Wikileak: Don Brash Resigns; Key Tipped To Take Charge 2006

Wikileak: Don Brash Resigns; Key Tipped To Take Charge 2006

06WELLINGTON928

Date: 11/24/2006

86862,11/24/2006 3:10,06WELLINGTON928,Embassy Wellington,CONFIDENTIAL//NOFORN,06WELLINGTON92 4|06WELLINGTON928,VZCZCXRO7393OO RUEHCHI RUEHFK RUEHHM RUEHKSO RUEHPBDE RUEHWL #0928/01 3280310ZNY CCCCC ZZHO 240310Z NOV 06FM AMEMBASSY WELLINGTONTO RUEHC/SECSTATE WASHDC IMMEDIATE 3527INFO RUEHZU/ASIAN PACIFIC ECONOMIC COOPERATION IMMEDIATERUEHBY/AMEMBASSY CANBERRA IMMEDIATE 4621RUEHLO/AMEMBASSY LONDON IMMEDIATE 0150RHEHAAA/NATIONAL SECURITY COUNCIL WASHDC IMMEDIATERUEKJCS/OSD WASHINGTON DC IMMEDIATERHHMUNA/CDR USPACOM HONOLULU HI IMMEDIATERHHJJAA/JICPAC HONOLULU HI IMMEDIATE,"C O N F I D E N T I A L SECTION 01 OF 02 WELLINGTON 000928 SIPDIS SIPDIS NOFORN STATE FOR D (FRITZ), EAP/FO, AND EAP/ANP NSC FOR VICTOR CHA SECDEF FOR OSD/ISD JESSICA POWERS PACOM FOR J01E/J2/J233/J5/SJFHQ

E.O. 12958:

DECL: 11/24/2016

TAGS: PGOV, PREL, NZ

SUBJECT: OPPOSITION LEADER BRASH RESIGNS; KEY TIPPED TO TAKE CHARGE

REF: WELLINGTON 924 Classified By: DCM David J. Keegan, for reasons 1.4 (b) and (d) Summary -------

1. (C) SUMMARY: New Zealand's main opposition party leader, Dr. Don Brash, has resigned after weeks of speculation over his leadership. Dogged by a series of gaffes and missteps that raised questions over his political judgment, Brash announced that the National Party will caucus on Monday to pick a new leader. The charismatic John Key is the likely contender. A former investment banker with Merrill Lynch, Key remains an admirer of the United States. He rates high with the NZ media and in polling, but many caucus members remain uncomfortable with his lack of political experience. Meanwhile, the gag order has just been lifted on the book reportedly containing allegations of National Party campaign malfeasance, which served as catalyst to Brash,s departure. The author claims it also contains information damaging to Key. End Summary. Brash,s often turbulent leadership comes to an end

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2. (SBU) Thursday afternoon, November 23, Brash announced his resignation as National Party Leader. Brash,s decision follows months of missteps, and there have long been rumors he would be removed by his caucus. But the speed of his departure was something of a surprise. In a hastily called press conference, Brash said he could no longer continue as leader because of continuing speculation about his future. Although he claimed to have been considering his future for some time, it is probable he knew his caucus would not support him following his latest political misstep over a soon to be published damaging book (reftel) . Brash declined to commit to staying in Parliament, saying it would be up to the new leader to decide if he had a future within the party. Brash,s resignation is effective from Monday November 27 when National,s caucus will meet to decide who among its MPs will become its next leader. And that leader is likely to be John Key

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3. (SBU) Even though anything could happen behind the closed caucus doors, Monday,s meeting to pick Brash,s successor is likely to be a straightforward transition to a John Key leadership. Soon after Brash,s resignation announcement Key, National,s Finance spokesman who has long been considered a potential leader, officially threw his hat in the leadership ring. Although former Party leader Bill English has refused to rule out a leadership bid he will probably not mount a challenge to Key as he is unlikely to win. On the day Brash resigned, Key got endorsements from two senior National MPs: Deputy Leader Gerry Brownlee and Industrial Relations Spokesman Wayne Mapp. National will want a smooth transition to the next leader, as a divisive contest could damage the party,s political fortunes going forward (particularly at a time when it is outstripping Labour in the polls). National Front bencher and shadow Trade Minister Tim Goser told DCM Thursday evening that National will move quickly to endorse Key and prepare to challenge Labour.

4. (C) Although the top slot is essentially secured, the Deputyship is wide open. Incumbent Brownlee refuses to say whether he will seek to retain his position. Other contenders are: Law and Order Spokesman Simon Power, Economic Development Spokesman Katherine Rich and Welfare Spokesman Judith Collins. Brownlee has the edge as an experienced street fighter, but National may wish to improve its currently poor standing with female voters by selecting a woman for the slot. English is not believed to be interested in serving as Key,s deputy, and he may expect to be offered the coveted finance portfolio in return for his support. Labour will be nervous about Key

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4. (C) Deputy Prime Minister Michael Cullen claims to be bullish at the prospect of facing a potential Key leadership, WELLINGTON 00000928 002 OF 002 but its probable both he and Prime Minister Clark would have preferred the status quo. Labour has often easily exploited Brash,s lack of political savvy, his struggle to perform within the adversarial bear pit of the Parliamentary debating chamber and his tendency towards embarrassing gaffes. Key has none of these weaknesses. In the 2005 campaign Key bested Cullen on the critical tax reform debate, scoring valuable political points for National. Additionally, a former very successful investment banker raised by his Austrian-Jewish widowed mother in NZ state housing, Key is a rags-to-riches story who appeals to New Zealanders. He also offers a more modern, fresh and dynamic leadership which could contrast with Labour, widely viewed as becoming stale and staid after 7 years in power. Clark and co. will try to exploit Key,s relative political inexperience: he entered parliament in 2002. However, Key has learnt the political game fast and will likely prove to be a more dangerous opponent for Labour than Brash.

COMMENT: U.S.-National Ties Will Remain Solid
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5. (C) Amid the swirl of speculation surrounding National,s next leader, the looming presence of Hager,s book, ""The Hollow Men"", remains (reftel). Among the allegations reportedly contained in the book are ones concerning a clandestine relationship between the National Party and some US neoconservatives during the 2005 election campaign. Post has not seen an advanced copy of the book but understands that this section will essentially take the form of name and shame, exercise. If the public reaction to this allegation is found to be politically damaging for the National Party, it may seek to publically place some distance between it and the US. But as reported reftel, we have heard the U.S. portion of the book is not prominent. In any case, Key is an admirer of the United States and friendly to Mission New Zealand, and other National contenders are the same. We anticipate continued good relations with the party no matter who takes up the reins. McCormick",24/11/2006

ENDS

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