The Green scenario

By VERNON SMALL

For two-and-a-half years Labour and the Greens have coexisted in relative peace, masking the fact that Helen Clark has been running a minority Government.

Now the Greens' line in the organic soil over genetic modification - and Clark's livid response - seem to have changed all that. Carefully nurtured co-operation and consultation at the top level, particularly between Clark and Green co-leader Jeanette Fitzsimons, has gone up in smoke.

Green co-leader Rod Donald accuses Labour of being power-hungry - a party not to be trusted to rule alone. Clark wags an admonitory finger at voters, warning them she needs a clear majority to resist the demands of single-issue Luddites who would hold her Government to ransom.

So is a Jeanettically modified Labour Government after the July 27 election a dead letter?

GM aside, Fitzsimons and Donald are ready to talk. And significant compromises - or a recognition of their own limited influence - will be the order of the day.

Clark claims the Greens "don't like economic growth, free trade or the superannuation fund".

But even on these litmus issues, they are clearly preparing a catalogue of compromises for post-election talks.

Donald puts it succinctly: "The only bottom line is GE - everything else has to be negotiable."

Last August a caucus retreat identified 78 key policies the party wanted progress on. The annual conference in Auckland this month took the next step, approving talks on either a full coalition deal, or supporting Labour on confidence and money-supply votes in exchange for specific policy agreements.

Fitzsimons wants to sign Labour up to a set of achievable policies that are clearly "Green".

Even under a deal for support on confidence and supply, the Greens would be seeking policy gains - in the present Parliament they believe they gave Labour too much of a blank cheque.

"I think what we should go for is a ring-fenced little pot of money - and we wouldn't be asking for much - out of which we can negotiate with ministers. And provided ministers support what we want to do, then we get to make those decisions."

She adds that the Greens would not expect to get more than their share of policies. "We are going to have to swallow some 'dead rats', whether we are in coalition or a support role."

The aim is progress towards Green goals rather than overnight wins, though some issues are urgent.

Rail transport, and specifically the re-nationalisation of the track network, is top of the list for immediate attention.

Donald describes rail as "a case of us pushing Labour further than they want to go but in a direction they are willing to take".

More freight and passengers on the rail network meets a suite of Green objectives - from energy efficiency to public transport to pollution control.

If an agreement were reached, it would probably be kept under wraps, he says, to ensure owner Tranz Rail does not ramp up the price.

But in Donald's mind, Tranz Rail has little option but to sell, because it faces expensive maintenance costs required under its lease deal.

Elsewhere, Labour's "love affair" with free trade and Finance Minister Michael Cullen's superannuation fund are the highest hurdles. But even here, the Greens are ready for compromise.

"We are quite clear that we are not going to be in a position to steer the Government away from its commitment to free-trade agreements," Fitzsimons says. "We might, though, be able to get a proper cost-benefit analysis of the ones we have got - with Australia and Singapore - before any more get negotiated."

Donald agrees, adding that rules and structures should cover labour and environmental standards. That implies New Zealand would impose variable tariffs depending on which country goods came from - a no-no under World Trade Organisation rules.

But the Greens could live with the WTO for now, Donald says. He is already thinking of a push on import substitution and a strong "buy New Zealand-made" campaign rather than a full-on assault on the free trade agenda.

Analysis of the products we import, he says, would show whether New Zealand had the raw materials and workforce to make those goods here. If we did, those products and services could be part of an expanded regional and industry development thrust.

On the Cullen super fund, there is less room for compromise, and it is shaping as a source of real friction.

Fitzsimons suggests stricter conditions on where the huge fund is invested, saying a heavy reliance on overseas investment worries her.

Donald is more critical, saying the yearly $2 billion for the fund will repeatedly block Green spending plans.

But the Greens appear to accept that such a central plank of Labour policy cannot be removed. Supporting Labour's Budget would mean approving funds for the scheme, unless they tried to amend the Budget - a move which the Finance Minister can veto.

"So the compromise may be that we freeze the fund where it is - cease contributions - but not dismantle it. With everything we are looking for the compromise solution," Donald says.

The Greens' vision of an "eco-nation" requires a radically different tax structure, moving the tax burden on to waste and pollution and away from desirable activities.

But Fitzsimons' aim again is to make progress rather than win an overnight revolution.

She would like to see an early move on some "eco-taxes" - carbon tax has long been on the Treasury's radar - but believes the extra funds should be matched by a drop in income tax, starting with a tax-free band on the first $5000 of income.

Donald says the broader Green vision emphasises qualitative rather than quantitative growth.

"We are saying, let's look at those sectors where we want to achieve quite rapid growth, and let'slook at other sectors of the economy where wewant to shrink them because of theirimpost on the environment in particular."

Toxic products and the use of private motor transport are top of the list for "shrinking".

But despite their alternative vision, the Greens would not seek short-term changes to crucial monetary policy settings, and Fitzsimons concedes that the party would not expect to have a huge influence in this area.

The Greens would probably take a similar "of them but not with them" stance on defence and security as part of a coalition.

"The Government has gone a long way towards what we want on defence already, with a focus on peacekeeping and getting rid of the air combat force and re-equipping the Navy with a fisheries protection emphasis," Donald says.

"We would obviously have a close look at defence [spending], because there may be ways it could be trimmed, but it is not a target in the way it was."

Both say our SAS troops should be pulled out of Afghanistan - the issue which split the Alliance in the present Government.

But Donald concedes that a compromise might see no further deployments made.

Fitzsimons: "We would certainly want a commitment that they are not going to launch further forays in Saudi Arabia or Iraq."

The Greens would continue to push for the Waihopai base to be closed, and would oppose extra cash for the SIS and the Government's electronic snoopers, the GCSB.

"They would have to get support from National on that, and they would get it," Fitzsimons says.

The party would also probably refuse to be part of the committee overseeing security and intelligence.

"We see a role for an SIS, but we are of two minds whether it should be stand alone and have greater scrutiny and accountability or be merged back into the police," says Donald.

In social policy, the Greens generally support Labour's direction, but would press for more spending, especially for their flagship policy on child poverty. A key would be the reintroduction of a universal child benefit at an annual cost of $500 million.

Fitzsimons says the benefit would be a priority if they were in coalition. But in a support role, they might settle for removing the discrepancies that give tax breaks to working families with children, but not to beneficiaries.

"The poorest children don't get it. Only the second-poorest get it."

The Greens' other big spending plan is a universal living allowance for students.

"We would push for that if we were in a position to have real influence. A good interim position would be raising the parental income threshold so about half of poor students qualify rather than a third," says Fitzsimons.

Donald is keen to begin writing off student debt for those who stay and work in New Zealand. But he admits Labour is unlikely to agree.

"We might be able to persuade them to set up a list of strategically needed positions that are hard to fill - anaesthetists, radiologists and rural GPs come to mind." Their loans could be abated.

Fitzsimons catalogues a range of other policies that would require little extra money - removing obstacles to farmers to go organic; recategorising dietary supplements; moving health spending priorities away from high-tech operations, such as heart or liver transplants; and more for mental health, especially for young people.

Donald and Fitzsimons rule out taking any of the top three jobs the Prime Minister can offer: Deputy Prime Minister, finance and foreign affairs.

"We do not want the deputy prime ministership. I think we would look too big for our boots," Donald says.

But if they could agree on a coalition deal, they would want portfolios where they could influence policy, rather than just oversee spending.

Transport, the environment, tourism and energy are top of their shopping list, although Fitzsimons says that MP Sue Bradford would be a good social policy minister.

Donald says the party has not talked about how many ministers it would seek.

"We are more interested in being strategic about that in identifying the ministries where we think we can make a difference, and develop a cluster approach - lead ministries and associates where things can tie together."

But if the Greens hold the balance of power, everything will come down to forging agreement on the ultimate stumbling block - a continuation past October next year of the moratorium on the commercial release of genetically modified organisms.

In the present standoff each side accuses the other of putting undue emphasis on the moratorium.

Fitzsimons: "I was staggered at how seriously they have taken this question of the GE moratorium. And it has changed the whole relationship.

"It is such a small thing to ask. It is not asking them to give up biotech or innovation or the knowledge economy or any of that. It is asking for a three-year extension of the moratorium that is in place, and it's a pretty scanty moratorium anyway because it has exemptions in it. It is a really, really easy thing for them to give."

Helen Clark: "They attribute an importance to GE which is just out of all proportion to its true importance ... But we will not be held to ransom by small and unrepresentative parties. It has to be a crunch election around whether a small party gets a veto on what the Government is, over a single issue."

Or could Labour and the Greens live with a "fudged" solution so both can claim they have defended their principles - perhaps through a "delay" in lifting the moratorium while preliminary work is completed?

Clark may be more offended by the Greens' public ultimatum than she is by the thought that the moratorium could be extended.

If so, she may bow to a compromise behind closed doors that she would never agree to under a public ultimatum.

Then Labour and the Greens can get down to business.

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