OPINION
Coalition talks will get down to the nitty gritty after the final election results are announced today and parties know where they stand.
The relationship building that has been going on over the past three weeks has been important to establish good faith and confidence that commitments to implement specific policies will be honoured by all sides.
But that confidence will also be vital to an even greater challenge for the incoming Government - the ability to respond to unforeseen issues that arise outside the manifesto commitments. That is the bulk of what governing is about.
On the basis of experience, there are bound to be a few surprises when the governing agreements emerge.
When Act’s charter schools policy emerged in its confidence and supply agreement with National after the 2011 election, it was a surprise. Effectively publicly-funded, privately-run schools, they were a phenomenon in Britain at the time but had barely been mentioned in the campaign by its then leader Don Brash.
And when New Zealand First’s coalition agreement with Labour in 2017 included a $1 billion per annum provincial growth fund, that also came as a surprise for the sheer magnitude of the win.
The economic circumstances would preclude a repeat, although New Zealand First has continued to target provincial New Zealand in the campaign.
Stuart Nash scaled back the Provincial Growth Fund in the past three years to a $200 million fund and New Zealand First can be expected to keep that, with some adjustments to the type of projects it funds.
New Zealand First has a lot of prioritisation to do, however. Nine days before the election, it released a manifesto with 300 policies in it. In good times, it would be lucky to get a third of what it wanted. In these much tougher times, expectations will have to be adjusted.
Returning agencies such as Waka Kotahi to their English names is likely to be an easy win that would not cost much.
If there is one bottom line for New Zealand First, it is likely to be stopping any increase in the age of entitlement to superannuation, funding for aged care, and some enhancement of the SuperGold Card that leader Winston Peters introduced in 2005.
In the law and order space, where there is broad agreement about the direction of travel in terms of sentencing and dealing with gangs, the party is likely to want to continue to claim credit for extra police officers and it should be able to get at least the 500 extra it campaigned on.
The surprise could come in the form of securing a referendum at the 2026 election on a four-year parliamentary term and/or its bid for New Zealand to host the 2026 Commonwealth Games.
Act’s surprise could be getting the ban on pseudoephedrine in over-the-counter cold and flu medicine lifted after it was banned in 2009 to counter the production of meth. Considering the prevalence of meth, it could be argued the ban has been ineffective.
Act has prioritised putting existing and proposed regulations through a tough test with a new Ministry of Regulation. It also wants to reduce the size of the public service.
It will be expecting gains in law and order, such as reinstating Three Strikes, and gun control.
Decisions over which ministerial roles parties have are usually made at the end of the negotiation and reflect the degree of the gains in the talks.
It would make sense for Peters and David Seymour to both be associate finance ministers to Nicola Willis, whether they end up inside or outside Cabinet. They need to know what is going on across the Government and there is no more central place to view that than from finance.
Peters could easily regain foreign affairs if he wanted it. It would give him the status that befitted him, but it didn’t win him votes in 2020 and he might want something more attuned to retail politics.
He could go for regional economic development, previously held by his de facto deputy Shane Jones, if not the more encompassing portfolio of economic development. Jones could go for something meaty that neither National nor Act have laid great claim to such as energy, which also has synergies with economic development, plus forestry, fisheries and aquaculture.
Jones could also handle the sensitive portfolio of Māori-Crown relations, which would include foreshore and seabed claims, and how the Treaty of Waitangi is handled in the public service. He and Peters have more knowledge and history in the area than most.
If they are looking to elevate newer MPs to ministerial roles, perhaps former Wellington Mayor Andy Foster could get local government.
Seymour has already staked a claim to becoming the minister for better regulation or whatever he wants to call himself. His party would want something in the law and order sector, perhaps the justice portfolio itself, and if not, then agriculture immediately and associate agriculture later.
Deputy leader Brooke van Velden can expect a big role, as can fourth-ranked newcomer Todd Stephenson.
There are pros and cons for smaller parties being inside government - be it with ministers inside or outside of Cabinet - and for being outside government, which would mean having no ministerial positions.
Different parties inside cabinet are likely to act more cohesively and take a more consensus approach to decision-making and that would be attractive to incoming Prime Minister Christopher Luxon.
Support parties outside cabinet are likely to get more freedom to act and speak independently.
The options are not endless but there are many possible permutations of governing arrangements that are likely to depend on a variety of factors. The primary one is obviously whether a party’s votes are needed for confidence and supply.
But there are others including what each party’s total party vote is; how much of the party’s policy is accepted in talks; whether ongoing policy development will be based on consensus or majority; how independent a voice the parties want to have during the term; and the potential competition between Seymour and Peters.
The provisional count on election night gave Act 9 per cent of the party vote and New Zealand First secured 6.46 per cent. If both parties are required for National to govern, and the gap widens between them to give Act, say, 10 per cent and New Zealand First 5 per cent, the relative weight of their voter support would make it easier for Act to be inside Cabinet and New Zealand First outside.
But if the gaps between them narrows and they end up, say, both close to 8 per cent, it could be highly problematic for Luxon.
In principle, Act should have a greater claim to a formal coalition and policy gains given the firm position by National that Act was its preferred partner. But under a scenario in which National needed Act and New Zealand First, having one partner party inside Cabinet in a coalition agreement and another outside with a confidence-and-supply agreement could be buying trouble down the track.
Likewise, having New Zealand First in cabinet with Peters potentially as deputy prime minister would be problematic for Act if it were outside Cabinet. And having Act in Cabinet with Seymour potentially as deputy prime minister would be problematic for New Zealand First.
That would result in a clash of chemistry, sooner or later. Both leaders are professional but they are at heart combative. The fact is that while New Zealand First and Act are chalk and cheese on economic nationalism, they are in the same political marketplace on many issues and the new arrangement of government should constrain their rivalry, not encourage it.
If both parties are needed, it would be better to have both parties in Cabinet or both outside Cabinet. Ministerial positions could still be held by support parties.
The New Zealand Defence force has a budget shortfall of $130 million.