New Zealand: Grand inquisitor takes charge in New Zealand

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She would, according to a fellow MP, be a good spokesman for the Spanish Inquisition. Jenny Shipley, the woman who will become Prime Minister of New Zealand, is a formidable political operator. But, our correspondent writes from Wellington, she has already upset her coalition partners.

New Zealand's ruling National Party yesterday confirmed Jenny Shipley as its new leader and Prime Minister-designate but its junior coalition partner refused to endorse the changeover. It was a first-day obstacle the woman who has been dubbed "the silent menacer of New Zealand politics" and, like Margaret Thatcher, tougher than any man in the Cabinet, took in her stride.

Having ousted seven-year Prime Minister Jim Bolger in a bloodless but faultlessly executed coup on Monday, she was happy to give Winston Peters' New Zealand First party a breathing space to consider the transition, she said.

It may be the only breathing space he gets, for if he stays in government as Deputy Prime Minister he will find Mrs Shipley very different to deal with than Mr Bolger, a former political opponent who became a late night whisky drinking friend as a Cabinet colleague.

He has already been warned by a former adviser and fellow NZ First MP, Michael Laws, who told a newspaper earlier this year: "Frankly, if I wanted somebody to bring a human face to the Spanish Inquisition, I would have chosen Jenny.

"Jenny can tell you in wonderful warm tones how she's going to garrotte you and then disembowel you and throw your intestines over her left shoulder," he said. "She never raises her voice and never uses bad language, but the assault is deadly."

Mr Peters, angry that he was not consulted about the coup and worried that Mrs Shipley, much more of an economic conservative than Mr Bolger, will shift policies to the right, said today NZ First would not decide whether to support her for another week.

"New Zealand First will not become captive to any new right wing agenda," he warned. "We will remain faithful to our principles and philosophy." Mr Peters added that any move to dilute the coalition agreement he signed with Mr Bolger 11 months ago as a basis for cooperation would "carry serious implications for the coalition partnership".

If his aim was to browbeat Mrs Shipley into submission before she takes up her new job next month, there was no sign he had succeeded when she addressed Parliament later in the day.

In tones that reflected more the velvet glove than the iron fist she is capable of, she assured the nation she wanted the centre-right coalition to continue and the agreement was an "enduring document" that she was not about to try to renegotiate. (Even though she said the National Party caucus had given her authority to talk to NZ First to "work on the coalition transition arrangements".)

She even confirmed that the NZ$5 billion extra spending on social policies that Mr Peters forced Mr Bolger to accept as the price of his co-operation was "not negotiable".

All of which, coupled with fulsome praise for Jim Bolger as an "outstanding leader of this country" had observers wondering why the coup had occurred. It happened, in fact, because National Party supporters in big business, afraid the extra government spending would cause a Budget blow-out, felt a soft Mr Bolger had allowed NZ First, with its focus on health, welfare and education, to compromise traditional conservative National Party policies.

Further, it was said, the government had halted the free market reforms and privatisation programme that were a feature of the Nationals' first six years in office (when they governed on their own) and the economy was at a standstill.

Mrs Shipley is expected to get things moving again and economic analysts were already telling clients in their faxed newsletters today that she would push the government further to the right, kick-start reform and pursue "business- friendly" policy initiatives.

How she will do this and keep a suspicious NZ First onside is far from clear. Especially as grassroots National Party supporters, weary of a spate of NZ First mini-scandals and mishaps this year, are looking to her to differentiate the party from its coalition partner and revive voter support in opinion polls that has reached alarmingly low levels.

Meanwhile, Mr Bolger called a press conference to reflect on the last seven years and perhaps his place in history. He likes to take credit for the country's remarkable economic recovery, but the groundwork for the sweeping reforms that brought this about was laid by a Labour government in 1984-90 which was kicked out by voters in favour of Mr Bolger for its pains.

He takes pride in his government's efforts to settle a century and a half of Maori grievances over confiscated land and other lost rights.

But he will probably be remembered most as the man who managed the transition from the Westminster style of first-past-the-post voting to proportional representation last year - the system that produced the coalition government and, ironically, ultimately his downfall.