Q+A interview with National Leader, John Key
Sunday 20th November, 2011
Q+A interview with National Leader, John Key.
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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JOHN KEY interviewed by PAUL HOLMES
PAUL This time
next week we’ll know who the new Prime Minister is, and
the man leading in the polls this weekend is the National
leader, John Key, who is obviously with us live. Do you
know how hard it is doing that stuff when you’re sitting
JOHN KEY – Prime Minister
Yeah, there you go. It’s no problems.
PAUL Anyway, the week just gone – good week?
JOHN Oh, look, it’s another week,
anyway. Let’s put it in those terms. Election campaigns
are always a bit quirky, but the one thing that does come
through – this is a campaign that’s about the economy.
It’s about economic leadership and about who can provide
stability over the next three years.
PAUL Let’s talk about the economy shortly.
JOHN That’s what
people care about.
PAUL I understand that. Let’s talk about the economy shortly. I have to deal with the teacup tape just briefly.
PAUL The worry about your going to the police that people have, I think, is you’re the Prime Minister; you’re effectively using the police to suppress this information. Is that healthy in a democracy?
JOHN Well, firstly, I
utterly reject that. That’s not correct.
PAUL But that’s what’s happened, though, isn’t it?
No. I mean, we believe that the information was
illegally obtained. We believe that’s in breach of the
Crimes Act, and therefore on that basis, I think that is the
view of a number of newspapers, because they haven’t
actually printed it. So in my view, we took the course of
action that was required. And, look, people can say
politicians are fair game Fair enough. Some people take
that view, but my view, and I take that view very seriously
and I’ve stood up for that principle even if I’ve been
attacked by certain parts of the media for doing so, I think
it inevitably leads to prominent New Zealanders and then
ordinary everyday New Zealanders, and I’m standing up
against that principle.
PAUL Very well. Let’ move on. Aroha Ireland, the young girl – she’s 16 now – you took her to Waitangi – says there’s nothing for her in New Zealand; she’s leaving to go and live in Melbourne.
PAUL So what does that tell you?
Yeah, I obviously reject that proposition as well,
which is I think New Zealand has a huge future. I mean,
PAUL She feels not.
JOHN Yeah, okay, well, lots of young
New Zealanders will go and take some time and go
PAUL 100,000 have gone in the last year.
JOHN And 30,000 came back. And that is
an issue about our wage gap, and it’s one of the reasons
why we’ve been working on that. It’s been a 30- to
40-year problem. But let’s look at some of things we’ve
been doing. I mean, lowering company taxes, attracting
investment, changing our tax structure – all of those
things are helping. And everyone says, ‘Look,
Australia’s doing well.’ Our growth rate this year is
going to be stronger than Australia’s. So, Australia has
a huge mining sector that helps parts of their economy.
It’s massive. So, you know, I look at New Zealand and
say, okay, people can be down in the mouth about it if they
want, but we have water, we can produce food, we’re part
of Asia, we’re a small country, we can be flexible, we
grow things, we have very intelligent people, we have a
‘number eight wire’ mentality. Look at what Peter
Jackson’s done with Lord of the Rings and the Hobbit.
Look at the boatbuilders around New Zealand. We’re living
in a world where people don’t just want to buy food for
the sake of eating; they want it for health benefits. All
of those things sit in front of New Zealand if we get our
policies right, and again I go back to the campaign. Do we
want $15.6 billion worth of extra debt from Labour, or do we
want to be back in surplus by 2014, 15 under
PAUL Let’s talk about that shortly, but the next three years – Business New Zealand and Federated Farmers say it’s all about export growth. Do you agree?
JOHN I do. I mean, I think in the
PAUL And so—
JOHN we get
wealthier when we sell more to the world than when we buy
from the world.
PAUL That’s right, so exports have fallen in your three years of power as a percentage of GDP.
JOHN Yeah, I
PAUL They fallen.
well, I don’t accept that proposition either. I’ll have
to go and have a look at those exact numbers, but the
numbers I have is export’s dramatically
PAUL Yeah, that’s from Export New Zealand, as a matter of fact, that number.
I’ll have to go and have a look at what they’re
PAUL Okay, but is it time to really help the exporters? I mean, does government really do enough for the exporters?
Yeah, so you sit back and say what allows a New
Zealand company to compete on the world stage? I mean,
firstly, it’s access to markets, so we have a programme of
getting out there and getting into those markets. We’re
in the process of signing an FTA with Korea. We’re doing
one with India. We’ve got the same situation with Russia.
The Deputy Prime Minister came back from the negotiations at
APEC, which will help us in America.
PAUL What I’m saying, I suppose, is do you do enough to help the little guy get access to the big markets?
do. I mean, look, you can always do more, but my point is
you need access to markets, you need to make sure they have
good science and innovation, because we can’t compete with
people who pay substandard wages, right? And the third
thing you can absolutely make sure you do for those little
guys is keep them competitive, so again look at what we are
doing. We are saying you have a 90-day probationary period.
We could say, you have a minimum wage that you can afford
that goes up every year but is reasonable. Labour say on
that little business, there’ll be a capital gains tax,
more through the ETS, a higher minimum wage, more KiwiSaver
contributions. I mean, can the small business that’s
borrowing against their home afford that?
PAUL And, of course, we don’t know, because we do not exist as an island, although we are islands—
JOHN Actually, I
think we do know. There’s half a million businesses out
there employing those 2.2 million people. Most of them had
a fairly torrid time over the last three years because of
the global financial crisis. They’re hanging on. Some
are doing better than others, but I tell you what – you go
and throw a lot more costs at them and see what happens to
employment in that sector.
PAUL You see, what if— I think an international expert has said, ‘The world has never seen anything like the collapse that’s gone on and the collapse that is going on.’ If a meltdown were to really happen again, if Europe were to go bottom up, do you have—? How do you protect us?
Well, you do what we have been doing over the last
three years, so you adjust. We had a zero budget going into
election year 2011. That’s unheard of. No government
goes into election year offering to give people no extra
money. We did that to get our books back in order and pay
for Christchurch. We have a plan that says 2014, 15,
we’re back in surplus Labour has a plan – $16 billion
more. When you’ve got a global debt crisis and Labour’s
proposition for New Zealanders is, ‘We’ll put more debt,
more on the credit card, and we hope we’ll work it out all
PAUL At the same time, though, the mood of the boardroom, the conference this week, there was disbelief that you’re going to be able to get into surplus by 2014, 15.
JOHN Well, I’m glad you’re
using the word ‘boardroom’, because they asked which
party do you support for economy policies? It was 94%
National and 1% Labour, so wasn’t too bad. But, look—
PAUL No, but they felt the word ‘fairy tale’ was used about getting back into surplus by 2014 and 15 By what will you be in surplus? How much?
would—? It’s $1.5 billion by 2014, 15. And, look,
basically what happens with our numbers – we had an $18
billion deficit this year. Half of that was Christchurch.
It’s $10 billion next year. We halve it again the year
after that – 4.4. We’re about 1.5 in deficit, then 1.5
in surplus. And my point is why do people think that’s
fairy land? Yes, okay, if Europe blows up, maybe that’s
an issue, and that obviously has an impact. We’re not
immune from what happens in the world, but our numbers have
been adjusted to reflect that there’s weakness in Europe.
They match the IMF numbers You know, there’s a lot of
different factors out there, but the only thing you can do
as a government – you can’t say, ‘I can control what
happens in Germany or France or Portugal or Spain.’ I can
do the best to make New Zealand companies competitive by
giving them a platform that allows them to grow.
PAUL Yes. And will some of that be cutting the public service? Bill English said this week, the squeeze – he said that the mood of the boardroom – the squeeze is only just starting on the public sector. What did he mean by that? Then you had Tony Ryall a couple days ago saying he’s going to cut the public service numbers from 39,000 to 36,000.
Well, firstly, we’ve done that, so we came in and
said, ‘We’re going to set a cap on the core state sector
just under 39,000.’ We set that cap. It didn’t mean
that it couldn’t go below that cap. It said that’s the
PAUL Well, the difference between 39 and 36 is 3000.
JOHN That’s right, so we’ve come
down to 36,500 now, and we’ve now said that’s the new
cap going forward. And again, it’s a bit of a sinking
lid, so it may go lower, but my point there is, firstly,
one, as a taxpayer, you want to make sure that your tax
dollars are well spent. Secondly, we can construct things
better. We’ve put together – it’s not called the
Ministry of Primary Industries – but we’ve put together
MFish and MAF together. The savings that have come from
that and the operational efficiencies that have come from
that are more significant than everyone thought.
PAUL At the same time, though, you had Bernie Monk representing the families the other day, saying, ‘It is shocking that one year on from Pike River, you still have only one underground mine inspector in New Zealand.’
Well, that’s a—
PAUL You can get below optimal levels, can’t you?
JOHN That’s a complex issue, so
firstly, the one mine inspector – there’s a very small
number of mines – that came out of the old rules and
regulations that have been there for some time, but all I
can say is there’s a Royal Commission of Inquiry. When
that Royal Commission reports back, if we are the
government, I’d give those miners and New Zealanders my
word I’ll take that Royal Commission very
PAUL Let us talk about Christchurch. The impression is – and I know there was some anger expressed yesterday in Christchurch – the impression is the rebuild has stalled because there’s no insurance.
Well, insurance is a factor in Christchurch –
let’s understand that.
JOHN So, firstly, just to put a little
bit of context around Christchurch – it is the
fourth-largest insurance claim in the world since 1970, so
only the ’94 Californian earthquake, ’95 Kobe, and the
most recent tsunami and earthquake in Japan are bigger.
400,000 claims. The earth is still moving there a bit, so
insurance is a factor for some people, so is the time
EQC’s taking, so are some of the council
PAUL Look, I know it’s a hell of a problem, but we’re looking for solutions. If you want governance for the next three years, Fletcher Building’s Jonathan Ling was saying you’ll have to be the insurer. You’ll have to be the insurer – the government. Hundreds of consents are ready to go, but they can’t get insurance. Then on the other hand, I’d say to you, well, why would anyone rebuild in Christchurch? I’m sorry, don’t mean offence to Christchurch, but nine quakes over three points on the Richter Scale this month.
but what’s happening there is obviously– and I’m not a
geologist, but there’s seismic activity, and when we look
at what’s called the decay curve – how large are those
movements – they’re starting to rapidly reduce. So my
point is you’re going through some activity in
Christchurch which may not repeat itself for 2000 years. In
terms of rebuilding, for the most part, where land can’t
be rebuilt on, like the red zone, that’s because it’s
liquefaction prone. But for the other parts of
Christchurch, you can build there very effectively. You may
need to change your building code and your
PAUL Would the government undertake to be the last-resort insurer? Would you?
Well, I have said, look, if insurance can’t be
provided, of course we need to see Christchurch rebuild, and
we’ll look at that. We already have in a way kind of
effectively own the AMI because of our implied guarantee or
at least structure. But the point is I don’t agree with
the proposition that insurance won’t come back. You’re
already starting to see Lloyds doing some things.
Interestingly enough, IAG has now returned. They’re in
Hurunui and Ashburton. They’re starting to close in on
Christchurch. And I think over time you will see insurers
coming back. Lots of people still do have insurance, so if
you’re insured, say, with IAG and your house is in the red
zone and you move somewhere else, you can get insurance.
So, yes, it’s a complex issue, but we’ve got to work
PAUL Can I move on just quickly to a couple of yes-nos, if you’d let me. Could you consider – would you move super to 67?
PAUL Asset sales – partial asset sales – four power companies and Air New Zealand. Could there be more?
Not in the next term.
PAUL Would you seek a mandate before you went further?
Yes. We’d never be going
further than the 51%, though. We want to retain
PAUL No, I mean numbers of companies.
PAUL Yeah. What is your feeling about Mr Peters possibly coming back into Parliament, Prime Minister?
That’s a matter for the voters, but I don’t
think it’ll happen.
PAUL And why should a young man living in a state house in Burnside vote National? Very quickly.
JOHN Because we want a brighter future.
I mean, the truth of it is, look, we are aspiration for New
Zealand. We believe in a country where there’s equality
of opportunity. I grew up in a state house. I got a decent
education. I lived in a society that gave people a go, and
that’s what we’re about. We’re a very centrist,
moderate and balanced government. In three years, we’ve
proven that we can handle things and take people with
PAUL Mr Key, leader of the National Party, thank you for your time.
JOHN Thank you.