Week in Review

Winston Peters should stand down as Racing Minister

Leaked documents seen by RNZ show racing industry figures donated large sums secretly to New Zealand First. Bernard Hickey argues Winston Peters should stand down as Racing Minister, at the very least, while those donations are being investigated by the Serious Fraud Office.

The political heat on Winston Peters to stand down as a minister is intensifying after revelations this morning on RNZ that leading racing industry figures donated to the New Zealand First Foundation in amounts just below the declarable thresholds.

RNZ reported from leaked documents that the New Zealand First Foundation received tens of thousands of dollars from donors in the horse racing industry in payments which fall just below the $15,000.01 threshold at which party donations are usually made public.

"As racing minister, New Zealand First leader Winston Peters has delivered significant benefits to the industry, including millions of dollars of government money spent on tax breaks and scrapping betting levies," RNZ reported.

Brendan Lindsay, the founder of Sistema and buyer of Patrick Hogan's Cambridge Stud, donated three amounts just below the threshold. Thoroughbred breeder Nelson Schick donated twice below the threshold.

Why it matters

Winston Peters is Racing Minister and has pushed through reforms to the NZ Racing Board and the industry that are expected to see the TAB sold off to Australian betting companies in a way that breeders and trainers want. He has also cut levies paid by the industry. See more background on the racing reforms from Mark Jennings from August 2018.

He stood aside as Foreign Minister in December 2008 when donations from Bob Jones, Owen Glenn and the Vela Family to Peters and New Zealand First were investigated by the Serious Fraud Office. The SFO cleared Peters and the party shortly before the November 2008 election, in which New Zealand First failed to get over the 5.0 percent threshold required to be in Parliament.

Speaking to media yesterday for the first time since donations to the New Zealand First Foundation were referred to the Serious Fraud Office for investigation, Peters sought to distance himself and his party from the issue, claiming: “I’m not subject to any investigation here, and nor, in that sense, is New Zealand First - so there is the end of it.”

Peters said he and his party would cooperate fully with the SFO’s work, but he remained confident the role of the foundation in collecting donations was within the law.

Ardern a spectator

At her post-Cabinet press conference on Monday, Prime Minister Jacinda Ardern did not explicitly state she had trust in Peters despite multiple questions from journalists, instead citing her “excellent working relationship with him”.

She said she had discussed the issue with Peters after cabinet, but the issue of whether he would stand down did not come up.

When asked what was different from 2008 when Peters stood down, Ardern said: "My job is to deal with the circumstances in front of me, not to draw reflections on what someone else did 10 years ago and this is the judgment I have made."

When pressed again ahead of Labour’s caucus meeting on Tuesday morning, the Prime Minister gave a more direct answer to the question of whether she trusted Peters, saying: "I do. I work with him every day. I couldn't operate this Government without a trusting relationship with Winston Peters, and that is at the core of why we've been able to run that strong, stable Government."

But Ardern again reiterated that she would not form a judgment on the allegations against Peters and New Zealand First until the SFO finished its investigation.

What it all means?

I think Peters should now come under enormous pressure to step aside as Racing Minister at the very least. If Ardern does not force or prompt him to jump, she will look weak and faces collateral damage, especially with her younger, and non-Winston, support base.

There is debate about whether her Labour predecessor Helen Clark asked Peters to step down in 2008 or he jumped. I suspect there was some pushing and shoving and pulling and then Peters stepped down.

The things to remember?

Peters forced her Capital Gains Tax backdown. He is the handbrake Labour and Green supporters would love to throw out of the car. Ardern should seek Helen Clark's advice.

Also at the least, the Government should put its Racing Industry Bill, which is in the select committee stage after its first reading in Parliament last month, on hold. See more here on the reforms at DIA.

The winner?

National Leader Simon Bridges' decision last week before the SFO began investigating the NZ First Foundation to say he did not trust Peters is suddenly looking better in retrospect.

The final word: Labour may need to engineer an electorate seat for New Zealand First to retain power in its current configuration, or risk a large amount of wasted vote benefiting National and ACT in a way that could give the centre-right unbridled power.