Peter Dunne says the controversy over NZ First's funding is already raising questions about how the reputation of the current Government may be affected

By Peter Dunne*

When the current coalition government was formed, there was some comment that this was perhaps New Zealand First's last chance at political redemption.

The party's two previous stints in government had failed to last three years. The 1996-98 coalition with National ended after Winston Peters was fired as Treasurer, and its 2005-08 stint with Labour came to a premature end when Mr Peters was suspended as Foreign Minister over what became known as the Owen Glenn affair.

Coming on top of Mr Peters' earlier sacking from a National Cabinet in 1991, less than a year after taking office, the omens were not good. But the general view was that New Zealand First would be different this time around, and there was unlikely to be any case of history repeating itself.

This week’s revelations about the shadowy New Zealand First Foundation and whether its activities are legitimate or a breach of electoral funding rules have raised afresh the question of whether New Zealand First and its leader can at last survive a full term in government, or whether leopards do not change their spots after all.

There are still too many unanswered questions about the Foundation and the way it works to be certain about its status, which may have to await the outcome of the Electoral Commission’s investigation now underway. But, in the meantime, the controversy is already raising questions about how, if at all, the reputation of the coalition government will be affected.

During the 1996-98 coalition, then National Prime Minister Jim Bolger took the view that New Zealand First’s travails at that time were primarily for that party to sort out, as they were nothing to do with the National Party.

However, over time that view became more difficult to sustain as some of the taint started to rub off on National. In the end, Mr Bolger was replaced as Prime Minister by Dame Jenny Shipley whose prime but unstated mission appeared to be to deal with New Zealand First, to quell the mounting anxiety of nervous backbenchers.

A few months later, Mr Peters was dismissed as Deputy Prime Minister and Treasurer, the coalition ended, and the government limped on as a minority government until it was defeated at the 1999 election. New Zealand First survived by the skin of its teeth, thanks to a very narrow win by Mr Peters in his then Tauranga electorate.

When, in 2007-08, questions began to be raised about the operations of the Spencer Trust and its relation to New Zealand First funding, Prime Minister Helen Clark initially took a similar hands-off approach as Jim Bolger had. However, as the saga dragged on, and a Privileges Committee inquiry began about a possible misleading of Parliament leading to evidence from Sir Owen Glenn contradicting the New Zealand First version of events, Prime Minister Clark’s patience ran out and Mr Peters was suspended as Foreign Minister. But the overall outcome was little different – her government was defeated at the 2008 election, and this time New Zealand First was tossed out of Parliament altogether.

As today’s Prime Minister Jacinda Ardern contemplates the allegations swirling about the New Zealand First Foundation, she should be mindful that, on the basis of her predecessors’ fates, she would appear to be damned if she does (in the Shipley fashion) or does not (in the Bolger and Clark approach). While her current instinct seems to be to follow the Bolger/Clark line, she must surely know that could become increasingly untenable, as this situation drags on, which seems highly likely. After all, the one certainty from history, is that events of this type are seldom as straightforward or easily clarified as New Zealand First continues to suggest. There are likely to be more twists and turns, enmeshing New Zealand First further in the mire, before a measure of clarity emerges.

While there is scant evidence this row is doing the Labour Party collateral damage at the moment, it is really only a matter of time, unless things are quickly tidied up. But the Prime Minister’s problem is that by then it may be too late for her. Already, she is being lambasted in some quarters for being too laid back in her dealings with New Zealand First Ministers and some of their more egregious behaviours, although this does overlook some of the realities of holding a coalition government together. Nevertheless, it could become increasingly difficult for her to maintain a dignified silence on this issue without looking weak and ineffectual, as is already being suggested – the last thing she would want as she heads into election year. Either way, the next few weeks are not going to be easy for her and her government.

Some have suggested she might call a snap election, but this seems a little fanciful. New Zealand does not have much of a tradition of early elections, unlike Britain or Australia, and, as Sir Robert Muldoon found out in 1984, having an early election because of problems within the government is not a winning strategy. Others say New Zealand First may be about to quit the coalition anyway to give it more freedom to campaign in the lead-up to the next election, but this makes little sense either. Why prove the accuracy of the latent claims your party cannot be relied on, by pulling out of the coalition several months early, and still expect people to vote for you as a reliable check on the big parties?

Meanwhile, National’s approach to the emerging omnishambles is puzzling.

On the one hand, National says the allegations of electoral financing rules being abused by New Zealand First are potentially of the most serious kind, which is why it wants an independent inquiry, over and above the Electoral Commission inquiry. But on the other hand, the National leader says that while this incident makes it less likely his party would seek to work with New Zealand First if in a position to do so after the next election, he is still not prepared to rule them out altogether.

If ever there was a time to be decisive as Sir John Key was in 2008 and say there is no way National would seek to work with New Zealand First after the next election, this is surely it. Such a statement would make it clear that New Zealand First is now solely Labour’s problem, making things even more difficult for the Prime Minister.

But National’s ambiguity leaves the lingering suspicion that if political power beckoned National would be still be willing to overlook what has happened. In so doing, it will not only further embolden New Zealand First, but also open itself up to facing all over again the same problems that bedevilled Prime Ministers Bolger, Shipley, Clark and now Ardern.

It is true after all – leopards do not change their spots.

*Peter Dunne is the former leader of UnitedFuture, an ex-Labour Party MP, and a former cabinet minister. This article first ran here and is used with permission.