Sunday 2nd October, 2011

Q+A interview with Sir Roger Douglas & Jim Anderton.

The interview has been transcribed below. The full length video interviews and panel discussions from this morning’s Q+A can be watched on tvnz.co.nz at, http://tvnz.co.nz/q-and-a-news

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SIR ROGER DOUGLAS & JIM ANDERTON interviewed by PAUL HOLMES

PAUL They are two of the most influential politicians of their generation. Sir Roger Douglas entered Parliament in 1969, but it was 1984 when he started implementing the most radical reforms since the Second World War, now known, of course, as Rogernomics. He floated the dollar, he sold assets, he reduced taxes and he introduced GST. He changed the shape of the country. Ultimately, he broke with the Labour Party and formed in 1993 ACT, re-entering Parliament in 2008. But now he’s calling it a day. Jim Anderton disagreed vehemently with the pace and the depth of the reforms implemented by Sir Roger in the 1980s. He too, however, broke with Labour, famously saying, ‘I’ve not left the party; the party’s left me.’ He formed the Alliance, then the Progressive, then he became deputy prime minister under Helen Clark and was the driving force behind the establishment of KiwiBank and the efforts since 2000 to roll back some of the Rogernomic reforms. He too is pulling up stumps. Their political divide was the country’s divide for most of the past generation. Sir Roger Douglas and Jim Anderton with me. More or less a reasonable summation?

SIR ROGER DOUGLAS – Departing ACT MP
Morning. Yeah, fair enough.

PAUL Morning. And thank you very much for coming in with your cold.

ROGER No, it’s a pleasure.

PAUL So, looking back over, what, nearly three decades, how was right? You or him?

ROGER I was, of course.

JIM ANDERTON – Departing Progressive MP
(laughs)

ROGER Well, I think we’ll leave that to history, really. The point I’d make simply is that none of the significant changes that we made in the ‘80s has actually been reversed.

PAUL And that is very true, and they’re going to be around for a long time after you’re gone.

JIM Well, I would just rest my case on history. I’ve been in two governments, one that Roger was the minister of finance, one that Michael Cullen was the minister of finance. The one that Roger had had an average increase in GDP in real terms of half a per cent. Ours was over 3% – six times more – and we ended up with Roger’s period of 235,000 jobless people and we had the greatest increase in inequality in New Zealand ’s political history. That’s not something that I’d want to emulate any time soon.

ROGER Well, I’m not really too interested in going back over numbers. If I looked—

PAUL Well, I mean, this was a process of major reform, wasn’t it?

JIM Well, you can call it reform, but, you know, there’s another description for it, too.

ROGER If you look at the employment question, we had huge increases of employment in the early ‘90s, and that was on the back of the reforms in the ‘80s. If I look back at the period when I made those changes, frankly, I wouldn’t change any of the economic changes that I made. If I had a regret leaving Parliament, the regret is that those issues in the social policy area still need attention. And, frankly, I don’t think we’re going to see a government in my lifetime do it. But, you know, I still believe— I spent most of my adult life in the Labour Party and I still believe in the propositions that I went— I want to eliminate poverty, decent education, health care. But the fact is that after 80 years of trying to deliver those things via the state, we cannot honestly say does every child get a decent education? No.

PAUL But we can’t counter the market necessarily. We’ve learnt we can’t counter the market, because we’ve had massive government bailouts all around world, market failures. KiwiBank has been a success and is doing very well – very popular. Air New Zealand , now 80% publicly owned again, is turning a good profit for the government. Looking back, might you have gone too far?

ROGER No, I don’t think I went too far. I think if there was a problem, we didn’t tackle the social policy area. Health, education, welfare – that’s 30% of the economy, and all of those areas are terribly inefficient. We’ve got in this country – just let me give you one figure – about 330,000 people of working age on some kind of benefit or not. And if you actually look at that group and ask yourself what is the most common characteristic amongst that group, the most common characteristic is the education system has failed them. And that group – they come out of school unable to get a job because they just simply don’t have an economic benefit—

PAUL He makes a good point. That situations still remains after the government of which you were the deputy prime minister.

JIM Well, look, Roger and I have never disagreed on a personal basis. We used to play cricket together, so we had a pretty good friendship.

ROGER Well, I still resent that, Jim. I mean, I remember him catching me out on 99 when I was playing for Auckland Grammar, so—

LAUGHTER

ROGER After 55 years, I still resent it, actually.

JIM But the policy, the issue – Roger talks about social policy – the problem is we had no analysis, in my view, Roger didn’t, of the social consequences of those actions. I mean—

PAUL Under nine years of the Labour Government – Labour-led government – we still had 330,000 people on a benefit.

JIM We reduced unemployment in the nine years—

PAUL And the fact is—

JIM We had the lowest levels in living memory, actually.

PAUL But again I go back to the fact being that the major planks of Roger Douglas’ reforms have not been reversed and there’s no sign of anyone going to do it, so he won in the end.

JIM Well, look, that’s a bit ironic for someone like me. I sit around the Cabinet table getting a fairly large dollop of money to invest in a Kiwi-owned bank, which you’ve mentioned. That had been sold by the same people that sat around the Cabinet table. Air New Zealand was bought back by the same people that had sold it. And the Solid Energy was on the block when I got into Cabinet, and we stopped that. So there were a number of changes. The Ministry of Economic, Industry and Regional Development was set up to take over from the right of Genghis Khan Ministry of Commerce, and the rest is history. So there were some major changes made, and directions were changed.

PAUL All right, great contributions from both of you. I mean, how are you personally together? I mean are you comfortable sitting with each other? I mean, you’re leaning away from him.

JIM (laughs) He’s got the flu. I don’t want it.

PAUL That’s right.

ROGER He warned me before I came in. He said give it to you, Paul. He didn’t want it. (laughs)

PAUL But this business in the Labour Party in the ‘80s – this was, okay, we’re older men now – this wasn’t just a split; it was a schism, wasn’t it? And were there times you detested each other?

JIM Well, I don’t think Roger would be able quote it – he might, but I can’t think of any time when I attacked him personally. I always talked about the policies and the issues. And there were one or two times when Roger—

PAUL Yeah, but you were very disruptive. I mean, you were uncomfortable with the policies. It made you terribly disruptive of the unity of the party.

JIM Well, I was against the policies, and the only way to oppose the policies was to oppose what Roger was doing, so there was not much option there.

PAUL It is sometimes said that the trouble really started when caucus didn’t elect you to Cabinet in 1984 and that you resented it and the problems grew out of that – it started to drive you.

JIM Well, people have always – some people have always put these things in personal terms like that. These were never the issues for me. I mean, I didn’t expect to get into Cabinet. I stood, that’s true, but first-term members don’t often get into Parliament.

PAUL Yeah, but you rebuilt the Labour Party. You were a very experienced politician.

JIM Yes, I was. At an organisation level, I was. And, unfortunately, when I went into government in ’84, I knew what the policies were. I’ve seen a photograph of myself on the front page of The Press, and I looked as though I’d just lost, you know, my lottery ticket that I’d won and I wasn’t very happy. And I knew already what was coming.

PAUL Did you see trouble coming in 1983? Did you see trouble coming with Jim?

ROGER Oh, I’m not sure that I’d put it in that term. I think that, to be fair—

PAUL Did you think that everyone was just going to agree with you?

ROGER No. (laughs) Well, I hoped that was going to be the case. No, it was very clear that there were some divisions. I put before the policy committee the economic policy that I wanted to run on, and it was quite clear that some of the members of the policy committee, particularly Jim and one or two from trade-union movement – they didn’t like it. And we sort of went with a milder version of what I’d been proposing.

JIM Well, I’d hate to have the other version. (laughs)

LAUGHTER

ROGER Well, you got it, Jim. Don’t worry.

PAUL So did it break your heart?

JIM Well, you know, I’d been a member of the Labour Party for 25 years—

PAUL And its sudden direction in ’84 did break your heart?

JIM It was, and people that I’d been very friendly with chose another direction and you lost a lot of friends, and that’s not ever easy.

PAUL So it was personal.

JIM Well, it was personal to everybody, I think, in terms of the hurt. Yeah, sure.

ROGER Let’s go to the heart of what the Labour Party is supposed to be about. The Labour Party would claim that they want to eradicate poverty. The Labour Party would claim that they want to have a decent education system for everyone, a decent health care system for everyone, no second-class citizens.

PAUL But we ain’t got it.

ROGER The fact is under— you cannot in any circumstances claim that you’ve got those things. And the main— And so we’ve tried the system that Jim wants to advocate for 80 years. It hasn’t worked for 80 years, and in a way that was where the pressure between Lange and I came.

PAUL And he’s right – it hasn’t worked.

JIM No, no, look, when you cut the top tax rate from 66c in the dollar to 33c in the dollar, you give the most affluent people in the country a huge windfall of money, and the theory was this was going to trickle down to the poor. Roger’s now telling us that it didn’t happen.

PAUL No.

JIM And now we’ve got the National Government giving $4.5 million in tax cuts to the same people. Boy, have they ever had a good 20-odd years in New Zealand —

ROGER No, no, Jim, you’re going— Look, I’ve had my day in politics, but, frankly, you’re going off on a tangent. What I’m talking here about is health, education and welfare—

JIM You can’t afford it, Roger, if you don’t pay for them.

PAUL One thing Roger Douglas always said – I think he said to me in the past – is he destroyed more privilege as a minister of finance than any other finance minister in New Zealand history—

JIM The most privileged people—

PAUL That’s a fair point.

JIM The most privileged people in New Zealand in the last 20 or 30 years have been the people who’ve had their taxes cut dramatically while the poorest people have both their taxes increased and the services and health and education, all of the things Roger talks about—

PAUL Can we just move on? I’m coming to the end of my time. A couple of last questions. You are both conviction politicians, whatever we all thought of both of you over the years. Have we got enough of those in Parliament at the moment? Is Parliament missing conviction politicians?

ROGER I think – well, I’ve only been back three years – I think, you know, Parliament has changed in many ways. I guess the leadership of parliamentary parties is always important, but I think you’ve seen with Clark and now with Key prime ministers who have had far more control than any other prime minister I’ve know.

PAUL What about you?

JIM I think MMP has made it very difficult to have the kind of ‘first past the post’ approach where you control the caucus, you control the cabinet and you get everything through. Now Parliament is far more representative than ever. In 140-odd years, when I first went to Parliament in 1984, there’d been 1300 MPs elected – 16 of them women. Now, if you look at the Parliament now and you look at the representation of Asians, Maori, Pacific Island , Asian communities and so on, it’s much more representative. And no party governs absolutely – they have to compromise. I wanted to abstain on Roger’s stuff. I wasn’t allowed to. I wasn’t even allowed to abstain. I had to vote.

ROGER Outrageous.

PAUL (laughs)

JIM Well, there we are. (laughs) Your parliament, Roger.

ROGER Rather mild, I thought.

PAUL All right, thank you both very much for coming in and thank you for your service.

ROGER Thank you.

JIM Thank you.

PAUL Very good. Jim Anderton and Sir Roger Douglas.

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