Political Roundup: The Winston-led government

Jacinda Ardern's major speech today is going to have to be very impressive if it's to steady the ship, after what was probably her worst week in government so far.

That's because the destabilisation brought about by Winston Peters has finally reached a level that has everyone wondering what exactly is going on.

The scandals of the last month over Clare Curran and Meka Whaitiri have been bad enough, but they pale into insignificance compared to having a deputy prime minister who has gone rogue and appears to be openly undermining Ardern and her ministers.

Recently, Peters and New Zealand First have been undermining the "Labour-led Government" in some crucial ways, almost as if seeking to rebrand as the "Winston Peters-led Government". For an outline of these, see Alex Braae's Five times NZ First muscled up on Labour and got away with it.

Political commentators seem to be united in detecting a crisis for the PM and Labour. Leading the field is veteran political journalist John Armstrong who says that 'Labour has been outsmarted and outmanoeuvred' by Winston Peters.

Armstrong stresses how severe the situation is, saying "Don't listen to those who dismiss the current muscle-flexing by Winston Peters as nothing more than the standard fare of MMP politics. It is anything but", and he warns that Ardern "should be worried — very worried."

It's all about New Zealand First trying to increase their visibility and public support: "Peters seems to be experimenting with the notion that minor parties which are far less polite get noticed by voters rather than being suffocated. If that is not enough to give Labour grief, Peters appears to be engaged in trying to pull off what would amount to a massive shift in power within the coalition."

Armstrong says that the degree of destabilisation is such that "the Doomsday Clock gauging the likely longevity of the current governing arrangement is now ticking much closer to midnight." And there's not a lot that Ardern can do about it, he says, because a strong reaction or retaliation "would be to pour petrol on a bonfire called "Coalition Tensions"."

This is also the point made by Danyl Mclauchlan, who says Ardern and Labour have no leverage over Peters and New Zealand First, apart from escalating the tensions in a way that would bring down the government: "Her ability to retaliate is incredibly limited. There are nuclear options or nothing. This is a horrible position for Ardern and the rest of her Cabinet. There's this notion out there that the prime minister has to be "tough", and that this will solve her problems, somehow, but it's hard to be tough when you have no leverage and no agency" – see: Jacinda and the Winston dilemma: do nothing or take the nuclear option.

There are numerous reasons for her lack of leverage. Partly it's because Peters is the type of politician for whom negotiations and agreements don't necessarily mean anything. He'll break commitments and move the goalposts as it suits.

But also, New Zealand First has already achieved most of their policy payoffs in the coalition government, and so they have little reason to play nice. Mclauchlan points out that if each party holds up each other's' legislation in Parliament, then New Zealand First has little to lose: "Labour currently has 67 bills in progress through parliament; New Zealand First has eight. This asymmetry gives Peters enormous leverage over Labour, and he's using it to implement a novel – for New Zealand – opposition-in-government strategy in which he appeals to soft National voters by routinely obstructing and embarrassing Labour and its ministers."

In this sense, according to Richard Harman, New Zealand First is cultivating its reputation as a handbreak on the more leftwing and liberal inclinations of Labour. And Peters pointed rejection this week of the government being described as "Labour-led" is part of the strategy: "the rejection of the Labour-led label is undoubtedly making the Government squirm. That's the point. NZ First believes it gets its votes by promising its voters it can restrain Labour from what NZ First MPs like to describe as its urban elitist tendencies. Making life visibly uncomfortable for Labour is central to that" – see: Who is in charge?

Harman suggests that Peters' "linguistic coup against his own Government" is ridiculous: "by any objective measurement, the Government is 'Labour-led'. For a start, some pages on its own Beehive website describe it as 'Labour-led'. And right from its inception that is what Prime Minister Jacinda Ardern has called it."

Apparently the "deeper and more calculating purpose behind" such tactics is an assertion of power: "what he apparently means to say with his subtle re-casting of the description of the Government is that NZ First and Labour are now equal partners."

This is also Audrey Young's reading of the situation: "Peters finally came clean about how he sees his party's status in the relationship, as an equal partner to Jacinda Ardern's Labour which explains a lot" – see: Failings in Coalition Government become glaringly apparent.

While not yet a "crisis", it is "the first falling-out", or the end of the "honeymoon" between Labour and New Zealand First. She points to how Peters undermined Labour's employment law reform this week, saying "Coalition partners behaving properly don't conduct themselves like that. Basic Coalition etiquette is missing." She focuses mainly on New Zealand First, saying "Peters appears to have no ability to stand back and see how his belligerence and petulance reflects badly on the Coalition."

Both sides are to blame, however, and Young says "Labour is not without sin" as they clearly failed to consult properly with New Zealand First over the intended announcement of the new Crown-Maori Relations agency. Despite going through Cabinet, she says "New Zealand First vetoed it, and not unreasonably in the circumstances".

This is serious stuff, according to Tracy Watkins: "Peters has not just diminished Labour with his grandstanding, he has diminished Ardern, who has had to turn the other cheek to his antics. In short, he is damaging not just Labour's brand, but its most potent electoral asset, Ardern" – see: Is Winston Peters Labour's dud Lotto win?.

The fact that New Zealand First has been targeting the Government's employment law reforms will be particularly troubling for Labour according to Watkins: "The bill is flagship Labour and core to its being. Workplace reforms are what get many of its grassroots activists out of bed every day."

What's more, the internal opposition was a complete surprise for Labour: "It thought it had wrangled Peters into supporting its industrial relations reforms, for instance – reforms which were one of this Government's first pieces of legislation, and which had been signed off by Cabinet, at which Peters has a chair… So Peters' sudden prevarication on NZ First's support was a bolt from the blue that completely blindsided the prime minister."

The two parties just need to get together and sort things out according to Fran O'Sullivan, who sees much of the wrangling as just "bickering" over "mere sideshows" such as the refugee quota – see: Winston Peters, Jacinda Ardern – It's time for a conversation.

What's "getting lost in the detritus of Government" are the "big issues" needing attention: "Housing New Zealanders, dealing with poverty and the homeless, getting a focus on infrastructure, reducing net immigration, improving health and education, and preparing for the future of work are critical."

But to Matthew Hooton there's a much more fundamental underlying tension in the coalition over the economy, with some darkening clouds on the horizon that are creating pressure. He argues the Government is facing some awful choices in the economy, due to forecasts suggesting they are not on target to meet their own self-imposed limits on debt – see: No new Prime Minister has had an easier ride than Jacinda Ardern.

Hooton says they have four unappealing options: abandon their Budget Responsibility Rules, raise taxes, cut spending, or just hope that economic growth improves. He believes that Ardern "and Finance Minister Grant Robertson are singularly unprepared to confront the difficult choices ahead."

Hooton believes it is this economic pressure that is driving Winston Peters' current defensive strategy: "If this is beyond Ardern and Robertson's comprehension, it is fully understood by Winston Peters and Jones. On this and other issues, they have no intention of going down with Ardern and Robertson. The survival of NZ First for another 25 years is far more important to them than the survival of this one Government for three. Subordination by the junior coalition partner will continue."

Finally, Steve Braunias notes in his latest weekly satire that Jacinda Ardern might be rather unhappy to be the subject of his secret diary "for the third week in a row". So here's all three: The Secret Diary of Jacinda Ardern: Week One, Week Two and Week Three.