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Shane Taurima interviews John Key

Sunday November 25, 2012

Shane Taurima interviews John Key

Q+A, 9-10am Sundays on TV ONE and one hour later on TV ONE plus 1.

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Q + A – November 25, 2012

Prime Minister

Interviewed by Shane Taurima

SHANE Prime Minister, thank you for joining us. Welcome home.

JOHN KEY – Prime Minister
Thanks very much.

SHANE I’d like to begin with unemployment and start with something you told us when you were last on Q+A.

MR KEY Sure.

JOHN KEY: But you're saying, for instance, unemployment’s at a very high level. Well, in fact, it’s 6.7% and falling.

SHANE But it’s not falling, though, is it, Prime Minister? As Greg said, it’s gone up to 7.3%. That’s an extra 17,000 more unemployed since we last spoke. And the economists are saying unless you change course, unless you do something different, it’s going to keep going that way.

MR KEY Actually, I don’t think the economists are saying that. I think they’re saying the government’s got a plan and—

SHANE Well, let me give you a quote, because Dr Ganesh Nana, he’s an economist and he says, quote, “Without changes to our policy settings, the short-term picture isn’t pretty, with our models projecting even further rises in jobless numbers,” end of quote.

MR KEY And with the greatest respect, he’s pretty much on his own. He’s a person who provides advice to the Labour Party and he’s not an independent economist.

SHANE So you don’t accept that?

MR KEY No. Well, look, what I’d say is if you go and look at the bulk of economists, the bank economists, you know, what the Reserve Bank, what the Treasury are saying – and others – in general, they would say, “Look, the government is on the right track in terms of what it’s doing for business to create jobs.” So if you look at the Household Labour Survey, that measures any person who says “I’m looking for—“

SHANE But I don’t want to debate those figures, only because you used them when we last spoke. The markets used them. So I don’t want to debate how the figures are brought together. The fact is, let’s just accept those are the figures. Do you accept, though, that you’ve underperformed on unemployment?

MR KEY No, what I’d say is if you go and look at the Household Labour Force Survey, it’s one way of measuring unemployment. I actually think it’s arguably the best way. It’s the biggest sample that we have.

SHANE And it’s gone up.

MR KEY But it’s like a political poll. It’s a sample. If you go and have a look at, say, people who are on the unemployment benefit under National, they’ve fallen, and they’ve fallen considerably in the last year. And if you go and have a look at the last time New Zealand had an unemployment rate of 7.3%, it was 1999. Those on an unemployment benefit were 150,000 and that population was smaller—

SHANE So are you saying it’s not a problem?

MR KEY Well, today it’s 50,000, and it’s been falling over that period. No, what I’m saying to you is, look, we need to create jobs as an economy. Government actually – contrary to what people think – doesn’t create jobs. What it does do is create an environment that encourages those tens of thousands of businesses around New Zealand to create jobs. And we’ve been providing that environment for them against the backdrop of an incredibly weak international position. You’ve just had David Shearer on who said, “Look, let’s magic that away. Let’s pretend that doesn’t exist.” But for all of next year, the predictions for the entire Eurozone is there will be no growth. Germany, the powerhouse of economic growth, is expected to grow at under 1%. Singapore’s just posted – I think, from memory – a negative quarter.

SHANE Well, let’s look at those countries—

MR KEY Even Australia’s been slowing down.

SHANE …at their unemployment rates, because we’re still higher than a lot of our key trading partners, and I can give you those figures: Australia – 5.4% unemployment rate; Japan – 4.2; Netherlands – 6.8. I can carry with the list but they’re all—

MR KEY Well, let’s look at Australia—

SHANE …much lower than us.

MR KEY Let’s look at Australia, because that’s the relevant comparison. We’re the same as Canada, and there's a lot of countries higher than us. But let’s look at Australia. Yes, we have an unemployment rate that’s higher than Australia. We have an employment rate that’s higher than Australia. More people essential to the economy are employed in New Zealand than in Australia. So if you look at what's called the labour-participation rate, a lot more people in New Zealand are employed. So they have a lot of different things. If you go and look at Japan, they have a very different way of doing things, but their productivity levels have been dramatically falling in Japan.

SHANE Well, let’s break it down even further. Let’s make it simple. Can anyone who wants a job get one currently?

MR KEY Of course by definition not every single person can, but let’s understand why they can't in certain areas. For a start off, there's a bit of a mismatch offered with skills. So quite a lot of the employers I talk to say, “Actually, we’re desperate for staff in these particular areas or these skills.” And they don’t necessarily have them. So let’s go back to what the government can do about that. That’s why we have national standards to make sure that children aren’t leaving school unable to read and write and do maths properly—

SHANE You talk about the government—

MR KEY And that’s—Well, that’s the point, isn’t it? The point is, we can sit around and identify the problem and I can sit around and tell you—

SHANE Well, actually, David Shearer has identified the problem, and he’s offered some solutions?

MR KEY Really?

SHANE He says you could actually do a bit more. He says you’ve taken this hands-off approach—

MR KEY Well, that’s—

SHANE He says you should be building 100,000 new homes. He says you should be spending a bit more of the $30 billion a year spent on New Zealand-made and giving more incentives to research and development. There are some solutions.

MR KEY OK, well, they’re in no position to talk about science and innovation, because this government’s done more than any government in terms of expenditure on science and innovation. I’m the first prime minister in New Zealand’s history to have a chief science advisor. We just named last week the Callaghan Institute, basically, which is going to be a forerunner to a very advanced institute. We’ve had scientific prizes. We’ve poured hundreds of millions of dollars into things like the Primary Growth Partnership and the global greenhouse gas alliance. So there's huge amounts happening there. When David Shearer says he has an answer, this is his answer: put on a capital gains tax, make you work two years longer and then spend all your money. No wonder he stumbled all the way through trying to explain how he’d build a house in Auckland for 300,000. The answer is he can't do it. He’s saying he’s going to give you a billion and a half dollars, create $30 billion worth of housing investment, magically make all that money and buy a section in Auckland for $50,000. No wonder David Cunliffe wants the job.

SHANE So you’re saying you can't build a house for 300,000?

MR KEY You can't build a house in Auckland off a section that you buy for $50,000. I’m sorry, but you won't find a section in Auckland for 50 grand. You will find one in rural Southland. So, yes, there is a housing issue in New Zealand and in Auckland and those prices have been rising. But what can the government do about that? One, work on the release of land. There's no question that the release of land will help. Secondly, reform the Resource Management Act so that our property developers aren’t in a position where they’re basically spending a decade to try and get approval for a programme. Reform the building sector, as we’ve been doing. Make sure there's more skills training – again, we’re doing a huge amount in that area.

SHANE And you’re listing things that you do. But I wonder, though, is this as good as it’s going to get?

MR KEY For New Zealand, you mean?

SHANE When we talk about unemployment, when we’ve got a rate of 7.3% and economists are saying it’s going to rise. When we’ve got a thousand people leaving our country—

MR KEY No, no, Ganesh Nana is saying it’s going to rise. Now, what I would say—

SHANE Are you saying it’s not going to rise?

MR KEY No, what I’m saying to you is—

SHANE No, are you saying, though, it’s not going to rise?

MR KEY No, what I’m saying to you is you are quoting one economist and I could get you lots of—

SHANE But answer that question, though, please, Prime Minister. Are you saying that the unemployment rate is not going to rise?

MR KEY Well, it’s not my job to predict a particular rate, because things move around. The Household Labour Survey—

SHANE Well, it is, isn’t it? To be fair, Prime Minister, it is, isn’t it? That’s part of your job.

MR KEY The Household Labour Force Survey is a survey. It’s a survey of 15,000 people. It has a quite significant margin of error and it bounces around a lot. Quite a number of the bank economists, in their review of the last number, said it’s notoriously volatile. So I can't tell you whether it might go up a little bit or go down a little bit. What I can tell you is that’s not the relevant point. The relevant point is is the government doing everything it can to create an environment to allow businesses to create jobs?

SHANE Well, the relevant point, I suppose, is whether this is as good as it’s going to get.

MR KEY Well, of course it’s not for New Zealand. But I think if you look at what we’ve done in four years – so for a start off, we’ve had real wage growth in New Zealand. Over the nine years of Labour, you had wage increases and very high levels of inflation. For a lot of New Zealanders, they’re enjoying very low interest rates at the moment. Actually, low levels of imported goods, particularly because of the high exchange rate, but nevertheless, that helps them. In fact, the crime rate in New Zealand’s been falling. The participation rate in schools and universities is increasing. The output of the number of kids, for instance, that have NCEA level 2 is now at 74-odd percent. You’ve got now a health system that’s delivering a lot better results. So across the board, I think we’re doing quite well, but all I’m saying to you is we've had to deal with the global financial crisis, which is ongoing. We’ve had to deal with the worst natural disaster in a number of generations and the huge costs. And in a couple of years’ time, we’re going to be back in surplus, and across a lot of other metrics in the economy and the overall society in New Zealand, we’re doing OK. Is it good enough? Well, I’d like to do better. But I think we need to be realistic.

SHANE The economy is looking bad, and when economists say it’s going to be like that for the next five to 10 years at least, when do you expect to see some improvement in these numbers?

MR KEY Well, I think in certain areas, we are seeing improvement. I mean, let’s go and look at public serv—

SHANE But we’re not with unemployment, though, are we?

MR KEY Well, let’s go and have a look at public services. We released a report last week that showed the despite the fact that in certain areas we’re either putting in no more money or in some areas even less money, the public services being delivered by this government are increasing and they’re better and they’re better respected by New Zealanders. If you look at, for instance, elective surgery in this country – there used to be massive waiting lists; now there's not. Look at the crime rate – overall it’s falling. So what I’d say to you is we are hugely focused as a government on the economy. No question about it. Why? Because at a high level, my belief is every single New Zealander wants to work, wants to provide for their family, wants independence and wants the comfort that comes from the knowledge that you can pay the bills and look after your family in the way that you want to. That’s the ambition of New Zealanders. So I would say to you—

SHANE Let’s—

MR KEY …there's a huge myriad of things we have to do. That’s why we've got the six planks of our business growth—

SHANE OK, let’s move on, because—

MR KEY And that’s why we’re following it.

SHANE I’d like to move on to Dotcom, because he was on the programme— he was on Q+A last week and he had quite a bit to say, and I’d like us to watch just a little bit of what he had to say.

MR KEY Sure.

PAUL HOLMES: Do you believe John Key has lied?


PAUL HOLMES: Do you have evidence of this?


MR KEY OK, so the answer to both of those questions is not. He’s completely and factually incorrect. So to say that someone lies means that you have to deliberately mislead people, and there's no way I have done that. My office has gone through every piece of correspondence my electoral office has had, every piece of correspondence that I’ve had that could be any way related to this area, any meetings I have had, what my ministries have done that I’m responsible for. There is absolutely nothing there.

SHANE So what proof do you think he has?

MR KEY Nothing. It’d be like normal. So he’d be joining one dot with another and trying to create some outcome over here. Let’s understand what's happening here. The government actually doesn’t care about Kim Dotcom. He might think we get up every morning and it’s a top-of-mind issue, but it’s not. In fact, most New Zealanders don’t care about Kim Dotcom. The person who cares about Kim Dotcom is Kim Dotcom. And as we’ve said all the way along, if this guy believes he’s so innocent, get on a plane, go to America, fight your case. If you win, come back to New Zealand, no problem.

SHANE But Dotcom, Prime Minister. This year, you’ve had the spy presentation you forgot about, the cafeteria visit you can't remember—

MR KEY No, no, hold on—

SHANE …the John Banks report you won't read. Let me finish. Let me finish, please.

MR KEY No, that’s all wrong. That’s all factually wrong.

SHANE Well, has it hurt you? Has it hurt you, do you think?

MR KEY Well, in the end, that’s for others to judge what they think, but let’s get a few facts right. So, basically, when it comes to this guy, it’s the United States that have decided to invoke the extradition treaty and want to take him back to the United States to be tried for what they perceive are crimes. That’s a matter for them. We have the extradition treaty in New Zealand. No one from any political party seems to be saying we should rip that up. So, when I went to GCSB, I went there and I had a presentation on something completely and utterly different, and there was one slide that had an icon in the middle of it that the director who was with me couldn’t remember it. When the advice was given to me to put together all of my parliamentary answers, no one in that organisation could remember it. So it wasn’t what was happening. I deal with thousands of pieces of paper and thousands of briefings a year. So the simple bottom line is I don’t think any New Zealander would expect me to remember one particular icon when in fact the attention was on something completely different and I was there for a different reason.

SHANE Do you think Dotcom would be one of the low points of the year for you?

MR KEY No, not at all.

SHANE What would be, then?

MR KEY Uh, well, I think the low points would be a number of fronts. One is in terms of the mixed-ownership model. I mean, my view is that’s actually the right model for New Zealand and for these companies. I think they’d perform better.

SHANE So the delays would be one of the low points?

MR KEY Yeah, I think we’d like to get there. I think those companies would perform arguably better or give investments for New Zealanders—

SHANE What about education? We’ve had class sizes, we've had school closures and of course we’ve got Novopay, which is still ongoing. Education’s been a tough one.

MR KEY Education’s always tough. I wouldn’t describe it as a low point. I think Novopay is something where it’s disappointing that it hasn’t delivered the results we would like. The minister and the ministry is putting a lot of pressure on Talent2 to deliver that. It’s a very complex system. I accept that, and I understand that there 92,000-odd transactions a pay cycle and there are lots of permutations and combinations.

SHANE What would you give yourself out of 10?

MR KEY Well, that’s of complete irrelevance, because the facts of life are that’s not my job. That’s what you're paid for and the other political commentators are paid for.

SHANE But you run this government as a CEO, and CEOs, they have to, you know, review people and people’s performance. How would you review your own performance?

MR KEY It’s not for me to do that, because—

SHANE Do you think you’re doing a good job?

MR KEY I— Well, I was asked a question last week, and I’ll give you the same answer to the same question I was asked.

SHANE OK, well, we've heard that answer and we’ve heard that response. Because people say, Prime Minister, that you haven’t looked like you’ve had a great year. You’ve looked a bit grumpy; you’ve looked a bit tired.

MR KEY Well, for a start off, when you work long hours, some of the time you are going to look tired. You know, I get off the plane and start working. That’s the way it works. You know, I work a lot of hours and I have a lot of papers to read and a lot of things to deal with. Am I grumpy? Not in the slightest. Look, let me tell you this for nothing: I came into politics to make a difference to New Zealand. Personally. I think we are making a big difference to New Zealand in lots of places. If I get hit by a bus tomorrow afternoon, in my view, we will have left New Zealand in better shape than we found it relative to all the things that we’re having to deal with. Am I enjoying it? Absolutely. It’s a privilege to be here. And one day I won't be here as prime minister. That’s true of every prime minister. So I intend to use my time here—

SHANE When will that be, do you think? Will you be leading National into the next election in 2014?

MR KEY I believe for sure I will be. I have the support of my caucus, unlike Labour. I do have the support of my caucus.

SHANE What about—? Because we asked David Shearer the same question. We asked what his poll target was for next year. This time next year, what's your target?

MR KEY Well, if you look at the polling – and let’s take TV ONE’s polling, Colmar Brunton – we have broadly been polling that number for about six years. So, yeah, it moves up and down a little bit, depending on what's going on. But broadly speaking, it’s been there for about six years. I mean, David Shearer was saying, “Oh, well, isn’t it great? Labour’s come up three points.” Labour polled the worst result in the 85-odd-year history of the party—

SHANE What about National, though, Prime Minister? You’ve been a few points down since the election. Do you think you can get those back?

MR KEY We hold 45% after what you’re arguing has been a pretty tough year, after a tough environment. We’ve been in the job for four years. So when you’re in government, you make decisions, and of course you cop the responsibility, and as time goes on, of course it gets tougher. It was tougher for any second-term government than the first term. It’ll be tougher for Obama in the second term than the first term. That’s just the way of it.

SHANE I have to jump in, because before we go, there's 280,000 New Zealanders living in Australia on temporary visas who don’t get any student loans or any form of welfare, even when things go wrong.

MR KEY That’s right.

SHANE Do you personally think that’s fair?

MR KEY Oh, look, in the end, they make their own decisions with their eyes open.

SHANE But do you think that’s fair?

MR KEY Well, it’s not for me to go in and tell Australia—

SHANE When the equivalent Australians living here – they get all those things.

MR KEY They do, and we have made that point to the Australian government. But in the end, people, if they want to go across the Tasman, need to do so with their eyes open and think about that. We talk a lot about people going to Australia, and we created that argument, and I’m more than happy to have that debate. It’s actually been going on for 40 or 50 years, but a lot of people come back, and they come back because in the end, let’s not undersell New Zealand. I go around the world a lot. I look at the problems that other countries have around the world a lot. We are a very blessed, lucky country. We can do better, but we’re a great country.

SHANE Nice place to leave it, Prime Minister. Thank you very much for joining us and have a wonderful Christmas.

MR KEY Yep, you too.

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