Points of interest:
– Government wants folic acid in bread deferred until May 2012; Cabinet to release consultation document tomorrow
– PM urges bakers to follow through on commitment to introduce folic acid bread for pregnant women
– Concedes it was “ludicrous” to introduce folic acid in September only to review it in October
– Government has not decided yet on sending SAS to Afghanistan, but PM says, “we’re a first world country that has to play its part in trying to stamp that terrorism out”
– “I’ve never said I’m philosophically opposed to the sale of state assets in some form, and I’ve never said that that is off the agenda forever…”
– A capital gains tax “hasn’t worked” in US, Australia and Britain and would be “punitive”

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


GUYON Thank you Prime Minister for coming in and joining us on the show this morning, we really appreciate that.  You said as Paul mentioned there that we look to be coming out of the recession, but the reality is that the human impact of a recession, that is unemployment, that the worst is yet to come, is that right?

JOHN KEY – Prime Minister
Well that has typically always been the case, unemployment is a lagging indicator and so what you often see is – even if you’re coming out of a recession – starting to generate positive economic growth, unemployment lags.

GUYON Why is that?

JOHN KEY Well there’s always been a lot of reasons for that.  It takes a while for firms to start reacting, firms operate under a nimbler more lean environment for a period of time, partly unemployment reflects, or their employment intentions reflect their future demand and what they perceive their future demand to be.

GUYON It must be strange for a lot of people though because the economy’s starting growing again, businesses are making a little bit more money, why are they laying people off?

JOHN KEY Yeah well I mean I think personally you’ve gotta accept this has been the worst recession since 1930, this hasn’t been your sort of run of the mill recession, we tend to have one of those every ten years.  The real challenge here has been coming through what has been the destruction of the international credit markets, can firms borrow money, will they actually have a future.  I mean you’ve seen unprecedented levels of reduced demand for goods and services, and New Zealand’s not immune from that.

GUYON I just guess I’m asking you though, do you think that businesses are actually just using this as an excuse to lay people off to clear the decks a bit, when really they could keep people on?

JOHN KEY Actually I tend to think it’s a little bit the opposite, I think the employers have been working very hard to hold on to their staff.  We had a job summit at the start of the year, you can have a view on that, I personally think it was a positive thing to do, but one of the most positive aspects of it was it got the unions, government and employers, all on the same page, at one place, at one time, and there was genuine commitment from employers and I think actually genuine commitment from the unions…

GUYON Okay, that’s commitment and sentiment, but where are the actual practical ideas?  I take you back to August last year when you were releasing National’s benefit policy, you said that your government would have an unrelenting focus on work, and you said that work has more than a monetary value, there is more than just an income to lose by not working, what damage is being done to those twelve hundred people a week who are going on to the dole and is there really nothing more that you can do about it?

JOHN KEY Well unquestionably there is damage when people lose their job, because I agree with the statement I made back in August you’ll be relieved to know, I mean it’s not just about income, it’s about self respect, it’s about the way you feel about yourself, it’s the way your children view you that you’re making a positive contribution the things that you do, it’s being master of your own destiny…

GUYON But as an employer yourself in terms of being the Prime Minister in charge roughly of the public sector, you’re laying those people off, you’re taking those people’s livelihoods and their mana, their dignity, away from them aren’t you?

JOHN KEY Actually I’d argue with you we’re rebalancing things, yes there’s been some redundancies, relatively small amount relative to the size of the core state sector, but we’ve been moving people from the back office into the front office, and if you look at our hiring demands in new areas, whether it’s  Police Officers, six hundred extra Police, in lots of did areas we’ve been hiring people on the front line, but I think you’ve gotta accept there’s a couple of things going on here and that’s what I really alluded to in my speech this week, and that was that yes there’s a recession and recessions come and go, they’re like the tide, they come in and out, the severity of them changes but they come and go, but there’s broader underlying structural issues in New Zealand, and that is about how we make New Zealand more productive, in other words how can we sell more to the rest of the world, be more competitive, that’s the focus of attention for the government, it’s got nothing to do with the recession, and that’s what’s driving our thoughts at the moment.

Well let’s look at that because I mean I see a lot of talk, a lot of sentiment, but not a lot of really big ideas.  We accept that you’ve been a bit constrained by the recession, but we’re coming out of that now, what is your idea post recession?  What are the big ideas from National to make us more wealthy and prosperous as a nation?

JOHN KEY Well firstly, if you’re looking for one single silver bullet, you won’t find it, and I don’t think any political leader can deliver that for you.  I mean just look at Obama, he spent 1.3 trillion New Zealand dollars on a stimulus package and they’ve lost two million jobs since then.  So if you want to lift productivity growth it’s actually the nuts and bolts stuff right across your economy, and I would utterly refute the suggestion that we aren’t doing a lot in all of those different areas.  Let’s take capital investment, spending seven and a half billion dollars or more, this week we just announced the Victoria Park tunnel, it goes on and on and on, reform of the Resource Management Act will be coming through parliament very soon.  Reform of the Emissions Trading Scheme, that’s happening as we speak, and there’ll be again a new piece of legislation to replace the old legislation you know very soon on the books, and it goes all the way through whether it’s a focus of literacy and numeracy, whether it’s ultimately about making sure we’ve reshaped the public service so it’s focused on delivering better outcomes for hopefully less for the future.

GUYON Sure, they’re all worthy things, but I’ll just quote you one of the company chairmen who was quoted in the New Zealand Herald’s session ‘Mood of the Boardroom’ this week, who said that the government is too timid, it just lacks any significant ideas, and in Opposition you had some big ideas, you were talking about New Zealand being an offshore banking centre in the manner of Ireland or Luxemburg do you still believe that’s possible?

Well I think those things are always possible, we’re looking at lots of different things, but let’s go back to the Mood of the Boardroom Survey, I mean that had overwhelming support for what the government’s doing.  Now of course business leaders will always want, or often want, a very very business focused attention to the economy and nothing else, but we actually live in a world where we need to balance the demands and requirements of all New Zealanders, not just the business sector, they would take a quite austere view to what the role and responsibilities of government is, I can understand that position, they might want us to do things that are quite radical on day one.  I actually don’t think that’s going to deliver the right results for the country, I think we’ve got to work through this, it’s an iterative process, it’s step by step, and we need to take people through it, and we’re doing that on the backdrop of very difficult economic conditions.

GUYON Isn’t it true though that you are constrained essentially by political expediency?  Nine out of ten of those CEOs wanted partial privatisation of state owned enterprises.  It’s an idea that your own Finance Minister was promoting a year or so ago, you’re simply not doing it because you were frightened by the Labour Party that you’d get too much criticism for it.

JOHN KEY Well personally I don’t believe that’s the big issue that’s gonna turn the New Zealand economy around, if someone can convince me that floating 25% of Meridian is somehow going to be the salvation to the New Zealand economy.

GUYON Well don’t we want companies to invest in rather than just housing?

JOHN KEY We do, but that’s about growing companies, and that’s one of the reasons why if you go back to the speech on Wednesday it was hugely focused on saying why is 90% of New Zealand’s exports coming from 5% of the companies.  So yes we want investment opportunities, and I happen to agree with Mark Weldon we want more things on the Stock Exchange, more companies to invest in, but you can get completely distracted in government on very small debates, one of those debates is about partial privatisation, we campaigned that we weren’t gonna do that in this term, and I’m not about to start breaking my word.

GUYON Are you gonna do it next term?

JOHN KEY Well we haven’t had that debate within Cabinet yet, so I’m not gonna prejudge that.

GUYON But longer term, you give us longer term ideals, you gave us in the speech this week that you wanted 30% tax rate, you can’t put a time frame on that can you?

JOHN KEY Well I’ve never said I’m philosophically opposed to the sale of state assets in some form, and I’ve never said that that is off the agenda forever, but I live in an horizon where I need to operate in the next three years, that’s the parliamentary cycle I’ve got.

GUYON That’s not long though for the companies to prepare for that, for people to prepare for that, so is that on the medium term agenda, you can tell us that tax at 30% in the dollar is on the medium term agenda, partial privatisation of assets or asset sales on that medium term agenda.

JOHN KEY We won’t spend any time thinking about what we’re gonna campaign on next term, what I can tell you is if there’s a change in position it’ll be up front and we’ll campaign on it, but we have to be focused on how we lift that productivity, and how we make sure that literacy and numeracy skills are increased…

GUYON Okay you’ve talked about that, I want to take you to another area that people would see as being one of the central things in terms of actually lifting the ability to invest and grow more wealthy as a country.  The Reserve Bank this week said pretty much, they warned that we were gonna enter possibly the same boom and bust cycle in housing.  Are you going to do anything to make housing a less attractive investment for people in terms of investment properties, and try to shift investment into the productive areas of the economy, are you going to do anything about that issue?

JOHN KEY Well firstly under Bob Buckle the government has established a Tax Working Group.  Now that Tax Working Group has a wide range of participants and it’s going to report back to the Minister of Finance at the latter part of the year, and it’s having a look at all of the structure of the tax system, how it operates, where there are efficiencies, maybe where there are loopholes, maybe where there aren’t.  I’m gonna leave that working group to come back and report to the government and not again prejudice its outcomes on day one.

GUYON Haven’t you ruled out a capital gains tax?

JOHN KEY Well I’ve repeatedly said I’m quite happy to say today, I personally don’t like capital gains taxes.  I don’t think that they work very effectively, they certainly don’t stop housing booms, I mean the United States, Australia and the UK, all have a form of capital gains tax on housing, and it hasn’t worked, they all had housing booms, and in fact even within the bureaucracy in New Zealand, the Secretary of the Treasury is very supportive of a capital gains tax, the main policy advisors in IRD are opposed to one.  So there’s quite a debate, but one of the reasons why housing has been such an effective form of investment for New Zealanders is the system hasn’t been working well, and the Minister of Local Government can talk about that, but the RMA has held back the lease of land, the Building Act’s been highly inefficient, we haven’t had the supply for what’s been an increasing population.  So let’s go and tackle those issues first, a punitive tax won’t necessarily just deal with the issue.

GUYON On tax Bill English said this week when he was visiting Australia, that he kind of expected Australia to move on tax next year, and that we might have to respond.  Are your tax cut agenda programme actually back on the agenda over this term?

JOHN KEY Well again we delayed personal tax cuts reluctantly.

GUYON But will you cut them if Australia does?

JOHN KEY Not specifically because Australia does, but the point that the Finance Minister is making he’s quite right.  Australia’s undertaking a thing called the Henry Review, so Henry – Lex Henry I think at the moment is out there reviewing tax in the Australian structure in the very same way that we are through the Bob Buckle Review.  So what is going to happen is, we’re ob going to go and have a look at what Australia does.  Now we can’t ignore the fact that our large Australian partner, the partner that we have a single economic market has been established with is undertaking tax review, otherwise we’d be too closing our eyes to the competitive threats around them.

GUYON So it sounds like if they cut taxes you’ll follow?

JOHN KEY Well let’s just have a look at what they do, they’ve got a different tax structure to us so we’re not saying holus bolus we would sign up to what they’re doing, we’re simply just saying we would need to look at what happens and what comes out of that review in Australia, who knows how ambitious it will be.

Let’s look at one of the big issues between Australia and New Zealand over the last couple of weeks, that is the moves to put Folic Acid in bread.  You went away and said you were seeking legal advice on whether we could get out of this.  Can we?

JOHN KEY Well I have sought legal advice from Crown Law, and it is quite challenging, but what I intend to do tomorrow is ask Cabinet to consider the release of a discussion document – that discussion document would be put in the public domain and consultation would take place over the next few weeks.  It includes three options but the government’s clearly stated preferred option is that there is a deferral to the mandatory inclusion of Folic Acid in bread, that deferral would take place until May 2012 and we could then use that time to fully assess the merits or otherwise of the debate.

GUYON So it’s looking like the likely option is that you put this thing off until after the election, after 2012 and then make a decision then?

JOHN KEY Yeah the reason for May 2012 is that there was always going to be a review by the Ministerial Council between New Zealand and Australia, that review’s going to take place in September 2011, and it takes about that period of time to report back, and they report twice, May and October.

GUYON So the bakers won’t have to put Folic Acid in their bread in September like they were going to have to?

JOHN KEY Not from a mandatory point of view but what I would say is the bakers have talked a fair bit about choice.  I accept that argument that we come as a political philosophy as a party that believes in choice, but it would be my expectation that the bakers would produce a range on a voluntary basis of breads that included Folic Acid so that women of a reproductive age could consider whether it’s in their best interests to eat that bread.

GUYON Why the change?  Last week on this show we had your Minister for Food Safety saying I can’t get out of this, there’s no way out of it, I have to go with the Australian regime, and now you seem to have come up with an alternative, what’s changed?

JOHN KEY Well it’s a very complex legal area, I mean some have argued that through the stroke of a pen this can simply be changed, actually that’s not correct, it’s a convoluted process.  The advice we had was the best route to take was one of those ministerial reviews that’s May or October.  You know it does seem a bit ludicrous if you are going to be implementing a mandatory inclusion of Folic Acid only to have a review in October to then take it back out again.  So we have worked harder, we’ve asked Crown Law to give us some advice, I think we’ve been quite creative in what we’re doing, but I’d hasten to add you know it is a consultation process, we can only give our preferred option, and in the end we’ll listen to the stakeholders.

GUYON Australia and New Zealand got a real reminder that this threat of terrorism is still with us this week, with the bombings in Jakarta.   Now most people see the home of this war on terrorism as in Afghanistan where America and others are prosecuting a war.  Do you believe in that war?

JOHN KEY Well look I think it’s necessary, New Zealand’s involvement in Afghanistan has been necessary.  There’s no great secret that we’re undertaking a review of our commitment to Afghanistan, that review is due to be released back to the government in August of this year, so next month.  At that point we’re going to make a number of decisions, but it’s our long term view that we would like to exit our activities in Afghanistan, but I do think it’s important that New Zealand plays its role, and plays its part in trying to get on top of what is a terrorist hotspot.

GUYON Because you believe in that war?

Well I believe in the fact that you know we have New Zealanders all around the world, I mean if we learnt something on Friday again it was that New Zealanders are never immune from the threat of terrorism, whether it was Mumbai or whether it’s ultimately Jakarta or the bombings in London, there are New Zealanders all around the world, and we’re a first world country that has to play its part in trying to stamp that terrorism out.

GUYON So are we going to fight, are we going to send our young men and women to fight in a combat role in Afghanistan again?

Well one of the things that’s being considered is whether the SAS would be redeployed to Afghanistan for a period of time.  Now we haven’t made that decision yet, but we’ll consider that in the wider context of…

GUYON You have to send them don’t you?  If you believe in the war you have to put your money where your mouth is.

JOHN KEY Well they have been sent before, the previous Labour government deployed them on three different occasions, so it’s one of the things the government is considering but the final decision hasn’t been made at this point.

It sounds though that you are committed to that, that you personally believe that if you believe in the war then you actually have to put the troops up at the sharp end and carry through with it?

JOHN KEY What I would like to see happen in Afghanistan from New Zealand’s perspective, and ultimately I guess from the world perspective, is that we stabilise Afghanistan, and that the huge commitment of foreign forces that are in there can ultimately be withdrawn from Afghanistan.  Now that can only happen if the position’s stabilised.  It’s very complex, it’s challenging, and at the moment it’s proving to be very costly from a human life perspective, and I wouldn’t want to put New Zealanders in the front of human fire, or danger, unless I felt it was in the right interests of New Zealand.

GUYON Is it?

Well you can see on Friday that we’re just simply not immune from that now, it’s a challenging situation, let’s look at the review when it comes back.

GUYON Just in the couple of minutes that we have got left, I just wanted to talk a little bit and see whether we can elicit from you what your vision looking forward is as Prime Minister.  You said in one of your quite famous speeches in 2007, the so-called ‘underclass speech’ and I’ll quote this to you.  ‘For me politics is not about the pursuit of power for the sake of it, unlike some I won’t measure the success or failure of my political career by the number of years I hold office’.

JOHN KEY That’s right.

How will you measure it?

JOHN KEY I’ll measure it whether we make a discernable difference to the lives of New Zealanders and some things I care passionately about.  I think economically we grossly under perform, and this government is not getting distracted on the side shows and issues of not national significance, it’s firmly focused on an economic agenda.  I will measure it on whether we live literacy and numeracy standards in this country, cos in my view it’s an absolute disgrace that one in five New Zealanders leave school hopelessly ill equipped from a literacy and numeracy perspective.  I’d like to measure it on whether we can actually deliver a better quality of living through out health system, and ultimately whether it’s a safer society, and they’re very core basic things, but they actually matter to the lives of everyday New Zealanders.

You said that you wouldn’t measure it about the number of years you hold office, how long do you want to hold this job?

Don’t know is the honest answer, I’m enjoying it, I’ve been there for eight or nine months now, never a dull moment, and it’s always challenging, and you know you have to have a thick skin if you want to do this job, but you also have to have a vision for where you want to go.  I have lots of energy and enthusiasm for it, but look in politics it’s first amongst equals, I’m there for as long as the National Party caucus want me to be there, and ultimately for as long as the New Zealand public want me to be there, and nine months into the job is a little bit early to start thinking about my retirement.

You hear a lot of people in political circles saying that you know perhaps two terms max, is that right?

JOHN KEY I don’t want to put a number on it, look I’ll be there for as long as I think I can make a difference and for as long as I enjoy the support of the public and the caucus.

GUYON Alright, good place to leave it, thanks very much Prime Minister for coming in and joining us this morning, I appreciate it.

Points of interest:
– Hide: Government asking councils to do too much, wants law changes to limit council services
– Local Govt. Minister wants to set “fiscal envelope” for councils
– Council spending “unsustainable”
– Need to control rates increases is “urgent”
– Leaky Buildings: Hide looking to have developers and builders provide a home warranty

The interview has been transcribed below.  The full length video interviews and panel discussions from this morning’s Q+A can be seen on tvnz.co.nz at,


PAUL Local government has long been a bug bear of ACT Leader, Rodney Hide, who grabbed the local government portfolio when the Cabinet jobs were handed round last year.  Mr Hide wasted no time before announcing the establishment of a Super City in Auckland, but his reform plans extend a lot further than the City of Sails.  Rodney Hide wants an end to big rate rises which really are bothering us all, so he’s planning a new law that would see the Beehive cap council spending.  He wants a new appraisal of what exactly core council services should be.  Councils of course see Mr Hide as a one man cartload of very tricky monkeys.  Well Rodney Hide is with us live.  What do you actually want to achieve with the rates?

RODNEY HIDE – Minister of Local Government
I want to get them under control, in the last few years we’ve seen them go up twice the rate of inflation.  The forecast is for them to go up at a similar rate, I think that’s unsustainable.

PAUL Come on to these numbers shortly, but do you actually want to cut rates, do you want to limit rates, or do you want to cap them?

RODNEY I want to get council spending under control, number one.  Ultimately it’s up to the councils but quite frankly right now the track they’re on is unsustainable.

PAUL And what was that track last year, average rate rise last year 8%?


PAUL In fact I think Internal Affairs themselves have said that rates are set to rise 60% in the next ten years, and a 2006 Local Government – an independent local government rates inquiry said the existing rating system will be unsustainable in ten years.

RODNEY Correct.

PAUL So how urgent do you see the need to act?

RODNEY Oh it’s very urgent, because here we are in tough times and it’s tough obviously for people on fixed incomes like pensioners, but it’s also tough for business, particularly farmers, who carry a disproportionate burden of the rates.

PAUL See what are people telling you about rates?

RODNEY Well there’s two things right, and this is the tricky thing for local councils, on the one hand you know we all want good services from local government.

PAUL And the money’s gotta come from somewhere.

RODNEY And on the second hand we don’t want our rates to go up, and that’s the tough thing that councils are trying to provide for.  My goal is to get the rates under control and my goal is to focus local government on what’s important and the core services.

PAUL Yes but Minister the money for the good services and renewed services has gotta come from somewhere.

RODNEY Sure, but there’s a lot of things that councils do, and they certainly complain to me that they shouldn’t be doing and don’t have to do, a lot of burdens that have been put on them by central government that have seen their costs sky rocket.  In fact Tim Shadbolt wrote to me and said that if they hadn’t have had the previous government for the nine years he could have had rates under control at the rate of inflation, but the extra burden that politicians had put on them they’ve seen the rates go up.

PAUL Just quite quickly, might there be some rate reductions from what you’re proposing?

RODNEY I’d love it, I mean ultimately central government doesn’t set the rates, it’s up to the councils, but certainly I believe that if we can …

PAUL Are rate reductions possible?

RODNEY Of course they’re possible, it’s a political decision.

PAUL And just to clear to this up, are the days of councils blithely increasing rates over?

RODNEY I hope so.

PAUL And where are you at with the planning for this legislation?

RODNEY Here’s what I’ve got, I’ve got a paper out that’s being discussed with Local Government New Zealand, my whole goal in this is to get transparency and accountability, to put ratepayers in the box seat, to actually have councils set a fiscal strategy and actually work within it and actually to have them focus on their core services, rather than if you like monuments.

PAUL Let me talk about core services shortly.  First of all another aspect of councils, which there is a perception in many places around the country perhaps particularly when it regards you know that councils are Hitlers, that there’s far too much red tape, that we have to get permission for too much, we almost have to ring the council to get a bloke round before we can mow the lawn.  Do you think there is too much red tape, would you like to see that reduced?

RODNEY Of course and I’m quite lucky because I’m also Minister of Regulatory Reform which is the minister to get rid of red tape.  There are two problems, one problem is central government has put a lot of heavy legislation on, second of all though councils have naturally become very risk averse, because if you find yourself with a leaky building, who’s ultimately responsible, well it’s the poor council, and so they’re having to be tough to protect the ratepayers, so we’re looking to put that responsibility back on to the developers, back on to the builders through a proper warranty system, so it’s not falling back on to the councils.  If we’re gonna have a system where councils are gonna have to cover the costs of any cock up, then councils are gonna make it tough to build a building.

PAUL So might you change some laws.

RODNEY We’re gonna change lots of laws if I have my way.

PAUL In order to make it easier for councils.  Are councils simply trying to do too much.  I mean is there an element of empire building in councils?

RODNEY Well I think it’s natural that politicians you know like to build empires, civil servants like to build empires, and that’s why we need to make sure that taxpayers and ratepayers ultimately have a say, and that we link back you know with the services to the actual cost it’s going to be, and that’s what I’m trying to drive towards so that people make a decision about well how much are you prepared to have your rates go up, and then force the councils to live within that budget.

PAUL Yes but what renews the services, what renews the infrastructure, where in the end do the millions and millions and millions of dollars come from.

RODNEY Well ultimately it’s from ratepayers and taxpayers of course, cos politicians don’t have their own money, they take it off you and I and the people that are watching this show, but what I’d like to do in local government is this, and this is my agenda.  It’s clear that councils, the few that actually set a good fiscal strategy and say here’s our budget and then work towards it can actually hold a good budget.

PAUL Do any of them?


PAUL Name them.

RODNEY Oh go into the Hutt and the Hutt Council’s done a great job of doing that, I went into Rotorua they’ve done a good job, but often other councils when I go to see them they say oh we’ve got a problem with affordability.  What they’ve done Paul is come along work out all the good projects and say oh how are we going to pay for this, so what I want to see first of all is ratepayers ideally able to when they have their three yearly ballot tick a box and say we’d like the council expenses held to the rate of inflation say, and then I’d like to see the councils within that cap or fiscal envelope, I’d like to see those councils focus on the core services and not rush off and build the monuments.

PAUL Right let’s talk about these core services, so you’re not saying we’re not gonna cap absolutely, that the people will have a say in the rate rise, is that what you mean?

RODNEY What I’d like to do is have ratepayers and voters have a say about whether they think core expenditure of local government should be rising say above the rate of inflation.

PAUL Core services, what are they?

RODNEY Well we don’t know, because no one’s actually even looked at this, but I certainly know what they’re not, and I’ve had councils that are investing in hotels, cooking schools, banks, you name it, Lotto shops, they clearly aren’t core services, and what I’m concerned about is if we’re gonna set a fiscal envelope for councils to work in, that the first priority should be what we think of is this proper job of local government.

PAUL So that is drains, that is cleaning…

RODNEY Absolutely, the basic infrastructure, my concern is if we actually set a fixed budget that the infrastructure could crumble and we actually have the politicians off you know building things that they like to cut the ribbon for, rather than the core services that we all need.

PAUL But to maintain the core services perhaps and to renew and maintain core infrastructure, councils are inevitably aren’t they going to have to raise more than the rate of inflation?

RODNEY Yes, and they’ll have to put that case though ultimately to the ratepayers.

PAUL You want more use of referenda don’t you?

RODNEY No I want the ratepayers to be able to have a say, and I think that when you ask yourself this, yes it’s a good idea to have governments operating to a budget, who are the best people to be setting what they think that budget is appropriate.  Well I think it’s actually the people who are going to pay for that.  Funnily enough when you do that quite often people say actually we don’t mind the rates going up faster than the rate of inflation because we do need some basic services, and then you go within that and you say okay the need is to focus on the core services and if you’re going to do something grandiose actually go back to the people that are gonna pay for it.

PAUL And ask them can we afford it, and are you prepared to pay?


PAUL We phoned around a few mayors as a matter of fact for their reaction to the kind of stuff that you’re planning, and most of them said to us look we could have the core services done by Monday afternoon, it’s the rest that takes us the rest of the week.  Tim Shadbolt said to us what’s the point of gleaming drains and beautiful white line painted roads if there’s no cultural and sporting life in a city, which councils have to promote.

RODNEY Of course and I agree with that, I think cultural and sporting life is important, and I’ve got no objections to councils actually getting involved in that, what I want to say though is that sometimes they get carried away, sometimes they commit tens of millions of dollars and they don’t take the ratepayers with them.  I’m not about telling them they can’t do this, they can’t do that, they can’t do this, but what I am saying is if you’re gonna commit tens of millions of dollars don’t just do it without taking the ratepayers with you, because we’ve seen so many poorly executed projects, particularly in local government, that have ended up becoming white elephants.

PAUL Example.

RODNEY Oh I don’t want to go through particular councils right now because I go round and meet them, but I think people at home know plenty of examples.

PAUL Bob Harvey in Waitakere City said look there’s always the unexpected millions that you need, he talked about heavy rains that wiped out the road to Piha, five million dollars to repair.

RODNEY Oh and 35 million dollars for their council offices, six hundred million dollars worth of debt that the ratepayers of the future are gonna have to carry, that wasn’t unexpected, that was actually planned for by Waitakere City Council.

PAUL Yeah but this is unexpected expenditure, unexpected of God stuff.

RODNEY Well look of course there are acts of God stuff Paul, but when you look at the rate rises, when you look at the sort of expenditure the councils have engaged in, that is not unexpected, they have planned for it.  Waitakere City Council it’s not unexpected expenditure that saw 35 million dollars on their flash offices, it’s not unexpected expenditure that saw them accumulate six hundred million dollars worth of debt.

PAUL I’m sure many people are very sympathetic to you wanting to keep the rates down, certainly there’s much grumbling and much concern about the rates, but if you really legislate, if you really force the councils to keep those rates increases well down, in the end aren’t kids gonna have to pay to go to the swimming pools, aren’t people gonna have to pay to use the libraries, aren’t people gonna have to pay to go to the art galleries?

RODNEY And that’s why I want to make this clear distinction, it’s not about me forcing the rates down, what is it about me is getting the costs under control for local councils, a lot of the costs come from central government, and I’m working to lower those costs, and I have to say the mayors are loving that part of my work, but the second thing is to allow ratepayers in the community to have a say about what they’re prepared to pay for.

PAUL I understand this but the inability surely – the inability they won’t be able to afford both the infrastructure and the cultural and sporting services.

RODNEY No no, not true, I have New Plymouth City Council come to see me, they actually put out a document to their community and said we could go on the low rate track, we could go on the medium rate track of increases, or the high rate track increases, do you know the community quite rightly in that case, they decided to go on the medium rate increases because they wanted the services, but what that did was actually set the fiscal strategy for that council and they took the community with them.  I’m quite happy for rates to increase if the community want that and want the services.  What I’m unhappy about is it doesn’t matter who you elect that the poor old pensioner gets socked with a 10-12% rate increase and actually lose their house.  I don’t like farmers actually struggling in their business because they’re paying inordinate amounts of rates with no say, and businesses are particularly being hit with discriminatory rates, where they disproportionately pay for services that they don’t use.

PAUL Or is this part of the ACT agenda?

RODNEY Of course it’s part of the ACT agenda, I’d like to go a lot further as part of the ACT agenda.

PAUL Actually, and if you force council to keep the rates down is it possible it might have to begin to sell assets, or partially sell assets?

RODNEY Of course I’m in favour of privatisation, I don’t see why we should have government trying to run a business, businesses run businesses and they do a far better job at managing capital and customers and all those things, you have competition and choice, of course I favour privatisation, unfortunately the ACT Party only got sufficient votes to have five MPs and the Prime Minister said it’s off the agenda, but you know I love privatisation because I think government should concentrate on being government, as soon as it starts to try and run a business it’s a disaster.

PAUL ACT Leader Rodney Hide, and Local Government Minister Rodney Hide, thank you very much for your time.

RODNEY Thank you for having me.

Q+A’s Panel Discussions with Paul Holmes, Therese Arseneau, Alisdair Thompson from the Employers & Manufacturers Assn and Helen Kelly from the Combined Trade Unions.

The video interview of the panel discussions from this morning’s Q+A can be seen on tvnz.co.nz at, http://tvnz.co.nz/q-and-a-news

Response to JOHN KEY interview

PAUL So what do our panel think of some of the things the Prime Minister was saying, Therese Arseneau, Alisdair Thompson and Helen Kelly.  So is the recession over as he asserts?

ALISDAIR THOMPSON – Employers and Manufacturers Association
Well it’s not over, we’ve probably got another couple of quarters of contraction to happen, but in our view it’s definitely bottomed out and there are signs of it coming up, and the first one I’d refer to, the last three even four months there’s been a slight improvement in the performance of manufacturing index, now we’ve still got a long way to go to get back to neutral, but it’s coming up, that’s for the last four months.  That measures things like forward orders, stock levels, sales and so on.  Then there’s the things like the balance of payments, we’re seeing an improvement there, the trade surplus we’ve got one now.  The focus I think on productivity that’s happening within firms is definitely on the way, they’re looking at lean manufacturing and TQM and such like so that once they come out of the recession they can get cracking, and I think too you know you just see this general feeling.  I’ve been meeting with two and a half thousand employers this last two or three weeks, and there is a feeling that we are improving, and I think that’s a key thing.

PAUL And also the feeling really that the guts didn’t completely drop out of things anyway.

THERESE ARSENEAU – Political Analyst
But I thought it was interesting when Bill English a few weeks ago said, the public does not judge it though by those indicators that you talked about, instead they judge it by the key indicator for them which is employment, and politically and statistically we see that, that that will hurt a government more than anything if unemployment keeps rising and the expectation as it will until right through in next year.

PAUL interesting that he described unemployment, what did he call it a lagging – a lagging kind of statistic, a lagging measurement, what do you think, recession over or?

HELEN KELLY – Combined Trade Unions

No I definitely don’t think it’s over, and if you look at what a recession from a working person’s point of view it is about whether they’ve got employment and whether there’s hope of employment in the future.  I think you know what we heard there is that there is a genuine commitment I think and honesty around John Key saying he wants to deal with the job issue, but very few ideas in how he’s going to do that.

PAUL But who has got the ideas around the world, what can any government really do?

HELEN Well if you take a look at Australia for example, they have taken quite a different approach, they have taken an investment approach to this recession, they have really clawed money into education and training and job creation and low wage earners have been given money, and they haven’t had to ….

PAUL But they probably have a hell of a lot more money.

THERESE But has it led to lower unemployment?  I mean I think it’s interesting, Canada, the United States, Australia, have all taken a more activist approach and yet our unemployment is lower than theirs.

HELEN We started from a very low base but actually it growing at a much more rapid rate than theirs.

PAUL China reported again 8% growth this week.

ALISDAIR Yes well unemployment here is not as bad as many people have thought.  Redundancy now we believe is coming down.  EMA over the last nine months was handling a huge number of calls from employers about how to reduce our payroll cost, shorter hours or redundancy, that has tailed right off now.  Once a person’s made redundant they have some time before they can go on to the unemployment role and benefit, because they’ve had a redundancy payment so they don’t qualify straight away.  Now those people who were made redundant two or three months ago are flying through on to unemployment, that’s the lag that the Prime Minister was talking about, that’s why we’re seeing a lift in the number of people on the dole, but the rate at which people are losing their jobs has definitely come down and we can measure that by the number of calls we’re getting to help employers with that.

PAUL Let’s examine one of the things the Prime Minister was talking about, and of course leaders want the government to be more proactive, and of course one of the things that as Guyon suggested to the Prime Minister they want to see is maybe partial privatisation of state assets, this is what the Prime Minister said.

John Key: ‘I’ve never said I’m philosophically opposed to the sale of state assets in some form, and I’ve never said that that is off the agenda forever, but I live in an horizon where I need to operate in the next three years, that’s the parliamentary cycle I’ve got.’

PAUL So fairly straight up on that, but nevertheless not philosophically opposed.

HELEN The most important point he made was that that’s not gonna create jobs.  You know there’s two different debates going on here, one is jobs and one is the focus….

ALISDAIR I don’t agree with that.

HELEN Well we’ve had an experience of privatisation of state assets causing mass unemployment in this country, actually you know jobs not being created through that.

PAUL We’re talking about the railways.

ALISDAIR Yeah but I disagree…

HELEN Yeah and it’s been a disaster, we’ve ended up having to buy them all back, you know the banks and the railways.

PAUL Well we didn’t have to buy them back did we?

THERESE But I think the bigger point is he talked about a three year cycle, I mean that is too short term vision for what we need, I mean the speech he gave last week was about a longer term vision and if we’re really gonna get this economy turned around in the long term, deal with the structural problems in the economy, he has to be looking more than three years down the road, and I agree with Helen that you know a lot of the speech that we heard from him, still I mean I think he put out a very good vision, very short on detail, and as of yet nothing really new.  I mean it’s the exact same thing the Chamber of Commerce put out before the election wasn’t it, that booklet they put out in terms of what needed to be done to the economy.

PAUL Yeah but he said that he’s not going to be distracted from an economic and productivity focus.

HELEN Well we think this focus has shifted from jobs to debt, and we want to see the shift back on – the Job Summit started the focus on jobs, it’s shifted in the Budget to debt and we want to see it moved back to the focus on jobs.

PAUL Now let’s go to another clip from the Prime Minister he brought up the subject or Guyon brought up a subject, which was very controversial on this programme last weekend when we had the Food Safety Minister Kate Wilkinson on Folic Acid in the bread.  A change now, look at this.

John Key:  ‘The government’s clearly stated preferred option is that there is a deferral to the mandatory inclusion of folic acid in bread, that deferral would take place until May 2012 and we could then use that time to fully assess the merits or otherwise of the debate.’

PAUL So last week we can do nothing, suddenly there’s a reversal, we can defer until May 2012.

ALISDAIR Well of course he’s right, of course we can defer it, I mean mass medication of the population isn’t necessary, if bakers bake some bread with folic acid in people can choose to buy it and eat it if they want to, and we should have that choice, he’s right, Kate Wilkinson was wrong.  Just because the last Labour government said we have to go down that path didn’t mean to say that Kate Wilkinson had to agree last week, the Prime Minister has fixed it.

PAUL We also seem to be on a committee with Australia where we have one vote and the Australians have nine, which presumably is six states, two territories and one federal representative.  But anyway so a reversal are you pleased about that?

HELEN I think it’s a sensible thing to do, to wait and see what the research is and I think there was a lot of concern after last week’s programme and obviously they’re the government and they can make these decisions.  I think what was revealing last week was that Kate Wilkinson didn’t understand that actually she is the Minister of Food Safety and can make these types of decisions.

PAUL And that we are an independent sovereign nation.

THERESE Yeah and yet another sort of flip flop in terms of a Minister says one thing and then the Prime Minister plays clean up afterwards.

ALISDAIR It tends to happen though doesn’t it, we saw a lot of that in the last nine years as well, you know it’s sort of what happens in politics.

PAUL Because they’re very focused on …

ALISDAIR The polls.

PAUL Jobs and productivity.

Response to RODNEY HIDE interview

PAUL So you’ve heard Mr Hide on what he wants to do with the rate rises and with the way he wants local government to administer itself.  Well it’s not unreasonable, I think there’ll be a lot of sympathy around the country for what he’s trying to do in terms of halting these imperious rates rises Alisdair what do you think?

ALISDAIR Yes indeed, and I think it’s great that we have the opportunity to have this debate about the controlling of costs and council and what is and isn’t core services, and how far over core services should we go, and the question he talked of at the end about privatisation, councils own gyms, hotels, all manner of things that they have no business in being in, and just like with government owning state owned enterprises if they did privatise half of them, you know not the whole lot but 40% or something like that, they would have that money then to invest in infrastructure.  We’ve got a multi billion dollar deficit in infrastructure in New Zealand that pays a great return, $4.80 for the western highway per dollar spent, that’s a much better investment for a government to be making, whether it’s local or central, and that’s why privatisation or partial privatisation makes sense and that’s why we should have the debate in the country.

PAUL Well he’s quite open about it too isn’t he, and I mean some would say it is inevitable that if you really contain councils and that the public contain their councils, some things might have to be sold.  What do you make of what he’s planning?

HELEN Well I think if you read the Cabinet paper which is now available you’ll see exactly what Rodney Hide’s planning and I don’t think he was necessarily open about that in this interview.  He lists the core services as transport, water and health and safety, refuse collection that sort of thing, and he has said in the Herald that citizens will have ballots around things about whether they want to run art galleries, and I imagine that includes things like skateboard parks, Pasifika Festivals, Festivals of the Arts, he has a very very narrow definition of core services in that Cabinet paper.

THERESE I think he’s got a point.

PAUL Well core services probably are narrow.

THERESE He has a point that local government spending is an issue and you see that it has impact in terms of productivity and the things that John Key was talking about in his interview.  The question is how he plans to go about it, and it strikes me that he’s taking a sledge hammer approach when maybe a scalpel would be a better idea, and all you have to do is look at a state like Colorado that has the same sort of principles that’s he’s recommending, that you have a set formula based on population and inflation, and in order to get any more money than that or spend any more than that, you have to go to a referendum, and it’s interesting he likes referenda when he thinks the answer’s gonna be no, he’s not so interested in the referendum on the Super City for Auckland.

HELEN And Colorado’s ditched that scheme, because Republicans and Democrats, the lot have said the whole place is run down, the education system’s failing…

PAUL Have they completely ditched it though.


PAUL Right, but the thing was the roads started to not get repaired but of the state of Colorado runs education, our councils don’t run education either.

THERESE It’s a different example.

PAUL Isn’t Rodney Hide saying before you work out what your increase in rates is going to be, go to the public and say here’s what we’d like to do.

THERESE Hold an election, it’s called an election.

PAUL No but I think he would formally at the election the council would probably have to put its proposed budget.

THERESE How many people are gonna vote yes for a rate rise.

HELEN And Rodney should have to put beside the ACT’s box when he stands for election going to privatise state assets, going to sell pensioner flats, going to shut down the art galleries.

ALISDAIR Yeah exactly they should say that.

PAUL Here’s what Rodney Hide was actually saying about the cultural activities, council being involved in cultural activities.

Rodney Hide: ‘I think cultural and sporting life is important and I’ve got no objection to councils actually getting involved in that, what I want to say though is that sometimes they get carried away, sometimes they commit tens of millions of dollars and they don’t take the ratepayers with them.  I’m not about telling them they can’t do this, they can’t do that, they can’t do this, but what I am saying is if you’re going to commit tens of millions of dollars, don’t just do it without taking the ratepayers with you because we’ve seen so many poorly executed projects particularly in local government that have ended up becoming white elephants.’

PAUL Like backing shows.

ALISDAIR Well yes indeed, and look there is something here about this core issue, you know the first and foremost issue for people is their health, and that is a truly core services, sanitation, collecting the rubbish, potable water, sewerage schemes, air quality, waterways quality, roads and public transport.  All of those things are essential and they are the top priority for local government, not to gold plate them but to make sure they’re there in a workable order, then you spend the money on those other things, and Shadbolt or whoever it was is right that a city or a district is more than just its roads and its sewerage.

PAUL Exactly as you say he does have a point.  I’ve gotta look ahead to the week ahead, what would you be expecting to see in the news this week.  You note that food prices have gone up.

HELEN Yeah food prices have gone up 7½% this year, very little coverage of that, adding $30 to every average family’s shopping basket, but also what’s going to happen this week is all those community education classes are gonna start up after the holidays, those adults are going to go back to those classes and find out that their courses have been cut and I think that’s going to make the news.

THERESE I think a very interesting question time for Kate Wilkinson.

Points of interest on alleged lewd conduct by David Garrett:

– Water cooler story “complete fabrication”

– Admits and regrets inappropriate remarks

– Has apologised “unreservedly” to the woman

Points of interest on justice issues:

– David Garrett:  admits the re-written three strikes bill would not save a single life; “zero”

– May not vote for his own bill; “we’ll have to see”

– Kim Workman: Prison population has grown 10% since Christmas

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

PAUL On Wednesday parliament’s Law and Order Select Committee heard submissions for ACT’s three strikes policy, under which offenders after three serious crimes could be locked away for at least 25 years.  It’s been controversial where it’s been tried overseas, National is reserving judgement on whether to support the bill.  In a moment we’ll debate the law with its architect David Garrett of ACT and the Director of Prison Reform Organisation, Rethinking Crime and Punishment, Kim Workman.

PAUL We say good morning to Mr Garrett and also to Kim Workman, but Mr Garrett before we begin to discuss the three strikes policy there’s another matter I must take up with you.  You’re in the news today, you’re in some trouble for having apparently made an inappropriate remark to a woman at parliament over the water cooler.  Did you make an inappropriate remark?

No Paul, the remark – the story about the water cooler is a complete fabrication, there are parts of the rest of the story that are quite accurate, well actually not quite, it says that Rodney reprimanded me, I would have said he tore several large strips off me actually, but they were about as he says inappropriate comments – the water cooler incident which as far as I’m concerned never occurred.

PAUL Well let’s not worry about the water cooler, did you make an inappropriate remark to a female staff member?

DAVID I believe that’s perfectly possible Paul.

PAUL Yes or no?

DAVID Well what’s inappropriate, Paul I come from a background – I’m probably the only Member of Parliament who has been an oil rig worker for ten years, it was a big adjustment to become a lawyer, and even bigger adjustment to become an MP, I’m on a very steep learning curve, I now understand very clearly that the kind of thing that might have been okay in a law firm in Tonga is not okay in parliament.

PAUL The perception of course of the woman obviously is that it was an inappropriate remark, Rodney Hide worked on oil rigs too but he doesn’t made inappropriate remarks.  Have you apologised to the woman?

DAVID Oh I have Paul, yes, unreservedly.

PAUL Do you regret making the remark?

DAVID I do, very much so yes.

PAUL The question being of course how many strikes before you’re out?

DAVID Well that’s up to Rodney, I’ve spoken to Rodney about it just this morning and he’s indicated that he still has faith in me and until that changes then I intend to keep doing what I’m doing.

PAUL Very good Mr Garrett, thank you for answering those questions.  Now, let’s talk about your three strikes legislation, why do you want it?

DAVID Because we have a situation where a number, we campaigned on – your story said 78, we actually campaigned on 77 and that figure came, and Kim’s well aware of this, it came from an OIA question that I asked back in 2007, it took months to get the answers by the way, and in summarising it, Kim’s seen the answers, 77 people as at November 2007 who are in gaol currently for murder or manslaughter, had at the time they committed the killing for which they’re incarcerated, served at least three sentences for serious violence.  Now it’s a simple matter of arithmetic that had there been a three strikes law of the type that we proposed, those people would be alive.

PAUL But in terms of why you want the legislation basically if there are serious violent recidivist offenders, you want them put away once and for all?

DAVID Well look what’s happened since the election Paul, very sadly during the campaign that number increased to 78 when the killer of Emma Agnew, one Liam Reid, aka Julian Edgecombe with a list a mile long was convicted of her murder, and it increased to 79 a month or two ago.  We need to personalise this Paul, a young fellow he was quite literally a Samoan choir boy, quite literally out celebrating his 24th birthday when he was killed by one Charlie Karaka because Karaka thought that this poor person resembled someone who’d stolen Karaka’s gang patch…

PAUL Let’s talk about the bill, I mean it’s all very well to personalise, it makes it very dramatic, let’s speak about the bill, you oppose it Kim Workman, why?

KIM WORKMAN – Prison Reform Advocate
Well I don’t think it’s necessary, it never has been.  We’ve got sufficient sanctions in New Zealand now to deal with serious violent offenders, I think the issue is something else.  The issue really is that we have people in prison like Burton and William Bell who are eventually going to come out and that needs to be addressed and we think that an amendment to the preventive detention provisions will secure that.

PAUL You would simply see a greater use of preventive detention?  The provision is there to keep people inside now?

KIM Exactly, and if it was extended to the offence of murder with perhaps a 14 year limit on parole, it would mean that the judiciary if they weren’t satisfied that the person could be released safety, could keep them there forever.

PAUL But isn’t what David Garrett’s proposing at least a signal to violent offenders in this country, by God we are not going to take any more?

KIM The difficulty for me is that the three strikes bill takes away the discretion of the judiciary and puts it in the hands of the Police, because the Police will have the discretion as to whether to charge them for the three strikes offence or not, they’ll indulge in plea bargaining.  In California somewhere between 25 and 40% of all three strike offences are dismissed because of the decisions on the part of the prosecution.  Now I’d rather see the discretion placed in the hands of the judiciary than the Police.

PAUL Alright, the 77 coffins and the 78 or 79 whatever it is…

DAVID Well 79 it is now Paul.

PAUL Well 77 in your stance before the election.  You say that 77 people would be alive if we’d had three strikes?

DAVID At the time they were killed.

PAUL Corrections say none would have been saved by the three strikes legislation.

DAVID No that’s not right Paul.  What Kim did very helpfully I have to say is make his own OIA request and it asked this question, pretty much using my wording – how many of the 400 and Kim will correct me if I get it slightly wrong – how many of the 420 persons currently serving time for murder or manslaughter would have been prevented from doing so by the bill as currently drafted.  The answer came back zero.  Now the bill as currently drafted is not what ACT campaigned.  The bill as currently drafted has added an extra five year test, so not only do the strikes have to be a conviction for an offence, but also the person has to receive five years on each occasion – 77 to zero.

PAUL In the first two imprisonments the person must have been convicted for a violent crime and be sentenced for five years.

DAVID Under the law as drafted yes.

PAUL The Nats have added some offences – well let’s talk about that shortly, but some very serious people are bothered by the bill.  Chris Finlayson the Attorney General is quite clear, he says the bill as it’s drafted now violates the Bill of Rights.

DAVID No no no Paul, I’m sorry, he doesn’t, he said it may.

PAUL He says disproportionate sentence is made by the Bill of Rights.  Jonathan Krebs of the Law Society says it’s bad law, it might cause offenders to kill witnesses rather than trust….

DAVID That argument has been comprehensively refuted, we had Dr Jennifer Walsh, an American academic who has specialised in her entire post doctoral career, in researching the impact of three strikes laws.  That claim by Crebbs who incidentally I’m sorry to have to say on live television, hadn’t read the submission that he presented, it was quite obvious.  When I called him on papers he was quoting he hadn’t read them, and he admitted it in Select Committee.

PAUL But what is wrong with what Kim Workman is saying about use preventive detention, keep it nice and simple.

DAVID Here is what’s wrong, two things.  Firstly that judges don’t use it enough, and secondly under Kim’s proposal you have to wait till they kill someone.  The whole idea of the three strikes proposal is to prevent people, the 77, 78. 79, whatever, who are on a path to kill, preventing them getting to that point, that’s the whole idea.

PAUL Is that a good point?

KIM No it’s not a good point actually, because you don’t have to wait until you kill somebody, the schedule under preventive detention allows for a whole range of crimes that could be dealt with short of murder.  What I’m saying is that as a final measure we should add murder to that schedule.  Now I think the other issue is that Jennifer Walsh was here certainly and she was talking about that it wouldn’t have any impact, it would stop people from murdering, it’s a lot of nonsense actually, Jennifer Walsh is a lecturer in political science, in a Christian private conservative university with five thousand students.  The real experts out there will say look that’s nonsense.

DAVID Who are the real experts – Professor Pratt from Victoria University, who’s commenting on laws he knows nothing about?  Who are the real experts Kim?  I believe you’re a Christian yourself, so is because Dr Walsh is a Christian does that disqualify her from having a valid academic opinion?

KIM No I’m just making the point that she’s not on the ten most wanted list in terms of expert on the three strikes.

PAUL Okay let’s come back to the bill as it stands, so it’s gone to the Select Committee, the Nats have added a few crimes, I mean this is all kinds of you know violent crimes, crimes against children, so forth, the Nats have added bestiality and acid throwing.

DAVID They’ve also added some attempted sexual offences which – and I’ll choose my words very carefully particularly ….

PAUL You’ve used the word Machiavellian, you think the Nats are being …

DAVID No I didn’t say that either, I said I was puzzled and one of the explanations for that might be a Machiavellian attempt to kill it.  Now Justice Minister Power has assured me that that is not the case, incidentally he’s also told me and Justice Minister Power and I have I think a good and open relationship, he has told me that he was surprised himself that adding that five year extra test lowered the number from 77 to zero.  Now I take Minister Power at his word, I take him at his word when he says he will listen and has listened with an open mind to the evidence he saw before him.

PAUL So to you mind bestiality and acid throwing being included?  Why should you go away for 25 years for acid throwing, throwing it where?  Where – on to the footpath?

DAVID No it’s actually an old fashioned offence, apparently I’m told that in the 1920s women who were jilted for breach of promise which was 1920 speak for having ..

PAUL Thrown acid in someone’s eyes.

DAVID To disfigure them.

PAUL But that would be covered now wouldn’t it, I mean you could get into serious trouble now.  Is the bill gonna pass, is it going to pass, can you pass it, have you got support?

DAVID We don’t know.

PAUL The Attorney General worries that it’s against the Bill of Rights.

DAVID Look Paul I read the Attorney General’s report very very carefully, very carefully, and I spoke with Chris about it, and what he says in the report is quite different from how it was characterised in the media.  If you read the report in full as I have done more than once, it quotes our Supreme Court, that makes it very very plain by quoting with approve of Canadian decisions that say in our constitutional system parliament is sovereign.

PAUL Have you got the numbers?

DAVID We don’t know.  We have only just finished hearing submissions just last week, just last Thursday I think it was, where we are awaiting the report, the executive report back from the officials, and on the thousand and seventy submissions that were made, 70% of which were strongly in favour, and I guess then we’ll start to discuss whether we can come to an agreement.

PAUL Are you happy with the bill as it stands?

DAVID No, no I’m not.

PAUL Are you gonna vote for it then?  Will you vote for it?

DAVID Well we’ll have to see, it’s early days Paul, as I said …

PAUL We’re going nowhere fast aren’t we?

DAVID I’ve been very impressed with Justice Minister Power, you know and I’m taking him at his word, perhaps that makes me naïve.

PAUL Where do you put the bill, do you call it nonsense?

KIM Well I think it is nonsense, look we’re very good at locking people up in New Zealand, since Christmas we’ve put an extra 700 people into the prison system, that’s almost a 10% increase which is costing us $95,000 per person.  We’ve got a Drivers for Crime policy which National has been brave enough to pursue, that’s where the money should be going into crime causation, dealing with the real issues.  The concern for me Paul is that the research is absolutely clear, the more people you put into prison the longer you keep them there the more likely they are to reoffend when they leave.

PAUL I’ve got to leave it there, thank you for coming in.

Points of interest:

– Moore on Fiji: “It represents a huge diplomatic failure by New Zealand and Australia”

– Mark on 3 Strikes: “ACT have been done… This law is a crock”

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

Response to KIM WORKMAN & DAVID GARRETT interview

PAUL Good or bad law, the three strikes law.

RON Oh I think there’s a bigger story here, ACT have been done, quite clearly the adjustments that Simon Power’s made to the original ACT bill and created as a government bill, this five year benchmark that he’s put in there will effectively mean that this law never actually sees any effect at all.

MIKE I think it’s superficial show pony nonsense.  I’d go for it if it worked, there are deeper issues at work.  Looks it what people want to hear, playing on the grief.  Nobody’s batting for the other side on the law and order issue.  It’s a bit like anti smacking, the anti smacking law would never do what those who supported it said it would do, it would never do what those opposed to it …

PAUL But the Nats might feel obliged to support this because it is what you might call a red meat issue.

MIKE I think we ought to spend some time on Mental Health and our law and order problems, I just think we go for these wonderful superficial …

RON I agree with that – if you want to talk about dealing with the Mental Health Act yeah we can have that debate, if you want to talk about what Kim wants to talk about all the time rehabilitation and what inmates are actually doing when they’re incarcerated, let’s have that debate, this debate is about whether this law, which is supposed to be a three strikes and you’re out law, should pass or whether it will achieve what they said it would achieve.  The benchmark has been set so high with the five years, who gets five years – take for example …

PAUL Nobody has been sentence for serious violent crimes for three five year sentences.

RON A driver hits a victim drags them for two kilometres down the road gets four years three months, doesn’t qualify as a first strike, a doctor sexually assaults two young girls gets two years, it’s not a strike.  This law is a crock, ACT have been done and the question for ACT is are they gonna vote for it.

PAUL Well that’s right, that’s right he doesn’t like the law as it is, the Nats have also added a few crimes, bestiality, incest, robber, acid throwing, aggravated burglary, kidnapping, underage sex crimes.

RON What about P dealing, P is the thing that is ripping our communities apart and you do not get a strike for being a P cook or a PAUL dealer.  Absolutely ridiculous.

MIKE Well it’s not gonna do what they say it’s gonna do, it never was.

PAUL Will it pass?

RON Haven’t a clue.

MIKE ACT should show some guts and vote against it.

RON Absolutely agree.

PAUL What would be coming up this week being in parliament.  Parliament’s in session again what news are you gonna be looking for keeping an eye on this week?

RON Oh it’s interesting, there’s a rather obscure bill going through that deals with funding from parliamentary services for political parties, land transfer amendments bills are gonna go through and of course the Asean Australia Free Trade area bill that’s going through.

MIKE Around some serious stuff goes on we’ll be hearing about water coolers and what come up next week will be Sunday’s lunch, and Iran.

PAUL There could be a bit more of that couldn’t there?

Response to STEPHEN SMITH interview

PAUL So what does our panel make of the some of the things the Australian Foreign Minister Stephen Smith was saying, Mike Moore and Ron Mark.  You’d have to say politically he’s a master at saying very little, is Mr Smith.

MIKE He did that very well.

PAUL He did that very well didn’t he?

MIKE Well look Australia is a serious country, here’s a country when the Tsunami hit Indonesia put a billion dollars up, more than Japan, more than US, military expenditure now is equal to the Philippines, Indonesia, Singapore and Malaysia put together.  They believe they live in a dangerous neighbourhood, and we do, and here’s the New Zealand interview and the New Zealand public saying why should you spend this money because deep down we think the Australians stand between us and any mischief, and why do we have these idealistic views on foreign policy, which are good and I have them, because deep down we think there’s no cost to being wrong, and there is a cost to being wrong, and the question if of China.

PAUL Let’s get on to China shortly.  Let me ask you about the IMF, he indicated that Fiji, he understood that Fiji may already have applied to the IMF or institutional financial institutions for some assistance.  Now here’s what he said.

‘Guyon Espiner:  So is the economy close to tipping over is that what you’re saying?   Stephen Smith:  Well I think it’s in a very precarious situation, I think it’s in a very precarious situation.  Guyon:  And they will need to call on the likes of the IMF etc is that what you’re saying?  Stephen:  Well my understanding is that some of those discussions have already occurred, conversations between Fiji and the international financial institutions as they should.’

PAUL Now my understanding was really what Australia and New Zealand are doing is more or less bringing some economic pressure and other pressures on Fiji to bring the regime to its senses, to get the restoration of democracy.  If Fiji go round the back of us to the IMF, if the IMF helped them out that rather defeats our purpose doesn’t it?

RON Funny that.  I think New Zealand and Australia quite clearly recognise that the last thing they want to be doing is severely impacting upon the ordinary people of Fiji and it’s a very difficult line to be walking when you’re trying to get the regime to accept change and to adjust, but at the same time not wishing to severely harm the livelihoods of the ordinary Fijians.

PAUL Yeah but at the same time when you bring economic pressure, try and bring economic pressure to bring a regime to its senses, you are in fact trying to put economic pressure on the ordinary people aren’t you so they bring the pressure on the regime?

MIKE Is that possible though.  It’ll be the World Bank not the IMF.  This represents a huge diplomatic failure by New Zealand and by Australia over several decades.

PAUL What does?

MIKE What’s happened in Fiji.  What is foreign policy about?  Foreign policy is projecting and protecting your interests and promoting your values, and building up over many years those values and those interests.  We have failed.  Now having said that this is not going to be solved by beating our chest doing the Tarzan act and pretend – you know we criticise the Americans or the Aussies for being belligerent and then we beat our chest and lecture and poke our fingers in the face of military people who don’t particularly like that.  This has to be worked through, you need a game changer, I know some people who are working on a game changer now, and this will not be resolved by hairy chested pp.

RON The other problem we have is that we’ve made a lot about using United Nations pressure by taking Fijian peacekeepers out of the UN forces, and we actually know that that’s not possible.  One of the greatest difficulties the United Nations has is getting credible defence forces from credible countries that aren’t corrupt, that don’t go around raping the locals, that don’t become part of the warlord problem themselves, to actually accept some of these very dangerous missions around the world that they’re responsible for.  So it’s one thing for New Zealand and Australia to be saying we want the United Nations to drop Fiji from its list of preferred countries.

MIKE Was there three or four thousand Fijians in the British Army and doing a damn good job, in security forces all round the world.

PAUL Just go back to something you were saying, you know some people working on a game changer?

MIKE Yeah there has to be a game changer there and to allow people to move, keep their dignity and keep their faith.

PAUL But who is working on a game changer?

MIKE Oh anyhow, this is a different coup than others, this is the first time they’ve had a go at the courts, the Council of Chiefs, and even got a military guy in the Central Bank.  They are now putting military guys into all sorts of SOEs and sort of stuff, so it is very serious stuff, but here’s New Zealand, we beat our chest about this coup but we’re very silent about coups in Thailand and elsewhere and sometimes we act as though we’re Texans of the specific and we pretend.  A bit of dignity, self respect, and allowing people to move back to change the game a bit would be worthwhile.

PAUL Still, I mean they were talking, Guyon and Stephen Smith were speaking about whether the Fijian economy is in dire straits, whether it might be about to tip.  If it tipped would that get rid of Bainimarama?

MIKE If the people were hurt enough and got up, but you know what happens if 50 Indian lawyers decide to march on the High Court copying what happened in India or Pakistan and then somebody starts beating the thing is explosive.

PAUL The military build up the hundred billion dollars military spend.

RON Over 20 years.

PAUL What do you make of it?

RON The biggest and I think Guyon said the biggest since World War II, excuse me the military build up in World War II happened over three years, not 20 years.  There’s a bit of hype there on that part, I think Australia recognises the problems it has in Indonesia, you know seconds offshore by jet aircraft, it sees issues there, it’s been working for a decade now, more, with Indonesian military, with the Indonesian government to try and develop good relationships there, but Australia – New Zealand has the luxury of knowing that we have the great continent of Australia between us and other hotspots of Asia.

MIKE And we’re becoming Canadians they’re becoming Texans.

RON We can say what we like but Australia is dealing with what they see is their threat.

PAUL Australia’s a little bit worried about China he said we’ve asked the Chinese to be open about the intentions of their big growing military power, are they right to worry about China?

MIKE Of course you should think about these things, but you shouldn’t demonise or idealise the problems faced, don’t forget it’s only 40 years ago that more than a hundred thousand Chinese were slaughtered in Indonesia, maybe half a million, now China wants a blue navy capacity to protect its people in the region, this becomes very complex.  You spend in Defence and you spend in diplomacy with the hope that you’ll never have to use it.  The key thing here is India, it would be a very dangerous thing to have China – I’m a China fan you know – China as the dominant economic power in our region, a successful India, a successful Japan, a successful China, a successful Russia, a successful confident America, this is the balance that is useful in our pond.

PAUL So we need some balancing in our region I guess, is what you’re saying.  Now he also spoke about an ANZAC ready reaction force.

‘Stephen Smith:  We certainly share this ambition, there’s a great historic connection between Australia and New Zealand in military terms through our ANZACS.  We have the closer defence relations and we work very closely, but we would frankly like to see some modern day expression of the ANZAC iconic symbol.’

Which might well be a very seamless and quickly deployed ready reaction force, would it be hard to achieve?

RON Well I think we already do that, we do it on a case by case as needed basis, and I mean we go back to 1982 the deployment into Sinai, the setting up of the Maori National Force and Observers, that was an ANZAC Rotary wing, Australians and New Zealanders in the same unit, bought their own helicopters and went in and did the job.  Some are still there doing other work, but look at East Timor, that was really an ANZAC involvement there, and I guess the key, and this is where the White Paper will be very important, is ensuring that what we equip ourselves with and the way in which we structure our Defence Forces is compatible with – and helpful in the wider sense given what Australia has already …

MIKE Of course we should do it, but we also ought to concede that while we’ll nearly always have the same objectives, sometimes we can take different roads.  For example I was able to launch the peace talks in Bougainville in PNG because I was a Kiwi, we give them 12 million a year, the Aussies give them 450 million a year and guess who they like.  So there are ways in which we can do this if we’re real smart, and stretch our dollar and stretch our diplomacy.

Points of interest:

Helen Clark says democracy may not be suitable for everyone

Peter Davis says Helen Clark felt rejected after losing the 2008 election

The interview has been transcribed below.  The full length video interview with Helen Clark & Peter Davis, Guyon Espiner’s interview with Bill English and ‘The week that was’ with Paul Holmes, Therese Arseneau, Mike Moore and Fran O’Sullivan can be seen on tvnz.co.nz at:


PAUL Welcome to you Helen Clark and congratulations again on the job and Professor Peter Davis welcome to you as well.  Once again your wife’s up and off.

PETER DAVIS – Medical Sociologist That’s right, no this is part of the lifestyle that if you’re hitched to the powerful and famous this kind of thing happens to you.

PAUL Did you think things might calm down a bit this time though after the defeat last year?

PETER Not really because I mean Helen’s an extremely competent and capable person and she’s available so why not use those skills on the international stage and I think it’s a great natural next step for her.

PAUL You essentially are a political spouse aren’t you?

PETER I guess so.

PAUL I don’t mean to demean you in saying that at all but…

PETER No no no no, I don’t look at it that way but yeah I guess I am, but we’ve led our lives sort of a little bit in parallel you might say and Helen’s given me the space to do what I have to do in my job and vice versa.

PAUL Some people would say parallel universes.

PETER Well that’s true you know.

PAUL Sometimes – did you think about staying home at all, or did you automatically just want to move on to another career?

HELEN CLARK – Former Prime Minister

Well New Zealand’s a small country and once you’ve had the wonderful privilege I’ve had as being PM for nine years where else do you go, I’m far too young to retire, I’ve got a lot of energy, I like to do constructive things, I certainly didn’t want to be Leader of the Opposition again, been there done that, so rather than sit here and grumble best to get on and find something constructive to do.

PAUL So you head off to New York, Peter stays here with his work and of course academics are notoriously dedicated to their work as well, of course people probably underestimate that don’t they how dedicated he is to what he does?

HELEN Sure, sure and Peter leads a research team and that team is very dependent on his expertise and international reputation for all the grants that come in, so it’s just not an option for him to walk away and let people down, but we’ve had a sort of long range commuter relationship for many years, it’s just the distance has got a big bigger.

PAUL Do you phone each other every day when you’re away?

HELEN Phone or email, Peter is always on the email so I’m more likely to get him to answer that than a phone call sometimes.

PAUL And here you are off to New York for four years is there a possibility he may become totally independent of you?

HELEN Oh I don’t think so.

PAUL Why not, he’s got places he can go.

HELEN I’ll still be rung and asked where things are in the house.

PAUL Will you know?

HELEN I would think so.

PAUL Seriously as a couple again, as a married couple, is there a possibility your worlds will diverge so much that you’ll have nothing much to say to each other?

HELEN Oh definitely not, look we’ve been together since 1977, we have common interests, common hobbies, we do a lot of things together and Peter’s own job involves quite a bit of international travel with conferences, I’m sure we’re gonna be seeing each other a lot of times a year.

PAUL Catching up yeah.  Did you think of going to New York City?

PETER Actually it’s come a little bit suddenly to kind of imagine that, and people are starting to sell the idea to me.  Yesterday – we’ve got the back door there, we’ve got the lawn the birds, the bird bath the sun those sort of things, hey this is quite a nice life style but then people have been saying to me you know New York’s like a little village so I think well I’d like to be in a village as well, so yeah it’s definitely worth a try.

PAUL Well of course there’s wonderful bird life I know that you’re a bird watcher, there is wonderful bird life up there you could take Helen on weekends away to watch birds, though you told me once she doesn’t have the patience for it.

PETER No that’s right.

PAUL Anyway Helen Clark the United Nations Development Programme what kind of stuff does it do, give us a micro idea of what it might do,

HELEN Well some people have focused on the five billion US annual budget, I put that in context and say that can only be about 80% of what we Kiwis spend on our health system with 4.2 million of us, so it’s gotta be spent very strategically, they do have 135 country offices around the world and the resident reps is really the poor of the system, the UNDP rep in country, and there’s a very important co-ordinating role with other UN agencies, for example UN High Commissioner for Refugees isn’t everywhere, FAO isn’t everywhere, the Population Fund isn’t everywhere, so the UNDP often by default is the UN voice in the developing country.

PAUL Yeah it does some very nice little specific projects as a matter of fact I looked up a couple yesterday, for example they’ve got a programme going on at the moment, there are two elections in Indonesia this year, some sex workers in the slums of Jakarta are going to little day classes where they’re being taught about voting and what a vote represents in terms of the electoral process, there’s another fellow who lost his legs years ago he’s in a wheelchair but he learnt sign language and he goes round teaching deaf people in the slums – and this is all United Nations Development programmes, they seem to be very nice little projects.

HELEN That’s correct and they’ve made governance selections transition to democracy one of their key things and they do it very well, most elections particularly when you’re emerging from a different sort of government to the democracy they play a big part in.

PAUL Stop right there though, does democracy work for everyone?  Are you gonna have to think about that?

HELEN Well it works for us, works for a lot of countries but of course there are a lot of countries where there isn’t democracy, some develop fast, some don’t.

PAUL And they’ve tried it and they don’t like it they’re uncomfortable with it perhaps, they get rid of it and they carry on.

HELEN Some have never had it and I think sometimes it’s a bit unrealistic to think you can transplant the institutions and the history we’ve got that underlies our institutions just holus bolus into countries with a different history.

PAUL I wonder too if there’s a bit of wastage at the United Nations Development Programme, another little bit of  my research says that recently the UNDP hosted 600 business leaders in Paris, I quote incorporating – and the business leaders were lectured on incorporating sustainability principles and their corporate social responsibility, what does that mean?

HELEN Well if we don’t we’re going to be a pretty sad planet aren’t we because we know that if everyone was to live on exactly the pattern that we in developed countries live now we need not one planet we need two three four or more, so we have to move to a low carbon form of development and I’m sure that’s what it’s getting at.

PAUL I suppose so but I wonder if there’s not a disconnect because in the same statement I see the UNDP says the private sector has destroyed a lot of the world’s wealth.  I spose you could say really the private sector’s raised the money which the UNDP so happily throws about the place do you know what I mean is that an entitlement attitude there?

HELEN But look at what’s happened in the last couple of years in our world with the shenanigans on Wall Street and in the city there’s no doubt private sectors created a lot of wealth in the past but it’s actually destroyed quite a lot recently too.

PAUL That is a famous old bureaucracy a lot of career servers in there and time servers in the United Nations of course this is not really I spose disputed but the advantage you’ve got with your 8000 employees is that you’re going in there un-house-trained aren’t you, you’re going in nice and new.

HELEN I’m a fresh face from outside and I think that’s what the Secretary General is looking for, he’s looking for shake up generally, he finds bureaucracy frustrating and I’ve been brought into the leadership level to give a new direction I guess.

PAUL Is he good?

HELEN Well I have enormous respect for the Secretary General and he’s a new broom through the organisation.

PAUL Exciting times.  Looking back, what was the biggest mistake you made as Prime Minister, I’m sure you’re not gonna tell me your biggest mistake, can I change the question.  What is the thing that you did which if you looked back you might do differently?

HELEN No I wouldn’t even go there because I never look back, that’s part of my style, I know journalists often got fed up with me saying move on move on, but I do.  You know in politics there’s always an opposition employed to pick over the things you’ve done and why this why that why not the other way, well let them do it but I’m moving on to the next thing.

HELEN What is the best decision?

HELEN The best decision…

PAUL Oh we look back on that one.

HELEN Well, there’s so many things I’m proud of, I’m even reluctant to single anything out.

PAUL Judith Tizard, Helen, should Judith – I know that you are close – Judith Tizard should she try to go back into parliament or should she stand aside during this period during which Labour must rebuild?

HELEN Well we have a list process and that process has to have integrity, it means that if list members retire or move on into an electorate seat in the course of a parliament then the next person on the list comes in, Judith was selected through a process with integrity, she’s absolutely entitled to take up that seat if that’s what happens.

PAUL Do they want her?

HELEN Well who’s they?

PAUL Well the front four or five.

HELEN Look the process has to have integrity, gotta be remembered Judith put in 18 years, a lot of people loved her, some didn’t, her family has a very very proud history in the New Zealand Labour Party and I think some of the comment that’s been in the columns of the media has been pretty unfair.

PAUL Election night you said that you hoped that so much of what you’d done didn’t disappear on a bonfire of right wingers, do you think it has?

PAUL I think the bonfire’s started, I just hope that the flame can be put out before it goes too far.

PAUL But they’ve hardly been rabid, they’re not 91 are they, not 1991 National Party they’ve hardly been rabid.

HELEN We haven’t got to the budget yet.  What we have had is the total undoing of the whole sustainability agenda which was pretty substantial and put us into a better position going into climate change talks and so on but…

PAUL We do have the total unbundling though of the world economic financial system.

HELEN Yeah but offshore if you listen to President Obama, Gordon Brown the EU Leaders, everyone’s saying the new deal for the economy has to also be the new deal for the environment, that’s not happening here.

PAUL Mr Key who’s been Prime Minister now about five months he seems to be, I mean you were a very shrewd worker of the public pulse the public mood I think we could say, John Key appears to be tapping into it well, do you agree, is he showing skills there?

HELEN Well you know I’m moving beyond partisan politics I’m not even getting involved in that, but can I say for the record John Key was very very supportive of my candidacy for this position and having the support formally of the New Zealand government and Ministry of Foreign Affairs was incredibly helpful.

PAUL Yes and he was gracious in the parliament the other day.

HELEN Absolutely.

PAUL Not so the one MP who’s name we cannot remember who did not stand up.  Peter can I ask you this seriously, what was Helen like in the weeks or the days and the weeks after last year’s electoral loss?

PETER I think she felt rejected basically, because she felt she’d done a good job which I also believe and had put her best foot forward and had been frankly an almost incomparable Prime Minister and yet somehow the public had not seen that the same way.  So it took some time for her to frankly come to terms with that and if I was in that position I’d feel the same way I guess.

PAUL But she’s moved on?

PETER Yes yes, I think she’s shown true character frankly because in politics you realise that you’ve got ups and downs hero to zero etc and you have to come back all the time and she has, and I think she’s shown her true character in that respect.

PAUL Moved on, do we leave parliament wounded, or do we leave parliament satisfied, have we moved on?

HELEN Well I think ready to go because I don’t feel there’s anywhere else to go here for me and that’s why this time is pretty important.  Paul I looked at you know how a lot of former PMs had gone, some had dignified exits and some didn’t, I wanted mine to be dignified.

PAUL Well I’ve enjoyed interviewing you over the years, this may be the last interview ever.

HELEN Oh I doubt it.

PAUL Because you are – like the poor you would always be with us.  You are off to Broadway.  Thank you very much for coming in, Helen Clark and Peter Davis.


Q+A debuts on TV One

TV One’s new Sunday Morning politics show Q+A went to air for the first time this morning bringing Paul Holmes back into the TVNZ fray.

The show was fairly fast paced and covered a lot of ground and seemed to set itself up as a comprehensive wrap of all things political in New Zealand.

The show consisted of a couple of interviews, a panel discussion and ended with viewer txts and emails.

Guyon Espiner’s interview of Prime Mininster John Key was in his typical fishing for sound bites style while Paul Holmes gave Labour Party Presdident and EPMU National Secretary a grilling over the potential conflict of interest in holding the two positions.

The panel consisted of Therese Arseneau, Phil O’Reilly and Green Party co-leader Russell Norman, who, as the politician on the panel, spent most of his time pimping policy.

David farrar has some thoughts on the show here.

What did you think of the first episode and how does it compare with Agenda?