Jessica Mutch interviews Peter Dunne
Jessica Mutch interviews Peter
Dunne
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Q+A
JESSICA
MUTCH INTERVIEWS PETER DUNNE
SUSAN
WOOD
He is the great survivor - perhaps the most
lobbied MP in Parliament. United Future leader Peter Dunne
says his party has held the balance of power for more than
20 pieces of legislation. How did this happen when he is a
party of one? Peter Dunne is with Jessica
Mutch.
JESSICA MUTCH
Peter
Dunne, thank you for your time this morning. I’d like to
start off by talking about IRD and the upgrade to software.
$1.5 billion seems like a huge amount of money. Why is it so
expensive over 10 years?
PETER DUNNE,
United Future leader
And that is simply a
ballpark estimate. This is a series of essentially specific
projects as you take various elements of the tax
system.
JESSICA But
why is it so
expensive?
PETER
The point is until we start the detailed work on each
particular project, that figure is really only a ballpark
estimate. I suspect it will differ and some projects will be
a little bit less expensive; others may turn out to be a wee
bit more. But what we are doing is
fundamentally-
JESSICA
Just to clarify, though, are you saying it could be more
than $1.5
billion?
PETER
No, I’m not saying that. I’m just simply saying that is
a ballpark estimate at this stage. But what we are doing is
changing the whole way in which we run our tax system.
Without being too technical about it, when we set up the
current system about 20 years ago, Inland Revenue simply
collected tax. Since then, you’ve added Child Support,
Working for Families, KiwiSaver, Paid Parental Leave - a
whole range of other initiatives that have come on which
have complicated the system. We need to have a technology
that is now fit for purpose. And that’s the basis of this
change, and we’ll be working our way through that over the
next few
years.
JESSICA Experts
like Rod Drury have come out and said this is an obscene
amount of money and it could have been done for cheaper. Is
that true?
PETER
Well, we’re working closely with Rod Drury. I’ve talked
with him on occasions. I know he meets with the commissioner
of the department regularly. I think some of the points he
made are very timely reminders and warnings, and we’re
certainly happy to work alongside him and others in the
industry in New Zealand to make sure we get the best
outcome. I mean, government technology projects don’t have
a very good reputation, and there have been a lot of
examples just of late - let’s take Novopay as a classic -
which we’ve gotta learn from, and I’m determined that we
will not repeat the errors. That means we will take our
time, we will consult widely with the affected parties and
the interests and make sure we get it right before we move
from one stage to the next.
JESSICA Because
Novopay, it’s cost $11 million already. I mean, do we run
the risk of this blowing out with an even bigger
budget?
PETER
Well, I think they’re the fears. There are also fears
about the governance and the supervision that clearly
Novopay has drawn attention to. I’m determined, working
with a group of ministers, that we’re going to work
through this systematically. We’re not going to get ahead
of ourselves. We know we have a big transformation project
ahead of us, but it’s important to get each step of that
right and only to go live when it is
right.
JESSICA Let’s
go back to that cost, though. An insider told the NBR last
week that if this had been done five years ago it would have
been in the ballpark of about
$600,000.
PETER I
find that comment a rather strange one. I don’t know who
the person was. I don’t recall them having had any
involvement in the discussions. I think this is someone
inventing facts after the event.
JESSICA So if it was
done earlier would it have been
cheaper?
PETER
Look, what happened originally, and this goes back to the
time of the Labour government, we started out then to try
and do a specific, off-the-shelf rebuild, starting - from
memory - with the Student Loan project. In the event that
proved impossible to do, so we’ve had to come back and
start afresh. Inevitably in that process some costs
accumulate that would not have been there had the original
objective been able to be achieved. It wasn’t able to be
achieved for one simple reason - none of the retailers, the
product retailers, said they could produce a product that
had the capacity to meet what we required, and that’s the
essential problem
here.
JESSICA Let’s
have a look at Australia, though. They did a similar upgrade
and theirs was $800 million. I mean, we’ve nearly doubled
that. Why is it so
expensive?
PETER
Yeah, and their outcome was disastrous, because they got the
political stitch halfway
through-
JESSICA So
will you learn from
that?
PETER So
what they ended up doing was they’ve effectively got two
parallel systems. That is a disaster. What we’ve got to
commit to is this - if we start this programme, we’ve got
to commit, even though it’s long-term, to seeing it
through, and that is where both the tension and the
potential cost arises. But I’m determined that we start
with designated projects, we get those right, we then move
on to the next one, and so on and so forth until we’ve
completed the complete
transformation.
JESSICA
How did you manage to convince the government that this was
the best place to spend this kind of money at the
moment?
PETER
Well, very simply. We have a system, as I said before, which
dates back to 1991 when the job of Inland Revenue was a far
more specific one. We’ve added on a series of
responsibilities over the years that only, in a way, Inland
Revenue has a capacity to deal with. The problem we have at
the moment is our system works perfectly well today but that
the capacity to make policy changes of a significant nature
or to add any new social programs to it is zero, so we’re
essentially in a time warp. We either upgrade or we end up
saying that the tax system stays as it is forever and a
day.
JESSICA What sort
of policy changes are you talking
about?
PETER Oh,
major changes. For instance, if we were to invent KiwiSaver
today, we probably would not be able to implement it within
the current system framework. Now, I think that that is
actually quite perverse - the government being told by a
systems constraint what it can and cannot do, not able to
implement its policy objectives, whatever they might be. So
it’s important we have change; the question is how you
manage a significant change of this nature in a way that’s
going to deliver the positive outcome you seek at the end
and learn from the lessons that have been mounting up over
the years about how not to do these things.
JESSICA You do hold a
lot of power. You’re a one-man party. We’ve seen since
2008 that you’ve actually held the crucial vote on 20
pieces of legislation. Is it right that one person,
yourself, has so much
power?
PETER
Well, firstly, I didn’t put myself in that position. The
electorate dealt the cards at the
election.
JESSICA But
how do you deal with
that?
PETER
And the second point is how I deal with it. I don’t just
wake up each morning and decide what capricious thing am I
going to do today. I’ve got a quite developed matrix of
how we deal with things. Firstly, is the issue under debate
covered by the confidence and supply agreement that United
Future has with National? If it is, as was the case with the
mixed ownership model, for instance, then the outcome is
very clear.
JESSICA
Let’s touch on that for a moment - the asset sales
legislation. You obviously hold the power to get that
through for National. Does that give you a lot of extra
power and bargaining power
back?
PETER In
some senses it does, on unrelated issues. But that was a
very clear case. Our election policy said we
oppose-
JESSICA Like
what? What kind of
trade-off-?
PETER
I don’t want to go into specific detail, because that
actually destroys the advantage that you’ve got. But come
back to that one. Our election policy said that we were, in
principal, opposed to asset sales except if the government
nominated the energy companies and Air New Zealand, we would
agree to that provided the public shareholding was to be no
greater than 49% and there was a cap on individual
shareholding. That was included on our negotiations and put
into the agreement. And the government at that point
didn’t want to statutorily specify those
limits-
JESSICA So you
got some influence over
that.
PETER And
so it became a no-brainer to vote for it when the
legislation
arrived.
JESSICA
Another one-
PETER
So that’s the first point. The second
point - because I haven’t finished what I was saying
before - if it’s not covered by the Confidence and Supply
agreement, is it something that was covered by United
Future’s election policy? And if it was, clearly you vote
for in accordance with that. That’s why I’m backing Paid
Parental Leave, for instance. The third one is neither of
the above, and then it just comes down to, basically, the
circumstances of the time and what seems like the right
thing to do.
JESSICA
And one of those things will be about SkyCity. The
government will need you if it needs to work out some kind
of a deal with SkyCity. Have you worked out any kind of
pay-off for
that?
PETER My
view on that is quite simple. I think Auckland needs a
world-class convention centre. In my role both as Associate
Minister of Health and previously, I’ve been working over
the last 10 years with the structure
of-
JESSICA But will
you get anything
back?
PETER Hang
on, hang on. And the important point about the SkyCity one,
from my perspective, is if you can achieve the convention
centre without a blowout in the number of gambling machines
and an increase in the numbers of those, then that’s the
best deal. But I’ve not seen any deal at this stage.
It’s premature to talk about that. If there’s a
trade-off then it may well be something that occurs at the
time, but if you’re saying to me do I say ‘I support
this in return for your doing that’, it’s not that
crude.
JESSICA So you
haven’t worked out any kind of agreement
with-
PETER
Well, it doesn’t work- I haven’t seen the details, so
there is no agreement at this point, other than I’ve
indicated the general view that I’ve just expressed to
you. But it doesn’t work in the way of saying, ‘you give
me this and I’ll give you that’. It works in the way of
saying, ‘OK, I’ll give you this thing. Now, when there
are things that arise that I might want, I suppose you could
say there’s money in the
bank’.
JESSICA
Let’s talk about the future of United Future. How long
will you stay in
politics?
PETER
I have no idea, because that decision’s ultimately not
made by me but by my voters in Ohariu in the first instance,
and that’s a decision that they will have the opportunity
to refresh or reject next year.
JESSICA Your
popularity in Ohariu has been going down. You got 1400 in
the last election. Do you need to have a cup of tea with the
prime
minister?
PETER
Well, my majority actually went up at the last
election.
JESSICA 1400
isn’t a huge majority,
though.
PETER No,
it’s not, but it’s better than it was. And I’ve been
there for nearly 30 years. I don’t need cups of tea with
people. I think they know me pretty well and they can make a
judgement.
JESSICA I
mean a cup of tea with the prime
minister.
PETER
Yes, I know what you mean. I didn’t have one with the
prime minister.
JESSICA
Will you have one, or will you want one this
time?
PETER
Actually, I have a cup of tea with the prime minister quite
frequently. It’s just that the public doesn’t see it.
(LAUGHS)
JESSICA When
you say ‘cup of tea’, will you ask for one with the
prime minister this
election?
PETER
I’m not going into that at this stage because the
election’s nearly 18 months away. What the lie of the
political land is at that time is far too soon to speculate
upon. What I will say is this - that United Future has been
around for a long time. We represent the flickering flame of
liberal democracy in New Zealand. That does wax and wane
from time to time. There will always be people who will
coalesce, if you like, around that point of view, and
we’re here to represent those points of view.
JESSICA That’s a
nice place to leave it. Thank you very much for your time
this morning, Peter
Dunne.
ENDS