John Armstrong: Peters' pact revolutionary

Let's get one thing absolutely clear. Whatever he may say to the contrary, Winston Peters is very definitely part and parcel of the new Labour-led Government.

No amount of wriggling - NZ First's demand to be seated on the Opposition benches being but the latest example - gets him off that particular hook.

Yesterday's nonsense over parliamentary seating followed the charade at Wednesday's swearing-in of ministers at Government House which saw a stony-faced Peters refuse to join his Labour counterparts in the traditional "team photograph".

Even though he is a minister outside the Cabinet, the swearing-in installed him as a member of the Executive Council - the body which advises the Governor-General and which is, according to the Cabinet Manual, the "highest formal instrument of government".

Such constitutional facts of life stand in the way of Peters' understandable desire to distance himself and his party from the Labour-Progressives minority Government, given that his declaration during the election campaign that NZ First would not be part of one.

Having bagged his parliamentary votes, Labour is naturally turning a blind eye to all this. If Peters needs to believe he has not joined the Government, then no one is going to get too precious about it.

As the Prime Minister has observed, the pragmatism entailed in constructing a Government means the constitutional theory will have to be rewritten around the day-to-day political practice.

Inevitably, attention has focused on the contents of the deal between NZ First and Labour. Peters has inevitably suffered severe criticism both for going back on his word and accepting the ultimate "bauble" of the Foreign Affairs portfolio for seemingly no good reason.

Putting that aside, Labour's agreement with Peters is revolutionary. It shakes the doctrine of collective ministerial responsibility to the core.

The deal may look tawdry in its detail, with Labour securing NZ First's seven votes on confidence motions - but not necessarily legislation - in exchange for Peters' ministerial post and a mixed bag of policy concessions.

However, the underlying structure may offer the best solution yet to the quandary plaguing MMP administrations: how to ensure minor parties preserve their identity without destabilising the Government.

The Cabinet Manual requires Peters to back all Cabinet decisions in public regardless of what he thinks about them in private. There is an agree-to-disagree clause in the manual which allows minor coalition partners to declare they take a different view to that of the major party. But it has been rarely invoked. And, anyway, Peters says he is neither in coalition nor the Government - as does Labour's other support partner and new Revenue Minister, United Future's Peter Dunne.

In order to get round the obstacle of collective ministerial responsibility, Labour drafted two similarly worded arrangements which require Peters and Dunne to comply with that doctrine only with regard to their portfolios. The pair are required to "fully represent" the Government's position when speaking about foreign policy and tax matters. They cannot take a different position or express a different view.

They are otherwise free to speak their minds on any other area of policy - with one exception which requires Peters and Dunne to support all "matters of confidence and supply" - and the Prime Minister has the power to declare anything a matter of confidence.

But as a means of pressuring Peters and Dunne, that would be a last resort which might kill her Government in the process.

Likewise, Peters and Dunne will have to think carefully about how they use their freedom to criticise Labour outside their portfolios.

It is new territory. When Parliament resumes next month, it will be technically possible for Peters to defend the Government one moment and attack it the next.

But Labour will not take kindly to being regularly dumped on by a support partner.

If Peters weighs into Labour too often on matters close to Labour's heart, he will undermine Government stability.

If he does it round the fringes, the novelty of a Government minister weighing into the Government will wear off. People will stop noticing. There will be no enhancement of NZ First's branding.

The more he weighs in, however, the more it will beg the question of why he is propping up the Government if he disagrees with it so much.

If he is silent, the Opposition will label him a Government "poodle" - the tag Peters gave Dunne in the last Parliament.

Dunne, who acknowledges it will be a tricky balancing act for him and Peters, says he may leave the substantive questions United Future throws at Labour to his two colleagues, and he will chip in with supplementary ones.

The Cabinet Manual will have to be rewritten at some point to make allowance for Peters' and Dunne's new freedom.

But if used sparingly, their right to speak more freely may be a lasting and valuable safety valve that strengthens the Government, rather than weakening it.

The new arrangement has the potential to give minor parties control over policy niches while quarantining them from being tainted by the failings of the major governing party, especially one engaged in a struggle to postpone its use-by date.

The knowledge that it could be pinged in public could serve as incentive for the major party to better treat its minor partners.

Both Labour and National have been woeful in giving sufficient credit to minor partners for their policy achievements.

The classic example is paid parental leave. That got a strong push from the Alliance. It met with resistance from Labour because of arguments about how much and when. But Labour later claimed the credit because paid parental leave had always been Labour policy.

With that in mind, Jim Anderton's new one-page agreement with Labour stipulates that new "processes" be developed to ensure the smaller party gets "appropriate credit for and recognition of" policy achievements, as well as being allowed to express different views publicly and in Parliament.

That also sounds like a radical departure from existing practice. The difference is Anderton is in formal coalition with Labour. Peters and Dunne are not.

Anderton argues that nothing can beat a seat at the Cabinet table in getting things done.

Presumably, Dunne would have joined him there had he got the chance.

However, the arrangement Dunne and Peters have with Labour avoids both the constraints of full coalition and the relative powerlessness of sitting on Parliament's crossbenches offering confidence and supply in return for a few limited policy concessions.

It is a halfway house. It is an experiment. But it may be the solution everyone has been looking for.