Fourth National Government of New Zealand - The National-New Zealand First Coalition

The National-New Zealand First Coalition

Following the 1996 election neither National nor Labour had a majority of the seats in parliament, meaning that a coalition government needed to be formed. National and Labour each had 'natural coalition partners' in the form of ACT and the Alliance respectively. However in the 120 seat parliament, National and ACT together had only 52 seats and Labour and the Alliance only 50. This made New Zealand First, with 17 seats, the 'kingmaker'. The other party in parliament, United, had only one seat and so was irrelevant.

Prior to the election, New Zealand First leader Winston Peters had created the impression that he was opposed to National and that voting for New Zealand First would change the government. However, after a month and a half of coalition negotiations with both National and Labour, Peters announced that his party would coalesce with National. This deeply angered many New Zealand First supporters.

Peters' decision could be justified by the fact that National had won more votes than Labour, but it is generally considered that National was willing to grant more policy concessions that Labour, who may have taken it for granted that he would go into government with them. As part of the coalition agreement, Peters was made Treasurer, a newly created position superior to but co-existing with that of Finance Minister. Various other New Zealand First MPs were given Ministerial or Associate Ministerial positions.

Within two years the coalition was showing major fractures. Several New Zealand First MPs had gone into politics specifically to combat some of National's early 1990s policies, and were unhappy at being made to perpetuate them. Neil Kirton, Associate Minister of Health, was particularly unhappy, and was fired from his position in 1997. He then led a campaign within New Zealand First to cancel the coalition and seek an arrangement with Labour.

By 1998, Peters had become aware that the coalition had lost his party so much support that it might not be returned to parliament in the following year's election. National's replacement of Jim Bolger, with whom he had a good working relationship, with Jenny Shipley increased the stresses on the coalition. In August 1998, Peters was fired from Cabinet after a dispute over the privatisation of Wellington International Airport. He cancelled the coalition shortly afterwards. However several New Zealand First MPs, including most of the Ministers, opted to leave the party and continue to support National. They, mostly now in a new party called Mauri Pacific, and a renegade Alliance MP, Alamein Kopu, formed a new coalition which allowed National to retain power until the 1999 election.