Justice Minister Andrew Little (centre) pictured with Parliamentary colleagues at Waitangi in February. Photo / John Stone
What initially looked to be another case of Labour being forced to bend to its intransigent Coalition partner, is increasingly looking like revenge for its former leader, writes Hamish Rutherford.
During Queen's Birthday weekend chatter picked up in political circles that New Zealand First and Labour were close to an agreement on what to do about commercial rents where businesses had been locked out during Covid-19.
Having ramped up expectations in late April of a solution to force compromise upon landlords, the process hit a major snag when NZ First refused to back a plan promoted by Justice Minister Andrew Little.
NZ First leader Winston Peters has been saying his concerns were around the sanctity of contract law, claiming that while there was a problem brought up by Covid-19, it was not one which should see the Government get in the way of contracts negotiated willingly between private individuals.
Cynics would point to the fact that among New Zealand First's donors are landlords.
For weeks Prime Minister Jacinda Ardern had been promising that something was coming, while at the same time progressively softening her language.
Surely no Labour Prime Minister has ever been forced to describe commercial landlords as "vulnerable"; whatever else happened it seemed like Ardern was learning that not all building owners were rich listers.
Many retirees own stakes in commercial real estate syndicates and many of those syndicates were largely powerless when, at the start of the lockdown, major tenants warned they were ceasing rent payments.
Over a period of weeks she and Grant Robertson had been continually diminishing how many businesses were unable to require their landlord negotiate to strike a deal, urging any tenant not to wait for what may or may not emerge from negotiations.
But by June 3 it was clear that a deal had been reached.
Napier MP Stuart Nash was clearly confident, bragging on his regular Newstalk ZB slot that a deal would be announced that week, claiming he had been working hard as the Minister of Small Business.
Nash's co-star on the show, National's Mark Mitchell, joked that Nash's comments would cause alarm in the Beehive. He was right.
Peters, consistent for his unpredictability, is in a fight for survival and Labour appears to believe he could take advantage of any opportunity to create distance from the rest of the Government.
Little apparently remains scarred by the time he spoke confidently about the Coalition's plans to repeal three strikes legislation, only to discover NZ First was not on the same page.
The deal which had been circulated to ministers charged with thrashing out the deal appeared designed to be limited in scope.
A paper put to the Cabinet Economic Development Committee by Little suggested an "implied clause" would be inserted into the Property Law Act, which would entitle qualifying businesses to rent relief.
But the businesses would be tightly defined and certainly small.
"I propose criteria to target rent relief to the businesses that need it most," Little wrote, adding that it would only apply to businesses which "have 50 or fewer full-time equivalent staff".
Furthermore, the rule was clearly set out in a way which would suit New Zealand First's nationalistic mindset.
To qualify businesses had to be "New Zealand based" Little's paper read, strongly suggesting that any business with any international operations would miss out.
"Businesses that have an overseas head office or are part of an overseas-based multi-national would not have the term implied into their leases".
What precisely happened next is unclear. But the deal which came out of the meeting was very different from the one that went in.
Little is said to have arrived at the meeting well prepared to put forward a counter-proposal which was worded somewhat similarly, but had widespread implications for who would be entitled to it.
Instead of 50 or fewer staff, the Cabinet minute recording the decision said it would apply to a business which "has 20 or fewer full-time equivalent staff per lease site".
The nationalistic language was also toned down from the original proposal to simply that the business was "New Zealand based".
While this would see some businesses - those which operate from a single site with 21-50 employees - excluded, it would broaden the scope of who was entitled in other ways, potentially significantly so.
Richard Thomson, managing director of gift shop chain Acquisitions, said under the original wording his company, with 140 staff, would miss out. But because each of his 22 sites had 10 or fewer staff, he would qualify.
He believes the "vast majority" of retailers would qualify at many of their sites. Thomson had identified how much the deal had changed within an hour of Little releasing the Cabinet decision, but denied knowing about the "political machinations" which led to it.
NZ First ministers were apparently willing to negotiate a change, despite some suggestion by those close to the situation that they did not appear to realise the implications.
"It was discussed at length," Little told the Herald afterwards. "The wording was very carefully worked out and it's recorded in the Cabinet minute."
Initially Labour emerged magnanimous, while NZ First was jubilant.
Peters ridiculed Labour's policy in a press statement as "using a sledgehammer to smash a nut", claiming it would have applied to all leases.
"This would've been poorly targeted policy and affected many landlords who've sensibly adapted to the changed circumstances brought by Covid-19."
Little initially played down the differences between the two parties, and said he would be happy if Labour was to go into Government with NZ First again.
But as Peters continued to mock Labour's position, Little teed off.
The former Labour leader told the Herald that after rebuffing his first proposal, NZ First was meant to come back with a counter-proposal. For more than a month Labour waited and when a counter-proposal was submitted "it was frankly laughable" and withdrawn within a day.
Little described Peters' claims about contract sanctity as "cute" (saying Parliament frequently made changes which impacted contract law). Peters' claims about Labour's position were "incorrect" because his proposal was never to apply to all contracts.
He also appeared to hint that rather than NZ First winning in the negotiations, it was Labour who had bested its coalition partner, saying that his party had waited for weeks but then got a decision which was close to what it had originally argued for.
"When we actually did some negotiations, they were excellent," Little said, adding that the month-long hiatus in negotiations was not its fault.
"I'm not sure why it took as long as it did for them to provide a counter-proposal, but it did take that long, and in the end they're going to have to answer for that."
NZ First leader Winston Peters is not one to take mocking gently, but so far NZ First has not responded to requests for comment.
Hours after the deal was announced, a post on The BFD, a website associated with former WhaleOil blogger Cameron Slater (who in turn is linked to political strategist Simon Lusk, who has been involved in NZ First fundraising) claimed that Peters had been "stitched up" and needed to go back to his original position.
Slater wrote that now many small businesses would not be entitled to relief, while a suburban McDonald's could.
"Sources say that Winston Peters thinks that this is a good compromise solution, but when he finds out he was stitched up by an unholy alliance of David Parker, Andrew Little and corporate lobbyist and former political staffer Neale Jones he may actually rethink his agreement."
Jones, Labour's former parliamentary chief of staff who has since formed his own government relations company, said his role was working for Specsavers for the benefit of the company's New Zealand franchisees, as part of a wider effort by retailers. He described most of Slater's post as "fantasy".
One of NZ First's donors has delivered blunt criticism both of the deal between Labour and NZ First and how it came together.
Troy Bowker, the outspoken Wellington asset manager who part-owns the Hurricanes super rugby franchise, unleashed a scathing statement. His company, Caniwi Capital, donated $24,150 to NZ First in 2019.
"NZ First obviously thought they were being clever by delaying the Labour-initiated commercial rent relief interference that Andrew Little announced with no detail in April," Bowker said, adding that Labour's position had caused many negotiations to stall, as tenants expected "free rent" from landlords.
Bowker said the deal meant that a number of "genuine" small businesses would miss out while a number of "very large nationwide businesses operating from many sites" would qualify at the expense of landlords, some of whom were not nearly as wealthy as the companies they leased space to.
"It looks to me like NZ First has been played by Labour here with the end result a debacle."
The Property Council described the package as "too little, too late", while Retail NZ was also unhappy, saying the package did not go far enough.
The arbitration industry certainly looks to be a winner from the deal, with $40 million set aside to cope with an expected wave of disputes.
But so does Little who, if nothing else, appears to have won a political victory over NZ First at a time when the populist party seems to be in the mood to cause Labour trouble.
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