Winston Peters gives his version of how the Government was formed

Winston Peters and Jacinda Ardern shaking hands after signing their coalition agreement. Photo / Mark Mitchell

In 2017, Labour leader Jacinda Ardern clinched coalition talks by offering New Zealand First leader Winston Peters the job of deputy prime minister, according to a leaked account of the highly confidential talks published in the book Blue Blood. Peters strongly disputes that account and spoke exclusively to the Weekend Herald about his side of the talks, considering that confidentiality lapsed after the publication of details in Blue Blood.

Coalition talks following the 2017 election started before they even began, according to the man at the centre of them, former deputy prime minister Winston Peters.

Peters told the Herald that before formal talks began after special votes had been counted, he had a private conversation with then-prime minister and National leader Bill English over one important detail: Judith Collins.

English - who would not comment on the conversation, citing the confidentiality of the talks - allegedly told Peters that Collins was moving against him in caucus.

"It was clear to me from the very beginning of discussions that English was worried about getting rolled," Peters said.

Peters said that English was trying to pre-empt him from hearing about the potential coup from someone else by discussing the tension "privately" before talks got going.

"They will have told you that I'm going to be rolled by Judith Collins, but she hasn't got the numbers," is Peters' recollection of the conversation.

As ever with Peters, the reason for the conversation lies in his complicated political past. Peters said that English knew Peters' experience from his first coalition agreement - the 1996 deal inked between NZ First and National, then led by Jim Bolger.

Bolger was later rolled by Jenny Shipley, and Peters walked from the Government after a huge falling-out with Shipley. The Government limped on without Peters and NZ First thanks to mass defections from NZ First MPs who propped up National.

"I was dealing with Jim Bolger - I shook his hand thinking I had a deal with him not knowing that secretly they were moving against me even then," Peters said.

"He [English] knew I'd be suspicious of it happening a second time round," Peters said.

Peters added that "at no time was [English] not honest and direct with me".

Following the 2017 election, the NZ First leader was in the position to form a government with National, or Labour and the Greens. After weeks of confidential negotiations, Peters picked Labour, forming the last Government.

Those talks were bound by confidentiality agreements, but details were revealed in the book Blue Blood, by political journalist Andrea Vance. Peters considers the fact that details are now public reason enough to go public with his own account of negotiations, including a dispute over a key point: when he was offered the position of deputy prime minister.

Blue Blood has a source who contends Peters was offered the role at the 11th hour of negotiations, Peters alleges that point was hammered out at the very beginning of talks.

Peters was not able to substantiate his version of events. He claims to have written documentation proving the timing of talks, but he refuses to release it.

Vance said she stood by her sourcing and reporting, which has not been publicly challenged by anyone but Peters himself.

A spokesperson for the Prime Minister would not give Ardern's version of events, citing the confidentiality commitments made at the time.

Labour sources have told the Herald the timing set out in the book is correct. Another scenario, supported by a source, suggests the truth is somewhere in between, with all three parties assuming Peters would be offered deputy prime minister from the start, although he was not formally offered the job until late in the talks.

Winston Peters and Jacinda Ardern signing their coalition agreement. Photo / Mark Mitchell

A source on the National side suggested this was closer to what actually happened. They told the Herald it was always assumed Peters would be offered the deputy prime minister role, but discussions about positions were not held until the leader-to-leader talks later in the process.

It is possible the decision over who would be deputy prime minister was not even decided by the time Peters had selected Labour. In an interview with RNZ after Peters announced his decision to back Labour, Ardern said Peters had been offered the role, but she had yet to hear whether he had accepted it.

In Peters' press conference announcing his decision to back Labour he said the deputy prime minister role had been offered to him, but he had not yet accepted it.

"If I choose to be the deputy prime minister - that was made clear to me," Peters said.

Speaking to the Herald years later, Peters said one of the reasons the announcement of the Government was delayed was indeed because of discussions over portfolios - and over who would occupy the role of deputy prime minister.

Peters contends that the role was settled in the first round of negotiations.

He said that one of the reasons talks dragged on beyond his self-imposed deadline of 12 October was that Ardern wanted to reopen the role of deputy prime minister, which Peters considered to be settled.

"Having had the matter of deputy prime minister settled on day one, it was at the 11th hour that Jacinda Ardern, when I was running through the portfolios, challenged me on the deputy prime ministership," Peters said.

"She wanted to relitigate it and I said to her, 'this has already been sorted out', whereupon she said 'why does somebody of your age want that job?'", Peters recalled.

Arguing the point with Ardern, Peters made the point that Warren Buffet, one of the wealthiest men in the world, was still running his investment firm Berkshire Hathaway at the ripe old age of 87 (Buffet is still running the firm today, at the age of 91).

"I have great clarity on this matter - I said, 'there's a guy called Warren Buffet who leads Berkshire Hathaway who is 87 years of age and over 10,000 people go to his speech every year because he's one of the smartest guys in the room when it comes to economics and business'," said Peters, who is 15 years younger than Buffet.

Peters said that he believed Ardern had promised the role to Labour's deputy leader Kelvin Davis. One person close to the negotiations said they also believed Ardern would have preferred Davis in the job.

"It was clear to me she'd promised it to Kelvin Davis... even despite the fact on day one it had been sorted out," Peters said.

Peters said this showed Ardern's "dramatic inexperience".

"Being around for a long time, you need to know the reason why you go for a job like that is you've got to know what's going on and that level of experience is critical to know what's going on," Peters said.

In the end, talks wrapped up with leader-to-leader meetings, which were widely reported on, but which Peters denies took place ("I never met personally leader-to-leader without my team to the best of my memory," Peters told the Herald earlier this week), and Peters announced he would back Labour on 20 October 2017.

Portfolios were announced shortly afterwards, and the new Government was sworn in on the 25th.

For his part, Peters said the early part of negotiations went rather smoothly.

"We met as a New Zealand First team and put up all of our objectives on a whiteboard so we were clear about what we would do and how we would do it," Peters said.

This brainstorming exercise focused on problems Peters wanted to see fixed. It did not dwell on specific portfolios and policies.

"Not so much policy-focused," Peters said of the brainstorming, "but problem-focused".

"We had nine years of very little progress in a serious context. We had a housing crisis, we had a serious inflow of immigration without any regard to how they would be housed, health or education," he said.

Winston Peters during Question Time shortly after the Government was formed. Photo / Mark Mitchell

From there, Peters set out negotiating with both sides.

Peters said he was the lead negotiator, backed up by whichever MP held the portfolio for what was being negotiated.

The two key staff on the team were David Broome, who did some negotiating, and Kirsty Martin, who "kept all the notes, all the fiscals, and all the back-up evidence".

Broome dealt exclusively, Peters said, with English's chief of staff, Wayne Eagleson.

Peters said he had "no complaints" about the way Eagleson handled his side of the negotiations.

He did, however, have concerns about what was on the table from National.

Peters believed National wanted to offer more in the way of portfolios, but fewer actual policy wins.

He said early on it was agreed NZ First would have five positions, four ministers inside Cabinet and one Parliamentary Under Secretary.

"I suspect National would have given us more ministers and less policy. That was our great concern," Peters said.

Looking back now, it was policy, much with significant cost attached to it, that Peters was most concerned with. This was particularly true in areas like defence, which Peters thought was underfunded, and the highway from Auckland to Whangārei, which National had pledged to build, but not announced funding for.

Peters also wanted to boost funding in things like rail.

"Between the 1870s and the 1880s, [then-Prime Minister Julius] Vogel built more railway than we did for the next 130 years and he did that with horse and cart," Peters said.

In the event, Peters secured billions of dollars for funding for KiwiRail - so much that Treasury had to change the way it was treated in the public accounts, switching it from a commercial entity to a public good.

Talks wrapped up after 11 days of negotiations (Peters refused to begin formal talks before special votes were counted).

Against some expectations, the Government survived right up until the election, defying the trend of NZ First coalitions' often acrimonious public fallouts, although privately Ardern and Peters were said to have had a massive falling-out, with one account saying the pair barely spoke to each other in their last months in Government.

Peters was knocked out of Parliament at the 2020 election. After spending months in silence, last year he announced his party would be back at the 2023 election.