KEY POINTS:
The country has spoken clearly. It wants a new Government and wants it today. The vote on Saturday was more decisive than usual under MMP. It left no doubt which of the main parties would hold power. No minor party has been given the option. National needs the
support of only the Act Party or the Maori Party, and the only question remaining is whether it will govern with one of them or both.
Act would seem the easier and quicker deal to do. An agreement was reached during the election campaign in which the coalition partner would settle for one Cabinet voice and it would not be Sir Roger Douglas, who declares himself content with that.
But the Prime Minister-elect may prefer an arrangement with the Maori Party, for the same reason that Helen Clark preferred to deal with parties to her right. Act is to National what the Greens were to Labour, a niche party on the outer end of the same side of the spectrum which can afford to be more purist than its mainstream partner. The main parties need to lean to the centre, and support from the other side of the centre-line can do them no harm.
John Key has made it clear how much he would like the Maori Party's support. With an eye to the next election and beyond, he knows National will need partners besides Act, which, on previous evidence of coalition politics, might struggle to survive the larger party's embrace. The Maori Party looks like a permanent feature of the political landscape, and National needs to forge a relationship with it.
The Maori Party, however, has had a disappointing election. It has added only one seat to the four it already held, and the electorate has not dealt it the cards it hoped to play. National now holds all the cards. With Act in its pocket, National will approach the Maori not in need but in a spirit of far-sighted generosity. That is not a basis on which to bargain a share of power. It is a recipe for mere concessions.
To prove that the bargain was not one-sided, the Maori Party would need some big prizes. In these circumstances it will not be easy for National to forge the relationship it wants, nor could it be done as quickly as the electorate plainly desires.
The decisive vote on Saturday was cast by an electorate mindful of economic crisis. The October collapse of financial confidence has left major economies sliding into a recession that is predicted to be deep and long. The predictions may be wrong but they seem to be universally accepted, and that sort of pessimism can be self-fulfilling.
In any event, New Zealand now urgently needs a government that can look ahead and make some decisions that will be crucial to the country's chances of riding out a recession in good shape for the future. National ought to form that government with Act without delay. It would also include Peter Dunne, lone survivor of his party, United Future. A coalition of that composition would not preclude a deal with the Maori Party later.
The new Government's first task is to update itself on the public accounts. The Treasury's pre-election report was bad enough, projecting deficits for a decade, but its estimates pre-dated the world financial meltdown. National is committed to further tax cuts and some judicious public spending and may need to adopt some of Labour's promised projects too.
But in striving to cushion the country from unemployment, the Government must be careful to not cushion the labour force from change. Economies are going to need to adjust to a better regulated financial system, and their patterns of investment will be different. Few Governments have come to office in more uncertain times. National should try to seal a coalition today.