On The Nation: Lisa Owen interviews Bill English

Headlines:
National Party leader Bill English admits that despite aiming to, his government wasn’t able to stop the increase in prison population.

English says he expects growth to remain in the 2.5-3% range and if government does its job there shouldn’t be a downturn.

English says he might stand down as leader if if he was in the same circumstances Andrew Little was when he stood down. But says currently he’s got strong support.

Lisa Owen: When Winston Peters announced he was going with Labour, he warned there were dark economic clouds on the horizon, and since the government was sworn in, it’s been hinting there could be a softening of growth when the half-yearly economic and fiscal update comes out next week. Are they under-promising so they can over-deliver, or has the National government, the previous National government, left them some bad numbers? Well, National’s leader, Bill English, joins me now. Mr English, do you agree with some of those dire predictions? And if you do, how long do you think the bad times could last?
Bill English: There’s no need for this economy to go off the rails. There’ll be events around the world, of course, that make some difference, the cycles in an economy, but this economy is in good shape; it’s resilient; it’s got some real energy and confidence, and it’s up to this government to make sure they keep that on track. And ironically, we in the opposition now have a more positive view about the New Zealand outlook than the government does.
Okay. Well, where do you think growth is going to go? How low do you think growth will go? Some have estimated about 2.4%. Where do you think would be realistic for it to settle at?
Well, as I said, there’s no particular reason why it should drop out of the sort of 2.5% to 3% range. It’s been running at 3% plus. There’s a big construction boom going on out there. In terms of trade, our commodity prices are in pretty good shape. If there’s any kind of downturn, then people should be asking the question why that happened rather than going with the softening up the government appears to be doing.
Okay. So you would accept a growth rate around 2.5%. If it goes below that, then you would be pointing the finger.
Well, it’s not a matter of what you accept. All I’m saying is it’s on a good track, it’s in good condition, the economy’s going well, and I can’t quite understand why the government’s talking it down more than the normal economic risk.
Okay. Well, briefings to incoming ministers were released this week, and some of them raised concerns about our low productivity. Now, that was a problem that was there before Labour got into government, so what responsibility do you take for that?
Well, the productivity issue, I think, was clouded with a lot of half-baked information and slogans. And some of it was a byproduct of what was the strongest feature of the economy in recent years with the job creation – 10,000 new jobs a month for the last couple of years – and when you’ve got that rate of job creation, you’re not going to necessarily have very high productivity, but actually, by international standards, productivity was pretty good.
So low-wage economy. But in terms of comparisons with OECD, we are low in terms of productivity, and one of the reports released this week says important areas of concern – and I’m quoting the report – are that productivity remains well below OECD countries. That just didn’t happen in the few weeks that Labour’s been in power, so, again, what responsibility do you take for that?
Well, look, we were overseeing the economy for the period when we were in the government. The economy grew well. Incomes grew well. There’s a few questions about productivity, but by international standards, it’s actually reasonably good, and what the new government—
So you accept that productivity– So per-hour productivity compared to OECD countries, you can see that we were lacking during your time.
No, I don’t accept that as a description of the economy, and I would stress again New Zealand’s rate of job creation has been amazing. We’ve got thousands of people came off welfare. We’ve absorbed thousands of people into the construction industry, for instance. That has some impact on productivity because they’re not necessarily high-productivity industries. So I don’t make any apology for the performance of the economy over the last wee while, and the government has to get to grips with the idea that its job is to support the confidence in the New Zealand economy, not talk it down.
So you don’t accept that people working longer hours for less money is a bad thing?
Well, they weren’t working longer hours for less money. In fact, just yesterday there was a revision of household incomes by Stats, who found out they’d made a mistake, and it turns out that household incomes since 2007 have risen just on 50% – five-oh .
That may be the case—
So incomes have been rising, in fact, more consistently in New Zealand than, for instance, in Australia.
But you accept productivity per hour—No, it’s not. We’re doing poorly there compared to other OECD countries, and that was happening on your watch.
Well, look, I accept there’s arguments around productivity. The point I’m making is that for the measures people have, jobs and incomes, 10,000 new jobs a month, consistent and moderate increases in incomes, and the government is already trying to soften everyone up for that dropping off, and I don’t think that is their job; their job is to reinforce confidence in the economy, make the decisions that’ll continue the job growth and the income growth.
Okay. They’re forced to work with what they’ve got, though, aren’t they? And elsewhere in the briefing papers that were released, there were some other things that might be regarded as unpleasant surprises – 72,000 houses short around the country, a prison population blowout on the horizon, a dysfunctional Ministry of Health, and no money for police pay rises. So have you left Labour a disaster zone?
No, not at all. None of that is new. They’re trying to spin it as some kind of big problem. I mean, the business of government is to deal with the issues that are there, and there’s always challenging issues. Take the police pay rises, for instance. That came up during the election campaign. The government is already scratching round for money because it’s spent all the money on the tertiary policy, and it’s going to struggle over the next few years to find enough to do things like pay for police pay increases. That’s not our problem; that’s their problem.
But you’ve just said none of that is new, so if none of it is new, why didn’t you fix it when you were in charge?
Well, we did. Take the housing numbers—
72,000 short.
There is a building pipeline of 100,000 out ahead, which the government acknowledges. That’s what the private sector and government are setting out to build over the next four years – four times the needed number, someone told me. So the construction sector, as everyone acknowledges, is going flat out – same with infrastructure. All this talk about infrastructure deficit is nonsense. They’re building flat-out, and the government, again, has to get on with the job of executing with the confidence and the direction New Zealand has that’s so positive.
So you take no responsibility for that list of things that I’ve just given you – 72,000 houses short, prison projections reaching 12,000 by 2026, and no money for police pay rises. None of it’s a surprise, but you don’t take any responsibility for any of it.
Oh, look, take the prison one, for instance. We spent most of our term in government grappling with the issues around prison numbers. They dropped for a while, then it turned round, and they started rising. That is a big challenge. It’s not a new one; everyone’s been aware of it for the last few years, and I hope we have the opportunity to make propositions ourselves, but certainly, the government now has the responsibility of dealing with what is a big, challenging issue, and that is the growth in the prison population. We never tried to hide that; it was all published.
No, but so that was a moral and fiscal failure on your watch.
Well, we didn’t get on top of the prison numbers, but there’s a pretty basic reason for it – the courts are locking up more people for longer for serious crimes, and they’re putting more people who may be a risk on remand, and the current ministers have explained that’s what’s driving it. We agree that’s what’s driving it, and now they’re the government, they have to come up with some solutions.
But you didn’t do anything around the remand thing when you were the government. If you know that that’s the issue, you could’ve done something.
No, we did—well, you talk to anyone in the Corrections sector. We did an enormous amount about reducing the reoffending rates; we’ve built a whole rehabilitation process within the prisons, and there’s now a great deal more understanding of the reasons why people are getting into prison, of the flows of people, of the costs that… There’s a toolkit there to use, but the policy issues, we agree, are challenging, because you’ve got to have public safety – public safety is number one – on the one hand, but it is expensive to have people in prison.
Okay, well, you’ve been hypercritical of this government. Your MPs have called them ‘hapless’ and ‘shambolic’ – those are the words they’ve used, but you would know that the Labour MPs and the Labour Government, they’re not stupid. So why is it that you think that they’re going to fail?
Well, we’ve just been holding them to account, like you’d expect an opposition to do. You know, they’re the government; we’re the opposition. Really, just in the few months that they’ve had, the lack of confidence in them is not actually to do with us; it’s to do with the fact that they say things and then they say they can’t do them. They say it’s a billion trees and then half a billion trees. They’ve senior ministers contradicting each other. That just never used to happen in New Zealand. Willie Jackson and the Prime Minister just had an argument last week over whether Te Reo will be compulsory. They had a big argument within the government publically about sanctions on beneficiaries.
So what’s your reason that you think this government will fail? Because, basically, they’re keeping the same fiscal responsibility rules as you – they’re going to have a surplus; they’re going to keep government spending under 30%; they’re going to lower debt to 20% of GDP, all of which was your fiscal parameters as well. So why is this government going to fail?
Well, we’re just pointing out the shambolic start that they’ve had. In fact, it doesn’t need us to point it out – the public can see it. And you do make a good point, though. The things that are likely to work will be where they pick up the policies in place, whether it’s water quality, whether it’s the fiscal policy, whether it’s social investment. They pick those up and develop them further in line with the positive direction New Zealand’s going, then they’re succeed in those areas. But the early indications are that they’re disorganised and they’re relying on the crutch of a big chequebook.
Okay, well, you’ve got your criticisms, but other than the ideas that you think that they pinched from you, can you name a good idea that they’re pursuing?
Oh, we’ve supported two things – extension of paid parental leave, and eventually, they’ll accept our extra tweak to it—
Yeah, but that’s one that you would say that they stole from you, so what’s one—?
No, we’re not complaining about them stealing policies from us; we just want to support things that are good for New Zealand and criticise them where they’re going to push New Zealand off-track. The other was the TPP trade agreement, where we offered unconditional support to the government to get that over the line, because these things are good for New Zealand.
So your party says it wants to be a strong opposition, but so far you seem to be holding things up, asking excessive amounts of questions just to kind of stir the pot. I put it to you that your guys are being petulant; you’re being bad losers. So when are you going to start to cooperate towards doing some good, if you want the best for this country?
Look, 44.5% of New Zealand voted for us, and they feel strongly that they want New Zealand to stay on a positive track, so our job is to represent them. Now, the stuff you’ve seen in Parliament, that’s a product of the disorganised shambles of the government getting started up. They’re just running it badly. They want to run the country, they should be able to run Parliament, and actually, us putting a bit of pressure on them, that’ll make them better at it.
So why don’t you just get in there and cooperate and do some good around policies like superannuation, child poverty, climate change? Why don’t you get some cross-party agreements going in those areas? If you really want the best for this country, you could be a new kind of opposition.
Well, the government will probably raise those issues next year; it hasn’t this year, and where they have, as I said, put up policies that we believe are good for New Zealand, we have supported them – the TPP. But we’re going to oppose things like later this week, right on the eve of Christmas, they’re going repeal our tax-cut package. That’s a tax-cut package that was voted for by Greens and New Zealand First, so a majority, a big majority in the Parliament voted for those tax cuts just five or six months ago. So we’re going to argue vigorously against them, and we don’t owe the government a break over the fact that they’re going to get rid of a balanced tax-cut package and misuse the revenue that they get from it.
Okay, so, I want to talk to you about your leadership of the National Party. What are your top three goals as leader?
Oh, to represent the almost one in two New Zealanders who voted for us, who want to keep New Zealand going in a right direction; develop the cohesion of the team in opposition. You know, we’re out of government – it’s quite a different world. We’ve got to rebuild our skills and get our team cohesive, and we’ve made a really good start to that. And down the road, look like the alternative government with better ideas for how to run this country, and that’s looking, you know, a bit easier than you might’ve thought.
I think it’s interesting you keep raising the number of people who voted for you. Are you still sour about the way things worked out?
Well, it’s just a fact. In the Parliament, we have more—
But the fact is that is that it’s MMP and a government was formed by someone else other than you.
Yeah, that’s right, but it’s an odd government and, basically, a weak one. The fact is – these are facts, Lisa, not assertions. In the Parliament, we have more seats than New Zealand First and Labour put together. The select committees of Parliament, where all the work happens—
You couldn’t form government, though – that is the point.
I know, and we accept that.
Okay.
We accept that, but that doesn’t mean that we pack our bags and go off and cry in our milk for two years. Actually, this is government that needs challenge, because they’ve inherited a country in great shape, and we intend to argue for that and not let them squander it.
All right, so, Andrew Little stood down for the good of his party, and as a consequence of that, Labour won. Do you think he made the right move?
Well, obviously.
So could that be the right move for you – to stand down for the good of your party?
Well, I suppose if it came to those circumstances, it would be pretty obvious, wouldn’t it? But we’re not in those circumstances. We’ve got strong public support; we’ve got a motivated support base; we’ve got people who want us to represent what’s working for New Zealand and make sure the government makes the progress that it’s promised.
Do you accept that some people are better as wingmen than the leader?
Well, that’s what makes a good team work.
So are you a wingman?
Well, I’m the leader and probably got stronger support than I’ve ever had.
All right, thanks for joining me this morning, Bill English.

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