Chapter 8
Annette was back in the thick of Labour Party politics almost before the taste of Robert Rimmer’s pasta faded. ‘We went through three years of awful division, based on who you had voted for, Mike or Helen. We weren’t fighting about what policy should be — in fact the policy debate in Labour had been well and truly settled, I think, by our loss in 1990, and there was no way we were going to continue with that agenda.’
The years of awful division culminated in the abortive ‘coup’ against Clark in 1996, a coup that was peculiar for the fact that it was not focused on any particular challenger. There is no agreement to this day on who the so-called challengers wanted as Clark’s replacement — Moore, Cullen or Goff, or someone else. What is clear is that it was born out of a real sense of desperation about the depths to which Labour support had been plummeting.
That was 1996, but in 1993 after the bruising leadership battle Helen Clark had tried to move quickly to appease the followers of Mike Moore.
Former finance minister David Caygill was elected deputy leader, narrowly defeating Michael Cullen 23 votes to 21. But Clark retained Cullen, who had supported Moore, as finance spokesperson. As well, she placed Goff, Peter Dunne and Annette on her front bench.
Goff’s promotion caused a stir. Just weeks earlier left-wing MPs had warned Moore his future would be on the line if Goff was put on the front bench. In the event, Moore never got the chance, but Clark did. Most MPs saw the line-up as a clever way of bridging the gap between the right and left wings of the party, between those who supported Moore and those who supported Clark. Cullen, though, believes it was a mistake to make Caygill deputy instead of him.
Clark was now the first female leader of a major party in New Zealand, but she had a huge challenge ahead of her. Not only did she have to bring the party and caucus together but at the same time she had to get it ready for the country’s first MMP election in 1996.
While she tried to be inclusive, Clark started on the back foot. It was going to be no easy task for Labour to put behind it at least six years of internecine conflict, exacerbated by the particularly bitter leadership spill which had thrust her into the top job.
For the first two years or so of her leadership, her per-formance was underwhelming as she struggled to cope with the demands of what is called ‘the worst job in politics’.
Barely had MPs returned from the Christmas break, after licking their wounds from the leadership struggle, than they were locked in a battle over inflation. Left-wing MPs wanted their influence felt immediately and they wanted the Reserve Bank Act amended to require the bank to take account of employment rather than just focus on the 0–2 per cent inflation target.
Moore was also criticised at the first caucus meeting of the year for visiting the Reserve Bank governor, Don Brash, immediately after the 1993 election to reassure financial markets about Labour’s commitment to keeping inflation under control.
By February 1994, the Evening Post was reporting that differences over the Reserve Bank were tipped to split Labour. Then Labour MP Peter Dunne said the debate was critical to the party’s future and could result in some MPs breaking away to form their own party.
Clark scoffed at talk of a split and became increasingly frustrated at reportage focused on the debate. Her frustration eventually reached a point where she refused to talk to Evening Post political reporter Brent Edwards for several months.
If there was one thing in Labour’s favour, it was that there was also open conjecture about Bolger’s leadership, with some National MPs saying he had to do better. Both major parties were split on ideological grounds, and this in turn was compounded by the complexity of adjusting to MMP.
There was also talk of Mike Moore starting up his own party, partly in reaction to his rejection as leader but also because of concerns about the direction of the party under Clark. Peter Dunne was also openly talking about the need for a new centre party. Moore finally stayed but Dunne didn’t.
In March the party held a special meeting of MPs to discuss how they would handle the transition to MMP. It was particularly aimed at managing conflict so that a public spat between Dunne and David Lange the previous month would not be repeated.
Meanwhile, Prime Minister Jim Bolger acknowledged that under MMP National would not be able to govern alone and he effectively sanctioned some of his MPs leaving to set up a new party, which could then act as a coalition partner for National.
Clark, under increasing pressure, called Bolger’s comment ‘nutty’. ‘This is the break-up of the National Party. . . . It is extremely good news for Labour. I cannot see in my wildest dreams Labour deliberately setting out to fragment in a desperate attempt to keep it together,’ she told the Evening Post.
Meanwhile, she was desperately trying to woo Moore as Labour’s poll ratings plunged, placing it behind not just National but the Alliance as well. She offered him the job as trade spokesperson, but he refused, saying he could not give 100 per cent to the Labour team.
In May he was even blunter, saying Labour risked being left behind by the Alliance and Sir Roger Douglas’s new political movement, the Association of Consumers and Taxpayers, which was soon to morph into the ACT political party. He said Labour had lost its way and lacked clear policies. Dunne also raised the ante as revenue spokesperson, saying tax cuts should be part of Labour’s policy. Many of his fellow MPs disagreed.
At a special caucus meeting in Nelson in May, Labour MPs hammered out some sort of compromise on inflation. They voted in favour of a recommendation put by Helen Clark that the Reserve Bank’s inflation target be changed from 0–2 to 1–3 per cent. But a suggestion the bank’s independence should be constrained was rejected, even by the party’s left-wing MPs.
In a separate move, Labour committed itself to full employment, but no specific policies were discussed at the meeting and there was no expectation on the Reserve Bank that it would have to take employment targets into account in setting interest rates.
Finally, in an effort to pull MPs together, they agreed on a code of conduct. Under the code errant MPs, like former leader Mike Moore, had to behave or face disciplinary action. Clark indicated she could lay a complaint against Moore if he continued to undermine her leadership. But Moore was not at the meeting. He had flown to Australia instead.
Later in the year Labour was also divided over whether quotas should be used to get more women, Maori and Pasifika people into Parliament. Clark herself opposed quotas for women. As always, union influence within the party continued to provoke debate and dissension and there were arguments over whether Labour Party head office had too much say in the selection of electorate candidates.
None of this did Labour any good and it failed to take advantage of the National Government’s own difficulties, which were further compounded when Ruth Richardson, who had been dumped as finance minister by Jim Bolger after the 1993 election, resigned from Parliament. For a moment it looked as if there could be an early election, but Labour would have been woefully unprepared.
Almost a year after Clark ousted Moore as Labour leader, relations between the two were still cold. Moore was a reluctant follower at best. Asked in July 1994 how Labour was doing, his answer was cryptic: ‘Ask the people.’
And his judgement of Clark’s leadership? ‘That’s an unfair question to ask of me. I think she has a number of strengths.’ Clark, though, was unequivocal, saying it had not been clear what Labour stood for under Moore’s leadership, but now it was.
But the leadership issue remained a tender subject for Labour and Clark’s position was by no means entrenched. A bid by Labour’s Maori vice-president Dover Samuels to challenge Maryan Street as president brought the issue to a head once again. Street was a strong supporter of Clark while Samuels had opposed her and described her as an unsuitable leader.
At the same time, Labour was fighting the by-election in Selwyn, which followed Ruth Richardson’s resignation from Parliament. But leadership woes also continued to dog the National Party, with Prime Minister Jim Bolger upsetting his party members by raising the republican debate.
By August 1994, Clark was calling for better party unity after leading trade unionist Mark Gosche, who was later to be a Labour Government minister, called on the Labour caucus to dump Moore, Dunne, Jack Elder, George Hawkins and Ross Robertson, people he identified as part of the Moore faction. Annette, the business development spokesperson, was not part of the group, but nor was she a member of the Clark faction.
Labour’s poor showing in the Selwyn by-election, com-ing third behind National and the Alliance, gave further encouragement to those calling for the Moore faction to be dealt to. And Clark came out strongly, telling MPs to get out of the party if they did not agree with Labour’s policy direction under her leadership. The call came at a key caucus meeting in August. Annette, by this time, was caught in the middle as the caucus secretary. She told the Evening Post there was little disagreement among MPs about policy. So what was the problem? ‘It gets down to personalities. That is the problem we have had for a long time,’ she said then.
There was still huge animosity between those who supported Moore and those who voted for Clark.
Just two months later, Peter Dunne left the Labour Party and began wooing MPs from both National and Labour to join his new party, as yet unnamed. In November he launched Future New Zealand.
The same month, Mike Moore was a notable absentee from Labour’s annual conference, saying it had been made clear to him he would not be welcome. He was angry with media reports at the time saying he was snubbing the conference out of bitterness. ‘I worked my guts out for the party. I have done my bloody share. Someone might consider one day to say thank you,’ he said. Like Annette, he too felt the party had not treated him well.
By the end of 1994, it appeared Clark had finally put her stamp on Labour, and on the other side of politics Bolger too was looking more assured than he ever had. For Clark, though, there was to be little respite.
In the middle of 1995 a new party — United New Zealand — was formed. Dunne joined the new party, which was led by Labour’s former social welfare spokesperson Clive Matthewson. Former Labour minister Margaret Austin aban-doned her party while four National MPs — Bruce Cliffe, John Robertson, Pauline Gardiner and Peter Hilt — also joined.
The Evening Post reported the formation of the new party this way: ‘It could lead to a fundamental realignment of parties and finally mark the end of the 60-year Labour–National duopoly. Or it could fall flat and mark the end of several political careers.’ A little over a year later, Dunne was the only one left in Parliament.
The new party immediately offered support to the minority National Government so there was no threat of an early election. Both major parties were feeling the growing pains of the new MMP system.
But Labour’s internal divisions continued and in November 1995 Mike Moore rejected an offer to go back on Labour’s front bench, accusing his colleagues of trying to save their political careers. Labour was continuing to poll badly and the first MMP election was only a year away.
Early in 1996, National MP Peter McCardle defected to New Zealand First and so did Labour MP Jack Elder, who had been a vocal critic of his old party following Moore’s ousting. Their defections to New Zealand First came after talk of a Mike Moore-led party came to nothing.
The two years after Moore was ousted as leader were desperate and difficult times for Helen Clark and Labour. While Clark had successfully wrested the Labour leadership from Moore, her accession to the top job could hardly have started in a worse fashion. From day one sexism coloured coverage of her as leader. Inside the caucus there was a lot of anxiety that Labour was divided and going nowhere. At the same time a resurgent Alliance Party under Jim Anderton’s leadership was threatening to usurp Labour as the major party on the centre-left of politics.
Clark repeatedly had to defend her leadership, which effectively made her look weak. By February 1996 things were grim and Moore, still smarting from his ousting, was openly rebellious. He told the Evening Post that Labour MPs were Klingons and Labour had only weeks to sort itself out. There were rumours Moore was planning to set up a new party to contest the country’s first MMP election later that year. He did consider it but could not find it in his heart to abandon Labour.
Just days later, the headline in the Evening Post read: ‘Clark may be on the brink’. The article reported growing unease within the caucus as Labour continued to languish in opinion polls. Unnamed MPs were quoted saying there would be no vote to oust Clark but that once she realised the depth of concern among Labour MPs she would resign.
No one challenged Clark then and Labour was helped by problems on the other side of politics as National Party MPs defected to new parties as the positioning for MMP began. New Zealand First was also experiencing difficulties with MP Michael Laws forced to quit politics.
By late March, Labour polled just 17 per cent in the One News-Colmar Brunton poll and was pinning its hopes on the release of its tax policy just a few days later. That policy included tax cuts aimed at the poor and increased family support payments while raising taxes for those earning more than $70,000 a year. The Evening Post reported Labour MPs admitting that the party was in real trouble if the tax package did not lift its support in the polls.
Things did not get better and a TV3-CM research poll released in May was disastrous for Labour. National was on 40 per cent, New Zealand First on 25 per cent and Labour trailing in third on a miserable 16 per cent, not that far ahead of the Alliance on 12 per cent. Clark too had been struggling as leader and had failed to connect with voters. Just a week later in the One News-Colmar Brunton poll Labour got 15 per cent support in the party vote. Both polls revealed just how low Labour’s stocks had fallen after years of disunity and drift.
Finally exasperated, some MPs acted. In what Clark des-cribed at the time as a ‘last gasp of the Rogernomes’, five MPs approached her and asked her to resign on 28 May. She refused. Annette King was one of those who went to Clark’s office.
Jim Sutton’s memory is that the five MPs — him, Annette, Michael Cullen, Phil Goff and Koro Wetere — wanted Mike Moore to replace Clark as leader. But that is not what Annette thought.
Cullen is clear that while the group were not pushing Moore as Clark’s replacement, had she chosen to stand down he was the only alternative. ‘It was clear Mike would be the person who would be supported to replace Helen. We only had a few months to go to the election. There was no prospect of anyone else. We didn’t have a Jacinda-like person in the caucus who could suddenly create a wave. We were in deep trouble and the ’96 election, even after she [Clark] had faced it down and polling recovered, it was still about not who was going to be the government but who was going to be the leading party in Opposition.’
These were desperate times for Labour. It genuinely faced the possibility of losing its status as a major party and risked falling behind the Alliance on the centre-left of politics.
Annette felt bad about the approach and Cullen agrees none of the five MPs did it with relish. ‘There was no sense of pleasure, no sense of revenge or anything else. I mean, it was, we were simply saying as senior members of the caucus that we felt we couldn’t win with Helen as leader, that we only had one chance really of being in a position to form a government and that was to change the leader to Mike, but there was going to be no coup attempt,’ he says.
Clark was not alone when approached by the gang of five. Her supporters, including Senior Whip Jonathan Hunt, Junior Whip Larry Sutherland, Lianne Dalziel, Steve Maharey and Trevor Mallard, were in the office with her.
Mallard had been in Parliament’s gym. ‘I got a call from Heather Simpson to say come at once up to Helen’s room. So I attended in a T-shirt and I think I hauled on some tracksuit pants or something like that. And it was a — I think it’s fair to say . . . there wasn’t a clear and obvious agenda. The senior member and initial spokesperson was Koro Wetere but supported by Michael and Annette as the other two main people there with a strong view that it was impossible for the Labour Party to win and that there was a real danger of decimation of the party.’
Based on Labour’s latest polling of 14 per cent and Clark garnering just 2 or 3 per cent as preferred Prime Minister, it was an understandable fear.
Mallard says there had been some mumblings about the leadership, particularly from MPs worried they would lose their seats in the 1996 election. There were also fears that if Labour came third behind the Alliance, it would struggle to recover in later elections. ‘The party wasn’t that well-funded and there were concerns around the campaign, the party organisation and the campaign as well. Despite Helen’s political knowledge, you know there was concern she wasn’t breaking through to the public. A view from quite a group of us, including some of the people who wanted her to go, was if she made it to Prime Minister she had the goods to be a really good one. But there was question of whether enough of the public could be convinced that that was the case, and then we were also coming up to the first of the MMP elections and no one quite knew what that meant. We knew that it would be less predictable than otherwise, and I think the still quite strong view was that could be to our disadvantage. As it happened the fluidity ended up being quite a lot to our advantage.’
Steve Maharey describes it as an awkward meeting. ‘I remember after they outlined why she had to go saying who are we going to replace her with because I can’t think of anyone you can replace her with, who would do any better? I absolutely adore Michael [Cullen] in many ways, but emotionally he was very fragile, and no bloody way could he become leader of a party. There was a lot of shuffling and “Oh well, we will find out”, but they didn’t actually say. And then Helen said she wasn’t going to go and that they would have to overthrow her, and we said we supported Helen and that it wouldn’t be a straightforward process. . . . Frankly the people on Helen’s side were a lot more tough than they were,’ says Maharey.
In many ways the group was naïve, although Phil Goff does not think so. ‘We were just desperate. We looked at it with total despair. How the hell can we get this up? How can we get back to a position where we can govern this country and win the confidence of the public?’
Annette takes up the story: ‘From 1993 to 1996 we were obviously divided — in the public eye and in reality. There was bitterness and resentment over what had happened to Mike. The polls were terrible. We reached 15 per cent or lower or something like that. Helen was Mrs 2 per cent. I was in the infamous group of five who went to Helen — me, Jim Sutton, Cullen, Koro Wetere and Goff — to tell her to step down. There was a hell of a lot of agitation going on. We were going to lose. The Alliance was ahead of us. We didn’t actually have a horse for the leadership. We weren’t putting up Mike. We just went to her to say, you have to go.
‘It was one of the most awful experiences of my political career walking in to her office. Helen was sitting at the top of the table. Steve Maharey was there. Judith Tizard might have been there. I think maybe Heather Simpson. I can remember sitting there with tears running down my face, because I felt so bad about having to do it. I will always remember Helen just looked at us, she stared at us, and it was obvious she was going nowhere. And subsequently Judith and others went into overdrive to get the party support behind her. I remember party secretary Tony Timms saying to me, “You have got to support Helen,” and I said, “I can’t, we are going to lose.”’
In the end, the group of five’s lack of conviction about toppling Clark counted against any likely change of leader-ship. And Annette, who was in tears, epitomised their lack of resolve. This was a coup no one wanted, not even those suggesting Clark should stand down.
And while Cullen and Sutton believed Moore would have been the logical choice to replace Clark if she stood down, Moore was never put up as a challenger.
‘We weren’t there as emissaries of Mike,’ says Phil Goff. He says it is possible Cullen might have put his hand up, but it was unlikely he would have had the support to become leader. ‘We calculated at the time we were one vote short of a majority if it went to a formal process. We didn’t want to take it to a formal caucus process because it was so close we thought we’d end up doing further damage to the Labour Party and probably get the blame for it as well.’
Instead Clark, emboldened by her support, stared down the challenge.
‘Oh yeah, I remember that. I wasn’t often the subject of Helen’s stare, but she did have that dead stare,’ says Goff.
Annette can now laugh about what happened. ‘Of course, we turned out to be wrong because we went from 15 per cent to something like 28 per cent by the ’96 election. But I still think what we did provided the impetus for making Helen show what she could do. I also think, looking back on it, that she had felt tentative in her own position because of the division. Now she was emboldened by party members and by caucus members, and by the fact that she had stared us down, and she kind of hit her straps, and she sort of moved out of this cloud to become more outspoken and direct.
‘Did she forgive us all? I tell you what she did, and this is the sign of a very good leader. She promoted us onto her front bench. You keep your so-called enemies close, and in my view the people who subsequently supported her most strongly in her nine years as Prime Minister were Cullen, Goff, King and Sutton. We were among her strongest supporters and probably those she relied upon the most and leant on most for carrying out difficult roles.’
Instead of punishing her challengers, Clark rewarded them. David Caygill stepped down and Michael Cullen became deputy leader, establishing a powerful leadership duo which was to take Labour through three terms of government.
Cullen points out, though, that he should have been made deputy in 1993 when Clark first became leader and that might have helped prevent the damage Labour suffered from then until 1996. ‘The mistake Helen made in 1993 was that she got the backing of David Caygill by promising the deputy leadership, but that meant that it was in a caucus that was split down the middle. It was a winner-takes-all leadership. If you actually accepted that I should be the party deputy leader then — and I thought I was the best-performing MP in Opposition from 1990 to ’93 — I had a reasonable claim on the position then, I think it might have been much easier to bring factions together,’ he says.
In many ways the challenge to Helen Clark was a turning point for both her and Labour. Up until that point her leadership had been shaky. From that moment on, however, there was no question about who was in charge of the party. Mallard is certain the ‘Claytons coup’ marked a change in fortunes for Clark’s leadership.
‘It wasn’t a nasty campaign. It was quick and it was over. Caygill made a decision that he wasn’t the right person for the deputy’s job and I think, while I’m sure he would have had a big role, a big contribution to make, it freed stuff up for the Michael–Helen relationship to develop, which I think became a core strength of Labour in government.’ Mallard also says that changes that happened around that time, or soon afterward, such as bringing Annette into the health area, were significant. ‘Helen, who thought health was really important, had someone close to her she supported and trusted . . . someone who was on a similar wavelength in many areas. I think that helped get confidence for Helen.’
It also helped that they all knew one another well. No one, Annette included, had challenged Clark out of malice or because of a deep-seated ideological aversion.
Mallard says, ‘There were a group of people who had been colleagues for quite a period of time, Helen and Michael from ’81 to ’96 and Annette in the ’84 group, and they knew each other well. I think they respected each other. People didn’t always agree. There were sometimes quite big policy and fiscal differences of view. I’m pretty certain one of the reasons I was associate finance spokesperson and minister was there was still a residual concern on Helen’s part around the dryness of Michael’s economic views and there was a wish in some areas to have a person in there who could have a look at that stuff, although as it turned out I ended up having to be the budget control minister, which was the opposite of what Helen wanted.’
From the moment Clark, who had struggled as leader, began to assert herself she got the support of all her caucus and Labour’s fortunes started to rise. Partly, it was probably because MPs knew that unless they pulled together most of them would not be returning after the election, based on Labour’s mid-year polling. In fact, on that polling Labour would be relegated to the also-rans in the election race.
Then in September just weeks before the 1996 election Mike Moore finally came in from the cold when he accepted Helen Clark’s offer to be Labour’s foreign affairs and trade spokesperson. But it was done with little grace, with Moore saying he had agreed to go back on the front bench after persuasion from foreign trade officials, National’s trade negotiations minister Philip Burdon and New Zealand First leader Winston Peters. It was hardly a ringing endorsement of Helen Clark.
But at least Labour went to election day sort of united. Or Labour would have done had it not been for reckless comments from David Lange, who was retiring from politics, but still had plenty to say about Labour and its troubles. In this case he said there was no way Labour could form a government with the Alliance and New Zealand First. But, worse, he also told ABC TV’s Lateline programme in Australia that after the election some Labour MPs were likely to defect to National.
Despite these irritants, Labour did haul itself back from the doldrums of opinion polls earlier in the year and won 28 per cent of the party vote, while National could only get 34 per cent. Ironically the result, Labour’s worst effort since the war, strengthened Clark’s hold on the leadership. And in another irony, Labour also had a chance of forming the next government if it could win the support of the Alliance and, crucially, New Zealand First.
The coalition talks with New Zealand First dragged on until finally, almost nine weeks after the election, its leader Winston Peters announced it would do a deal with National.
As disappointed as Labour was, it was a blessing in disguise. At best a Labour-Alliance-New Zealand First coalition would have suffered the same fate as the National-New Zealand First Government. It managed to last three years but only just, after the coalition between the two parties broke down and Peters was sacked from Cabinet by the then Prime Minister Jenny Shipley. At worst a three-party coalition led by Labour would have broken down much more quickly and forced a snap election.
Labour, still recovering from its period in government and subsequent years of division and squabbling, might have not been able to survive such a shock. Another three years until 1999 gave it time to build greater unity and repair the rift with Jim Anderton and the Alliance.
Looking on from the Opposition benches, Labour had none of the worries that faced National. Talk began immediately about Bolger’s leadership and so too did the grumbling about New Zealand First and Winston Peters.
A year later that disquiet spilled over and Shipley orches-trated a coup against Bolger while he was overseas attending the Commonwealth Heads of Government Meeting in Edinburgh. When he landed back in Auckland in November 1997, he was met with the news that he no longer had the majority support of his caucus and, after some negotiation, he agreed to step down as National Party leader and Prime Minister at the end of the month.
It was a coup quite different to the public and bitter leadership spill Labour had conducted when Clark ousted Moore in 1993. It also marked continuing difficulties for National and helped lay the ground for a successful election campaign by Labour in 1999.
Shipley’s relationship with Peters was difficult and after months of crises the coalition finally fell apart in August 1998. But rather than call an early election, Shipley opted to continue governing with a ragtag group of deserters from New Zealand First, who left the party to stay as part of the government.
The Evening Post reported: ‘After weeks of political tur-moil government stability now rests on the support of a few political opportunists. Prime Minister Jenny Shipley can now claim she has the numbers in Parliament to support a minority National Government.
‘But to remain on the Treasury benches she must rely on former New Zealand First MPs Jack Elder, Ann Batten, Tukoroirangi Morgan, Rana Waitai, Deborah Morris and Peter McCardle. For many of them their only reason to support National is to salvage their own political futures.’
While the government was effectively falling apart, Labour was mending its rift with the Alliance. The two parties forged a truce and based on polls at the end of 1997 they had enough support to form a government if an election were held then.
Mallard says the National-led Government’s problems were evident early in its third term. ‘It disintegrated first by the coup against Bolger and then the awful relationship between Peters and Shipley and the lot Shipley cobbled together . . . I mean Alamein Kopu — it looked like an absolute shambles. And that meant really from early in 1998 it became pretty clear that we were going to be the government and right through that term we looked more and more like a government in waiting. It’s not often that an Opposition looks more competent and stable than a government, but that was certainly the case at that time.’