Retired politicians in demand

Michael Reddell NZ politics, Uncategorized

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, [Correction: he resigned in ill-health a few months before his death]
  • Lange left Parliament at 54, and appeared to have had 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.)

30 thoughts on “Retired politicians in demand”

  1. Michael.

    Your most opinionated and least substantiated piece to date. Please stick to the knitting!

    Michael

    Michael Dunn

    Principal

    Economic and Fiscal Consulting Limited

    Wellington, New Zealand

    +64 21 396 700

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    • The first comment on an opinion piece is often telling.
      Eco/fisc is clearly desperate to :
      1. Silence opinion
      2. Declare his superiority
      3. Promote his own business
      I find this an arrogant and self serving attitude which demonstrates much that is sick in our financial sector today.
      Long may you keep Croaking Cassandra!
      Best wishes.

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  2. Your link to Nigel Haworth’s comment: “”Xi is taking a very brave step, trying to lead the world … he is posing a possibility of a different way based on collaboration and cooperation””. This is surely the collaboration of the elephant and the mouse – only brave if you are the mouse.

    Do Chinese authorities really prefer this kind of sycophancy to straight talk?

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  3. What is your opinion of a dual citizen USA/NZ being head of a political party and therefore potentially a PM? My considered thought is it would be OK since it is up to voters to decide all matters and we should not second guess them. Ref Winston Churchill’s american mother.

    Similarly if Mr Jian Yang was an electorate MP I would be less disturbed by his failure to make even the least reported criticism of China’s rule in Tibet or stories of organ harvesting of Falun Gong prisoners.

    I’m not too concerned about perceived foreign influence whether Chinese or American or even maybe most significant Australian. That is a subset of a bigger problem: undue influence from businesses. Would we want a retired minister of Health getting a well paid job with a pharmaceutical company? Even the most reputable NZ business can be bought out and then any employed ex-ministers would be left in the invidious position of staying or resigning.

    IMHO for the benefit of NZ Bill English’s best career choice would be to remain a virtually silent back-bench MP.

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    • I was a bit surprised to learn that Genter was still a US citizen. I have a bit of sympathy with the Australian law – for all its complications and absurdities – but as Hamilton and Joske point out (in the testimony I linked to) there is an important difference between a society/country that more or less shares our values/freedoms, and one that runs a system directly antithetical to our own. There is a real reluctance in NZ to name a difference like that.

      In many ways the biggest direct threat from Chinese influence activities in NZ is on NZ citizens of Chinese origins – the control of the Chinese media, cultural associations etc etc. But beyond that one has an expansionist power – quite open about what it is doing in the SCS – which is a threat not just to more like-minded countries in the region, but to the rule of law, freedom of the seas (and skies) etc.

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      • I think it is wrong for Genter to be an NZ MP as she has a US citizenship. It is clear that her loyalties can be conflicted and that she may be in a position that she may not act in the best interests of NZ.

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      • Whether or not her loyalties are conflicted is a decision voters can make. [That means rules for list candidates and minimal rules for electorate candidates. Whoever said a donkey with a Labour badge would be elected in a South Wales mining electorate was right. But why not? Who is going to claim they are superior to other voters and pass laws restricting their freedom of choice?]

        It makes no sense having categories for “shares values” and “doesn’t share values” decided by law. Countries can change. And some are quick to sign up to human right declarations and then ignore them. Best to have rules that are universal and applicable to all countries.

        That should be how we handle retired MPs. Either let the ex-minister of defence be well paid by North Korea or ISIS or if not then stop a PM taking employment with Christian Aid Monaco. A midway point would be any employment for say 10 years after leaving parliament has to be approved by parliament. Certainly the current situation where Anne-Marie Brady is experiencing persistent suspicious burglaries in New Zealand while ex-party leaders are directors of banks reputedly controlled by the Communist Party of China is not satisfactory to all New Zealanders.

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      • I agree that “shares values” isn’t a basis for legislation, but – on Jian Yang, or even Chris Tremain/Jenny Shipley – I’m not arguing for legislation, but for cultural self-discipline, incl party leaders (and organisations) that know what is right and do it. As I’ve noted before, no one would have considered having an unrepentant, not entirely straightforward, KGB officer as an MP in the 70s, or an unrepentant ex-Gestapo trainer in the NZ or UK Parliaments in the late 1930s.

        On politicians and their activities after holding office, even the US has stricter rules than the (almost non-existent) ones we have. In the UK, I’m no fan of Gordon Brown but was interested to see that the only financial role he has taken on – several years after leaving office – is one where all the payments he receive will go to his charitable foundation.

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      • Powell: No, we do not fight for values. I would fight for this country even if it had a communist
        government.
        Thatcher: Nonsense, Enoch. If I send British troops abroad, it will be to defend our values.
        Powell: No, Prime Minister, values exist in a transcendental realm, beyond space and time. They
        can neither be fought for, nor destroyed.

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      • I hope I would not have fought for Germany in World War Two, had I been German. A few brave people refused to, and of course mostly paid the price. Countries warrant only provisional loyalty (as I used to note on my SIS security clearance application forms!)

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      • Bob, most of us were not aware that Genter is a US citizen. She had not declared publicly that she would place the interest of NZ ahead of any US policy. Jiang has no such conflict as China does not recognise dual citizenship. Therefore Jiang would have pledged his loyalties, hand to heart in a public ceremony that he has no conflict in putting NZ interests ahead of China. He would have had to hand in his Chinese passport and renounce his Chinese citizenship at the Chinese embassy. It is therefore wrong for Michael to question the loyalties of a New Zealander who have not done anything wrong other than to cultivate strong relationships with China in the interests of NZ.

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      • Thank you Michael. This is an excellent, well researched piece. Those who are antagonistic to what you are saying are either extraordinarily ignorant about what is really happening – or perhaps their motives may need questioning.

        One of the most staggering aspects about all this was when Chris Finlayson, then Minister in charge of the SIS in this country (supposed to be the Security Intelligence Services) dismissed any question of there being any concern about MP Jian Yang, In spite of the fact he had concealed his spying background from the pparently utterly naïve National party – And thus obtained a high list placing.

        There is a very good case to be made that New Zealanders should have been able to expect Jian Yang to have been immediately expelled from the party. And we should certainly be asking why he is still now there.

        Surely we should be able to expect better from our SIS? Moreover, when an audience member reminded Finlayson of the internationally respected Dr Anne-Marie Brady’s warnings about what was happening – He referred to her dismissively.

        So what on earth is happening?

        The National Party’s relationship with Communist Chinese interests would now seem to be a cause for considerable concern. I recollect a photograph of Bill English (equally naïve?) surrounded by a group of young Chinese working within the National Party.

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  4. Yes Mr Reddell you only itemised the retirement activities of previous PMs and listed the national party senior office holders who now work for banks controlled by the PRC. This was central to your careful and detailed discussion of the issues arising with the revolving door from senior political positions to those associated with commercial activity.

    Mr Dunn on the other hand has totally demolished your piece with his two sentence put down.

    Alternatively, talk about arrogant,

    Mr Dunn doesn’t even do your readers the courtesy of explaining to us mere mortals why your piece is “opinionated” and your least “substantiated”. He just swoops down on high and delivers his verdict.

    Mr Dunn’s comment about knitting demonstrates an old fashioned sort of view that people who knit aren’t capable of serious political discussion. They’re the sort of people who should retire to the drawing room while those of serious mind discuss weighty matters over port.

    Personally I find Mr Reddell’s articles challenge my political viewpoint, However he consistently substantiate his views with facts.

    Those who disagree with him should do the same. Not just hurl trashy insults.

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  5. These sorts of politicians care most highly about keeping markets free and open. Liberty and democracy are secondary concerns to them.

    I don’t think politician-directorships is a problem in NZ, but if one looks to the US were it is a massive problem that shows that this trend only has to continue for a few more years and then it likely will be a major problem here too.

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  6. Excuse my cynicism

    The truth lies in the second sentence of the Stuff article
    “English has both the experience and contacts needed”

    The article has a sense of naivety to it. The kernel is the value of the parliamentary contacts and the level of esteem of Bill English is held in. Whatever value was attributed to the Bill English machine prior to the September election, it has a value a fraction of that now in 2018. The machine was devalued with the loss of power. It is doubtful the labour machine will give him much time and attention, or access

    The recruitment of a senior politician into a senior role in a commercial operation is simply buying access

    After many years of denial, in a submission to a Senate inquiry, the largest AU lobby group, The Minerals Council of Australia has conceded it makes political donations and pays to attend fundraisers to gain access to members of parliament. The frank admission – reflects a commonly held belief about the role of money in politics – sticks out because major corporations and lobby groups by and large claim they make donations to support democracy

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  9. 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.  
    ……..
    I am
    http://imgbox.com/hPbuHrAE

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  11. Pervasive, stealthy, insidious, clandestine
    double-happy chinese influence – both commercial and political
    Do they understand the implications of lack of moral authority

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    • There is a real dilemma developing here

      PM Jacinda Ardern will ask the police to investigate the break-ins to Anne-Marie Brady’s premises and theft of computers

      Whereas the Police were unable to investigate the Ruakaka Pipeline Fracture which cost the country $ millions and there was only one culprit possibly 2 digger operators but only one principal – they say they couldn’t find the smoking gun – they knew who it was – they just couldn’t prove it

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  12. It is, of course, quite inappropriate for the PM (or any politician) to ask Police to investigate any specific event/crime (unless perhaps it is to refer themselves for investigation). Politicians pass laws, and budgets, and beyond that choices about what the investigate etc should be solely a matter for the Police. (Which is not to suggest that I have any confidence in our police force, or its senior leadership – the longstanding refusal to take seriously Electoral Act breaches, pursuit of which might be awkward for serving govts and their parties, is just one example.)

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  14. I see a future NZ as like Thailand with an oligarchy dominated by Chinese and backed by military.
    Labour abandoned governance of a people in favor of what it saw as a moral (diverse/multi ethnic) society. That goal has meant maintaining a false narrative and the narrative has been convenient for property developers, banks etc.

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    • Unless the Maori decided that their King has the same rights, privileges and authority as the Thailand King, I am completely at a loss as to how that future scenario could ever occur. Most of us are Royalists anyway and favour the Monarchy in England. God save the Queen!!!

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