A few days ago, shortly after Bill English announced that he would shortly be leaving Parliament, Stuff had an article on his post-politics prospects.
English, credited with steering New Zealand through the global financial crisis, is likely to be in strong demand on company boards. He has both the experience and contacts needed.
The demand may be especially strong in Australia, where the business media often fawned at the performance of the former National-led government, in comparison to its own governments.
There is quite a bit of hype there – recall that, despite the fact of the “fawning”, Australia’s productivity growth substantially outstripped that of New Zealand over recent years. But while business is very different from politics, and the Australian business/political environment is quite different than that in New Zealand, quite possibly English’s services will be in considerable demand.
The article goes on to suggest that a bank board might be a possibility
One of the early rumours circulating on Tuesday was that English was set for a seat on the board of a major Australian bank, with an investment banker speculating that he could soon be a director of Westpac on both sides of the Tasman.
John Key, after all, turned up not long ago as chair of ANZ’s New Zealand subsidiary.
Whether or not there is anything to the possibility of English turning up on a bank board I (obviously) have no idea (although the Westpac main board looks chock-full of bankers, lawyers, and accountants) but what concerns me is the lack of concern about the idea (or about the fact of John Key being recruited directly to chair ANZ’s New Zealand board).
Until just over a year ago, Bill English had been Minister of Finance for eight years. In that role he had responsibility for the framework of legislation (primary and secondary) governing the prudential regulation of banks, non-banks, and insurers. He was minister responsible for the Reserve Bank of New Zealand, the prudential supervisory agency (including for banks). He appointed the people who appointed the new Governor (and – single decisionmaking – supervisor). His department – The Treasury – was a key participant in the trans-Tasman banking council. Even in his year as Prime Minister, there was no sign that he had lost interest in matters economic and financial.
It would be a dreadful look if a retiring former Minister of Finance went (more or less) straight from politics onto the board of a Bank. It would be almost as bad as if a retiring Governor of the Reserve Bank made a similar move. The issue – especially for the Minister of Finance case – isn’t about inside information; ministers aren’t usually privy to much individual institution data, and the broad intended sweep of policy (a) usually isn’t that secret, and (b) is somewhat specific to particular governments. It is about incentives, appearances, and our ability to be reasonably confident that our governors are governing in the public interest and not in their own interests.
Probably few people go into politics initially for the post-politics opportunities. Nonetheless, people need to feed their families, and fill their days, and even if you eventually get to the very top, even being Prime Minister doesn’t last forever. Bill English is only 56, and the current Prime Minister – even if consistently successful – is likely to be out of Parliament by the time she is 50. And – even in New Zealand – private sector directorships can pay pretty well (it was suggested that John Key might be getting $200,000 per annum for chairing the ANZ – a big bank to be sure, but an unlisted 100 per cent subsidiary of an Australian parent, pretty substantially controlled by that parent).
Whatever the sector, a Cabinet minister who legislates/regulates in ways which are welcomed by the regulated industry are much more likely to find the post-politics doors open than one who regulates in a way the industry finds costly or inconvenient. It isn’t just an issue in banking – it could be telecoms, or electricity, or transport, export education or whatever. I’m no great fan of most business regulation, but it exists – and the community as a whole has made a decision that such regulation is necessary or desirable. If so, it is easy to envisage cases of a conflict between the public interest and the private interests of the regulated entities.
I’m not suggesting that Bill English (or John Key) made any decisions during their terms in office for reasons other than some mix of their view of the best thing for the country, and their view of how best to get re-elected. But the incentives, and risks around them. are things that need managing. It would set a dreadful example if Bill English shortly turns up on the board of a bank (in John Key’s case, the concern might be more about his membership of the Air New Zealand board – a majority state-owned company, with ownership sold down by Key’s government, and where Key himself had until quite recently been Minister of Tourism).
(It is interesting to note that the main boards of the four big Australian banks do not appear to have a single former politician on them, although one is now chaired by a former Secretary to the Treasury.)
I’m not sure if there are any rules on what ministers can do once out of office – there is no sign of anything in the (non-binding) Cabinet Manual. Quite probably it wouldn’t be easy to draw up a good, workable and reasonable set of rules. But I’m also struck by the fact that it appears to be a relatively new problem, at least as regards former Prime Ministers.
Going back 100 years:
- Massey died in office
- Bell (PM for a mere 16 days) ceased holding active political office at 77,
- Coates died while still an MP,
- Ward died while still an MP,
- Forbes left Parliament at 74,
- Savage died in office,
- Fraser died while Leader of the Opposition,
- Holland left Parliament at age 64, already ill and never really recovered,
- Holyoake went from Parliament to being Governor-General and finally left office at 76,
- Nash died while still an MP,
- Marshall left Parliament to practice law and held various prominent private sector directorships,
- Kirk died in office,
- Rowling held only government-appointed roles and governance roles in community bodies after retirement,
- Muldoon died while still an MP,
- Lange left Parliament at 54, and appeared to have only community involvements subsequently,
- Palmer returned to the practice of law, at the interfaces with public policy,
- Moore mostly held government-sponsored positions after leaving Parliament, although did for a time – 15 years after being Minister of Trade – work for Fonterra,
- Bolger held some lower-level commercial directorships, but not until several years after leaving Parliament (and the Prime Ministership),
- Shipley has held numerous directorships,
- Clark moved on from Parliament to head the UNDP (government-sponsored),
- John Key left Parliament at 55, and appears to be picking up various directorships and the like, and
- Bill English is leaving Parliament at 56.
I’m old-fashioned enough to think that being Prime Minister (or Governor of the Reserve Bank) should be a stepping stone to retirement, or at least a retreat to advocating the ideas one governed on, or doing good through community and voluntary organisations or government roles. That isn’t an anti-business stance at all, just that the extent of the regulatory state has become so pervasive, and so much money is at stake, that it should trouble us, and cause questions to be asked, when senior politicians step so readily from politics into the board room (or consultancy rooms) of private businesses. I’ve always found oddly attractive the stories of Harry Truman – who left office with almost nothing but his old army pension, but still wouldn’t do product endorsements – or Clement Attlee who (reportedly) took the bus to the House of Lords in his retirement. Or even George W Bush, who seems to have retired to paint, or John Howard. I don’t wish poverty on our past leaders – a decent parliamentary pension seems appropriate – nor to make politics the preserve of the wealthy, but equally that public service shouldn’t be stepping stone to wealth, via regulated industries, either. If the stepping stone is there, the risks to good government are real.
It would concern me if Bill English quickly shows up on a bank board, or even the board of a commercial entity much affected by specific government regulation/legislation. But perhaps even more concerning should be if he follows in the path set by so many of our recent senior politicians (sadly, particularly National Party ones) and ends up being remunerated to serve the interests of – or trade off the back of good relations with – the government of the People’s Republic of China and of the Chinese Communist Party (which, of course, controls the government).
There are the directorships of Chinese banks (former ministers Chris Tremain and Ruth Richardson, former Prime Minister, Jenny Shipley, and former National Party leader – and Reserve Bank Governor – Don Brash). There are consultancy contracts (John Key, and Comcast’s interests in China). Or Board memberships of Chinese government affiliated entities (Jenny Shipley).
Quite possibly all these people believe that are doing good. But their positions put them in a situation where they have to think very hard if ever once they considered taking a stand against an aggressive expansionist repressive dictatorial state (from which, directly or indirectly, they are remunerated). New Zealand isn’t unique in having former political leaders taking this path, but that we aren’t alone shouldn’t make it any more acceptable. There were apologists for evil in the late 1930s too.
Might one hope for better from Bill English? One might have – I would have – hoped so. But when you’ve served as Deputy Prime Minister and Prime Minister for nine years and never once spoken out against the evils of the regime (domestic or foreign policy – see continued illegal expansionism in the South China Sea), when as party leader you’ve kept on your list (and then promoted) an MP who has been, and probably still is, a member of the Chinese Communist Party, a former member of the Chinese intelligence services, someone who is repeatedly photographed with Chinese Embassy figures, and who has never once been heard to criticise any aspect of the evil regime he once served, I’m not sure there is any reason for optimism. This was the same party leader who, only a few months ago, refused to answer any serious questions about his MP Jian Yang, despite clear evidence that he had withheld information about his past in the intelligence services from New Zealand authorites when applying for citizenship or residence. And who has never once engaged with the observations of a leading former diplomat who publicly stated last year that he was always very careful what he said around Jian Yang because the latter was known to be close to the Chinese Embassy. In what sense did Bill English represent the attitudes and values of New Zealand and its people?
Last year, I repeatedly encouraged people to read, and engage with, Anne-Marie Brady’s paper on PRC party/government influence activities in New Zealand. There is an increasing stream of reports and papers on these activities in other countries – a recent testimony (full version number 20 here) to the Australian parliamentary committee on proposed new foreign political interference laws, or a substantial report from a German think-tank. But where are our political leaders? It is sad state we’ve come to when a former PRC intelligence official – an open associate of an embassy of a hostile foreign powers, who withheld material information from the authorities – gets to vote for the new Leader of the Opposition (will any media ask the candidates their attitudes to Chinese interference in New Zealand and other democratic countries?).
(And, to be fair and balanced, not that there is any sign that the parties that make-up the new government are any more willing to make a stand for the values that underpin our society. It isn’t many months since the President of the Labour Party was openly gushing about Xi Jinping and PRC regime.)