's attempts to overhaul the welfare system. But Dunne could frustrate any attempt by Labour to raise taxes.

Property rights for de facto couples - United Future opposes the Property (Relationships) Act, which gives de facto couples the same property rights as married couples if the relationship breaks up. But Dunne told the Herald on Sunday that his party would have been happy to see the legislation go through as separate bills to keep the distinction between married couples, de facto couples and same-sex relationships. The argument hardly looks likely to bring down a government, and many family lawyers have argued that the new law urgently needs revision. But Labour could face a series of embarrassing controversies like this if United Future MPs are offended by any initiatives involving women, the family and homosexuality.

Immigration - United Future wants to aim for a net gain of 10,000 new immigrants a year. It remains to be seen how hard Dunne will push for this policy, which is a hangover from his earlier coalition with the Ethnic Minority Party.

Helen Clark has vigorously defended new immigrants against attacks from NZ First leader Winston Peters, but would not be keen to give him any more ammunition.

Treaty of Waitangi - United Future would try to nudge Labour to take a harder line on settlements. It wants a 2010 deadline, a spending cap of $200 million a year and the right for non-Maori to lodge claims.

OPTION 3: GREENS and/or UNITED FUTURE

Advantages: Clark's dream scenario, as it would allow her to play the two parties off against each other. In theory, Labour could govern virtually as if it had a majority. If the Greens tried to pull her down on GM, she could turn to Peter Dunne. If United Future tried to block Labour's social programmes, the more progressive Greens would come to her rescue.

Disadvantages: No one likes being treated like a doormat.

Labour might get away with this approach for a while but it would run the danger of turning every other party in Parliament against it, including the Greens and NZ First.

Labour would have to scrape for support on every issue.

Perhaps most importantly it would anger the public, who cast more than a third of their votes for minor parties at this election - suggesting that they want Labour to govern by consensus in the spirit of MMP.

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