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### Viewing cable 05WELLINGTON96, NEW ZEALAND PRIME MINISTER CLARK IN STATE OF THE

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Reference ID | Created | Released | Classification | Origin
--- | --- | --- | --- | ---
05WELLINGTON96 | 2005-02-02 03:58 | 2011-04-28 00:00 | CONFIDENTIAL | Embassy Wellington

`

    This record is a partial extract of the original cable. The full text of the original cable is not available.

` `

    C O N F I D E N T I A L SECTION 01 OF 02 WELLINGTON 000096

    SIPDIS

    DEPT FOR EAP/ANP
    NSC FOR GREEN

    E.O. 12958: DECL: 02/01/2015
    TAGS: PGOV PHUM PREL NZ
    SUBJECT: NEW ZEALAND PRIME MINISTER CLARK IN STATE OF THE
    NATION: "NO WORRIES"; MEDIA REACTION MUTED

    REF: WELLINGTON 78

    Classified By: ACTING DEPUTY CHIEF OF MISSION KATHERINE B. HADDA, FOR R
    EASONS 1.4(B,D)

     ¶1. (C) Summary:  In her opening speech of the year, PM Helen
    Clark launched the opening salvo of her election campaign.
    She indirectly countered Opposition leader Don Brash,s
    welfare policy speech (reftel) by outlining childcare and
    other policies she defined as the best way to encourage women
    to return to the workplace.  While the Prime Minister
    affirmed her interest in a US FTA, in almost the same breath
    she took a swipe at the National Party (and no doubt at the
    Embassy and other U.S. officials) by reiterating her
    Government's support for NZ's iconic anti-nuclear
    legislation.  Labor productivity and economic growth were a
    common thread throughout the speech, with special focus on
    the "ownership society" and increasing productivity to OECD
    standards.  PM Clark pointed to Asia as the way forward for
    NZ economically and politically, but aside from declaring
    interest in FTAs did not go into detail on the country's role
    in the region.

    ¶2.  (C) Opposition party MPs, who like the rest of New
    Zealanders knew most of the content of the heavily-leaked
    speech before it was delivered, immediately criticized the
    Labour Government as complacent, greedy, and out of touch.
    But reflecting the speech's failure to break new ground, an
    internal rift in the Opposition National Party dominated the
    next day's headlines, relegating Clark's presentation and the
    opposition response to a media byline.  End Summary.

    Foreign Policy Pro-NZ or anti-US?
    ---------------------------------

    ¶2. (C)  While Clark's State of the Nation address focused
    almost exclusively on the domestic agenda, Clark made a point
    of celebrating NZ's independent foreign policy, with its
    focus on human rights, disarmament and peacekeeping.  As part
    of this "independence," Clark again utilized her party's
    misquote of National Party leader Don Brash by declaring that
    NZ's iconic "nuclear-free status won't be gone by lunchtime
    with a Labour-led government."  Consistent with the GoNZ's
    recent foreign policy focus, Clark called for a continuation
    of NZ's dynamic trade agenda, together with a call for
    increased (and unspecified) engagement with Asia.  Making
    clear that the GoNZ's priorities were to continue its robust
    pace of negotiating free trade agreements (FTAs,) Clark
    pointed proudly to positive developments in FTAs with
    Thailand, China, Singapore and Chile, ASEAN and Malaysia.
    Clark noted "we remain ready to enter negotiations with the
    United States.  The mutual benefits of an FTA between us are
    clear."

    Policy Highlights
    -----------------

    ¶3. (U) Domestically, Clark hammered home Labour's
    achievements in economic growth, health, education, and
    reduction of crime.  While leaving major policy announcements
    for the 2005 budget and future election pledges, Clark
    delineated eight "key areas of activity and policy
    development," largely listing on-going GoNZ programs and
    previously announced initiatives.  The areas included:
    lifting labor productivity, lifting participation rates in
    the workforce, infrastructure development, new savings
    initiatives, Maori development, a dynamic trade agenda,
    increased engagement with Asia and building national identity
    and pride.

    Securing NZ's Economic Growth
    ------------------------------

    ¶3. (U) Labour productivity and economic growth were a common
    thread throughout the speech, with a special focus on the
    "ownership society."  While driving home NZ's low
    unemployment, high economic surplus and strong GDP growth,
    Clark outlined policy areas designed to expand and secure
    recent economic benefits across a broader portion of society.
     Striking back at Opposition leader Don Brash's criticism of
    Labour's welfare policies (reftel), Clark pointed to Labour's
    changes to the Superannuation scheme and mortgage insurance
    programs as first steps in encouraging increased savings
    rates.  She hinted at future policies designed to "encourage
    a co-coordinated lifetime approach to savings."  To lift
    labor productivity Clark announced continued investment in
    skilled migration and a proposal to encourage expatriate
    NZers to return home.

    ¶4. (U) In her most controversial policy, Clark announced a
    need to increase women's participation in the workforce,
    which currently lags behind OECD averages.  Here Clark
    highlighted the Working For Families package in the 2004
    budget, with its paid parental leave and additional childcare
    subsidies, as offering assistance to working mothers.  By
    stressing that such assistance would also enable mothers
    receiving state benefits to return to the workforce, Clark
    also took an indirect jab at Brash's welfare critique.
    Admitting that childcare was not the only obstacle to
    returning to work, Clark also pointed to the GoNZ's program
    to address pay equity issues in the public sector.  United
    Future leader Peter Dunne, whose party is in an alliance with
    Labour, called this policy "neo-Soviet," asking why women
    should sacrifice quality of life for the good of national
    productivity.

    Rebuttals: Overshadowed By Scandal
    ----------------------------------

    ¶5. (U) Opposition leader Don Brash gave an articulate
    rebuttal to Clark's comments, claiming that this was a
    classic tax and spend government.  He condemned Clark for
    merely "outlining what the Government will do with taxpayer's
    money."  Brash reiterated National's mantra of personal
    responsibility, and summarized his recent policy statements
    on welfare, race relations and economic development.  Despite
    his detailed response, Brash's remarks were completely
    overshadowed in the next day's media reports by his decision
    to remove MP Katherine Rich's from her welfare portfolio,
    after she publicly disagreed with aspects of his recent
    welfare speech.

    ¶6. (U) ACT Party leader Rodney Hide provided the sole foreign
    policy commentary of the day, rebuking PM Clark for her
    statements on the FTA, noting that Clark would "stand ready"
    to negotiate an FTA until "hell froze over" since she didn't
    like the Americans.  Noting Clark's decision to begin her
    speech with references to NZ's post-tsunami aid package, Hide
    reprimanded Clark for not mentioning the US' substantial
    support to the affected region.  He also bemoaned that her
    speech and the remarks of other opposition MPs had failed to
    mention the successful elections in Iraq, which were a great
    step forward for democracy in that country.

    Comment
    -------

    ¶7. (C) Comment:  Clark is sticking to her trademark approach
    ) a gradual development of policies, with no surprises - but
    it appears she may have erred on the side of caution.  While
    media reporting on in the past week was substantial, with all
    key elements of the speech leaked early, reporting on the
    State of the Nation speech was minimal.  National's "sacking"
    of Katherine Rich dominated public discussion.  Proving the
    adage that no coverage is bad coverage, Brash has taken a
    page from Clark's "solidarity" playbook and used the
    opportunity to demonstrate that sometimes a strong leader has
    to take a stand, and not allow internal dissent.
    Swindells

`