Perhaps nothing became John Key more than the manner of his departure. Tired – “nothing left in the tank” – and admirably unwilling to go into an election year and lie about his willingness to serve another full term, or to just struggle on, he chose to walk away instead.
It is rare for political leaders to leave voluntarily when they are well, undefeated, and not facing any serious internal challenge. Harold Wilson (in the UK) and Calvin Coolidge are two who spring to mind. Enoch Powell’s maxim was that
“All political lives, unless they are cut off in midstream at a happy juncture, end in failure, because that is the nature of politics and of human affairs.”
John F Kennedy and Norman Kirk were examples of leaders cut off in their prime, and reputations shaped for decades by the combination of their short time in office and the unexpected early deaths.
At one level, John Key’s political career won’t have ended in failure. He remained popular and had had a pretty good chance of leading his party to a fourth term in government next year. But at another level, so what? If almost all political careers end in failure, in Powell’s terms, that includes the careers of many very great men and women. For each of Bob Hawke, Paul Keating, and John Howard, their careers ended in failure and defeat, but it doesn’t change what they had accomplished over the course of their careers. The same could be said for Margaret Thatcher, Winston Churchill or Charles de Gaulle. I might even include Tony Blair and Gordon Brown in such a list. They left having made a difference. I’m not sure that same can be said of John Key.
There were three election victories, to be sure. But here are the centre-right (National +ACT) vote shares for those three elections.
| 2008 | 48.58 per cent |
| 2011 | 48.38 per cent |
| 2014 | 47.73 per cent |
Only at the 2008 election did those two parties together have a clear electoral majority (they obtained a tiny majority in 2014, and lost it shortly afterwards in the Northland by-election). Those vote shares – and those of the National Party alone – look very impressive in an FPP context, but those weren’t the rules Key was operating under. Throughout his term he had either small majorities or a minority-government position. Passing any contentious legislation required cobbling together the numbers among minority parties, and partly for that reason not much contentious was actually done.
In his 1975 election campaign, the then Opposition leader Robert Muldoon stated that if his party was elected his goal was to leave the country no worse than he found it. That wasn’t how John Key articulated his vision. In his campaign opening address in 2008 he talked about serious change.
You are looking for a Government that will focus on the issues that matter to you – a Government with a plan for economic recovery, and a Government with fresh ideas and the energy to meet the challenges this country faces.
At this election National is offering exactly that.
I am campaigning on strengthening our economy, on rising to the challenge presented by tough global conditions, and on delivering greater prosperity to New Zealanders and their families
Of Labour’s economic performance he said
It’s a shocking record, and Helen Clark and Michael Cullen should be judged by it.
Promising something different
National’s plan faces the fact that we must lift productivity in this country.
Labour has a dreadful record on productivity and National will do better. ……Labour won’t do that. End of story.
Third, National’s plan recognises that lifting productivity also means removing the bottlenecks in the economy – the roading problems and the creaky communications networks that are holding business back. That’s why National will fix the Resource Management Act and that’s why we’ll invest more in the infrastructure the economy needs to grow.
Fourth, lifting productivity also means encouraging businesses to invest.
The guys in red like to talk about this idea. But let me tell you something. I’ve had a bit more to do with business than them and it’s actually more straightforward than they think.
The number 1 reason that private companies invest is because they are profitable and feeling positive about the future. All the R&D credits in the world won’t cut it if companies aren’t making any money. We have to get the fundamentals right first.
And
…we must grow our economy faster.
I know we can do it.
You want to know why? Because I’ve actually worked in the world of finance and business. Helen Clark hasn’t. I’ve actually picked up a struggling business and made it grow. Helen Clark never has. And I’ve actually got stuck into a business, trimmed its sails, and delivered some profits to its shareholders.
And that’s what I am determined to do for this country.
I was always a bit of a sceptic on John Key, but during that election campaign – in the middle of a recession and with the international financial crises as backdrop – the aspirations he spoke of occasionally resonated. The National Party has now taken down the link to the economic speech Key gave just a few days before the 2008 election but – naive as I perhaps was – I actually found this passage quite inspiring, and had it pinned above my desk at The Treasury for the following year or two.
I came into politics because I believed New Zealand was underperforming economically as a country. I don’t think it’s good enough that so many New Zealanders feel forced to leave our country each year to seek higher wages in Australia. I don’t think it’s good enough that our average incomes lag so far behind the rest of the world. And I think it’s unforgivable that the Labour Party has done so little to address these fundamental challenges.
I believe that a very big step change is needed in our economic performance to ensure New Zealand can make the most of its considerable potential. Growing the economy of this country continues to be my driving ambition. I stand before you today ready to deliver on that ambition for New Zealand.
You have my personal commitment that if I am elected Prime Minister in eight days’ time I will work tirelessly over the next three years to deliver the stronger economic future our country deserves.
I don’t doubt that he has worked tirelessly over the last eight years, but to what end?
There has been no “very big step change” in our economic performance. What is worse perhaps, there has been no serious attempt to bring about such a change. The 2025 Taskforce’s prescription was dismissed – from some Caribbean island where the Prime Minister was – the night before its report was released. And if he didn’t like that prescription there was no sign of any energy being put into finding a package of measures he really believed would make a difference. Worse still has been the sheer dishonesty of the last few years in which the Prime Minister repeatedly asserts that New Zealand is doing very well by international standards, and is somehow the envy of the advanced world. Only a few months ago we had the nonsensical claims that he was remaking New Zealand as the Switzerland of the South Pacific, or the frankly rather offensive proposition (to all those struggling in that market) that Auckland house prices were just what one expects in a successful global city – when all the time, Auckland’s GDP per capita has been falling relative to that in the rest of the country (and when the government knows it has been making little or no progress in freeing up land use restrictions). And for all the talk of international connections etc, there has been no nationwide productivity growth in the last few years, and exports as a share of GDP are, if anything, a bit lower now than they were in 2008.
Of course, over eight years in office almost any government is going to do some worthwhile things. When Malcolm Turnbull last year talked to wanting to emulate the Key reform programme, I managed a brief list of worthwhile reforms.
- Some modest welfare reforms (but 10.3 per cent of the working age population – and one in three Maori – is still on working age welfare benefits)
- Partial privatisations (of minority stakes only) in several state-owned companies
- The wind-back of Kiwisaver subsidies (but, on the other hand, policy is now to make Kiwisaver compulsory)
- The establishment of the Productivity Commission
- Some very modest reforms to the Resource Management Act
- Some modest labour market reforms (probationary periods)
But on the other hand, I noted this list
- Higher effective corporate tax rates
- The debacle of the earthquake-strengthening legislation
- The continuing debasement of our skills-based immigration system, both in the way it is administered and in formal announced policy.
- New overlays of financial market regulation
- The re-establishment of direct government controls over who banks can and cannot lend to
- The continuation of a regime of “corporate welfare”, including for example the Sky and Tiwai Point deals, and the smell that the Saudi sheep deal gives off
- The degree of central government control of the Christchurch repair project, involving both wasteful projects (some of which may not finally go ahead), and the way central government has artificially boosted land prices and impeded the prompt redevelopment of the central city.
- The continuing apparent decline in the rigour of public sector policy advice, and in the use of robust cost-benefit analyses in underpinning policy decisions.
- Increased first home buyer subsidies.
- Undermining housing affordability with mandatory insulation etc requirements for rental properties
- Continuing increases in minimum wages, from very high levels (relative to median wages) at a time when unemployment is quite high, and policy was supposedly oriented to getting people off welfare.
- Heavy investment in the newly state-repurchased loss-making Kiwirail
As Eric Crampton notes, the new government regulations that killed off ipredict now mean we don’t even have functioning predictions markets to follow in the wake of the Prime Minister’s resignation.
Of course, some credit is due to the government for returning the budget to balance, or even modest surplus. It isn’t a trivial achievement, especially against the backdrop of the Canterbury earthquakes, but equally when you have benefited from (a) high terms of trade, (b) low interest rates, (c) rapid population growth which in the short-term tends to raised government revenue more than expenditure, and (d) unexpectedly slow wage inflation, and (e) some very big spending programmes from the outgoing previous government that had not yet become firmly entrenched, it was all a little easier than it might otherwise have been. And important as maintaining fiscal balance is, it isn’t the sort of structural reform that generates the very big step changes in economic performance that John Key talked of.
The Prime Minister would also no doubt note the reduced outflow of New Zealanders to Australia. As I’ve noted here previously, there is a lot of year-to-year volatility in those figures, but the average outflow of New Zealanders has been lower over his term than over the nine years of the Clark-Cullen government. That would have been encouraging if a reflected a sustained narrowing in the income/productivity gaps between New Zealand and Australia. As it is, it seems to reflect higher unemployment rates in Australia and a recognition that the position of New Zealanders moving to Australia isn’t alwasy very secure if things don’t turn out well. As for productivity, those gaps have only continued to widen over the Key years (and especially the last few years).
Of course, relative to other advanced countries the years since 2008 have not been especially bad in New Zealand. There have been plenty of countries that have done worse, and plenty that have done better. We’ve been middling at best and that is probably about the least we should have expected as – through some mix of good management or good luck – our incoming government in 2008 inherited neither a fiscal nor a financial crisis.
I haven’t touched much on the debacle that is the housing market. It didn’t feature in that 2008 campaign launch – probably house prices were falling at that point of the recession. But in many parts of the country – including our largest city – the issues of unaffordability are so much worse now than they were then. Turning around our long-term productivity performance might seem really hard. Doing something effective to reverse the inexorable climb in real house prices just wouldn’t have been that hard – between land use law reforms, and easing back on the immigration-led population pressures until new policy frameworks left the housing market better able to cope. But, in fact, there has been almost no serious reform, and a generation of young families are increasingly shut out of home ownership. It is inexcusable. And perhaps the worst of it is that there was never any sign that the government was willing to go down fighting, to spend serious political capital – and perhaps to fail in the attempt nonetheless – to make a real difference. That isn’t leadership. At best it is followership.
I could go on. About, for example, the suspension of property rights following the earthquakes, about the weak regard for the institutions of our democracy, or – mundanely – about the fiscal and moral failure that the big increase in (already high) prisoner numbers over the term of this government represents. But I’m sure you get the drift. It has been eight largely wasted years – building on at least the previous nine largely wasted years – in which none of the big structural economic challenges New Zealand faced has been even seriously addressed. On not one of them can the government show serious progress and on some – house prices most noticeably – things are now even worse than they were in November 2008 when John Key spoke of his goal of securing a very big step change in economic performance. He has held office, and left at a time of his own choosing. But to what end? In that sense, surely, his political career ends in a failure much more indelible than that of a mere electoral defeat or internal coup.
croaking cassandra 
Key talked alot about housing in his 2007 Nat Party Conference speech – useful to read it all but here are the action points:
“Unlike Labour, National has a concrete plan for making housing more affordable. It has four parts to it:
Ensuring people are in a better financial position to afford a house.
Freeing up the supply of land.
Dealing with the compliance issues that drive up building costs, and
Allowing state house tenants to buy the houses they live in.”
http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=10455931
You’re quite right – the more you look at it, the more it appears to me that he just accelerated what Clark/Cullen had started: that is, pump up immigration, relax overseas investment rules and hence generate greater capital gains and that ‘feel good/richer’ feeling among the existing property-owning public.
The question is, just how perilous will it be if that property bubble spectacularly bursts?
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Thanks. Yes, the Commerce select committee’s housing inquiry that Gerry Brownlee chaired in 2007 (?) suggested a real desire to do something. From memory, the Nats were even talking about a “use it or lose it” approach to residential-zoned land – it wasn’t a policy I favoured, but at least recognised the importance of the land availability issue.
I’m still less convinced that house prices are a bubble. I think they are mostly a regulatory distortion – accentuated by immigration and probably some foreign purchases. But unless the land supply is really freed up it is hard to see a large permanent reversal in prices – could easily see a 20% fall in the next recession, but 20% isn’t going to threaten the banking system or even many owner-occupiers.
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…Not to mention that a 20% reversal in house values would wind back maybe 3 years of house price increases in Auckland (if people decided not to hold onto their properties). Even so, it would not account to the previous six years of phenomenal increases on what was already un-affordable housing by conventional standards in 2008
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Tourism is Singapore’s top export earner. His thinking around tourism and then nominating himself as the Tourism minister was likely formulated due to this time in Singapore heading up Merrill Lynch in Singapore. The difference between Singapore and NZ tourism industry is the capital investment infrastructure that was demanded by the Singapore Government was massive.
In the process of offering a Casino licence, the Singapore Government went through a tender process calling for an investment which started around $7 billion and ended being an investment well in excess of $10 billion in theme parks plus hotels plus casino.
Our lame duck approach to Sky City for a Auckland $400 million dollar convention centre to extend and renew their casino licence. Fortunately they are adding another $300 million hotel. The original licencing under a Bolger led National government was just as pathetic at around $200 million.
As a result we have a massive tourism industry based on free air and beautiful scenery which employs a huge number of chefs, waiters, prostitutes and cleaners, lots of cleaners because tourists are a dirty and messy lot. Unfortunately Auckland is the initial destination of most tourists with Auckland International Airport handling 17 million inbound and outbound passenger traffic every 12 months.
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Hi Michael. One success you underweight in my view is getting elected and continuity. We can’t know the counter-factual – how NZ might have fared in the absence of Key – but living in Australia I can assure you even less reform gets done (and even some backward steps taken) when the prime minister and govt changes so frequently. It’s probable that a more policy agressive Key wouldn’t have lasted long in the job.
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As you say, who knows the counterfactual. Would he have survived a more aggressive policy path? Perhaps it depends somewhat on the nature of that path – I’m less sure, for example, that things like cutting back the immigration target, very slowly raising the NZS age (which, after all, Australia has managed) and indexing the age for the future, and dealing with land use availability on the fringes of the city (even if they did nothing about forcing intensification) don’t seem like measures that would have been sure-fire vote losers. Australia does seem something of an advanced country exception with its rapid turnover of PMs in the last few years.
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Don’t forget the promise to remove the Maori seats. Unfortunately he found there were more of them as a group in Parliament than the rest of us.
There is lots of good that has been done but fundamental stuff has not had a big enough push.
When first elected Key made the call to cuddle the Maori Party in preference to Act. That was his mistake and ultimately lead to where we are today.
Some much promise and so little to show in the way of change.
English IMHO is a very average Finance Minister. Key had one thing going for him when he began. English complained that Key had an idea every minute when it came to problem solving. Of course you can’t have that so the game was to fluster those idea’s.
For all that he is a very likeable guy and he has inspired confidence in people during some hard times.
Few could have matched that and at the end of the day people want to be safe, feel safe and be liked.
The contest will be interesting.
There are now three declared candidates for the National Party Leadership and hence to become the 39th Prime Minister of New Zealand. They are:
Deputy Prime Minister and Finance Minister Bill English
Health and Sports Minister Jonathan Coleman
Corrections and Police Minister Judith Collins
Bill English entered Parliament in 1990 and is aged 54.
Judith Collins entered Parliament in 2002 and is aged 57.
Jonathan Coleman entered Parliament in 2005 and is aged 50.
https://jonathancoleman.national.org.nz/about
Dr Jonathan Coleman is the Minister of Health and Minister for Sport and Recreation. He was elected to Parliament in 2005 and is the MP for Northcote which he holds with a 9664 majority.
He has been a Cabinet Minister since 2008, and has previously held the portfolios of Immigration, Broadcasting, Associate Tourism, Associate Health, Defence, State Services, and Associate Finance.
Prior to entering Parliament, Dr Coleman studied medicine at Auckland University. Following house surgeon years in Hawkes Bay and Auckland, he obtained a Diploma of Obstetrics.
He spent eight years overseas working and furthering his studies. After a year as a GP trainee in Oxford, Dr Coleman worked at a GP practice in London where he became a partner. He holds a Masters in Business Administration (MBA) from the London Business School.
After returning to New Zealand in 2001, Dr Coleman worked in clinical medicine and in management consultancy for PricewaterhouseCoopers.
Dr Coleman is married with two children.
Now its time English and Smith found a batch somewhere in the woods.
.Collins is not everyone’s favourite Mum but of late I have been impressed with Coleman. FWIW
Of course this contest is because Key managed to discourage the two men who should have taken his and Englihes place.
I refer to Tony Ryall and Simon Power.
Ryall quit becuase he couldn’t see another 6-9 years to get to the top which is where he wanted to be and Power for a similar reason along.
So much for Key’s people picking and new faces.
Like so much around Key nothing was ever what it seemed despite his saying so.
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Comprehensive reform can only ever be undertaken when the government has a safe majority. Key has never had the platform to lead radical change. The RMA reforms best demonstrate the difficulty of trying to make progress in an MMP environment. The challenge was harder with Smith in control but the chances of making 1984/5 type reforms under MMP are remote.
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Ah, but that’s not true. Key + Act had a clear majority and could have done most of the important changes but he chose to back both Maori Party and ACT meaning that he had a safe partner either way. That however did not turn out well for NZ. Ethnic politics became the game.
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Yes, I think that is largely right. Of course, not many people argue that we now need comprehensive reforms of the scale/difficulty of the 80s reforms. But, equally, politicians help make platforms for change, and really successful ones change the nature of conversations, take people with them, and leave the landscape changed as a result. As I noted to an earlier commenter, a policy agenda of (a) a materially lower immigration target, (b) a slow increase in the NZS age to 67 (perhaps over 10 years) and life expectancy indexing beyond that, and (c) legislation to free up land use on urban peripheries, together with provisions for targeted rates/MUDs should not have been beyond the capability of a government over the last eight years. After all, in the first term, National and ACT alone had an absolute majority.
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Academia is generally supportive of radical reform – that being, discard the RMA – it is past its use-by date.
For example, a good piece here written for the Productivity Commission – long but worth the thorough read in my opinion;
Click to access better-urban-planning-draft-report-miller.pdf
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Hi Mike
Thanks for this – interesting post and interesting comments. There certainly was a pronounced desire in Key’s day not to frighten the horses, but as my old colleague Peter Jolly said, maybe there’s currently little political scope to strike out more boldly.
I was struck by your comment on the “fiscal and moral failure that the big increase in (already high) prisoner numbers over the term of this government represents”. It’s not something I’m usually across, but – like busses – I’d not sooner seen your comment about prisoner numbers than I came across this piece
Click to access Dec+2016+Bill+Gross+Investment+Outlook_December+2016_FINAL.pdf
pointing out that our incarceration rates are indeed well above the OECD average and also well above countries we’d compare ourselves with (notably Australia and the UK). We’re pretty much an order of magnitude higher than Ireland.
If this is an interest of yours, I’d be really interested in what’s gone on.
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THanks Donal. It is an interest of mine, but I’m severely constrained from comment as my wife is a senior manager in the Ministry of Justice. Changes in bail/remand provisions in recent years make quite a big difference to the more recent numbers, but there are longer-term issues as well.
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Michael you may be constrained but luckily the Salvation Army isn’t. Just back from the launch of this report.
http://www.salvationarmy.org.nz/research-media/social-policy-and-parliamentary-unit/latest-report/beyond-prison-gate
It includes quite a good discussion of how we got to the disgrace that is an increasing prison population at a time of falling crime.
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The biggest numbers of people incarcerated are young men who go on to become older men and mostly Maori.
IMHO the problem starts in education system. That system is geared to the quiet white or other ethnic who will stay at school until they hit 20. There are lioterally thousands of young men who could have or did leave school and up until recently had no work or jobs. Not their fault the system says you need educating and the system didn’t create the jobs and many that were were late to the market and were then filled by Immigrants who had the skills.
WE, that is the GOVT. ,has failed young men for a long while. They removed apprenticeships, removed any incentives to take on trainee’s (and just remember if you are taking on a young man as a trainee (or young lady), then the employer needs a break. They take time to train but all the good stuff we had was demolished and replace with polyteck training which was another way to waste money mostly on poor quality courses that took far to long to teach and were/are run by broken down tradesmen that cannot hack it in industry.
Another disaster idea of the education Unions. The waste is astounding and the people coming to industry from many of these programs lack the skills they have paid a lot of money to be taught.
I have had something to do with men from jail and introducing them back into the society they live in. The greatest truth is that the success of that process is determined by who they go to work for and the time that can be spent mentoring them. Many or should I say most leave jail with the clothes they stand up in, go straight back from where they came and meanwhile their previous relationships have turned to custard.
Many indeed have nothing and nowhere sensible for them to go. Its easy to commit a crime and go back into jail where although it’s not nice they are comparatively safe and get feed and doctored as necessary.
It is an immense challenge to help men change their lives but we must do it.
The place to start if we are serious is to reintroduce youth rates. That in itself would have made a difference to many hundreds of young men upon leaving school Employers would have embraced that totally Now I don’t mean we should suppress wages of men started working that way but education on the job is good practical stuff while at the same time if a young fella goes to work 8-9 hours a day he is less inclined to get out and cause trouble.
But those that were the power and who never took this track just will never understand.
Most people are not dumb and learning is lifetime, everyday. My favourtie saying is “Wow learnt something new today that I never know” and that can be simple or complex. so to me the important thing is to encourage that and tell people that they can learn and make their life better.
IMHO one of Keys best traits is that he can learn quickly when it is required. He can talk to people about anything.
Anne Tolley is onto it, Judith Collins thinks locking them up is the answer.
Some of course should never come out.
It is onteresting to see the fall off in recidivism rates for those convicted of 3 strikes penalties. It drops well on the first strike and even more on the second and if you get to,three you deserve to be in jail.Remember there is always more not published or said about offenders of this ilk. They are bad bastards.
And of course the other cause of high lockups is our stupid drug laws.We’ve demonized the soft drugs so people are left with the bad stuff and the gangs are stronger than ever. You can blame the bouffant one from Oharia for that
Idiot.
Lets hope we get a radical change.
At the moment between English and Coleman.
English doesn’t have change in his mindset.
Lobby you MP’s for Coleman
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“And of course the other cause of high lockups is our stupid drug laws.We’ve demonized the soft drugs so people are left with the bad stuff and the gangs are stronger than ever. You can blame the bouffant one from Oharia for that
Idiot.”
Your diagnosis of the problem is correct. There are communities where methamphetamine is supplanting cannabis as the social drug of choice, which is disastrous. It’s a supplier-driven market and meth is easier, cheaper and less risky to supply.
But I’m perpetually amazed by how many people seem to think Peter Dunne can pass laws. He’s not perfect, but he has actually been the only MP talking about drug law reform. He’s also responsible for the National Drug Policy, which is a good document.
The awful inaction on drug law reform is principally down to Key. His office had a strong hand in Simon Power’s disgraceful dismissal of the Law Commission’s review of the Misuse of Drugs Act in 2010 and the message since then has been that the law will not change. I heard him reiterate that in a speech only a month ago.
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I believe that after the 2008 election, the public could not have claimed being kept in the dark over a reform agenda involving house prices.
Go to 2 min 40 sec in to this interview of John Key in 2007:
If winding back house prices from 2007 levels turned out to be “in the too hard basket” once the election victory had been secured, where was the wisdom in letting the problem become an even more painful one to address? Even deliberately spiking the market with reforms re immigrant “investors”. What is the agenda here? Crony capitalism on behalf of the property-financing industry, perhaps? Leftist critics are of course too stupid to connect these dots, even if it is useful prima facie evidence in support of their boilerplate rhetoric.
But I can’t see this ending any differently to other historic episodes of speculative manias. Croaking Cassandra has been a voice of sanity on this, epitomised by the posting a few months ago headed “a couple of cartoons”. You are quite right that the needed reforms, and the necessary courage to do them, are of the Roger Douglas level of significance. Douglas would have dealt with this if it had been the pressing issue in his time, and Lange would probably have supported him. Lange is possibly the only PM that we have ever had, who both possessed massive charisma, and put it to use persuading Kiwis to accept very unpopular reforms. I often wonder, since Kiwis electoral intransigence on “reforms” is now the excuse for “wannabe popular at all costs” leadership, whether Rogernomics and Ruthnomics was all worth it, and whether NZ should have just gone on to sovereign default under successive irresponsible, can-kicking administrations.
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