Shane Taurima interviews Prime Minister John Key
Nationals and Prime Minister John Keys long honeymoon with the electorate appears to be on the slide. Opposition parties are having a field day with the former ACC minister being forced to resign, the Privacy Commissioner investigating some leaked emails, and the current ACC minister threatening two Labour MPs and a radio station with legal action. Then theres the revolt by senior diplomats against government cuts. Whats going on inside National? Prime Minister John Keys just back from the Nuclear Security Summit in Korea to be faced with the job of trying to clean up this mess. He joins me now. Good morning, Prime Minister.
SHANE A big week?
JOHN Yeah. Well, you have some good ones and some bad ones. Thats the way it goes sometimes in politics. But were a government with a big agenda. I mean, we were elected to do some important things for NZ.
SHANE And the Free Trade Agreement with South Korea I daresay is part of that. How important is that for you?
JOHN I think very important. Theyre our fifth largest market. If you think about whats happening to our companies up there, particularly Fonterra and Zespri, theyre not only paying a lot of tariffs as they go into Korea. But the big issues is because Korea has signed both the US and European FTAs, whats now happening is were at a strategic disadvantage. I think those big companies are only really clinging on to those markets, and unless we ultimately complete the FTA, I think NZ companies will end up, you know, concentrating on other markets. Now, of course weve got a great entry to places like China, but you dont necessarily want to have all your eggs in one basket.
SHANE Is that the reason for the delay?
JOHN The reason for the delay was that they were under a lot of political pressure as they pass both the US and the European FTAs, particularly from their agricultural lobby. So the truth is they put everything on hold, including the FTA negotiations with Australia and others.
SHANE So what are we doing to speed that up?
JOHN Well, were having good discussions with them. I had very good discussions with the president. Theyve got their national elections taking place in about a week or so. But Im confident well get back on to serious negotiations with our negotiating team and theirs, and, look, over time I think well make progress. But even the Korean president himself pointed out it took six years for the US to sign their FTA with Korea.
SHANE Youve returned home to find yourself being dragged into the ACC saga. Lets clear up a few things. The Sovereign Insurance letter says youre a support person of Bronwyn Pullar. You say no. Were Bronwyn Pullar and Michelle Boag lying?
JOHN Well, look, Im not going to go and analyse who said what to who. I simply wasnt there and dont know. All I can tell you is what I do know, which is I met Bronwyn Pullar when I first came into the National Party. She was a member of the National Party. She used to come to functions. I have clear memories of her telling me about her dissatisfaction with ACC. I dont have memories of any dissatisfaction with Sovereign, but I certainly do with ACC. And thats been my involvement. I was asked under the Official Information Act what contact Id had with her in terms of correspondence, I think, recently, so my office when through all of our files. Couldnt find any correspondence. I dont have her number in my phonebook. To the best of my memory Ive never rung her. Certainly never texted her. Dont have her numbers. So the point is- My only point is, look, I go to, actually, lots of things where people put my name into the frame, where they say they know me or they talk to me or Im associated with them. Thats just a fact of being prime minister.
SHANE And I take the point about name-dropping.
JOHN Yeah, it happens.
SHANE I accept that. But were talking about Michelle Boag who, at the time, was the National Party president. She clearly used your name to put pressure on Sovereign Insurance. Are you comfortable with that?
JOHN All I can tell you is what I know and what I dont know. I cant talk about others motivations or what they did or didnt do. Im not party to those conversations.
SHANE But are you comfortable with that?
JOHN Well, I can tell you absolutely categorically that Im not involved and have not been involved in any support or advisory arrangement with Bronwyn Pullar or Michelle Boag.
SHANE Fran OSullivan wrote in The Herald yesterday that, and I quote, Anyone in the commercial world would regard the provision of such a list as an undue attempt to exert influence. Shes right, isnt she?
JOHN Well, again, its not for me to critique the motivations of others. Its simply for me to explain my position. When Im not party to something, then I cant speak and shouldnt overly speculate on why others might do things. Im sure everybodys got their own view on what was either said or what was gained. All I can tell you is its not unusual for people to use my name. They do use it. They dont use it with my authority. But I cant control that.
SHANE But are you happy with that?
JOHN Of course Im not happy with that, because the implication- Some people who watch Close Up or Television ONE News will have taken the view that I am somehow associated when Im not. But I cant, unfortunately, stop that, because I dont control every conversation that every New Zealander has with either other New Zealanders or organisations.
SHANE Michelle Boag - do you think shes brought the National Party into disrepute?
JOHN Well, again, shes advocating, obviously, for Bronwyn Pullar, and what youve gotta say is this whole saga has been a long-standing saga from what we can see. I mean, the great irony of all this is that our political opponents would want to argue that somehow Bronwyn Pullars had special treatment from ACC because of her association with the National Party. Well, in fact, the very reason shes a complainant, the very reason shes completely dissatisfied with ACC, tells you thats not the case. But again, you know, thats for others-
SHANE But the concern, though, Prime Minister, is that your party gave her assistance no one else could get.
JOHN Well, we would reject that. I mean, I advocate for people all the time. Theyre on my files if you want to go through them in my parliamentary or my electorate office. Youll find numerous examples of me advocating for my constituents that have come in or people that have had real concerns, whether its with Immigration or ACC or Inland Revenue. I take up lots of cases for constituents.
SHANE So does that mean that anyone could get two MPs to arrange meetings and advocate for them, two former party presidents to help them, the ear of several other MPs, and be able to email the board of ACC?
JOHN Well, look, at the end of the day, Im not going to go through every individual circumstance, but what I can say is this has been a very - clearly, by the documented evidence that youve seen, given the accident took place in 2002, a decade of dissatisfaction from Bronwyn Pullar with ACC, and clearly, from ACCs perspective, a very strong belief that theyve acted in absolutely the right way. Ive had constituents who have had long-standing battles with ACC, so it does happen that you get that situation.
SHANE So youre satisfied with how Michelle Boag has conducted herself with Bronwyn Pullar?
JOHN Well, its not for me to critique that. Im not involved in that relationship. Im not engaged with that and Im not part of that. So youre asking me a question I cant possibly answer because I simply dont know.
SHANE Are you having second thoughts about holding a full enquiry?
JOHN No. I mean, the question would be, an inquiry into what? I mean, quite clearly, the former minister, Nick Smith, put himself in the position of a perceived conflict of interest and he did, in my view, absolutely the right and appropriate thing to resign.
SHANE I put it to you, though, into whether members of your party did a series of favours for Bronwyn Pullar, or indeed for any other National Party ally. Thats what Labour and the Greens want.
JOHN Well, I go back to my earlier point. If that was the case, then Bronwyn Pullar wouldnt be a complainant. Her issues would have been resolved. Bronwyn Pullar is a complainant because she believes she hasnt been fairly treated by ACC. So I fully accept that Nick Smith put himself in a position of perceived conflict of interest. Thats why I accepted his resignation. Ive gotta say Im very saddened by that, cos I personally think he was an outstanding minister. But the facts of life are that he put himself in a very difficult position. Outside of that, I havent seen anything that would indicate that shes had anything thats unusual.
SHANE Talking about Nick Smith, what advice are you giving your ministers about how to manage a conflict of interest?
JOHN Well, there are clear guidelines to be followed. I mean, the Cabinet Manual gives those guidelines. The Cabinet Office works very closely with ministers.
SHANE But beyond that, though, beyond what the Cabinet Manual says, Im sure youve given them advice over the last few days.
JOHN Well, the Cabinet Manual reflects the reality that its quite possible for a minister to be in the position where they are in the perceived conflict of interest. NZs a small place. You know, people are married, they have brothers and sisters, they have family members-
SHANE So thats OK?
JOHN No, of course its not OK. The issue is to manage the conflict of interest. So there are lots of ways you can absolve yourself from- or refrain from putting yourself in a perceived conflict of interest. You excuse yourself from the paperwork. Ministers follow a very clear set of guidelines in that regard. I have very clear potential conflicts of interest. I manage those very carefully. I dont get paperwork on certain things.
SHANE If thats not OK, is it OK, then, for two ministers to be helping out a former party president?
JOHN In what way?
SHANE With the whole Michelle Boag saga.
JOHN What did they do?
SHANE They helped Bronwyn Pullar.
JOHN Well, people can go and advocate for a member of the public. I mean, thats just the way the system works. We can choose not to have that if we want. But in fact, actually, there are 4.5 million New Zealanders, and a significant slice of them interact with ACC at any one given time. I think there are about a million claims a year, and there are at least a section of them who feel they are not properly treated. They go to their local member of parliament and their local member of parliament advocates for them. Theres nothing wrong with that. In Bronwyn Pullars case, she clearly felt she wasnt being treated fairly. Whether she was or not is a matter for others to determine. I go back to my earlier point. If she was somehow being treated well, in her mind, she wouldnt be on the front page of the paper, cos the facts of life are the issue would have been dealt with.
SHANE Sorry to speak over you. The ACC minister has taken legal action against two Labour MPs and a radio station. You backed Judith Collins on Thursday. Do you still back her today?
JOHN Oh, absolutely. Judith Collins is a person of high integrity. She feels her reputation has been impugned and shes taken action accordingly.
SHANE Whos paying for it?
JOHN Well, thats yet to be determined, but she would be within her rights at least to ask for support. The Cabinet Manual, again, makes that quite clear.
SHANE So you would support the Crown, the taxpayer paying for it?
JOHN Well, thats the decision that the Cabinet needs to make, and it hasnt made that decision yet. Im simply making the point that the Cabinet Manual spells out.
SHANE What about your own opinion, then. Do you think taxpayers should be footing the bill?
JOHN Well, thats a matter that the Cabinet is going to have to consider, and so-
SHANE Your personal opinion?
JOHN Well, lets let the Cabinet have that discussion. But at the end of the day, shes acting in her capacity as a minister of the Crown, and her reputation-
SHANE Why does she need to do this, though? Thats the question, I suppose. Why does she need to do this? Cant you just take her aside and have a chat with her?
JOHN Well, we could also take those who she is claiming to have defamed her aside and say, Why didnt you say the truth? Why do you make things up? I mean, its all very well having a go at Judith Collins, but two - one of them in particular - very senior members of the NZ parliament in the view of Judith Collins defamed her.
SHANE Why not wait for the Privacy Commissioners enquiry?
JOHN Cos the Defamation Act requires you within five working days to lay out your case.
SHANE Do you not think it will be properly investigated by the Privacy Commissioner?
JOHN Oh, the Privacy Commissioners got good work to do, and we want to get to the bottom of that. But the point from the minister is that yes, she received information - quite appropriately, actually; thats the whole point here - on-sent that information to the chief executive and chairman of ACC. She followed absolutely her responsibilities there to do that as the minister. And so the point is the Privacy Commissioner and the police can go and have a look at that paper trail and will. But her point is that two members of parliament have gone out and said shes responsible when she has categorically said on the record that she is not.
SHANE Who do you think is behind these leaks?
JOHN Dont know.
SHANE Do you have an opinion on what their modus operandi may be?
JOHN Well, theres clearly a complaint here between Bronwyn Pullar, with Michelle Boag supporting her, and ACC. And one side of that argument believes very strongly that they are not getting a fair deal, and the corporation feels theyve done absolutely what is required.
SHANE Let me put it to you this way - is this the start of the battle to replace you as leader? Collins versus Joyce?
JOHN (LAUGHS) No. What this is is a complaint that Bronwyn Pullars had for well over a decade. But, look, let me take this point, cos we could spend the whole morning, Shane, talking about this-
SHANE Can I just-
JOHN No, let me make this point. We can spend all morning talking about this, but in the end, sometimes you just get a complainant whos not happy with the corporation, who carries on for a very long time. Thats whats happened here. Unfortunately, Nick Smiths been collateral damage for that, and thats what it is now. But were a government that came in, as I said earlier on, to do some serious things, and they are get those books back into order, get public services going properly in the country, make sure that we can-
SHANE And we accept that, Prime Minister. What Id like to put to you-
JOHN Well, what Id like to put to you-
SHANE Going back to back to my original question, please, what is happening inside National? Because this is clearly an attack coming from within. Its not coming from Labour. Its not coming from the Greens, or anyone else. Its coming from within National.
JOHN Well, I dont think you can actually make that claim. Theres nothing in it for National to do this.
SHANE And hence the question being posed to you. Who do you think is behind the leaks?
JOHN Well, wouldnt have a clue, but the point is this is a dispute between Bronwyn Pullar and ACC, and I go back to my earlier point that at the end of the day not that many people care about that dispute. Bronwyn Pullar clearly very strongly does, and the corporation very strongly does, and New Zealanders want to make sure that theres integrity in ACC, and I give them my commitment that on everything Ive seen there is. But beyond that, actually what they care about is is the country getting back into surplus, are we creating jobs and are we going forward.
SHANE Can we move on to MFAT please? I dont want to debate the changes around the policy. But are you happy with the way in which the minister, Murray McCully, has handled the reforms?
JOHN Absolutely. Hes done his job. Look, lets take a step back. MFAT is part of a wider government network. That government network basically is in a position where were asking it to save money, and, in the case of MFAT, modernise, and whenever you have change, change is always difficult, and its in fact more difficult when youre doing it with the public service, because there are big component parts that you dont directly run as the minister. Thats the separation between the state sector and effectively-
SHANE Because, of course, the criticism of Murry McCully is that hes micro-managing the reforms. Hes doing the job of the CEO.
JOHN Thats the criticism of his political opponents, but actually thats not correct. I mean, the Chief Executive has set the direction that he wants to take the ministry. Of course, the minister as the purchasing agent, if you like, makes it clear the sorts of things he wants. Yes, John Allens set out an aggressive agenda of potential change, and not all of its going to be accepted. Youve had the Heads of Mission now coming back to New Zealand to sit down and talk to the Chief Executive. But in the end, that organisation is going to change. Im sure therell be some things thatll be rejected and some thatll be accepted. MFAT people themselves tell me regularly that there needs to be change, and we need to basically save money. Now, were gonna have a budget thats coming up in May. Last years budget was a zero budget. What Id say to NZers tonight is that there is every probability that this years budget in 2012 will either be zero or very close to a zero budget, and thats because the governments absolutely committed to going back into surplus by 2014/2015.
SHANE So, let us confirm that, cos thats a fairly significant announcement. Youre saying that there will be no or very little new spending. A zero budget this year.
JOHN Thats my expectation. Itll be either a zero budget or very close to zero. What that means is we will spend more money in health and education, but all other ministries will be expected to save money. Why are we doing that? Well, because we need to get NZ back into surplus so were not racking up more debts and more defecit so that future generations arent continuing to pay for debts that we would be racking up today. So in the four years we will have delivered budgets, we will have spent about $2 billion worth of new money over that four-year period, effectively, of new expenditure through the budget process. Michael Cullen and Helen Clark will have spent $12 billion at the same time. Thats $10 billion of taxes youre not having-
SHANE You mentioned a future prime minister, and I do want to put this question to you, about you seeing out the rest of this term.
SHANE What about the next election?
JOHN (CHUCKLES) Oh, look, OK, well address that when we come to it, but its my expectation I will be.
SHANE Absolutely. That you very much for your time and for joining us this morning.
JOHN OK, thanks so much indeed.