National rules out NZ First as coalition partner

NATIONAL BUSINESS REVIEW: National Party leader John Key has ruled out working with New Zealand First leader Winston Peters post-election altogether and says opponents are wrong to suggest that would change if he was struggling to form a government.

Mr Peters' party is being investigated by the Serious Fraud Office over questions how donated money was spent and Parliament's privileges committee is looking at whether rules were broken regarding an undeclared $100,000 donation from billionaire Owen Glenn.

Last week Deputy Prime Minister Michael Cullen said Mr Key had given himself a wriggle out clause by saying unless Mr Peters could give credible answers to questions swirling around him he would not work with Mr Peters.

Today Dr Cullen criticised Mr Key for his hardened position, saying he was disregarding natural justice and not letting inquiries finish before passing judgement.

"John Key's stance shows that he has no respect for basic New Zealand values of fair play," Dr Cullen said.

Mr Key told NZPA that the bar he set for who he would work with was higher than if they were cleared by investigations or not.

"I have to have confidence in them and confidence in their word. The sheer weight of allegations and the actions of Mr Peters in the last few months means that I have lost that confidence in him."

Mr Key ruled out having Mr Peters as a minister, forming a coalition with his party or entering any kind of support arrangement with NZ First.

"The lot... we have categorically ruled him out altogether."

Mr Key said he did not think Mr Peters would be able to clear up all the allegations swirling around.

"I think it's highly unlikely he will be able to resolve to my satisfaction answers to all of those allegations and that still leaves you with his handling of the situation."

Progressive leader Jim Anderton, speaking on TV One's Agenda programme this morning, said Mr Key was not being brave and knew Mr Peters may not be in a position to negotiate following this year's general election.

"I'll give you this prediction that if Winston is there and he has the numbers to make John Key the prime minister you'll find John Key finds very quick reasons why Winston's a man of high integrity fast."

Mr Key responded: "As is so often the case Jim Anderton has got it wrong."

Mr Anderton took a serve at the SFO. He described the fact that a bill disestablishing it is on hold while the SFO conducts this inquiry as "a nice lifeline for them, so no one in this situation has got their hands completely clean".

Also on Agenda Green co-leader Jeanette Fitzsimons said it was up to her party, but her preference would be not to have to work with Mr Peters.

"If you're sitting around a Cabinet table with someone you have to be able to trust them, you have to be able to take their word."

She hoped the allegations that most concerned her -- relating to Mr Peters recanting criticism of Simunovich Fisheries during a 2003 parliamentary inquiry into scampi quota -- could be looked at. The SFO said there was not enough evidence to inquire at this point.

ACT leader Rodney Hide, who was successful in getting the SFO to look at what undeclared donations from Sir Robert Jones and the wealthy Vela family were spent on, wants a wider inquiry.

He thinks the SFO should look at all political donations to the party over the past 15 years.

United Future leader Peter Dunne said in the first instance his party would base who it worked with on policy. However the fact that Mr Peters let the controversy draw out without giving straight answers would be a factor "you take into account as to whether you can do business with that person subsequently".

Mr Dunne said it was unlikely other small parties would be put in the position of deciding whether to work with Mr Peters as National had ruled it out and Labour was unlikely to try again.

SFO investigators met Mr Peters' lawyer, Peter Williams QC, yesterday. The lawyer was confident information he was able to given them would result in Mr Peters being cleared.

On Friday Mr Peters stepped aside as Foreign Affairs, Racing and Associate Senior Citizens Minister until the investigation was complete.