Clark faces coalition headache

Helen Clark gives a press conference in Nelson yesterday. Picture / Tim Skinner

Third-term Prime Minister Helen Clark is facing a coalition headache, with at least one minor party already making demands, while the support of another remains uncertain.

Formal negotiations between prospective coalition partners will begin in earnest tomorrow - following confirmation yesterday of the final election results - and could be concluded as soon as next weekend.

The onus is on the minor parties to appear reasonable in negotiations, but neither the Maori Party nor New Zealand First are likely to easily acquiesce to Labour's vision.

Maori Party co-leader Pita Sharples said yesterday that while Clark had made it quite clear she only wanted Jim Anderton in a formal coalition, the Maori Party could possibly provide support on confidence and supply but that would come at a price.

"The Maori Party would need something back before we'd entertain that. Consultation on all things Maori, I think, would be the first thing, and a few bills through."

New Zealand First leader Winston Peters went underground yesterday and also remains an uncertain quantity despite his pledge not to bring down the Government.

At the same time, Don Brash has pledged to lead National into the next election and says he has no fears about a leadership coup.

The 65-year-old said he could survive as leader beyond 2008, if that was when the next election was, denying his age would be a barrier: "When I first got involved in politics, the people who counselled me said you've got to think in terms of at least three terms. I'm not planning imminent retirement at all."

He paid tribute to the depth of talent in his expanded caucus: "It's a fantastic line-up and I'm delighted there are many people in that caucus who would make excellent leaders of the National Party."

Under Dr Brash, National has lifted the number of MPs from 27 to 48 after the party's worst election result ever in 2002.

He is believed to have the backing of the party hierarchy and senior caucus figures, but that could change if National's poll ratings drop next year.

Dr Brash's most likely successor is finance spokesman John Key, but Bill English, Simon Power and Gerry Brownlee are also possibilities.

After conceding the election yesterday, Dr Brash said Labour faced "very difficult circumstances" and would be unable to maintain a "winner takes all" style of Government.

After potentially torturous coalition negotiations, Labour would face an economic slow-down, low export prices, a high exchange rate, and possible interest rate rises.

If it could not go full-term, National would "be waiting in the wings".

Act leader Rodney Hide yesterday criticised the way National had run its election campaign, saying maximising the party vote at the expense of potential allies was ill-suited to the MMP environment.

But he pledged to resume a close working relationship with National in opposition. "It's my intention to hold this Government to account every day and have an election at the earliest possible opportunity," he said.

The leaders of National's potential coalition allies said Dr Brash was correct to concede but that he was not entirely out of contention.

"If there's a hiccup, he's back in like a burglar," said Maori Party co-leader Pita Sharples.

Despite losing the election, National will be breathing a sigh of relief after coming within 0.02 per cent of losing a second seat in Parliament.

The party yesterday lost list MP Katrina Shanks as the final election count brought the size of Parliament from 122 seats to 121.

Labour now has 50 seats to National's 48.

But if the Greens had received the extra 1246 votes - or 0.02 per cent - required to bring Nandor Tanczos back, their extra seat would also have come off National's tally, according to calculations by political commentator Colin James.

The final result did not change the number of seats held by any party other than National and no electorate seats switched hands.

Labour and ally Jim Anderton are now 10 votes shy of a 61-vote majority in the 121-seat Parliament.

The necessary support could come from the Greens (6) and the Maori Party (4); NZ First (7) and United future (3); NZ First and the Maori Party together; or a four-party arrangement.

If NZ First abstained on confidence and supply - as Winston Peters has indicated they might - Labour would need 58 votes for a majority.

The Greens' sworn aversion to a National Government makes them the least-demanding option for Labour but Helen Clark may not find them a palatable choice.

United Future and NZ First have both ruled out supporting a formal coalition that includes the Greens.

"One thing that she will want to avoid is being locked into a left solution," said Mr James. "She has made clear in the last three years that she values the chance to reach across the centre line. That's why she was keen to have the relationship she had with United in the last parliament."

Clark is understood to be especially reluctant to rely on the Maori Party.

Pita Sharples took a more conciliatory position on the crucial foreshore and seabed legislation than his party president, Whatarangi Winiata, who said on election night that the party would rather return the country to the polls than compromise on its principles. "They made the legislation, we want to repeal it," Sharples said.

"To put that up initially would be to block any sort of cooperation between the pair of us. But neither of us can afford to let it go at this stage so we'd have to have a deal on other things."

- HERALD ON SUNDAY