Q+A: Sunday 10 November
 
CORIN DANN INTERVIEWS JOHN KEY AND BILL ENGLISH
 
 
CORIN DANN
John Key, Bill English, thank you very much for joining us on Q+A. Five years that you’ve now been running the government. You arguably are the two most powerful people in this government. How would you describe your relationship? Is it the type of relationship where you would go and have a beer together?
 
JOHN KEY - Prime Minister of NZ
Yeah, certainly we would, but, I mean, it’s an incredibly tight relationship. I mean, it’s, I think, physically impossible to run a government unless the Deputy Prime Minister and the Prime Minister have a great working relationship, and particularly the Minister of Finance, I think, and the Prime Minister. And you’ve seen that go terribly wrong with David Lange and Roger Douglas, and I just can’t imagine what it would be like to run a government where you start writing to each other.
 
CORIN            Is it the stereotype where it’s that you’re the communicator and the one with the vision and Bill’s holding the purse strings? Bill?
 
BILL ENGLISH - Finance Minister
                        Oh, look, it’s a bit like that. A Prime Minister has a role out front, and a Finance Minister is necessarily in the back office. But the great thing is we’ve got a good common understanding about issues. The Prime Minister might be out there cutting ribbons, but he knows what’s going on with the policy, and so it works. We think the same way about a lot of things and good common understanding.
 
CORIN            So what happens when a big problem arises, as they do on a weekly, daily basis? Take Chorus or something, and you suddenly go, ‘Right, what are we going to do now?’ How do you two work through a big decision like that?
 
JOHN              Well, firstly, it would be really early communication. So it’s not just the fact that we talk to each other, txt each other or whatever it might be. There’s daily, sometimes hourly, communication, but it’s actually that our offices are extremely closely linked. So I’m just as likely to run into Bill’s main press secretary or his economic team on my floor as he would be to run into my people. So there’d be fairly early stuff. There would almost certainly, if you take Chorus as an example, be a conversation that would be held probably with a wider group than just the two of us. It might include three or four and the relevant minister. And, actually, there’d be an extremely robust conversation about what are the range of options available to us, what are the political outcomes of the calls that we might make, and then often, you know, further work that Bill and Treasury might do.
 
CORIN            And so who’s the one that says, ‘Oh, we can’t go too far’? Who puts the political lens on it and says, ‘Oh, this isn’t going to go down well with the public or is?’
 
BILL                Look, we’re all trying to do that, but, in the end, those judgements are ultimately made by the Prime Minister.
 
CORIN            Do you ever have any big disagreements though on direction in terms of whether you’re going far enough to the right or whether you should be pushing harder on something?
 
JOHN              I’d say no. One of the big advantages is that we’re both central-right, so I think we’re smart enough to work out that if we want an enduring policy, then we need to make change that we can take the public with us. And over the course of the five years, we’ve demonstrated that. So if you look at the Business Growth Agenda, you know, that’s our economic framework. That is 366 individual changes that we’re making. None of them we would, in isolation, argue is going to turn the dial, but in totality, they are turning the dial significantly in favour of NZ being a higher-growth, competitive economy.
 
CORIN            Do both of you want to stay on right through next term if you win?
 
JOHN              Yep.
 
CORIN            Bill, you’ve obviously come on to the list now from the electorate seat. Is that a sign, perhaps, that you’re winding down a bit or-?
 
BILL                Oh, no, it makes it a bit more practical for me to be quite focused on Deputy Prime Minister and Finance Minister.
 
CORIN            And if-?
 
JOHN              And Bill’s been a very dedicated local MP. He can’t say that, but I can sort of say that for him. I know that, because he’s really hard to get a hold of on a Friday because he’s always in Southland, yeah.
 
CORIN            I know too, in the media.
 
JOHN              So, I mean, the reality of it is when you’re Deputy Prime Minister, Minister of Finance and minister of so many other things, effectively, in the government. Um, I mean, Bill’s doing the heavy lifting, and he’s driving those big government agencies which are doing the heavy lifting. And so, in practice, can you actually dedicate a lot of time to local issues? I think the answer is not easily. In my case, you know, I’ve got a different situation, really. The public are probably going to be a lot more forgiving that the Prime Minister of the day as your constituency MP is going to be less available, and I think it was just really a call about how that might work.
 
CORIN            Sure. What about succession?  I mean, if you were to decide in the next term that you’d had enough, Bill, would you step up and look to take the role?
 
BILL                I wouldn’t be expecting to do that, but, in any case, those are matters for a caucus and the wider party-
 
CORIN            You two don’t have a Brown-Blair agreement when it comes to potential succession?
 
JOHN              No. And the truth is that we’ve got a broad caucus, and there’s lots of people you could point to that actually could come through, depending on the timing. I think there’s a range of people, both on the front bench and people who are emerging.
 
CORIN            Could I pick you up on that? So we’ve got Steven Joyce and Judith Collins. They’re both frontrunners. Have you got any preferences?
 
JOHN              Uh, well, a) it probably almost certainly wouldn’t be our choice. If you’re talking about the leader, it wouldn’t be my choice, because I wouldn’t be part of the caucus. The caucus would be making that decision, and if they were doing a coup, then they wouldn’t be coming to consult me on it, so we’re not too worried about that. I personally think both of them would make fine leaders and fine prime ministers, but there’s others as well, and it would depend on the timing. Hopefully it’s going to be a long way into the future, and that’ll bring other people into play as well. But it’s a healthy position that we’re in. We’ve worked really hard, I think, in Cabinet to have a range of people at different levels. We have rotated and brought people in, and the lesson we really learnt was from Helen Clark and Michael Cullen where they were extremely dominant and ran a tight ship from the Labour Party’s perspective. But when they left after the 2008 election, there’s been a massive hole that I’m not quite sure they’ve even managed to fill yet.
 
CORIN            Does that mean, though, that if you didn’t get across the line in the next election, would you stick around then? Bill, I mean, you’ve been in finance for five years. What would you want to do? Would you want to be the Opposition finance spokesman?
 
BILL                To be honest, I haven’t really thought about that. Uh, I suppose when you’re closer to the election, you might.
 
CORIN            Prime Minister, what about you? If you didn’t get across the line, is that it for politics for you?
 
JOHN              Well, I don’t have a plan B. In other words, what happens if we lose the election? I’m totally focused on winning the election. But I’ve been reasonably upfront with people, saying that, you know, eventually, if you lose an election, generally there’s a change of leader. If there’s a change of leader, I don’t think it’s actually healthy to get in the way of the next leader. And most prime ministers that have lost elections haven’t stayed around long, long-term. But in the end, I hope we win, and I hope we get to stay there, because it’s very much unfinished business.
 
CORIN            Talking of the five years, one of the narratives of your critics is that you have become, um, advocates of this crony capitalism, that you’re helping out with the likes of The Hobbit, with Sky City and now there’s Chorus. How do you feel about getting that tag that you’ve become almost Muldoon-like in your, sort of, intervention in the economy?
 
JOHN              Well, Bill will have a view from the Treasury, but I can give you the ninth-floor view which is, I mean, it’s lunacy to argue the case that somehow we’re anything like Muldoon and we’re intervening in the economy in those different levels. So let’s just run through it. I mean-
 
CORIN            But this is coming from the right wing, some of this criticism.
 
JOHN              Yeah, but whether it’s from the far right or the left, I mean, people are going to have their views, and they’re going to want to pick on an individual point. But for a start-off, as a government, we make thousands of decisions. Lots and lots of them. And, yeah, one or two are going to attract attention. But if you look at The Hobbit, yeah, we did clarify the law around the definition of the contractor, and, yes, we did make the conditions slightly better for Warner Bros to come here. That also created- the word now is about 5000 jobs. You know, a blockbuster movie, the first one-
 
CORIN            So do you see it as pragmatism? Is that what it is?
 
JOHN              Well, if you look at all of those three issues. Chorus is yet to be resolved, and we can come back to that. But, OK, at the end of the day, Tiwai Point is an issue that involves a massive part of electricity generation and supply in NZ. So, 20 per cent of electricity or 14 per cent or something is consumed by these guys. That’s 3000+ jobs in Southland. If we sat back and did absolutely nothing or didn’t create jobs through The Hobbit, which New Zealanders wanted, the criticism would then be this is a government that’s out of touch with the people on the street who survive and livelihood is earned through those jobs. And my view is that New Zealanders are good, hardworking, decent people. They just want to get on and be able to raise their family and have independence from the government. And if we’re just going to sit back and say, well, everything’s the market and there’s no role for government, then, in my view, we’re really abandoning those people, when actually that’s just not the real world.
 
CORIN            But cynics would say, Bill English, that you were just looking after Tiwai Point so that you could see Meridian properly.
 
BILL                Well, look, the critics can’t alternate between saying we’re a hands-off government not doing enough on the one hand, and then on the other hand, say we’re doing too much. In fact, I think what we’ve shown over five years is an ability to keep on track around good, sound policy that’s going to improve public services and lift the economy.
 
CORIN            But the argument from your critics is that you end up helping out your rich mates. That’s what they say. That this is a government that is only interested in its rich mates.
 
JOHN              OK, but the reality is it’s about the jobs or the situation that’s involved. I mean, you take Chorus as an example. Um, you run through all the different arguments, but let’s take a step back and say, ‘What are the big drivers to what’s actually happening to NZ and around the world?’ And the answer is the emergence of Asia as a high-growth economy, and the internet and the power of the digital economy to take NZ to the world. So we can sit back as a country all we like if we want and say we’re not going to embrace ultra-fast broadband-
 
CORIN            But I think everyone understands that we need to have the ultra-fast broadband. What they can’t understand is why did Chorus get it in the first place if they were going to run into these problems that could mean that Bill English now has to find a few hundred million to top them up?
 
JOHN              Because at the time, absolutely nobody predicted that the Commerce Commission would drop that rate from $45 to $35 and essentially take a half a billion dollars, although in total it would be a $1 billion impact on Chorus, but a half a billion dollars out of the equation which is all being used to finance, essentially, the build of ultra-fast broadband.
 
CORIN            So it’s essentially bad luck? You couldn’t predict it?
 
JOHN              In the end, that’s the point about being in government. We can sit around and feel sorry for ourselves or moan about decisions that are made, but, actually, we don’t get a choice on this floor and on the seventh floor with Bill to say we’re going to deal with issues. When you’re the government of the day, you deal with every issue that comes along, good and bad, and you actually have to find your way through it, and that’s the practicality of government. We can’t just put our hands up and say, ‘It’s all a bit too difficult.’
 
BILL                In terms of the government’s focus, though, alongside that, that’s all focused on job creation and higher incomes, and we’re seeing some results of that really building up now. But also-
 
CORIN            Fast enough, though? I mean, 6.2 per cent?
 
BILL                Well, it’s picking up speed. I think that’s pretty clear. But also we’ve had, with the Prime Minister’s leadership, had a very strong focus on the most vulnerable, protecting them in the recession, and really getting inside these problems of underachievement in our schools, welfare dependency, rising prison population. You know, really hard stuff.
 
CORIN            How are you helping the most vulnerable? Because we consistently hear complaints that we have 250,000 children living in poverty, that we’ve got inequality, the rich getting richer. How are you helping those people at the bottom?
 
BILL                Well, actually, the inequality is reducing. All the most recent measures show that. Uh, but really getting inside the hard problems like the fact that kids have been consistently failing in our schools, that is a big, hard issue. The same with long-term welfare dependency, and we’ve made significant policy change. So this idea that the government’s just focused on some businesses is completely wrong.
 
CORIN            Will you look at, though, a sweetener in the election campaign? Will there be some offer of a potential tax cut or something for that lower to middle class group?
 
BILL                I think you’ll just have to wait and see. I mean, the, um-
 
CORIN            Is that a yes?
 
BILL                Well, you’ll just have to wait and see.
 
CORIN            And as Prime Minister, would you like to be able to go to the electorate with an offer of something like a tax cut if you could, if Bill has delivered you the books in the shape that he hopes?
 
JOHN              Well, firstly, he’s given us the best position we can to go into an election in 2014 and win that election. Because, in the end, the things that matter - the economy, law and order, health and education - are in the best shape they’ve been for a very long time driven off the work that Bill and other senior ministers have been doing. Technically, of course we’re going to go into that election with some promises. I can’t tell you what they are, because we haven’t even sat around ourselves and thought exactly what those will be, but there’ll be things that we will campaign on. But if you’re asking us whether we’re going to get into a spending war with Labour, the answer’s no.
 
CORIN            The election next year; are we looking at a November election, essentially?
 
JOHN              Uh, not guaranteed. I mean, we’re certainly picking an election at the back end of the year. There’s no reason to go early, but we’ll just need to think about that window of when it would make perfect sense. There are issues that we have to consider. Australia hosting the G20 at the end of the year, bits and pieces like that. So we’ll just sort of think that through, but, look, it’s in that window, I think, of sort of September to November roughly, but we'll make an announcement sometime next year.
 
CORIN            And, Bill, are you expecting to see a dirty campaign this time?
 
BILL                Look, every election campaign’s pretty tough, and MMP means that you can only ever win on a knife edge. We got a big vote as a party, but we still only got a working majority of two or three seats. And going into your third election, you know, you’re not a novelty to the public, and you’ve got to put your case, and there’s a lot of people trying to stop you doing that. So, yeah, it’ll be a pretty intense campaign.
 
CORIN            And don’t expect it to get nasty or anything like that?
 
JOHN              They’re always tough and intense, and there’s always weird things that happen, and, yeah, some of them, you just never pick. I mean, 2011, obviously, we had the issue around the tea tapes, and that consumed the campaign for a week and a half, and you would never have really picked it. So, yeah, if you’re asking me do I hope that we don’t have any of that and it’s straightforward, of course I hope that. But, yeah, I mean, there’s a lot at stake. Labour, after six years of Opposition, will be desperate to get into government. We don’t believe they’ll take the country in the right direction, so we’re very clearly desperate to stay, because we believe we’re on the right track. So, yeah, it’ll be tough and intense.
 
CORIN            How tough will you guys get? Because, I mean, you can see it this far out that there might be a bit of a scare campaign against particularly the likes of the Greens.
 
JOHN              I think we will definitely want to make sure that New Zealanders understand what those alternatives are, because there’s no question that David Cunliffe has said he’s taking the Labour Party to the left. He’s been put in to his job by the Union Movement, and the Greens are very far left. So there is a stark choice. Now, actually, that’s not a bad thing. It gives New Zealanders a chance to say, ‘Do I want a centre-right government, or do I want a far-left government?’ But they’ve got to be aware of what that all means.
 
CORIN            And you’ve got no plans to move further right or further left yourself?
 
JOHN              No.  We mapped this path together in consultation when we were in Opposition. We’re carrying out what we thought we’d do, and we’re not changing. I mean, we believe we’re in the right place for NZ and for the future of the country. I think, you know, people make their own assessments about whether far-left economics works.
 
CORIN            I’m just going to pick you up on that. So did you literally sit down in Opposition and write a little plan that would see you through - what - how many terms? What were you thinking?
 
BILL                Oh, well, you know, four or five terms, obviously. We thought we were pretty good. (BOTH CHUCKLE)
 
JOHN              We are.
 
BILL                But the setting out of the kind of approach we would take-
 
CORIN            Which is what? Incremental, bedded-in changes?
 
BILL                Yeah. Take the public with us, win the arguments, lock in the change, focus on basics, pretty orthodox policy. Now, there’s been a lot of other stuff happen that we didn’t expect, but it hasn’t thrown us off that track.
 
CORIN            Prime Minister John Key, thank you.
 
JOHN              OK, thank you.
 
CORIN            Bill English, cheers.
 
BILL                Thank you.

ENDS

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