Q+A: Shane Taurima Interviews John Key
Q+A: Shane Taurima Interviews John
Key
Key stands by John Banks: “I accept
the minister at his word”, despite sworn statements
released last
week.
SHANE Mr
Banks says he didn’t know about any donation. This
week’s release of sworn statements state otherwise. Do you
believe he was telling the truth
there?
JOHN
Well, what I can tell you is there is a range of
different views
there…
SHANE But
do you believe him? Do you think he was telling the truth
there?
JOHN
We’ve asked directly the questions. We’ve been
given assurances, and I accept the minister at his
word.
Despite hui resolutions not to negotiate
until ‘national framework’ established, PM rejects new
framework and broad conversation on water
rights.
“The government doesn’t recognise this
[water rights] as a national issue…” They’re a
“local issue”.
Maori views on water
“fractured” after national hui.
“…elements
like water and wind and the sun and air and fire and all
these things, and the sea, along with natural resources like
oil and gas, are there for the national interest of
everyone.”
PM doesn’t “think it will be
necessary” to legislate on water ownership, but won’t
rule it out.
Asia “is certainly slowing down”
and “the big worrying factor, if there is one, is
Australia.”
PM plays down likelihood of direct
intervention to save jobs, as in 2009: “The answer to New
Zealand is not necessarily coming up with a make-work scheme
funded off taxpayers. It comes off New Zealand having a
competitive industry.”
Subsidies, such as those
seen in Australia, would preserve “what we’ve always
done, and you can do that, but that will deliver you an
economy which is likely to produce not what the world
wants”.
Q+A, 9-10am Sundays on TV ONE and
one hour later on TV ONE plus 1.
Thanks
to the support from NZ On Air.
Q+A is on
Facebook, http://www.facebook.com/NZQandA#!/NZQandA
and on Twitter, http://twitter.com/#!/NZQandA
Q+A
SHANE
TAURIMA INTERVIEWS JOHN
KEY
SHANE
TAURIMA
Prime Minister, good morning. Thank you
for joining us. You’ve just returned from overseas. How
concerned are you about the state of the world economy,
especially Asia?
JOHN KEY - Prime
Minister
Well, I don’t think I learnt anything
new over there. The situation that we’re seeing in Europe
and the United States has been there for four years, and
that is that they’ve got a lot of the things that you’d
want to avoid here in New Zealand - high levels of
government debt, high levels of bureaucracy,
fundamentally ageing population, inflexibility in their
labour market. So if you look at the government’s
programme, it’s been very focused on lifting
competitiveness, making sure that we can sell our goods to
the world and succeed. But there’s no getting away from
the fact that those 21 leaders that sat around that table
are reflecting what they see, which is it’s been four
years of long, hard grind, and there’s more in front of
us.
SHANE So,
how’s
Asia?
JOHN
Well, there’s a mixture of views there. It’s
certainly slowing down. We got a briefing from Christine
Lagarde, the head of the IMF, and she indicated, look,
China’s going to be a bit slower this year than they
originally thought, although she thought that they would be
stronger in 2013 - picking about 8.25% as their growth rate.
Overall, a number of leaders I spoke to were doing well. So,
for instance, the Philippines. Still very, very, strong
there.
SHANE
So certainly slowing down in China. How’s that
going to affect us
here?
JOHN
Well, it depends on how far they slow down and what
the real impacts are. They’ve announced this week a very
big package of infrastructure spending and domestic
stimulus. So I think the Chinese will be very keen to make
sure they maintain a growth rate of around about 7.5%, 8%.
Now, that is lower than what they’ve achieved over the
last decade, but they’re becoming a more developed
country, so it’s always harder as time goes on to maintain
those stratospheric rates. But I think the big worrying
factor, if there is one, is that a quarter of our exports go
to Australia. So they are our biggest market. Australia is
hugely dependent on China because China buy a lot of their
minerals. Number two, in our case, is China itself, and then
third is the United States. So while Europe matters to us -
obviously it’s still an important market - the big issue,
of course, is that if Europe slows down, that slows China
down because China’s biggest market is Europe. So we’re
all interconnected in this global
world.
SHANE
We’re interconnected. So what can we do about it
here?
JOHN
We can do the things we have been doing. So if you
look at the government, you’ll get lots of people - and I
have no doubt David Shearer will come on the show soon,
click his fingers and say all these wonderful things can
happen.
SHANE
So what are you
doing?
JOHN
Yeah. So let’s look at it. We have undertaken tax
reform. So, we have a tax system that’s pretty much now, I
think, the envy of most countries in the world.
Three-quarters of New Zealanders pay 17.5% or less. We have
broad-base, low-rate taxation. Secondly, if you go and have
a look at what we’re doing around skills development,
innovation and science - again, increasing the expenditure
that’s there, starting to move up that value curve. It
keeps going. Building of infrastructure. Again, hugely
important that we have the infrastructure, whether it’s
ultra-fast broadband, water, roads, you name it, to support
economic growth.
SHANE
Let me stop you there, because you’ve just listed
three things.
Great.
JOHN
I can list six if you want, because that’s really
been the government’s programme.
SHANE Let’s
deal with those three, though, because while you’ve been
away, there’s been a number of announcements. We saw it in
Greg’s intro. Just last week, 120 jobs lost at the paper
mill at Kawerau.
JOHN
Yeah. So let’s take a step back and
say-
SHANE I
can give you a list of six things. There are a lot of jobs
being lost, Prime Minister. And the policies that you’re
giving us, does it mean that they’re not
working?
JOHN
I can give you the list of the 50,000 jobs that
we’ve created over the last couple of years. I can give
you the indications that New Zealand is growing faster than
most other countries. So we grew at 1.1% for the first
quarter of this year. That’s the third-highest rate in the
OECD. The point here is we can’t magic away the European
recession or the US recession or the issues the world faces.
What we can do is say, ‘How does New Zealand succeed on a
global stage?’ And the answer is when we’re competitive,
when we’re productive, then we can sell things to the rest
of the world. So, if you take Kawerau, why is there a
reduction in demand for pulp and paper? Well, people don’t
buy their newspapers. It’s the same reason why APN have
got the New Zealand Herald for sale. It’s the same reason
why Fairfax’s print media around the world is struggling.
It’s because people are not going to the newspaper in the
same way they used to. They go online, and so that’s why
the government’s supported ultra-fast
broadband.
SHANE
So, we’re talking about the Kawerau paper mill
because the Australian Government, for example, they’ve
given Norske Skog a subsidy to keep it open. Why aren’t we
doing the same for
Kawerau?
JOHN
We could do that, obviously,
but-
SHANE Are
you?
JOHN
Well, this is the point. New Zealand’s a small
economy. It’s flexible in the world. In any one given
year, this economy creates about a quarter of a million jobs
and loses a number slightly smaller than that. We create net
positive jobs. So if you want to preserve what we’ve
always done, of course you can do that, but that will
deliver you an economy which is likely to produce not what
the world wants but something quite different. Under that
strategy, we’d still be making cars and we’d still be
selling legs of lamb to Europe instead of racks of lamb and
better cuts and moving up the value chain and Fonterra
producing nutraceuticals and all of those things. So all I
can say to you is I go round lots of businesses. Now, I’ll
tell you what’s making those export businesses work, and
that is because they are addressing the issues that they
need to address. They’re competitive. They’re investing
in technology.
SHANE
But it still doesn’t help these job losses, and
let’s break it down even further. What do you
say-
JOHN
But there will always be job losses, Shane. There
will always be parts of the economy where, for whatever
reason, there’s a change in pattern. So years ago, we all
did different things from what we’re doing today. The
point for New Zealand is if we’re going to sell more to
the world than we buy from the world, if we’re going to
earn our way in the world and not spend more than we earn,
then we have to have a highly focused, competitive economy.
And we need to have three things: access to capital, access
to markets and access to skilled labour.
SHANE Barack
Obama’s going for re-election on the back of his
government saving the auto industry. We talked about
Australia giving subsidies. Just this week South Korea
announced a government credit for small businesses. If
it’s good enough for our trading partners to be doing
these things, why aren’t
we?
JOHN
So, let’s have a look at some of those
places.
SHANE
But why aren’t
we?
JOHN
Well, in the case of the auto industry, that
decision was made a long time ago for New Zealand not to
have that on a subsidised basis. And, yes, that caused pain
and dislocation for the industry. But it also bred a new
competitive industry. So let’s look at wine. Years ago, it
was a totally protected industry. Yes, we got rid of all
that protection, but what did we build? A world-class,
highly successful industry based on new types and varieties.
SHANE But you
get my point, though, don’t you? I’m talking about
government taking or coming up with direct initiatives like
you did, if I can take you back to 2009. You held a job
summit. You came up with a nine-day fortnight. You came up
with a lot of things like, for example, Community Max, and
there was a list of them. What are you doing now, though,
Prime Minister?
Now.
JOHN
If I just take you back to your point, many of the
countries you are pointing to that are paying out these
levels of subsidies are backed up by governments that are
hugely indebted. So the whole problem in Europe, the whole
reason why you’re seeing countries like Spain, like Greece
and right through Southern Europe in the sort of mess they
are is they have huge levels of government debt. So the
answer in New Zealand is not necessarily coming up with a
make-work scheme funded off taxpayers’ taxes. It comes off
New Zealand having a competitive industry, making sure that
we have flexible labour markets, making sure that we are
investing in things that will make the economy go faster,
like science and
innovation.
SHANE
What’s changed from 2009 to now when you had that
direct approach to help protect and create new jobs? It
doesn’t seem like you’re doing that
now.
JOHN
I disagree with that. In 2009, what was really
required was we were in a situation where there was huge
global uncertainty. Countries all around the world decided
that they would have direct stimulus plans, and yes, we
spent some money on, effectively, make-work schemes. Those
sorts of schemes are still there now, but they’re in a
different form. But what we’ve really been trying to do is
shore up the foundation stone of which New Zealand industry
is based. So if you want to reform the Resource Management
Act, if you want to make sure that labour laws are flexible,
if you want to make sure that we have access to
international markets through FTAs, if you want to make sure
we have skills and people coming out of our education system
with those skills, then you build a highly productive,
long-term economy for New Zealand which succeeds. If you
don’t and you focus on those small minutia which is all
really about essentially ensuring that poor behaviour or,
ultimately, inflexibility is embedded in your economy, you
eventually will go
broke.
SHANE
Let’s talk about water. Another New Zealand
company, Mighty River Power, is it on track to be sold early
next year?
JOHN
That would be my view. The government is going
through a consultation process at the moment. It’s quite a
narrow consultation in relation to shares plus, which was an
idea promoted by the Waitangi Tribunal. It wasn’t fleshed
out by the Tribunal. The government is very firmly of the
view that it wouldn’t work and that it isn’t
appropriate, or if a government of any day wanted to
register those sorts of interests and rights that are
reflected in shares plus, you can do it in another
way.
SHANE So
let’s just confirm that. The consultation you’re about
to embark on is just about shares
plus?
JOHN
Correct, and what people are conflating here is two
different things. There are Maori who will have a range of
views on what their rights and interests are when it comes
to water-
SHANE
And one of those rights or, sorry, one of those
views is that they want a national framework. Is that on the
cards?
JOHN
Well, let me just finish this point. So they are
having a debate about the rights and interests of water as
they see it. But there’s a second thing going on, which is
does the sale of shares make any difference in terms of a
government wanting to recognise those rights and interests?
The answer to that is no. The government was very clear at
preserving that capacity by taking over what was the old
Section 9 of the SOE Act. So any relationship between the
Treaty partners, between Maori and the Crown is well and
truly preserved. Whether we want to register a particular
right or interest is a matter of the government of the
day.
SHANE So
this framework that they want, are they going to get
it?
JOHN
There is a framework of sorts. So if you look at
Treaty settlements as an example, and this sort of
fits-
SHANE
But that’s not the framework they’re talking
about, are they? They want a new framework, and they were
quite clear about it at their hui on
Thursday.
JOHN
I don’t think there is clarity, actually. If you
go and have a look at the media reporting by Friday, it was
already quite fractured in terms of their views. So the
government has a general framework for dealing with these
water rights and interests issues. It’s been doing that
for four years. Back in 2009 when we came in, we set a
framework for what co-governance, for instance, of waterways
might look like. We’ve been actively engaging in
consultation, discussion and recognition of certain rights
and interests. But if you’re saying what some Maori are
saying, and certainly the Maori Council seems to be
promoting, which is a national settlement and a national
hui.
SHANE
Well, the Maori King is too. It’s not just the
council. It’s the Maori King
too.
JOHN
And he’s welcome to have that
view-
SHANE
But they’re not going to get it. Is that the
case?
JOHN
Well, the government doesn’t recognise this as a
national issue, and the reason for that is the Waitangi
Tribunal doesn’t either. It says water rights are a local
issue. So we’re more than happy to work with local
iwi.
SHANE It
looks as though it’s going to end up in the court
regardless, doesn’t
it?
JOHN
Well, it may do. I can’t stop someone taking an
application to the courts against the Crown, but that
application would have to be about whether the sale of
shares in any way impinges the ability or impedes the
ability of Maori to register their rights and interests in
water. And the answer to that is it doesn’t. And as I said
in the paper yesterday, if it did, if the sales of shares
impacted on that, then you would be saying that iwi that
have water that is used by Contact Energy now no longer have
any capacity to register rights and issues because we’ve
sold 100% of it.
SHANE
Well, it sounds like you’re pretty confident that
if it did end up in court over the issues of shares, you’d
win.
JOHN
Well, I’m very confident that we’ve taken the
best advice we can. We’ve acted on that advice. We’ve
had a long-term period where we’ve been recognising rights
and interests. Where there is a fundamental difference is
what some iwi believe those rights and interests are. And I
think if you take the debate all the way back, my own
personal view of this situation is that if you go back to
1840 when we signed the Treaty, the Crown as one partner
agreed to preserve what were effectively established
property rights around land, forestry and fishery. What we
also, I think, then said was let’s also make sure that all
New Zealanders enjoy the same rights of being a New
Zealander, the same capacity to access those rights. But I
think at that point we also said let’s together, in
partnership, build and modern-day New Zealand. So if you
accept that viewpoint, then I think you have to accept that
elements like water and wind and the sun and air and fire
and all these things, and the sea, along with natural
resources like oil and gas, are there for the national
interest of everyone. They’re there for the benefit of all
New Zealanders, not one particular group over
another.
SHANE
And on that point, can I just ask, do you still
rule out not legislation to say that nobody owns
water?
JOHN
I believe very strongly that the common law
position supports the government’s view. If someone was to
go to court, and that situation has been in place in Canada,
that is a very long process. They’ve been there for
decades. Whether the
courts-
SHANE
Do you still rule it out,
though?
JOHN
I don’t think it will be necessary, because the
government’s view is we are consulting in good faith on
that very narrow point. Unless there is some particular
reason why we believe we’ve got it wrong or we can’t
answer the particular questions about that narrow point of
shares plus, we’ll be progressing towards the float of
Mighty River Power and Meridian and
Genesis.
SHANE
Finally, Prime Minister, I want to talk to you
about your standards for your ministers. Is lying a sackable
offence for members of your
cabinet?
JOHN
The test for whether someone can be a minister is
whether they-
SHANE
Is lying, though? Is that
acceptable?
JOHN
The test is whether they enjoy my confidence. And
if a minister tells me, ‘This is my position, and this is
what I’ve done,’ I accept their word in good faith,
unless it’s proven
otherwise.
SHANE
Let’s take a look at this
clip.
Jessica Mutch to John
Banks
Did you know that Kim Dotcom was making a donation to
your mayoral campaign?
John
Banks No, I didn’t
know.
SHANE
Mr Banks says he didn’t know about any donation.
This week’s release of sworn statements state otherwise.
Do you believe he was telling the truth
there?
JOHN
Well, what I can tell you is there is a range of
different views
there…
SHANE
But do you believe him? Do you think he was telling
the truth
there?
JOHN
We’ve asked directly the questions. We’ve been
given assurances, and I accept the minister at his word.
Let’s understand what’s happening here. This is a
politically motivated attack by
Labour.
SHANE
So you believe he was telling the
truth?
JOHN
If it’s not politically motivated. Let’s just
go through this
point.
SHANE
It’s a genuine question, though, Prime Minister,
and it’s an easy
question.
JOHN
And I accept the minister at his word. And the
point here is there will always be people with a different
range of views. It’s important that people comply with the
law. So, in my opinion, that law is very badly drafted,
which is why my government’s going to fix it up. And if
the Labour Party really believed in this, and it wasn’t
just a way of getting to the government, they would have
changed the law, and they didn’t do
that.
SHANE
Going back to telling the truth. This week, we had
a release of sworn statements that said otherwise. Are they
not telling the truth, Prime
Minister?
JOHN
Well, that’s their view, but it has to be seen in
the context of the law. The fact that someone tells you they
may make you a donation doesn’t mean under the old
electoral law that you know that they
have.
SHANE
This isn’t about the issue being you. All I want
to know is having read the police report, whether you
believe Mr Banks when he
said-
JOHN
I haven’t read that police report, and I’m not
going to because I don’t need to. I rely, as any prime
minister would, that I enjoy the
confidence-
SHANE
Why wouldn’t you read the police
report?
JOHN
Because it’s not my job to do a forensic
analysis. What I can tell you is the law doesn’t work.
What I can tell you is this is a politically motivated
attempt by the Labour Party to get at the government. Fair
enough. That’s called
politics.
SHANE
So you believe him even though others say he was
lying?
JOHN
No, what I’m saying to you is accept his word. I
accept that the law is very ambiguous, and I accept that the
Labour Party are using this as a politically motivated
attempt to get to the government. Because they’re not
going after- This is a guy that lost the mayoral election.
They didn’t try and test this out after he lost. They
didn’t test it out for every other candidate. They’re
not testing it out around the country. And, by the way, when
they changed the central government law around donations,
they didn’t bother to do it for local government. But
today they care about it, and that’s because it’s
politically
motivated.
SHANE
Prime Minister, we have to leave it there, but we
do appreciate your time. Thank you for coming
in.
JOHN
Thanks very
much.
ENDS