National’s respite from the storm

IFWE didn’t already know John Key never cries, it would be tempting to think he might shed a tear at the rapturous welcome he gets from rank and file at this weekend’s party conference. After the year he has had, no-one could blame Mr Key for getting a tad emotional about being surrounded by so much love.

The post-election conference for a prime minister’s party is usually billed as the victory conference, a chance to bask in the glow of winning.

The mood this weekend, however, is more likely to be relief.

The Government has lurched from one bad headline to the next and some of Mr Key’s ministers have seemingly been hell-bent on disproving the widely held view that, all things being equal, voters are more likely to give governments a third term than not.

Grumpiness over National’s selfinflicted wounds might have spilled over into this weekend’s conference as well, but the carnage doesn’t seem to have done National too much damage in the polls (yet), and the experience of being hammered for pretty much eight months in a row seems to have turbo-shocked ministers into pulling up their socks in recent weeks.

Besides, most of the delegates are long enough in the tooth that they have seen it all before. As Right-wing commentator Matthew Hooton points out, National Party conferences in the early 1990s used to be surrounded by riot police. Jim Bolger still got to lead the party into not just one, but two more terms.

But those in National who were around back then (probably most of them) will also remember the extraordinary circumstances of National’s third-term win: the first MMP election in 1996 was decided by Winston Peters, who campaigned to bring down the Bolger government, only to sign up as Mr Bolger’s deputy when the election delivered his fledgling NZ First party the balance of power.

Confronted by the potential for MMP to throw up another first on current polls – a Left-wing government led by a Labour Party that gets fewer votes than National – the spectre of Mr Peters riding again to the rescue will hover over the conference this weekend.

Officially, talks about whether National will change its position going into this election and leave itself open to a deal with NZ First won’t happen till much closer to the election.

But unofficially, it would be a surprise if the conference weren’t used as a sounding board. Many Nats are talking about the prospect and some, like Mr Hooton, already think it is a done deal.

His reasoning is that Mr Peters will never sign up to a deal with Labour that puts him second-ranked in its affections behind the Greens, who are increasingly dominant, and – less charitably – because being in the box seat with National will deliver him juicier portfolios and a knighthood, which Labour can’t give him.

If National is also gifted with the Colin-Craig-led Conservative Party – aided by a possible change to electoral rules lowering the threshold for parliamentary representation from 5 per cent to 4 per cent – NZ First might be a useful buffer to keep the Christian party secure on National’s flank, but at arm’s length in case of potential flakiness.

Of course, if there is also a measure of desperation to all these calculations, it is because National’s situation is desperate, once NZ First and the Conservatives are taken out of the equation.

Its polls might be holding up (internal polling is said to show National back up at about 50 per cent since the row over iwi water rights) but there is an awkward truth to National’s current plight: its election-night result of 47 per cent is staggeringly high in the MMP environment, but even if it repeats the feat in 2014, it could easily lose.

It was almost touching to watch the gramps and grandma of Parliament, Tariana Turia and Pita Sharples, troop back from their late-night meeting with Mr Key to do battle over iwi water rights on Wednesday. It drove home that no matter how gamely Mrs Turia battles on – she even had weight loss surgery so her health wouldn’t let her down – she can’t carry the flag forever. Once she goes, the party will struggle to survive.

ACT’s future, meanwhile, rests on leader John Banks, a lame duck till police decide whether to charge him over allegations surrounding campaign donations.

Mr Key has already laid the groundwork for a possible deal with Mr Peters, suggesting his emphatic rejection of a man he previously labelled toxic and unreliable carried a time-stamp that expired at the 2011 election.

But with two and a bit years to go till the next election, National will wait to see what else the cards throw up.

In contrast to 2011, when Mr Key seemed invincible, there is an acknowledgment that the next election is a 50-50 call.

If that seems at odds with National’s greater willingness to push through unpopular policy than during its first term, when the electorate would have cut it more slack, that is because it knows voters will be more demanding of results.

In an election that will boil down to one issue: economic credibility. The view is voters will stomach unpopular policies, so long as they can see there are runs on the board and agree the Government is on the right track.

If that explains the contradiction between polls showing National’s support mostly holding up despite overwhelming opposition to its partial asset sales plan, it also explains why the Government will be heartened by the sight of only a thousand or two protesters on the streets last week.

The failure of asset sale opponents to whip up a bigger groundswell will be vindication of its view that voters have moved on. But asset sales remain one of the biggest threats to National achieving a third term – ironically, not because it is determined to ride roughshod over public opinion by proceeding with the sales, but because it could yet be stopped in its tracks by the courts.

The unspoken fear within senior government circles is that if the courts do intervene in Maori rights over water and issue an injunction, it could take a decade to sort out.

That would not just scuttle the programme, it would deliver a death blow to National’s uphill battle to get the books back into surplus by 2014-15.

And possibly a death blow to National’s hopes of holding another victory conference in three years’ time.