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Cunliffe Interview: Q+A

Sunday 3 November, 2013

Labour sets out differences to government

Labour leader David Cunliffe has told TV ONE’s Q+A programme that Labour will gradually raise the age people can start receiving the pension to 67, and Paid Parental Leave will be increased to 26 weeks.

Speaking to political editor Corin Dann at the Labour Party conference, Mr Cunliffe also says a Labour government would reserve the right to buy back state assets if the State Owned Enterprise was in trouble or if it was in the public’s interest.

In terms of oil and gas exploration, Mr Cunliffe says there’s also more research to do before Labour has a clear policy on deep-sea oil-drilling.

“Not without proper environmental standards and clean-up capacity, and I am not personally convinced that what the public has yet seen and what we have yet seen would qualify for that. There’s more work to be done before we sign off on that,” Mr Cunliffe says.

He also dampened talk of dissention within Labour over the Trans-Pacific Partnership agreement which the National-led government is currently negotiating with 11 other countries including the US.

Labour’s Trade spokesman Phil Goff is keen for Labour to support the TPP, telling Corin Dann that he’d been briefed by Trade minister Phil Groser that the deal was worth $5 billion in jobs, but Mr Cunliffe says the party has to weigh up the pros and cons of an agreement.

“The verbal assurances of Mr Groser do not satisfy the president of the CTU. And my job as the leader of the Labour Party is to ensure, as leader of the whole party, that the bits fit together, that we have a coherent approach that rationally looks at both the trade upside, which is Phil’s proper job to represent, and that we also look at the domestic fish hooks – the impact on intellectual property, the impact on farming, but, most importantly, the ability of the agreement to constrain future governments from their normal regulatory function.”

“So this is a massive agreement whichever way you go. It’s a massive move to go into it; it would be a massive move not to go into it. It is a big call. It is one of the generational questions in front of New Zealanders, but it is one that we are perfectly able to handle. We have a robust but a very good internal process. We’ve had good discussions at the caucus level.”

Mr Cunliffe laid out Labour’s four pillars of policy heading into next year’s election.

“We set up four pillars of policy around creating an economy that works for all New Zealanders, closing up some of the social gaps, building a fair society, protecting our environment and, of course, building a nation.”

He also says the difference between his opponent, Prime Minister John Key, who came from a similar background to him, comes down to how they want to help the next generations.

“The difference between my opponent and myself is that— or the similarity is we both came from modest homes and families. We both worked our way up with the benefit of a good state education. The difference is I’m not going to pull the ladder up. I’m going to make sure that it’s there for the next generation, and I’m going to make sure that it’s even better than it was when I was a kid. I think that’s what all New Zealanders who are fair-minded want – a good chance for everybody to get ahead, whether it’s education or housing.”


Q+A, 9-10am Sundays on TV ONE and one hour later on TV ONE plus 1. Streamed live at www.tvnz.co.nz

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


CORIN David Cunliffe, thank you very much for joining us here on Q+A this morning. You’ve been in the job now six or seven weeks. You came in with a huge amount of optimism after winning that leadership battle, yet you’ve made no impact, really, in the polls. 34 per cent in the two polls – the TV ONE poll and the Fairfax poll. What’s going on? Why haven’t you made or brought through some of that momentum into the polls?

DAVID CUNLIFFE – Labour Party Leader
Well, I think for a start you’re ignoring the Roy Morgan, which was 35 and a half, and that’s about where our own polling is showing us at the moment. Yes, of course there’s a first blush of optimism, and then it’s settling down to business as usual. And I’ve always said polls will go up and they will come down, but the direction of travel will be that Labour will rise and, on today’s numbers, could already form a government with the Green Party. We are on our way to the Beehive.

CORIN Is it that you’ve only been really talking to people on the left; you aren’t engaging with that middle chunk of New Zealand voters?

DAVID Oh, look, I’ve been really clear that my first job as leader of the Labour Party and co-leader of the labour movement is to engage with our base. If this team that you see here is not on board with the task of running the race of their lives, then there won’t be much of an election. So I’ve always seen it as essential that the broader team here is clear about that project, that they know that we’re going to be true to Labour values, that we’re going to be delivering policies that are in line with our policy platform, and I think that’s the first priority.

CORIN So you came up with this insurance policy yesterday in your major speech. You had a great opportunity to talk to New Zealanders. Was that it? Is that all you came up with – the insurance policy? Because it didn’t look like much else that was new.

DAVID As I said to a number of commentators, behind yesterday’s speech is a great deal of work and work in setting a strategic framework for us. We set up four pillars of policy around creating an economy that works for all New Zealanders, closing up some of the social gaps, building a fair society, protecting our environment and, of course, building a nation. And I think if you look into that, you’ll see that behind each of those topics there’s a great deal of policy. It’s the tip of a much, much broader iceberg. And as my first major speech, I think it’s good to see it as a whole and to see that structure and framework as well as the new stuff, which is, of course, is Kiwi-Assure – very important in its own right.

CORIN Okay, well, let’s take that. Isn’t that really just a ploy? You’ve brought the conference here; you’ve announced a policy which really is targeting people in Christchurch and Christchurch East. This is just about shoring up your vote in that seat.

DAVID Not at all. Kiwi-Assure is a nationwide thing. Look, it’s very much like KiwiBank, which has been wildly popular with New Zealanders, which I was a foundation customer. Kiwi-Assure will be part of the New Zealand Post Group, alongside KiwiBank. It will offer home, contents, personal, car insurance.

CORIN But you can’t guarantee it will bring down premiums, though?

DAVID Well, just like KiwiBank helped to keep that banking market competitive, in fact, did bring down some interest rates.

CORIN But we have a competitive market, so why bring in a state one when you can’t even lower the prices?

DAVID Well, actually, we only have a— No, I’m sorry, we have a semi-competitive market, where over 60 per cent of the market is held by two foreign-owned insurers, and it’s not a market which has our confidence that it is perfectly competitive. And so we are simply working with the market here to introduce more competition. This isn’t heavy-handed nationalisation or regulation. We’re working with the market.

CORIN Granted that there are plenty of people in Christchurch that have had poor experiences with insurance companies, and I think we’ve all heard those stories, as the Government has pointed out in response to your policy, these insurance companies are paying out $20 billion. It has worked. They are going to hand over the money, and they’re able to do that because they’re able to spread the risk internationally.

DAVID So, I met one woman just before the conference – Christchurch woman – who works for one of the social agencies. She personally had had 17 assessments of her damaged home and no payout, and she’s been waiting three years after the earthquakes. Now, she tells me that she knows of dozens of people who are in the same situation.

CORIN No one’s disputing that there are plenty of people in Christchurch—

DAVID But that’s not good enough. No, I’m sorry, that’s not good enough for the people of Christchurch. I don’t know how Christchurch people are as patient as they are, but we are not content with the service standards in that industry. Now, on the economic front, it’s in New Zealand’s national interests that we have a Kiwi-owned insurer, because we do not want all of the profit of that insurer—

CORIN But why is it in New Zealand’s interests for taxpayers to take on the extra risk of an insurance company—?

DAVID Well, that is a little gem that the current—

CORIN Especially those who aren’t— for example, who have had a bad experience?

DAVID Do you mind if I answer the question? So the Government has said that we’re taking on all this extra risk, but it’s not for two reasons. Firstly, this is a private entity which will be held by the board of New Zealand Post Group. So it’s not going to be something that is going to be a direct thing that government agencies are going to manage directly. The second thing is, of course, it will access the global wholesale reinsurance market, and any retail insurance company secures its risk on the wholesale market, and this would be no different.

CORIN Again, what’s the point if you’re not going to be able to guarantee a reduction in premiums? Is it just the service that you’re going to be able to improve?

DAVID It will be good service, it will be Kiwi-owned, and it will be highly competitive. Now, just as KiwiBank helped keep bank interest rates down, we think that this will help keep insurance premiums down.

CORIN All right, if I could come to where Labour is going? We saw yesterday the head of the Trade Union movement, Helen Kelly, very clearly saying that she did not want to see Labour support the Trans-Pacific Partnership, this giant free-trade deal involving the United States. Yet you have the likes of Phil Goff in your party who are very clearly keen to see your party support it. How can you marry those two conflicts together? How can you marry them together?

DAVID Well, just as we did yesterday when the Labour-affiliated unions met and decided to amend their own motion to simply withhold support for the TPP pending further information becoming available. Now, I think that shows a lot of responsibility and goodwill by our affiliated unions.

CORIN What information?

DAVID What information?

CORIN What do you need?

DAVID What is the value of the upside of this agreement to New Zealand in terms of jobs?

CORIN Well, Phil Goff told me yesterday he’s been briefed by Tim Groser and it’s about $5 billion.

DAVID There are some studies in that order of magnitude, but we haven’t had access to the Government’s full set of briefing documents on that. No way.

CORIN Phil Goff says he’s had 60 questions answered by Tim Groser or something in that vicinity and that he’s been assured by him that this policy— you know, things like Pharmac are not going to be watered down, so clearly he’s having those discussions. What’s the problem?

DAVID Well, clearly, the verbal assurances of Mr Groser do not satisfy the president of the CTU. And my job as the leader of the Labour Party is to ensure, as leader of the whole party, that the bits fit together, that we have a coherent approach that rationally looks at both the trade upside, which is Phil’s proper job to represent, and that we also look at the domestic fish hooks – the impact on intellectual property, the impact on farming, but, most importantly, the ability of the agreement to constrain future governments from their normal regulatory function.

CORIN Sure, and you know this will be a massive move if Labour was to break on free trade, and you’ve got a union movement pushing really hard for you not to go down that road. How on earth are you going to sort that out?

DAVID So this is a massive agreement whichever way you go. It’s a massive move to go into it; it would be a massive move not to go into it. It is a big call. It is one of the generational questions in front of New Zealanders, but it is one that we are perfectly able to handle. We have a robust but a very good internal process. We’ve had good discussions at the caucus level.

CORIN Do you support free trade personally – the concept of free trade?

DAVID Well, that’s a bit like saying, ‘Do you support this or that-ism?’ and it would depend what you mean.

CORIN Philosophically, do you see a benefit?

DAVID Look, I’ve worked as a diplomat before I became a politician. I’m fully aware of the advantages to New Zealand of good, open fair international-trade rules, and as a minister in the previous government, I supported things like the China Free-Trade Agreement—

CORIN Could we just go through a few issues just to get a sense of where Labour is at at the moment?

DAVID Sure.

CORIN The super age – will you be campaigning on 67 – increasing the age to 67?

DAVID We’ll certainly be lifting the age gradually, and we’ll certainly protect New Zealanders who are unable to work. My expectation is that will stay at 67.

CORIN Deep-sea oil drilling – yes or no?

DAVID Well, not without proper environmental standards and clean-up capacity, and I am not personally convinced that what the public has yet seen and what we have yet seen would qualify for that. There’s more work to be done before we sign off on that.

CORIN Paid parental leave – increased to 26 weeks.

DAVID 26 weeks.

CORIN Will you do that?

DAVID Yes, we will.

CORIN You will do that?

DAVID Yes, we will.

CORIN You’re not putting any financial constraints on that?

DAVID It’s budget reform.

CORIN So that’s done?

DAVID That’s done.

CORIN Okay. Will you buy back state assets?

DAVID We reserve the right when they’re in trouble or for other reasons, if it’s in the public interest.

CORIN So hang on, you reserve the right if they’re in trouble, so the likes of Solid Energy?

DAVID Or for other reasons if it’s in the public interest.

CORIN So you’re not ruling out a possibility of buying back energy companies?

DAVID We’re not ruling anything in or out.

CORIN Okay, and one last one on the monarchy – a little bit of debate at this conference about that. Your party’s looking at issues around it. Do you support scrapping the monarchy?

DAVID Look, I support a constitutional conversation as the Labour Party does, which will allow New Zealanders to evolve a more mature and stable constitutional form, but that’s not something that I, as Labour Party, would want to impose, either on the party or on the public. It’s for New Zealanders to come to their own decisions about what’s right for them.

CORIN Okay, what’s the message—? Firstly, have you been meeting with business leaders around the country?

DAVID Sure.

CORIN What is the message you’ve been giving? Because my sources suggest that they are coming away and feeling that you’re not going to rock the boat too much, that they’re reasonably happy, they’re worried about the Greens. What are you telling them?

DAVID I think that they understand that as a broad-based political party that’s likely to be the government in less than a year’s time, we will govern responsibility and we’ll govern for all New Zealanders. They know that we are a party committed to growth, they know we’re also a party with a very strong social heart, and we can do both of those things.

CORIN Yeah, well, that’s interesting, because Mike Treen from the Unite Union said in his blog, ‘Even the relatively modest policies that David Cunliffe is talking about – living wage, small tax increases for the rich – are likely to generate significant business opposition.’ He says, ‘The usual response from social democratic governments in those circumstances is capitulation. I expect no difference from a Cunliffe-led government, but I’m happy to be proved wrong.’ Will he be?

DAVID He’ll be happy.

CORIN Why? You won’t capitulate?

DAVID Because I am moderate but resolute, and just like you’ve asked me to take positions on some issues, I don’t write a cheque I can’t cash. And so I’ll be working closely with my Labour colleagues, with the caucus, with the broader party to ensure that we move consistently, responsibly and determinedly in a way, in line with the speech I gave yesterday, that’s good for New Zealanders.

CORIN I imagine Helen Clark was resolute too when she came into government and walked into the so-called ‘winter of discontent’ and faced a business backlash. Are you saying that you would stand up to a similar backlash?

DAVID Well, of course, that occurred after the Clark Government had implemented many of its initial policy positions in labour law, in tax reforms, and we’ve made commitments to do some very significant moves in our first hundred days.

CORIN If we could move on to the issues of the living wage? Treasury this week, you would’ve seen the rebuttal, I guess, of that policy. They made a very strong point that, in fact, the living wage will only help— well, it won’t help the families— these types of families that you’ve got on your living wage documents. This is Aotearoa Living Wage, but they’re not going to benefit from this, because the abatement of Working for Families – even if they get $18.40 an hour, they don’t get any benefit because they’ll lose that from their Working for Families. So how is that policy going to target poor families?

DAVID Well, look, run the counterfactual. Are people really saying that they believe that workers and their families shouldn’t be paid a wage sufficient for them to feed their kids? That’s why we’re going to be, firstly, increasing the minimum wage to $15 an hour and, secondly, pioneering the living wage for the core public service, and as we can, we’ll seek to roll that out to the broader state sector and also provide incentives for contractors. So, for example, an employer who is an accredited living-wage employer will be able to get a preference for government procurement.

CORIN And you don’t believe that will lead to job losses, as Treasury suggests?

DAVID No, I don’t think it will lead any significant job losses. That’s a thing which is often rolled out by the business community when they, you know, don’t like something, but often enough it doesn’t occur.

CORIN A lot of rhetoric in your speech yesterday about two New Zealands – a rich New Zealand—

DAVID I’m very concerned about it.

CORIN Which New Zealand do you come from?

DAVID Oh, I come from I guess you could say both, which makes me a kind of interesting character for the current government. I grew up a kid in a vicarage, and I think we all know that ministers, religion—

CORIN So you’ve done well; you’ve got ahead.

DAVID Absolutely.

CORIN Why then is the message that you seem to be also giving is that, ‘If you earn over $150,000, we will tax you. If you just work hard and buy an investment property, we will tax that as well.’ The message you’re sending to a lot of young New Zealanders, ‘We will penalise you for that aspiration.’

DAVID Not at all. Not at all. In fact, we’re going to be helping young New Zealanders to get into their first home by rolling back the Government’s mortgage restrictions on the loan-to-value ratios.

CORIN But that’s what the right would say, wouldn’t they? They would say, ‘There you are. You’re helping them,’ when, in fact, the right would say, ‘Let them do it themselves.’

DAVID The difference between my opponent and myself is that— or the similarity is we both came from modest homes and families. We both worked our way up with the benefit of a good state education. The difference is I’m not going to pull the ladder up. I’m going to make sure that it’s there for the next generation, and I’m going to make sure that it’s even better than it was when I was a kid. I think that’s what all New Zealanders who are fair-minded want – a good chance for everybody to get ahead, whether it’s education or housing.

CORIN You seem to argue pretty strongly that inequality is the big issue that’s going to dominate this election year, that people are very concerned about inequality.

DAVID I think they are.

CORIN And the rich getting richer. Yet MSD’s report here – the Household Incomes Report from 2013 – clearly says there’s no evidence of any general rise or fall in income inequality since 2007, since your government.

DAVID Well, there’s an economist’s tool called Gini coefficient—

CORIN That’s exactly what this is from.

DAVID …which rose throughout the 1990s, which was still rising in the first years of the Clark Government, which the Clark Government managed to turn around and get to fall slightly. And my advice is that has risen significantly since the current government.

CORIN Well, they said it hasn’t happened.

DAVID Oh, well, I understand that it has so I’ll be looking very closely at that. My understanding is that the Gini coefficient has been rising again and—

CORIN The point is this government encountered two earthquakes and a global financial crisis and has now produced an economy that is going to be growing three to four per cent a year.

DAVID Well, look, an earthquake is no excuse for rising social division, either in Christchurch or elsewhere. In fact, there’s an old saying ‘never waste a good crisis’. An opportunity to have a $30 billion reinvestment cheque means that it’s perfectly possible to rebuild a city here which is both inclusive and socially well designed, as well providing a good platform for economic growth.

CORIN So are you saying that that’s the only reason we’re seeing this growth in New Zealand is because of the earthquakes?

DAVID Oh, look, I think the Government’s made a range of choices which absolutely reinforce privilege, as I said yesterday. To give massive tax cuts to the top while putting GST up on everybody else was obviously going to have that effect. To slash services from Crown agencies while seeing wage rates stuck in very, very low gear has also widened the gap.

CORIN David Cunliffe, thank you very much for joining us on Q+A.

DAVID You’re very welcome. Thank you.

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