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John Key on The Nation

'THE NATION'

JOHN KEY
Interviewed by SEAN PLUNKET

Sean Critics call him, the Prime Minister, Mr Flip Flop and say his true views and intentions are hard to pin down. We'll find out if that is the case. Joining me now in the studio is the Prime Minister John Key. Prime Minister good morning to you.

John Key – Prime Minister
Good morning Sean.

Sean Are you going back to them again (McGehan Close) this election campaign?

John Don’t know. I've been back there recently, I've been a number of times actually over the course of the time I've been Prime Minister, initially to see Joan on a couple of occasions, she's no longer living in McGehan Close, but you know if you look at that street…

Sean Have you changed?

John Well I think actually if you look at that street, the first thing you need to acknowledge that there are a lot of low income people living in that street, and recessions, and we've had the worst recession since the Great Depression, are always tougher on lower income people, that’s actually true. But I think if you look at what the government has done – I mean the primary part….

Sean No but my question was what's happened in McGehan Close and you're telling me that times have been tough since you’ve been Prime Minister.

John What I'm saying is a statement of fact, times are tougher in recession and they tend to disproportionately hurt lower income people. But if you go and have a look at what we've done. I think we did a lot to take the edges off that recession for those most vulnerable people like the people that live in McGehan Close. It would have been easy for the government to put up a case that we didn’t have the money to support Working for Families, or to support benefit payments at the same levels. Actually we've done that. In that street, a lot of that street has been the beneficiary of our Home Insulation Programme that we've worked on.

Sean Prime Minister you said that Joan no longer lives in McGehan Close and I guess looking back at your life you no longer live in Hollyford Avenue, you got out.

John Correct.

Sean So what drove you to get out of the state house? Talking about that I think one of your sisters said at 8, 9 or 10 you said I'm gonna be a millionaire and I'm gonna be the Prime Minister. But you're growing up with a widowed mother who would seem to me to have been taken away from her support mechanisms in some way. You had no father figure. What drove you to decide that young that that’s what you wanted to do, and was it the desire to get out of the state house?

John Well sometimes you're a product of the environment, so I think the first thing you have to acknowledge in my case was I had a truly remarkable mother, and I mean I have the unconditional love that I think most children have for their parents, but in the case of my mother I also have great admiration, because here was a woman who was confronted twice in her life, once when she essentially was a Jewish refugee going into England, largely abandoned on her own when the war started in 1938, and secondly when Dad died, picking the children up and taking us to Christchurch. And so with my mother what I saw was that great belief in – she always would say John you get out of life what you put into it. And so I think I do have a positive attitude, and I do have a belief I can make a difference to my own life.

Sean And you put that down to your Mum?

John Well totally. In Mum I saw someone that really went and did that and yes she was on a widow's benefit, but she started working and she worked at nights and she worked as a cleaner, and eventually she got other jobs and yes she was in a state house but eventually she bought an ownership flat, and she took control of her own life. And if you look at the welfare reforms that we want to undertake, the thing that concerns me about the welfare system today is that we do have people that have been on the benefit now for three or four generations, where there's been no role model there showing people that actually there's a way to control your own destiny through your own efforts and your own hard work.

Sean But it takes hard decisions and I'm wondering if looking back at your Mum's life, and it is a remarkable story – for instance marrying your father – do you think that was a marriage of love or because your mother needed to marry someone to get out of the situation in which she found herself, as you said, alone in Britain.

John Well for me that’s an impossible question to ask, and the reason for that is I simply don’t know my father.

Sean Did she never talk to you about that?

John Not really, and Dad as people will know was an alcoholic, so he died when I was about six. I don’t have great memories of Dad, and it was a pretty tough time I think for Mum, so she didn’t really spend a lot of time talking about that.

Sean And you never thought later in life to ask her about what your Dad was like? And I'm particularly fascinated about the timing of when your Mum finally said to your Dad get out, and he died, was it days, was it weeks?

John Look I can't ultimately remember, it was some time beforehand, if it was to test my memory it was in sort of months but I mean I was six years of age so I don’t exactly know. To be honest no. I mean Mum taught me a lot of things and one was look forward in life, don’t necessarily spend time looking back. She didn’t want me to sit around and feel sorry for myself, and there was nothing for me to feel sorry about actually, there was a lot of love there. I mean yes I didn’t have two parents turning up to watch my rugby games, but actually a lot of New Zealand children don’t have two parents turning up for a rugby game for a variety of reasons. I don’t turn up to all my son's rugby games. I wish I could but I don’t. But the reality is that with Mum she said to me look you make the best of your life. She also because she came from a family that was well off, and I think we need to acknowledge that, her parents had really taught her that education was important, and so if you look at the things that I really believe in, they ultimately are about making sure that we get a quality of opportunity for every young New Zealander, and that is about a decent education system, and that's why…

Sean Did she tell you you were better than Hollyford Ave? did she tell you there was a better world out there for you?

John Well she wanted me to be aspirational, she never ever you know stopped me wanting to do things with the one exception when I wanted to train horses and she didn’t think that was a great idea for me to do that and leave school when I was 15. But outside of that yes she pushed me hard, and she had huge expectations of me, and she demanded standards. I remember once when I first started – I can't remember whether I'd just started working, I got a cheque book and I bounced a cheque and she just hit the roof. She didn’t talk to me for two days, she basically grounded me even though I was at university, I mean there were rules and you didn’t break those rules. She had high expectations of me and it was the same things in terms of doing my homework all that sort of stuff.

Sean Have you never rebelled against that?

John I mean all kids go through a period where there's a lot of testosterone flying around when you're younger, but I don’t remember huge issues on that, I mean I largely accepted it. I mean I'm not saying I was a model child but…

Sean But looking at your life Prime Minister you got on with pretty well exactly what your Mum wanted you to, but it's an interesting thing, she was Labour?

John Yeah she was Labour.

Sean And you were as a young fella, a fan of Rob Muldoon. I understand you used to argue around the kitchen or round the dinner table. How does a guy who's living in a state house with a Mum on a widow's benefit, see Rob Muldoon as his political ideal? Why weren’t you drawn to Norm Kirk and the Labour Party, surely that was a more natural place. Was that a rebellion against Mum?

John I don’t think so, look you know I liked the fact that Muldoon had a view of where he thought New Zealand should go. I mean in the end he probably didn’t deliver on that vision, but he was not afraid to get out there and do what he believed in, and it was an exciting time in New Zealand politics, there was a lot happening then.

Sean And on television we used to see government ministers basically fronting against union leaders who were taking the ferries out or Kinleith out, and it really was a left versus right, it was a workers versus capital environment, you chose the capital over the worker. You didn’t think the unions were right?

John No, no I don’t think they're right, and the reason why I don’t think they're right, I mean look we need to provide proper workplace support for workers, and I accept that, and I don’t think we're anti union as a government, but I do believe in flexibility in the labour markets, and we make changes to support that flexibility. But in the end I'm a person that believes you can make a difference in your own life.

Sean Did you like Muldoon because he was a strong man and you didn’t have a Dad?

John I don’t know. I've never gone and psychoanalysed it, I mean to be perfectly honest. I just remember Muldoon as being a guy that was there at the forefront of our – I thought that whole political debate was interesting, and I thought it was interesting that in the end it's a contest of ideals, it's about what you believe and how you want to see the country shaped, and he stood up for what he believed in.

Sean So as young as 9 or 10 you're saying I want to be a millionaire, and I want to be the Prime Minister. Why didn’t you say I want to find the cure for cancer, or I want to be an All Black?

John Yeah, well I probably did want to be an All Black but I at least had a healthy sense of reality about my rugby skills, but look I think when you're in any environment like that, I mean most people are ambitious for what they want to do. I certainly was and I was encouraged to be ambitious.

Sean Financially ambitious.

John Yeah, financially ambitious, and you know successful in what I wanted to do, and you know you're not blind to the environment you're in. I mean I went to Burnside High School, which is I think a decile 9 or 10 school these days, I was in a very good environment, actually had a pocket of state houses that were feeding into Burnside, but a lot of Burnside's a very wealthy…

Sean And you saw the next step?

John Well my friends you know the large bulk of my friends came from nice homes, had nice environment, and I looked at that and said yeah well that’s kinda what I want for my life, and my mother encouraged me to want that, and actually my mother went on and did a lot of those things by buying her own ownership flat and trying to build a better life for herself.

Sean Now interesting, because that sense of purpose and the ability to see where you were going seems to have carried on throughout your life. I look at your university career. You gave up economics and took up accountancy because you analysed who were the managers, and you know the big boys in New Zealand business and they had accountancy degrees, not economics degrees, yet you were an A grade student in economics. That indicates to me that you were sometimes prepared to cast aside what you're good at, or maybe what you enjoy in the pursuit of a goal?

John Yeah well you’ve gotta make sacrifices if you want to achieve your goal, and I mean that’s what I always talk to young people about when I go to school. I say ability's great, but ability counts for a certain amount, attitude counts for a lot more, and so yeah I am prepared to make sacrifices, and I have made sacrifices in my life, and my family make a lot of sacrifices now in the pursuit of my political career. But in reality you’ve gotta make some choices. I mean look maybe I looked at it too narrowly, I mean if you look at it today, I mean it's actually not the world dominated by accountants.

Sean Would you look at it and say you could have had more fun growing up?

John No look I had a lot of fun, I have no regrets, I have no regrets in my childhood.

Sean Looking at your early business career you sold yourself to Canterbury. A great story about you taking a whole lot of excess and they must have been long stubbies or something, and selling them to Poland, and it looks like you were a very confident person. Then you get into the finance markets. Were you doing that because you loved it or because that was part of the goal of being the millionaire?

John Well I did it because you know I was initially attracted to it because I thought it was really exciting, and I remember watching a programme called A Day in the Life of a Foreign Exchange Dealer with a guy called Alan Cole who funnily enough years later came and worked for me. But basically the long and short of it was, I looked at that, and I remember saying to Bronagh watching it on the couch, say I could go and do that, and the markets were opening up, the New Zealand dollar had just been deregulated by Lange and Douglas. But what I found when I went into it was not only did I enjoy it, actually I was good at it. I had good natural instincts as a trader.

Sean And you would have been earning at that time that was the boom, megabucks, right?

John Correct.

Sean So in 12, 15 years you have gone from you know the widowed Mum in the state house to being a high flyer. Now I knew a lot of people in that time and they went crazy.

John They did.

Sean Did you?

John No, not overly. I mean we were always very conservative with the bonuses that I made and Bronagh was working as well, so we poured that money into paying off our first house in Hataitai, which was in Belvedere Road, so we did that. Ultimately when we came to Auckland we did the same thing.

Sean What did you think of the guys who were working around you though who were going out and having the Moet for lunch?

John A bit stupid.

Sean And buying the Beamers?

John Well look I mean at the end of the day there are always a few trappings around that, and so you know a BMW came with my package at one point, and yes there were lunches where we drank you know a lot of Moet and fine wine, and that was nice. But I also worked in the UK and a lot effectively in the United States, and Singapore with people that earned a lot of money and they largely blew it, and my view of that was always it was stupid for them to do that, and the reason was that they weren’t thinking about the life cycle of a trader in the financial markets. I mean we used to think people that were over 30 in the financial markets were old, and we couldn’t find people that were old, I mean at 40 on a trading floor. When I left Merril Lynch running global foreign exchange, … in their Ecommerce business, I was 40 I think from memory, and I was from memory pretty much the oldest person on the floor with the exception of one or two.

Sean Do you think your Mum's influence was also there in terms of not living the high life and going crazy?

John Well I think what the influence was, was I can remember very vividly my time in the state house, and my time where there wasn't a lot of money around and where Mum really struggled to pay the bills, but she got there, and I remember Mum having the jar where she would put the – you know when she was working as a night porter she'd get tips and she'd bring the tips home and she'd put them in the jar, and the jar was used to pay for the little extra things that we needed, and we didn’t get them until there was money in the jar. So that was very vivid with me. So I looked at it and said hey if I'm in the financial markets for a period of time, and it doesn’t last forever like a lot of things in life, then for me personally I've gotta make sure that I don’t blow that opportunity cos it may never come again.

Sean Alright, so you get to 40, you’ve reached the top of that game. Did you put a tick in the box saying I'm a millionaire now, did you put a tick in the box and say now it's time for politics?

John Well I didn’t sort of consciously do it quite like that. I mean there was a plan but it didn’t sort of say okay you’ve reached this financial milestone, but I wanted to go into politics and I'd been talking about it for a long period of time. So if you talk to people I worked with, apparently I incessantly talked about it .

Sean Did you read politics, did you read Marx.

John Marx I haven’t read, but other books I did.

Sean Okay what about Anran?

John Yeah I've read Anran, but I've got my own philosophy of what I do and what I think has worked.

Sean And where did you get that from though?

John Well it's partly just again being in that environment, I looked at leaders that I thought made a difference.

Sean Lee Kuan Yew in Singapore…

John Well Lee Kuan Yew is I think a remarkable man and one of the true privileges I had as Leader of the Opposition was actually to sit down and have a few hours with Lee Kuan Yew, and he did I think incredible things. I mean it's a different environment, it wouldn’t work in New Zealand in the same way, I'm not arguing that everything they do around human rights or people's personal rights in that country are the same as what we want in New Zealand.

Sean But quite authoritarian rather than libertarian, and when we look at Muldoon some similarities there too.

John Yeah but look at that system. That system in Singapore is all about the right incentives for people to work and for people to ultimately be able to be successful and they celebrate success. I mean this is a country where…

Sean And reject the idea of wealthy as a position that is anything anyone should aspire to?

John Well I think their point is, you know you’ve gotta make your own luck. They live, it's a very small country with about four and a half million people, breaking away from Malaysia as a country which is part of a very – at that point was highly populated but poor, Asia. And they sat there and said we're gonna transform this country and it's gonna be an opportunity to grow wealth for all of their people, and for the most part their people have done very well. They have a high standard of living right across the board relative to their peers in Asia. Now that’s changing dramatically as we speak…

Sean Now that’s the sort of transformation that was in your mind when you came back here, got the seat in Helensville and presumably decided here's the plan to be Prime Minister, in six years I'll lead the National Party?

John Yeah well look I always wanted to go into politics, so there was a natural – I mean I came back to run, it wasn't an accidental thing, I didn’t just give up my banking career and say look I'm gonna come back New Zealand I'll see what happens next.

Sean With the idea that you would lead the party and be the Prime Minister?

John Well I think every person who goes into politics, every MP wants to be Prime Minister.

Sean Well you’ve been wanting to be Prime Minister since you were 10?

John Yeah and why wouldn’t you want to. Look I go to schools today and I say to kids put up your hands if you want to be Prime Minister. Quite a few of them do. I say good on ya, don’t rush in I'm enjoying the job, but outside that, good on ya. Because don’t we want our young people to be aspirational. I brought back titular honours in New Zealand and the knighthoods and damehoods – why? Because I want to celebrate success.

Sean And you want to give other people something to aim or aspire to?

John Absolutely. Look I with a small group of other Ministers put together that list as part of appointments and honours, and I still read them when they come out in the paper, even though I know every person that’s on the list, I still read them on the Monday morning as we did last Monday, the Queen's Birthday Honours List, and I still read their citations, and I feel good about the fact that other New Zealanders are celebrating what they’ve done. If it's Dame Rosy Horton, who's gone out there and dedicated her life to raising money for charities, or Sir Graham Harrison who's built an incredible empire and done a lot for New Zealand's meat industry, I'm proud of those people, and I want New Zealanders to be able to celebrate alongside them.

Sean Are you proud of your record as Prime Minister and do you feel you’ve stayed true. We played those quotes from your maiden speech that you’ve gotta be bold, sometimes you’ve got to ignore public opinion. Your speeches now seem to be about incrementalism, about taking people with you, about searching for the centre of politics, which is a long way away from you know the enthusiasm for change and bold decision making that you talked about in that maiden speech.

John Well firstly I don’t search for the centre of politics. I am in the centre of politics. I mean that’s where I am and I think it is a function …

Sean But you work hard to stay there I'm presuming Prime Minister?

John Well look it's a function of the fact that (a) I'm a product of my environment, so we know that environment and we've discussed it, so that’s shaped my life to a certain degree, but secondly I've also had, you know as I say a good business career, I've seen the opportunities that people can make. So I want New Zealand to be successful and to do well and to be vibrant…

Sean Have your political views changed then or how to get there, has that changed since that maiden speech?

John No I don’t think so at all, in fact if you go and have a look at it, we are campaigning in this election on some things where the political opinion polls would say don’t do it. I mean mixed ownership model fits within that category, but I want to carry that argument because it's the right thing for New Zealand. It's the right thing for the millions of New Zealanders that are looking for an investment, whether it's the 1.7 million Kiwi Saver accounts or whatever it might be. When I look at New Zealanders and I say this when I go to Grey Power all the time, someone will always stand up and say Mr Key we don’t like the fact that you're gonna sell some assets and they’ll all clap. And I say put up your hand if you put your money in a failed finance company and they all put up their hand. In this country in the last couple of years has had 64 failed finance companies that have roughly cost New Zealanders about three and half billion dollars.

Sean And are you arguing that’s because they didn’t have anywhere else to put their money and do better than it was un the bank?

John They didn’t have alternative investments and look it's more than just finding an investment platform, it's about releasing capital to build assets to make New Zealand a stronger country, and we are going to build ultra fast broadband, we are building Waterview as a major road in New Zealand, we are upgrading our transmission network. All of those things – I mean if we don’t have those we will not be the high growth country. It's as simple as that.

Sean You're also talking and starting to talk increasingly about the benefit reform, and many have accused you of not spending your political capital, so they're happy to hear that, and Don Brash I guess trying to drag you that way as well. But I'm wondering for you whether or not benefit reform is really about providing more incentive for people to do what you have done in your life, to be aspirational, to get out of McGehan Close, and I guess my question to you – are you trying to make McGehan Close a better place to live, or perhaps a worse place to live so more people are motivated to move on and move up?

John Well I'm not trying to make it a worse place to live, and I'm not trying to be punitive or pejorative actually about my comments when it comes to welfare. But what I am saying is when you’ve got 350 odd thousand New Zealanders of working age on a benefit supporting 220,000 children, when 13% of the working age population is on a benefit as opposed to 2% in the 1970s, something's gone wrong, and I think we've gotta sit there and say are we actually helping those people. Because I think you judge society by the way you look after the sick and the vulnerable. But I also think you judge a society by how many people you create that are dependent on that society, and in my mother's case I saw her go on a widow's benefit, and I saw the state help her and support her when she needed it, and she was on her own. But I equally saw her get off it.

Sean Presumably she didn’t like that, and she wanted to change that. I put it to you that there are a whole lot of people intergenerationally who don’t have a mother like you had, and done have the role model or the motivation to make the decisions and the choices you made.

John And I think we are sending some of the very wrong messages, particularly to young people, that are getting trapped on welfare, and we can have a politically correct debate about it if we want to, but the truth is that there are some young girls who go on the DPB because they don’t see themselves as having another opportunity or pathway in their lives. They get trapped on that and they stay on that for a very long period of time, and we know they have lots of other children on it. We know that there are people that are 18 years of age on an unemployment benefit and I think as a country most of us would sit around and say that’s crazy, they should be in work, they should be in training, or they should be back at school. Now my main point to you is that we need to you know make sure that the welfare system works the way we want it to. For most people actually it does, cos a lot of people go on the unemployment benefit and transition off it pretty quickly.

Sean And that’s the goal?

John That’s the goal.

Sean Final question to you Prime Minister, do you think Mum would be proud?

John I think so. I hope so, and in the case of Mum I think she would and the reason why she would be is that she wanted us as children to have dreams and to follow those dreams. She didn’t expect perfection, she didn’t expect us always to get everything right. She recognised that you know there's a frailty about the human spirit, and sometimes you get things wrong, and I've made mistakes and I admit those mistakes when I can, and when I do, but for the most part actually she would have wanted me to stick true to what I believe in, and that is to try and make New Zealand a better country. And that’s why I'm there.

Sean Thank you very much for your time today. The Prime Minister, John Key.

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