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John Key -
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JOHN KEY interviewed by GUYON ESPINER
GUYON Thank you Prime Minister for joining us this morning, we really appreciate your time. When you spoke briefly to the Conference yesterday, you said that you were elected with a fairly simple mission and that was to make us wealthier and more safer, so I want to test some of that progress 20 months into your premiership this morning. Let's start with the economy. Growth has stalled a little bit, 2000 more people applied to be on a benefit last month, has the recovery stalled?
JOHN KEY - Prime Minister No I don't think so. If you have a look at what the Reserve Bank and the Treasury are predicting, growth between 3 and 4% for this year and for the next few years, so they're predicting a recovery in growth. The IMF just recently upgraded global growth numbers, so they look strong, so I think internationally it's looking okay. I mean we can't rule out a double dip recession in Europe, but I tend to think personally we're going to get through that without that.
GUYON So the unemployment that we saw last month, those numbers starting to climb again, was that an aberration or is that going to be part of a trend?
JOHN Well there's two things to look at in unemployment. One is the household labour force survey and that's the one that saw unemployment fall from 7.1% to 6%. The other is numbers on a benefit, now they rose from 60 to 62,000. They're off their peak which was around about 80,000. Its worth putting in perspective. There are a couple of million jobs in the economy, those on a benefit total 333,000 so a couple of thousand it's material, but it's not overly significant.
GUYON Okay but you told us in March last year that we would grow aggressively out of the recession, that was your prediction, you were wrong.
JOHN Well I don't think you actually can say I was wrong at this point.
GUYON But we're not growing aggressively are we?
JOHN Well for a start we're probably not going to see the massive upswing that we had say after 1999 when we had 6% growth. I wouldn't want to predict exactly what it's going to be, but for instance a lot of people 12 months ago thought at this period we would still be in negative territory, because we'd be doing much worse. So one argument you could create is look at 3 or 3�% growth is much more aggressive than people thought. But look in the end the issue is, one about how fast we grow, but also how fast we grow relative to other countries, and I think we are doing everything we can to feasibly lift that growth rate and lift opportunities and create jobs.
GUYON And one of the things you're trying to do to create jobs is extend this 90 day trial period for workers. The study that came out last night showed that 22% of new workers on that trial are sacked within that first three months. Do you worry about the confidence of those often young people in their first job sacked in their trial period. Does that worry you?
JOHN Well the first thing I think you have to say is what's the policy about, and the argument here is it's about creating jobs for people that may not get jobs, so there's a lot of people in my view would be locked out of the labour markets without this opportunity, and they're typically young people, people with maybe international qualifications, it might be returning women to the workforce, certainly migrants fit within that category. So firstly it's about opportunity. There inevitably will be some people that will lose their job or will choose to quit.
GUYON Does that surprise you though? 22% were dismissed mainly for performance reasons. Are nearly one in four, one in five young New Zealanders incompetent at their jobs?
JOHN Yes so I think the first thing to say here is it was very small sample, it was 42 people. Now if you look at the employers and manufacturers, they've looked at a wider sample.
GUYON Well they spoke to nearly a thousand businesses.
JOHN Yeah but you looking in the employers and manufacturers on a wider sample, it was 90% of people keeping their job, and when it's applied right across the workforce, remembering that even with the 90 day trial period for small companies, only one in two employees chose to take it up, cos they don't have to take it up, they can contract it out.
GUYON But is that a real choice, I mean if you've got two candidates for a job and one's prepared to go on the trial period and one's not then who's the employer going to take?
JOHN Well one level might argue about your confidence that you can hold down the job, but as I said the other day you know my experience of meeting people that are unemployed is they want an opportunity, they want to be given a go. I'm not sure that they're gonna sit there and always worry about the trial period, I mean if they can't make it in 90 days then maybe they're not fit for that job, maybe they're fit for another job and they may choose to leave of their own volition, or it may not work out. But very few employers in my view are going to go and abuse the scheme, and the reason for that is the first 90 days is not the most productive days of an employee, it's usually much later on, they need some time to bed into the system. What we're doing is actually quite mild compared to international countries that we compare ourselves with, the UK, the United States, Australia for instance, all have very different systems. Look one interesting thing was when we proposed this for small companies, 20 employees or less, the unions rolled out all the press releases they're rolling out today. They said they would name and shame those employers that took advantage of the system. To the best of my knowledge they haven't named and shamed anybody.
GUYON Can I move on to another economic idea that National had promoted and that is, increasing mining on the Crown land. Now we've had the review of Schedule 4 which protects that conservation land. I'll take you back to the opening of parliament February 9 this year and quote you. It is my expectation that the government will act on at least some of these recommendations, and make significant changes to Schedule 4, because new mining on Crown land as the potential to increase economic growth and create jobs. Are you still going to make significant change to Schedule 4?
JOHN Well I can't answer that question today, because the mining paper is actually going to Cabinet tomorrow, so Cabinet haven't had an opportunity to discuss that. I think if you look at it now in hindsight, even if we were to adopt everything that we went out there and took to the public for submission, there were 7000 hectares, as opposed to the 467,000 hectares that the officials put up to reclassify out of Schedule 4. So I don't think you could actually claim 7000 is significant.
GUYON Well you say, your words Prime Minister.
JOHN I know.
GUYON So you're wrong?
JOHN Well what I'm saying is at the time when we looked at that we were considering much broader, well potentially a broader unlocking of Schedule 4.
GUYON So will it be 7000 hectares?
JOHN Well you'll have to wait and see, I'm not going to make that announcement today. Cabinet needs to consider that issue.
GUYON But you have been giving fairly strong signals haven't you that you're going to retreat significantly from there. Is it going to be as much as 7000 hectares? I'm not asking for the policy prescription, but can you give us a message as the leader of the country. Is it going to be 7000?
JOHN Well what I can give you a message on, is I think mining and exploration presents real opportunities for New Zealand. I think they've gotta be don't the right way, as I've said they've gotta create jobs, they've gotta retain value in New Zealand, and they've gotta be done environmentally sustainably, but I think it can provide opportunities. I've always believed Schedule 4 is actually quite a small part of that, compared to oil and gas exploration.
GUYON Yes, small part but sensitive though aren't they? Are you going to mine on Great Barrier? Are you going to take the 705 hectares out of Great Barrier?
JOHN Well again, Cabinet needs to consider that, and it's going to do that tomorrow.
GUYON What do you think?
JOHN Well it's really inappropriate for me to sort of prejudge the discussion we're going to have in Cabinet tomorrow. What I can say to you is, we are a government that listens, so we've seen those who've put in submissions that are opposed.
GUYON And the message was don't do it, and you've listened to that?
JOHN Yeah the message was opposed by a decent number of people, it's also supported by quite a lot of people, even on the island themselves. I think 3 to 1 they were opposed, but even some of those that were opposed said we recognise the benefits of this. Now my point to you would be, why would we be interested in minding? We're interested in growing the economy, and we're interested in jobs. Now we've gotta do that in a way that preserves our brand image. So yes Schedule 4 is part of the issue, but the much broader issue is those other areas, which present in my view a real step change to New Zealand. Schedule 4 would do if we're prepared to tackle very large areas, and we've already made it quite clear we're not prepared to tackle large areas.
GUYON So this isn't a big part of the economic equation, the new mining on conservation land?
JOHN Well not on Schedule 4. I mean conservation land is much wider than Schedule 4, and the previous government issues around about 88 permits on conservation land. So I think there are opportunities there, but the sensitive bit is Schedule 4, that's going to Cabinet tomorrow.
GUYON On another contentious issue which is asset sales, you've ruled them out this term?
JOHN Yeah.
GUYON You've said you'll have a look in the future, but you've ruled out the sale of KiwiBank, and you seem to really have lost your appetite for partial privatisation. Has National given up on privatisation?
JOHN No, I don't think you would say that we've lost our appetite. I think what you'd say is that we had a policy that was fit for three years, and for good reason. I never thought it was the number one thing we needed to embark on to again deliver real growth and change in our economy. It's not that it's not potentially part of the mix, but it wasn't the most important thing.
GUYON So do you think you will partially privatise some assets in your tenure as Prime Minister?
JOHN Well what I would say to you is that what is really important ...
GUYON I'm talking privatisation - do you think in your tenure as Prime Minister that you will preside over the partial float of any assets?
JOHN Well we might do. I can't rule that out.
GUYON Do you want to do that?
JOHN Well I'm not opposed to that, as I've said before I'm not ideologically opposed, and there might be some benefits in certain areas.
GUYON Which ones?
JOHN Well again, there's probably not much point on me speculating on that until we go through a process. What I can tell you is we'll ....
GUYON Are there some specific types of assets though Prime Minister? I'm not asking for a list. Are there types of assets. We know the Air New Zealand model 25% private ownership and majority Crown ownership works quite well.
JOHN It does work well.
GUYON Works quite well for an airline. What sort of businesses? Energy companies? What sort of businesses would it work well with?
JOHN Well I think anyone that looks at the ownership of Crown assets in terms of the SOEs recognises very quickly, there are only a small group that actually could be subject to a partial float, and that's because of their size and scale. I mean learning media and those things are tiny, you couldn't and wouldn't bother doing a float on those sorts of things for a partial float.
GUYON So which ones? Energy companies presumably?
JOHN Well you can do the maths as simple as I can but there's three or four of them that are big enough to consider. Now I'm not saying we would or wouldn't do that, as I've always said. We need to go away and kick the tyres on that, but we've taken KiwiBank off the table. If we do others and decide that they are fit for a partial float, then we'll campaign on that in 2011.
GUYON Okay, let's move to the other aspect of what you I spose could say is your mission statement, and that was to make New Zealand a safer place. Violent crime went up 9.2% last year - you're failing.
JOHN Well I don't agree with that actually. You've gotta be very careful how you look at those statistics. For a start off, one of the reasons why the crime stats sometimes rise, is because the Police are actually apprehending more people, they're actually engaged in more activity. Now you know when you look at it as a percentage increase...
GUYON Well what measure should we look at? In the public when we're trying to determine whether our streets are safer?
JOHN Well one of the things that for instance gets logged in there, is things like domestic violent, where the Police have played a much more proactive role. They've gone into a lot more homes, they've responded much more quickly. The community has spoken out about those things.
GUYON That's exactly what Helen Clark told us when the crime statistics went up.
JOHN Well that's the reality of it. Now I've asked the Minister of Police actually to go away and have a look at that data, and to come back and I think to present the public a much clearer picture. But what is true, is we're a country that has too many homicides, I'm the first prepared to accept that.
GUYON About 25% in your first year in office.
JOHN There are too many of them. But the important point here is it comes off numerically quite a low number. So there are years when you can look at it and say there've been 100 people or 50 people or whatever it is killed in New Zealand, the next year might be less. It's a little bit like the road toll, sometimes it's larger and sometimes it's smaller. So the percentage increase one year on year might be coming off a very low base or a high base. What you need to look at is the trend over time. All I can say is we've passed 18 bills into law.
GUYON And have they made any impact? The Police said that it had a negligible impact.
JOHN Well I don't accept that actually. We've put 255 extra Police on the street in Counties Manukau alone, the results from that have been extremely good, we've been very happy with that.
GUYON New Zealand's a safer place under National?
JOHN Counties Manukau is definitely a safer place, and it's demonstrated both in the murders that have taken place there. It's demonstrated in the bag snatching there. It's demonstrated in quite a number of statistics in Counties Manukau. Across New Zealand we're adding 600 extra Police, and we have done anything from tazers right through to making sure that we'll add DNA testing. Yesterday at the Conference I talked about the asset recovery. We've now got 50 million dollars of assets that came from criminals that we've got tied up and that will potentially be used for the right reasons, not the wrong reasons.
GUYON Yeah but tougher policies, longer sentences, the jails are full of eight and a half thousand people. Is there a time that you're gonna have to rethink this strategy towards crime and punishment?
GUYON Well I think you raise a really interesting point there. So what are the options and levers available to a government? So number one is, you pass some laws I think to send a strong message, and we've done that, whether it's three strikes, or whether it's saying look we're going to cancel parole in certain cases, or whether we're saying you have to work when you're in prison. All of those things we can do that, to act as a deterrent or to take hardened criminals out of circulation. But the much bigger issue is why are people coming into the web of crime, why are they on that conveyor belt? And I think that drivers of crime is a much more complex issue, and I think you can take it back to certain areas where there's been a breakdown in the family unit, a breakdown in certain parts of society, where you've got a lot of young people exposed to drugs, where you've got a home life that's not giving them their support. Now I'm not saying in day one any government can fix that. I'm not saying my government can, but I think over time we can do things that will make a substantial difference.
GUYON Just in the final few minutes that we have got I want to talk briefly about your political arrangements and relationships with the ACT Party, the Maori Party, and United Future. Will National stand a strong candidate and try to win the seat of Epsom that is currently held by Rodney Hide?
JOHN We haven't made that decision yet. That's something we do actively have to go....
GUYON You haven't made a decision whether you're going to try and win Epsom?
JOHN No. What we are going to do for sure is campaign for the maximum party vote.
GUYON It sounds like you're going to stand aside in Epsom?
JOHN Well we haven't made that decision yet.
GUYON Why wouldn't you? I mean you try to win every other seat don't you?
JOHN Yeah, but what we try and win is the maximum party vote.
GUYON Have you done a deal with Rodney Hide in Epsom?
JOHN Not at this stage.
GUYON You're open to a deal though?
JOHN Well all I'd say to you is, we work in an MMP environment. The MMP environment first and foremost says, get the maximum party votes you can.
GUYON You're telling people in Epsom to vote for Rodney Hide.
JOHN I'm not telling them anything yet.
GUYON That's what you're telling them this morning essentially?
JOHN No, what I'm telling you is...
GUYON Well you're telling every other National voter to vote for their candidate in their seat, but in Epsom?
JOHN Well actually I'm telling every New Zealander, or I'm asking every New Zealander probably a better way to phrase it - I'm asking every New Zealander to give their party vote to National in the next general election. What I'm saying to you is, whether we run a very strong candidate in Epsom, is something we haven't determined yet. But what I can tell you is, in the last 20 months I think we've demonstrated that we can work with the Maori Party, the ACT Party and the United Future Party.
GUYON Okay, it sounds like you're open to a deal though in Epsom. Ohariu Belmont with Peter Dunne, are you going to try to win the Ohariu Belmont seat?
JOHN Well those decisions have been made yet. We will have to confront those decisions and make that quite clear what we're doing.
GUYON You will also have to confront the question possibly of Winston Peters. Will you do what you did in 2008 and rule out this morning working with Winston Peters?
JOHN Well we may do, but the point I would say is he has to rule himself in, and he hasn't done that yet. Whether he turns up in 2011, his team certainly doesn't look like it's going to, whether he does is something we'll cross. When that bridge comes along, if it comes along we'll make that decision, but that's a 2011 decision, not a 2010 one.
GUYON Another 2011 question, and my final one. If you win the 2011 election, can you guarantee that you will see out the full term as Prime Minister?
JOHN Well I don't think any Prime Minister can guarantee that, simply because you're there at the whim of caucus which ultimately determine whether you are the leader. But what I can say is I thoroughly enjoy the job, I'm doing it to the best of my ability, I'm going to ask New Zealanders in 2011 to support me.
GUYON You can guarantee that you'd see the term out with caucus support?
JOHN Oh I'd like to think so yes, I mean I want to be there for another three years, that's not an issue of contention, but I just can't be sure because no Prime Minister can be sure, as Kevin Rudd wasn't sure a few weeks ago.
GUYON Good place to leave it. Thank you very much Prime Minister for joining us, we appreciate it.
