John Key pt.2

It’s sometimes said that the holy grail for any politician is to be (at least perceived as) economically conservative - but socially liberal; so given his modest upbringing and subsequent rise (by New Zealand standards) to fairly spectacular wealth as an international investment banker, John Key ostensibly has all the cards laid out in his favour. His resolutely middle-class upbringing appears to be holding him to the sort of pragmatic centrist social policy ground that Don Brash ill-advisedly rejected, and in Key’s response to Michael Cullen’s last budget he certainly enjoyed himself immensely - as a quick persual of the video will reveal.

If you check out the National Party’s current Wikipedia entry, you’ll find that the party currently advocates “reducing taxes, reducing social welfare payments, promoting free trade, restoring or maintaining New Zealand's traditional (Western) defence and security alliances and promoting one standard of citizenship for all New Zealanders ("One law for all"). Key has also made a point of trying to change the current perception that National is the party of land owners and employers, with his focus on poverty and ‘fixing the broken rungs at the bottom of the ladder”.

Historically the party was formed out of a merger between the “United Party” (no, not that one) which had business and middle class support in the cities, and the “Reform Party” which had overwhelmingly rural, famer support, in May 1936. However, over the years the party has retained a reputation for showing more favour to farmers and business owners than Labour – but current demographics seem to have dictated Key’s reaching back out to the (lower and) middle classes that Labour has courted so effectively under Helen Clark. That said, the party's policy documents contain commitments to doubling New Zealand's economic growth, and they also argue for giving welfare payments only to "those in genuine need" and to "speedy, full and final settlements to historic Waitangi Treaty claims." Truly an ambitious attempt to be all things to all people – but do they have the policy to make it work?

Key is pretty clear that under a National government, infrastructure investment would be a high priority, with varying degrees of public / private ownership structures the preferred method of doing this. Here in our second installment, John holds forth on broadband and Telecom while neatly sidestepping issues of how his PR firm manages his image…

Can you tell us about your thoughts on broadband in New Zealand? Are you familiar with how the Japanese and Korean governments have used a mixture of incentives to encourage private companies to service small remote areas where the government matches private contributions. They now have speeds of up to 100Mb per second.

Well I think the first thing is, I think broadband is critical and the internet is critical to New Zealand’s economic success, so you can see that for the first time in New Zealand’s history, the tyranny of distance is not going to be an issue. Not withstanding that we’re not getting this to work currently at the moment. This is kind of the future I think of where we go in terms of business and politics and communication in general, and this is impossible unless you have broadband. I think secondly you’re absolutely right, I don’t know what the numbers of households are that are not economic to roll out broadband to currently, but my guess is it’s probably not a long way from half the current applications.

It’s probably similar to back in the 20’s or 30’s when they were establishing the National Radio Network.

Yeah that’s my guess. So we’ve seen a subsidy of sorts that happened through Project Probe where the government did that across the country to 26 locations to roll out towards schools and government agencies, to get a broadband connection out there. That’s certainly made some difference. So I think there’s no question we want to get broadband and roll it out across the country at speeds that can really deliver performance. There are a number of options for achieving that, and certainly one of them is… probably we’re a little reluctant about what platform that they go on because in New Zealand’s perspective, we think it could be either fibre, copper, or ultimately wireless. So to a certain degree we probably favour some system of encouraging the private sector to do that, then necessarily co-investment in the network, but we’re working our way through that at the moment. Australia is certainly looking at a co-investment model.

And your policy in regards to the local loop unbundling and separation of Telecom.

We support local unbundling and the separation of Telecom. My view is that I’m not as negative as they are on operational separation and they’re really arguing that structural separation is the only thing that will work. They know the numbers better than I do, and my view’s been for a long period of time that they were pretty happy with the system that we’ve actually proposed, which is a tripartite model: a wholesale company, a retail company and a network company. But what ever, we will need to look at it. If structural separation is the right answer with a net-code type model then yeah; look maybe that’s the way forward. But whatever we do know is that, I think unless we can get competition into that market then a big monopolistic incumbent ultimately slows competition and we don’t like that.

I guess a large part of that is because of Telecom’s lobbying powers.

Well there have been a lot of different reasons. I mean they’ve been creating the case that they had unfettered property rights because they bought that, and to a certain degree that’s true, there is no question that the price that the shareholders of Telecom paid was significantly greater than if they had sold it even on an incumbent basis, or without the lines network. But I think it is also true to say that, when we made that sale, as a lot of other governments did, it happened at a time when no one really recognised the internet and the way things would play out. So I think that [Telecom] have had a long time to come to terms with it, and my view is that they have had a pretty good economic return so there are some times when we have to call in the national interest above individual shareholders and this is one of them.

The story has been touted for you, I guess by your PR firm, of your 'battling' from a State house. Speaking to Nicky Hagar, he was quite vehement that you lived in as much of a State house as he did (in the sense that your background was solidly middle, not lower-class). To what extent do you think you’ve had a free ride by the media so far in terms of your portrayal of yourself?

Well I don’t know anything about Nicky Hagar’s background. But all I can say is that there’s nothing in terms of my background, it’s literally just a statement of fact. It might annoy the left that I grew up in a state house, brought up by a solo mother. It may frustrate them that I am now a National party supporter, or in fact always have been. But that’s just a statement of fact - it is what it is. I don’t know quite why they get bent out of shape over it, my perspective is, that it is what it is. It’s had an influence on me there is no doubt about it; I think it’s given me a pretty strong social conscience but I also believe enormously in individuals, and taking personal responsibility and you get out of life what you put into it.

And your mother was a Labour supporter?

She was absolutely, through and through.

It’s obviously lit the fire under you to succeed in terms of financial success.

Yeah, I have never argued that I wasn’t brought up by a mother that made enormous contributions and did amazing things for me, and I am very grateful for that. But I am not going to go around and apologise for something that is factually correct, and if it annoys the left, well tough luck you’ve got to get over it.

To what extent do you think you’ve lead a relatively uncritical life in the media spotlight so far.

I think there has been plenty of criticism, Chris Trotter has spent quite a long time writing pretty harsh articles and so have others. My only view of all that sort of stuff is, people have to spend a little bit of time getting to know me and in the end they all have to judge me on the actions that I take and the policies that I promote and the people that I have around me. My view of that is that it’s a combination of a very ambitious view for New Zealand, it’s a pretty progressive view, and it’s one that I think all New Zealanders can feel as though they can be part of the mix. It’s a different form of leadership but then ultimately every leader is different in their own right. So in the end I won’t judge my own results, I’ll leave the New Zealand public to do that.

Next week: login to hear John speak optimistically of New Zealand's future, the correlation between economic progress and social progress, the fallout within the National Party following Dr Brash's departure, and how National plans to stimulate growth and lower inflation at the same time...