Credible threat: a National-Green coalition

Common interests

The Green party, Labour and National all have a common interest in having the Greens and National seriously explore a coalition agreement.

Various right-wing pundits and commentators have been promoting this coalition idea and sceptics have, probably rightly, said they only want it to weaken Winston Peters' hand in coalition negotiations.

But when you think about it more deeply, the strategy would work equally well for the Labour party and, surprisingly perhaps, most of all for the Greens.

At the moment, Winston Peters holds all the cards:

  • He can extract a high price for supporting National.
  • He can play off Labour against National, to get the best deal for himself as long as Labour can keep the Greens on board in a three-way coalition.
  • In negotiations with Labour he can promote his interests at the Greens' expense, playing down their interests to the point that they are almost, but not quite, ready to walk away.
But if the Greens and National start seriously discussing a coalition deal, the whole dynamic will change:

  • New Zealand First can't get more from National than National is willing to offer the Greens.  This puts Peters in a "dutch auction" position where he has to bid for less than what the Greens would take, to earn National's favour.
  • He can't play off Labour against National as effectively. He has to seriously consider how a three-way coalition with the Greens and Labour will work as a genuine partnership, or see the Greens go with National and shut him out altogether.
  • The Greens will be in a much stronger bargaining position with Labour and New Zealand First, in negotiating to form a centre-left government.
This scenario works surprisingly well for Labour.  If Jacinda Ardern intends to form a stable and credible coalition it needs Greens and NZ First to play nicely with each other, and for both to work well with Labour.  If the Greens are able to walk away from the negotiating table, NZ First has to play nicely or lose.

This works well for National most obviously because it restricts New Zealand First's negotiating position. But it may have a more profound effect on how National operates in government, depending on what Bill English wants, how badly he wants it, and who his friends are in caucus. Because a National-Green coalition deal that would work effectively, would have to also change how this National government operates.  

And that could works for the Greens: maybe they can't change the government altogether, but they can substantially change how this National government operates, and that might be enough.  But they would need to draft a coalition deal with National strong enough to overcome their own membership's anger at the past nine years of National government. 

Game Theory

For the second scenario to work, a coalition deal between Greens and National cannot be a non-credible threat

The idea of a "Credible Threat" comes from a branch of economics called Game Theory, which deals with interdependence in business strategy; situations where the outcome for each participant depends on the choices of all:
Strategic moves. A player can use threats and promises to alter other players’ expectations of his future actions, and thereby induce them to take actions favorable to him or deter them from making moves that harm him. To succeed, the threats and promises must be credible.
In other words, if all the other players in this coalition-building game want to limit NZ First's options and make them play nicely, then a National-Green coalition deal must be a realistic possibility. 

If National and the Greens appear to be bluffing, Winston holds all the cards.  If not, then everybody else is in a stronger position.  So let's imagine what such a National-Green coalition deal might look like.

A Framework Deal

Start by taking the top five ranked members of the Green Party list: James Shaw, Marama Davidson Julie Ann Genter, Eugenie Sage and Gareth Hughes. We will make them all full cabinet members.

Make James Shaw the Deputy Prime Minister and Minister for Climate Change (replacing Paula Bennett in both those roles), and promise him that National will support the development and enactment of a Zero Carbon Act within 24 months (before the 2020 budget is due, so the Greens can withdraw confidence and supply if the Act is not passed by then).

Make Marama Davidson the Minister of Social Development (Social Welfare) and promise that she can implement the whole of the Greens “Mending the Safety Net” policy in the first and second budgets (2018 and 2019).  She would replace Anne Tolley in that role.

Make Julie Anne Genter the Minister of Transport. Drop the Roads of National Significance policy, bring rail under the control of the NZTA, and allow JAG to redirect transport funding toward the development of a low-carbon transport system.  This is the "low-hanging fruit" for reducing greenhouse gas emissions in New Zealand; much easier than dealing with agricultural methane emissions. She would replace Simon Bridges in that role.

Make Eugenie Sage Minister for the Environment, replacing Nick Smith. Give her free rein to implement the Greens "Clean water, great farming" policy.

Make Gareth Hughes the Minister of Local Government, because of the overlap with Environment in terms of land use planning rules and implementation, and allow him implement the Greens' proposed "Every House a Home" policy.

At this stage, you've still got Jan Logie and Chloe Swarbrick sitting on the bench, and possibly Golriz Ghahraman too, after special votes have been counted.  

I suspect Jan Logie would be uncomfortable at the Cabinet table in a National government, but could be considered for an Associate Minister role outside of cabinet. Let's her take Social Housing off Alfred Ngaro. Please.

Swarbrick and Ghahraman are new to parliament, but might take up under-secretary roles, in which they can learn the ropes.

In essence the deal has to be strong enough for the Greens to take it back to a Special General Meeting of their party and have it approved by the membership.  That won't work unless the Greens are very confident they will get genuine policy wins on both their social and environmental policies. 

Giving substantial roles to the entire Green caucus, and empowering them to deliver significant policy outcomes that span both environmental and social outcomes might just do it.  Fortunately the Greens have a talented caucus and strong, carefully considered, policy statements to take to the table.


The Greens need to make it a condition of the deal that Bill English remains Prime Minister for the duration of the term, and is not replaced by (say) Judith Collins or Steven Joyce.  

They need to show their membership and people who voted Green that they might not change the government, they will be significantly changing this government 

Taking the top five Green Party list members as full cabinet members would almost certainly require Bill English to do a cabinet reshuffle.  As the Chair of Cabinet he has to make the group work together effectively. 

It would be in his best interests to demote some of the harder right ministers from the Key government and replace them with moderates and "blue/greens" from his caucus. If he wants a framework deal with the Greens to present a credible threat, then he might signal such changes before the close of negotiations.

To make this deal a genuinely credible threat, Bill English and the National Party have to take a significant risk with their own caucus, membership, and voters, acknowledging that the Greens would be taking an enormous risk with theirs.

The Green Party might not actually go into coalition with National. I think it highly unlikely.  But I also think they will be doing a great favour to themselves, to their potential coalition partners, and to New Zealand as a whole, if they seriously explore the possibility with National.  

And it might be best that they start doing that immediately, while Winston Peters is still playing hard to get.

Opportunity Costs

All parties have to consider what could happen if the Greens and National are not prepared to talk about a credible coalition deal. 

Both Labour and National have paid a high price to have Winston Peters in coalition in the past: he has a penchant for taking top jobs for himself. New Zealand First simply doesn't have the same depth of talent as the Greens in the top positions on his party list - they tend to be solid, rather than sparkling.  

And really, hasn't everybody enough of Winston Peters throwing his weight around by playing "kingmaker"?  I certainly have.

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