New Zealand's `Thatcher' takes over from Bolger

New Zealand's long-serving Prime Minister, Jim Bolger, announced yesterday that he would resign. The country will have its first woman PM, Jenny Shipley, who has been called a New Zealand version of Margaret Thatcher. David Barber in Wellington says the c

Jim Bolger, 62, leader of the conservative National Party since 1986 and Prime Minister for the last seven years, announced he would step down later this month after Jenny Shipley told him he had lost the support of a majority of his MPs.

Mrs Shipley, 45, Minister of Transport and Women's Affairs, is a tough politician who has been likened to former British prime minister, Margaret Thatcher. As Social Welfare Minister in 1990 she presided over wide-ranging cuts in benefits of up to 25 per cent. As Minister of Health from 1993 she introduced disastrously unpopular health reforms which remain the biggest problem for the government in voters' eyes.

After refusing all day to go, Mr Bolger issued a late night statement saying "changing circumstances make it appropriate for me to step down as Prime Minister".

He said he was signalling his intention to retire now to permit an orderly transition for the National Party's coalition government with Winston Peters' populist New Zealand First party.

But there was widespread speculation that as Prime Minister, Mrs Shipley would end the 11-month-old formal coalition which has become one of the country's most unpopular governments ever; it scored a 90 per cent disapproval rating in a recent poll.

Although NZ First's 17 MPs give the coalition a single seat majority in Parliament, analysts predicted Mrs Shipley could dump Mr Peters, who is Deputy Prime Minister and Treasurer, and run a minority government with the support of a handful of disaffected NZ First MPs, the eight representatives of the right-wing ACT NZ party (formerly the Association of Consumers and Taxpayers) and the lone United NZ MP, Peter Dunne.

Mr Peters, once the country's most popular politician, attracted an 88 per cent unfavourable rating in a recent poll of voters and is blamed by many National Party backbenchers for the government's unpopularity.

Mrs Shipley indicated that Mr Peters did not figure in her future plans when she did not consult him on her move, merely informing him this morning that she had the numbers to oust Mr Bolger. Support for NZ First, which won 13 per cent of the vote at the election in October last year, has slipped to 2 per cent in opinion polls.

A leadership bid by Mrs Shipley has long been on the cards as the polls showed support for the coalition dwindling. A poll last month indicated the main opposition Labour Party, led by Helen Clark, would romp home in an immediate election.

But the timing of Mrs Shipley's challenge stunned political analysts who had not expected her to move until the New Year. The plot to oust Mr Bolger quickly was apparently hatched over the last two weeks while he and his party deputy, Foreign Minister Don McKinnon, were overseas attending the Commonwealth Heads of Government meeting in Edinburgh and making a state visit to France.

Mr Bolger is seen by many in the National Party to have been too soft with his big-spending coalition partners in New Zealand First at the cost of National's traditional right-wing policies and fiscal restraint. Mrs Shipley has never been accused of being too soft on anyone.