Roger Douglas Interview

Interview with Roger Douglas

Question One: You have just recently returned to the ACT Party. Why now? What made you come back?

A: Well, I look at New Zealand right now, and I think we’re coming to a crossroads. I think that if we look at how we’re doing right now, in comparison to Australia and other countries, we’re simply not doing as well as we should be. I  personally think that ACT’s the only party that can make a difference. We can make a change of Government with National, but the only way to really change the policies, to change the direction of the country, is with ACT. And I wanted to play a part in that.

Question Two: You mentioned National there, now obviously ACT is running at about 1 to 2 percent in the current polls. Do you think with the way National has become more centrist, especially under John Key, it leaves more room open for ACT?

A: Well it certainly leaves more room open for us, and I think it’s possible for ACT to get 6 percent plus, if we can get 6 percent or more, then we can change the way things are operating in New Zealand. With 6 or 7 we can expect two or three cabinet positions and help to make a difference.
Question Three: for readers who might not know them, what are the specific policy differences between National and ACT?

A: Well I think the differences between ACT and all the other political parties is that most of the other political parties want to deliver services through monopoly supply. In other words they want to deliver education, other government services through monopolies, deliver health care that way, they want to deliver welfare that way. Through big monopoly organisation. Now anyone who thinks about the economy, they don’t actually have to be an economist to understand that monopolies are essentially bad. It’s a moral thing, they don’t have the care for the customer. Now what ACT believes is that the customer should have choice, they should be bale to make decisions in an open market place. The truth is that private organisations in an open market place have to deliver what the customer wants. If they don’t deliver what the customer wants, they go broke.

Question 4: You are famous for pioneering the Free Market Reforms of the 1980’s, which were continued under National Finance Minister Ruth Richardson in the 1990’s. Now since Labour took over….

A: [Interupts] We’ve gone down hill…

Question: Ha ha, well I guess you figured out where I was heading with that question…

A: Well if you think about it, when we came into Government in 1984, New Zealand was in crisis, we were pretty much broke. When we left government in 1989 we were leading Australia in a whole bunch of indicators, our inflation was lower, our balance of payments were better, the interest on our debts were lower, our debts were lower. Between 1995 and 2000 our growth was higher than Australia. Nine years of this Labour Government and we’re 300 dollars a week behind Australia. The problem with that is that all of our young people are leaving New Zealand. One in every three students who graduates will be out of this country in 5 years time. You know why? Because there isn’t an opportunity here for them.

Now what ACT will be doing is putting forward policies to close than income gap, and we’ll be the only part frankly that can do that. Our policy will be around the point of how do we beat Australia by 2020, how do we ensure that young New Zealanders stay in New Zealand, and can lead satisfying and well paid lives here in New Zealand, rather than having to go to Australia or somewhere else.

Question: Student Debt just recently hit 10 billion dollars. What can ACT do to help the student debt problem? There’s suggestions from people like The Greens that increasing availability of student allowances is a good way to do that. Do you agree?

Answer: Well it takes a little long to explain, maybe I’ll send you some of my thinking on it. But at the end of the day, I’m in favour of a very simple proposition. I think if we had a flat 15% tax rate, that would go a long way towards keeping graduates here, and they wouldn’t have to be so worried about debt. But when they have to go out and go into the market place, and they’re paying the highest tax rate when their earning 1.4 times the average wage, and their paying the top tax rate, well that’s ridiculous when the rest of the OECD you have to earn about 5.6 times the average wage.

To me, the best way to help with student debt is not to treat the symptoms, and that’s what most other parties are doing, treating symptoms rather than solving long term problems. I’d rather look at long term solutions.

Nandor Interview part one

Nandor Tanczos is a long standing member of the Green Party, and New Zealand’s first ever Rastafarian MP. In the first of a two part interview, Hayden Munro sat down to talk to him about the talk he gave at UC, The Emissions Trading Scheme, and the end of industrial civilisation.

Q: You’re in town for a talk you are giving called ‘Sustainability: At the Tipping Point’. For those reading this that won’t be able to attend, could you just go over what’s going to be in that talk?
A: Sure, well basically what I’m doing is looking at some of the physical realities we face: climate change, peak oil, metals depletion, the combined effects of all this to things like food security.  What I’m interested in really is not these kinds of realities but what are the implications of this? In terms of politics, in terms of culture, what is industrial civilisation going to look like over the next century? Is it going to survive it at all?
There are a lot of people now starting to talk about climate change, I mean it’s become main stream to talk about the environment, but the responses are extremely shallow and superficial. You know the sort of “we can make money from carbon trading” response. What I’m interested in is what does all this mean for us, on a deeper level? I’m interested in starting some discussion around those issues.
Q. Do you think industrial society will survive the next century?

A. No.
I think we are in the twilight years of industrial society.
I mean bits and pieces of it may linger potentially. Elements of our culture will continue to linger, but become increasingly difficult to maintain. I think the impact of climate change, peak oil and the political instability that will come with those things will spell the end of our civilisation.
Q. On a Government level, what can we do to respond to that?
A. Well the first difficulty is that Governments are almost universally compromised by corporate agendas. Governments are almost universally in service to corporations, and they’re also compromised by their own feelings of smug self importance, and that makes it really difficult for them to respond in a meaningful way.
There are really useful things Governments could do; they don’t appear to be doing them, but there are useful things they could do. I think one of the things I’m saying is that the real solutions are coming out of the community; they’re coming out of the communities that are saying “we need to take this seriously, and do the best to ensure ourselves food security, energy security and the basics of life, and at the same time rebuild a life worth living.”
Now Governments can do a lot to facilitate those developments as well. Again they don’t often do that, but that’s where it’s really important to have good people in Government, in local authority, and in corporations. And of course I think that as an MP for the Green Party supporting the Green Party is an important way to ensure that happens, because it’s about having people who see the need to facilitate that community development.
Q. You touched on carbon trading a little there. That’s something that’s been in the news a lot recently, with many people saying the bottom is falling out on the Government’s carbon trading scheme, since it puts New Zealand industry at a disadvantage against foreign corporations who don’t have to follow the scheme. Is there any way around that issue? You said corporations wield a lot of power, and you’re really asking them to take a big financial hit with this scheme.

A.
Yeah but we’re not really are we?
I mean, our biggest green house gas emitter is agriculture, entirely exempted from the scheme, then subsidised at the tax payers expense until 2025. Our biggest growing emitter is transport, and now there’s growing political pressure to exempt transport from paying for their carbon.
It seems basic to me that you have to internalise the cost of carbon, and other kinds of environmental services. If we continue to allow business to get a free ride from using and depleting the environment, then why on earth would they change? Why would they? It doesn’t cost them anything. Ok, occasionally you might get the odd person who feels really strongly about the issues and they might make some changes in their corporation, and that’s great. I’m not belittling the importance of ethical values in business. But the business sector as a whole? By law they’re charged to make a profit, they respond to monetary or regulatory signals only.  So you’ve either got to regulate them or charge them for their carbon. How on earth are they going to change?
This international drive to say “well we’re going to be the last to charge for carbon so our competitors don’t get an advantage” well that’s all very well. But let’s look at the reality of climate change: most researchers say that a two degree centigrade rise in temperature is the most we can afford before we face catastrophic climate change. That means we HAVE to stabilise atmospheric carbon dioxide at about 44 parts per million. Some researchers say there is no way, even with aggressive mitigation strategies that we can do that. It’s increasingly looking like we won’t even stop at 550 parts per million. Even if we took aggressive action right now, we will not escape the impact of climate change. The question we have before us, the only question we have before us, is how bad are we going to allow it to get?
Now, to my mind that’s all bullshit, this “we don’t want to give our competitors an advantage” stuff. We

don’t have time to fuck around. It’s as simple as that.

Q. On a political level though, as annoying as that can be, the issue around climate change isn’t settled for everyone. Not everyone accepts the validity of the argument for climate change. A great example of this is ACT on Campus, who actually protested at Earth Hour, because they think the whole thing is bullshit. They were handing out pamphlets with stuff like “It’s cyclical warming” etc. So in a political climate where not everyone accepts the validity of climate change, doesn’t that make it so much harder to convince big companies that changes need to be made, and that they should make the sacrifice?

A. Well I mean clearly you can’t make people deal with evidence rationally. I mean you can’t force people to be convinced by evidence, and there are some people who still deny that human induced climate change is a reality. That’s in spite of the, ok maybe you can’t call it a consensus, but the overwhelming majority of climate scientists who say it is a reality.

Just on an aside, the idea that it’s all a fake and that somehow there’s this global conspiracy of scientists to fake climate change because it’s good for their research money? Ok so the entire fossil fuels industry is being [laughs] unfairly treated by the global scientists because there’s more money to come from Governments than oil companies for research?  Yeah it’s a little stretch; it stretches my credulity a little.

But you’re quite right, the fact that there’s this denial of climate change, and of course there will be because it’s not in some peoples short term economic interests to do anything about it, it does make it more difficult. But my sense is that most ordinary people agree that climate change is happening, and they take it seriously and they want to do something about it. The response to my talk, which is a pretty hard out talk about the implications of climate change, has been very positive. My sense is that people want to talk about it, because they’re sick of hearing bullshit. “Oh we’re going to be carbon neutral” says the Government, while they do nothing about it. I think increasingly people do want to see some action.

Even businesses want to see action, because what they want is certainty, and they want the government to get real about it, stop talking bullshit and do something about it. So I think there is a growing appetite that gives them some results and security around it. I think the worst thing for business is when it’s like “are we or aren’t we?” because then they can’t make strategic investment decisions. When the Government is saying “ok we’ll put a levy on sheep farms…oh wait no we’re not because there’s a farmer backlash against that” then saying “ok, we’ll crack down on carbon emissions… oh wait no we won’t because there’s a transport backlash”. While things are like that, business can’t plan anything because they don’t know what’s going on.

So does the fact that people still deny human induced climate change is a reality make things politically harder? Maybe a little bit, but no more than you’d expect. I guess for me this is where it comes down to actually having some political leadership. If we had political leadership that was actually courageous and prepared to do something and back the nice fuzzy words that have been thrown around, the people would respect that.
The reality is that if businesses only survive because of an enormous environmental subsidy, including the fact they contribute to climate change, then actually, their day is over.

Q: On the subject of political leadership, what do you think of the response to climate change from National and Labour?

A.    It’s…..um…..flatulent really. Labour says “oh, we’re going to be carbon neutral” but they have no policies to get us there, in fact they have policies that take us in the other direction. National puts in some targets.

Q. Yeah “50 by 50” their saying..

A: Yeah, but again it’s a nice aspiration but where are the policies to get us there? I’ve yet to see any of the big parties suggest anything that would make a real impact. In a way our biggest issue is that our biggest emitter, our biggest single emitter, neither of them will touch farming. And our biggest growing emitter, neither of them will touch transport nor break our addiction to fossil fuels and our love affair with the private car. So they can say what they like, but I’ve yet to see either of them do anything about it.

Ok….someone’s going to have to explain this to me.

As part of the many cool features of a wordpress blog, there is a section that tells me the various search engine terms people have used that bring up my blog. Now these are generally what you would expect: “Michael Cullen and Tax Cuts” “Abortion Law” “Hayden Munro”(people are looking for me by name now, scary). The other day however, there was a search term so odd, so strange I’m going to have to ask whoever it was for an explanation, if just to satisfy my own curiosity.

So for my sainity: Please, who in their right mind put “Don Brash Testicles” into google?

What were you looking for???

The internet is a scary scary place.

ETS

That sound you just heard was the bottom falling out of New Zealand’s Emissions Trading Scheme.

The last nail in the scheme’s coffin was the announcement this past week that that the transport industry, New Zealand’s fastest growing emitter of carbon, would be excluded from the scheme until January 1st 2011. Add this to the exemption given to agriculture that means they will not be included in the scheme until well after 2020, and New Zealand now has an emission trading scheme that is essentially impotent.
So how exactly did a scheme that’s mere announcement helped Helen Clark win a UN award for “blazing new trails for sustainability and the fight against climate change” end up as such a joke?

There are those, many of them wounded Green supporters (the party has threatened to vote against the now neutered scheme), who would argue that the scheme was never really taken seriously by Labour. It was announced in the lead up to the 2005 election as a vote winner, nothing more. At the time, climate change was on everybody’s mind, An Inconvenient Truth was a big hit, and Labour was running against a former banker who was anything but environmentally friendly.

According to critics of the scheme, Labour was always planning to renege on their promises of making New Zealand one of the first carbon neutral states in the world. The political risks of truly implementing as visionary and courageous a scheme as Labour had told us theirs was to be were never ones Labour was willing to take.

When it comes to curbing Carbon emissions, it’s very easy to talk a big game. Promises to help the world “‘kick the carbon habit’”, as Clark put it, are winners with the voters. An issue as scary as human induced climate change is the sort of thing Government’s like to promise voters they can fix. Being seen to have solutions for big problems is part of selling yourself to voters, and in many peoples eyes, climate change is one of the biggest problems there is.

However actually implementing policy that is going to help reduce the damage done by climate change is a whole other story. Major action requires major sacrifices, it requires lowering the amount of oil we use, it requires the dairying industry to say goodbye to the record profits it currently enjoys, it even requires the average citizen the pay more at the pump. You try selling those sacrifices to a public already hurting economically, and tell me how it goes.

Even worse than those sacrifices, is the issue of business leakage. If New Zealand were to force our businesses to pay for the carbon they use, it obviously increases the operating cost for New Zealand companies. This has a two pronged effect: firstly it makes New Zealand a significantly less attractive place to do business, weakening foreign investment and potentially pushing many of our firms overseas (a political hot button after the Fisher and Paykel plant closures).

Secondly, it gives an unfair price advantage to foreign importers, as locally produced products will have to rise in price to cover the increased cost of carbon. This means not only does the New Zealand consumer face higher prices, our employers could go out of business as they loose market share to cheaper foreign goods.

Of course the reality that Labour is ignoring here is that if serious changes aren’t made, the consequences of climate change for New Zealand, both economically and politically, will be far worse than anything the trading scheme could cause.

Labour argues that by the time the exemptions run out, foreign countries will have emissions trading schemes of their own, meaning the problem of leakage will no longer be an issue. According to them, exemptions are just a way of ensuring we have a slow and sensible response to climate change.

The problem is, Labour didn’t promise “slow and sensible” they promised we would be one of the first carbon neutral countries on Earth. By failing to deliver on this promise, Labour has backed itself into a corner. Either the promise was a lie to win votes, or Labour is a sincere believer in the scheme, yet was willing to compromise it’s beliefs so as not to piss off the business community. When it comes to climate change, Labour are either liars, or people who can’t get the job done.

What a great message to be sending voters in election year.

Ouch, my pride

So I read this today, from another excellent blog, http://www.medialawjournal.co.nz/?p=103 and I have to give credit to Michael Cullen for his AMAZING dodge of the question on student allowances. What a hearty and long winded way of saying “No, piss off”.

This guys one of my bad ass politicians for a reason people.

Say what you want about Labour, but at least they can work stairs…

On Thursday I was lucky enough to have a sit down interview with John Key, which should be running in Canta soon. Actually getting to meet politicians has been one of the most interesting parts of this whole writing thing, if only to see how they act in person.

You get some very interesting looks into how people actually are when you get to meet them in person. For example Russel Norman swears a whole lot more in person than I would have expected, and Nandor Tancoz is very open about the way he is perceived, an admirable quality in a member of parliament.

Meeting Roger Douglas (yes, the interview is still coming, I’m being messed around by his press people) in person was REALLY interesting, as he did a couple of small things that probably say a lot about him.

The first of these when was when I was walking him up to the Canta office to do the interview. I was walking ahead of him, and opened the door and walked through, keeping my hand on the door to stop it swinging shut on him. When he saw I was doing this, he sped up a little and walked past me, the end result being thatI was now politely holding the door open for him as he walked past me, instead of simply stopping it from slamming on him as I walked past. It’s a really little thing, but to me it showed he’s clearly used to dealing with people who either A) Treat him like he’s royalty or B) Have a lot better manners than I do.

The second really interesting thing that happened with Douglas was at the end of a very engaging interview we had to cut short due to time constraints, I raised the possibility of finishing the interview via email or phone. He said this was fine, and as he walked out the door, ran off a string of numbers including what I think was an extension number, without even turning to look at me. I was left standing alone in the office thinking to myself “Umm….so that was 03….94….um……crap”.

Clearly a man used to dealing with people who you can throw a string of numbers at and have them memorise it in an instant. I like to think of the ACT head office as being like what happens when I go drinking with friends taking commerce degrees. They discuss the in depth implications of rises of the price of fish in India, and its effect on medium term inflation in proportion to the price of grain in china, and I stare blankly in my bowl of chips and thank God I’m taking a BA.

But by far the most interesting person to interview in person has been John Key. This is a guy who has dominated New Zealand politics for the last year and a bit, and at this stage looks like the Prime Minister in waiting. As a person, he’s also very interesting to me, as he grew up a block away from where I used to live, and we went to the same high school. As someone studying political science, I also have to say though the arm chair politician in me disagrees with some of his moves, the guy (Or Kevin Taylor or whoever else is writing is lines) is VERY good at politics, especially the media side of it that I find so interesting. I’ll point it out when I post the interview, but even in person to me, off the top of his head, he frames a new issue in a way that fits and advances the overall message of his campaign.
Brilliant.

The biggest surprise in meeting Key was actually how…small he seemed. Usually with politicians you get a sense they KNOW they are someone important and demand you acknowledge that in someway (see Douglas and the door). With Key, there was no sense that he carried himself as if he thought he was important. From the moment he got out of the car he was friendly, chatty (he and my editor ended up talking about Ali Vs Liston and The Flight of The Concords), and an all around nice guy.

The cynic in me (and it’s a VERY cynical one) wonders how much of it was an act, a political mask, the sort of thing that gave him the nickname “the smiling assassin” when he worked as a currency trader. To rise to the top of the National Party, which is famous for its bitter leadership disagreements and unfriendly caucus, you need a lot more than just charm. You pretty much have to be a goddamn bad ass.

Yet if there is a deep dark killer instinct to Key, he hides it well in person.

From a political science standpoint, this approachable, charming yet not pompous type of guy is EXACTLY the type of guy I would want if I was Kevin Taylor and running a campaign against a Government with as many scandals, and as high a negative as Labour. In a campaign that has become so much about personality, I really think Labour might be boned this year. Still, there is one advantage they have over Key.
Helen Clark has figured out how to work stairs.

So there I am, a little star struck to be meeting John Key, and we’re walking up to the Canta office, up the flight of stairs in the UCSA building when suddenly, BAM, Key trips and falls on the stairs, and comes quite close to hitting his head.
Awwwwwwwkward.

So there you have it, the guys a political genius, he’s probably going to win the election, but he can’t quite master the art of walking up stairs.

Finally, the weakness Labour has been waiting for.

Michael Cullen Interview

Michael Cullen is the Deputy Leader of the Labour Party, and the current Mnister of Finance. Hayden Munro talked to him about the upcoming elections, the differences between Labour and Nationalm and the health of the economy.

1. Since John Key became the leader of the National Party, National has been moving closer to Labour on a number of policies, such as nuclear ships, interest-free student loans etc. With National’s policies now so close to Labour’s, what reason do people have to pick one over the other? What major differences still exist between the parties?

Many New Zealanders would, I am sure, love to believe that National has surrendered its bitter and staunch opposition to every progressive policy initiative enacted by Labour in government these past eight years and now embraces everything that it previously so strongly opposed.

National thinks that it has all of its bases covered because it has so many positions on almost every major issue.

But the record is that National strongly opposed this government’s initial move to end the requirement for payment of interest on loans by students still in study. National strongly opposed Labour’s 2005 decision to remove interest on loans for those working in New Zealand – a policy that John Key has also described as “ill-considered and poorly designed” and said “it was never for us (National), because we have standards”.

In the case of the Labour-led government’s long-standing position in favour of multilateral action mandated by the United Nations Security Council, it is critical to recall that in 2003 the National Opposition strongly attacked the government because, they said at the time, we were somehow not standing sufficiently close to our allies – National condemned Labour’s decision not to send young New Zealand soldiers to participate in the invasion of Iraq.

National’s branding in 2008 is to hide its record and to muddy the waters around what its actual agenda is in the hope that no one notices until after people have voted.

2. Labour has been criticised by the for failing to deliver meaningful increases in the numbers of students receiving student allowances. In fact according to an NZUSA Press Release on 29th February “the number of students receiving an allowance and not having to rely on a student loan actually fell by 10%” in 2006. With student debt just recently hitting 10 billion dollars, is Labour still committed to major increases in availability of allowances, given that in 2005 Labour promised that half of all students would be receiving an allowance under a third term Labour Government, which so far has not happened?

Labour views the promotion of young New Zealanders into higher education and skills training, and life-long up-skilling of the workforce, as vital ingrendients not only to promote social justice and fairness but also in lifting the productive capacity of the economy over time.

Without wanting to sound like a broken record, Labour’s record on promoting higher education since our first budget in 2000 puts National’s nine years in government to shame. The record includes:

Scrapping interest on student loans so that Kiwis working in New Zealand after graduation get their interest removed (so that the estimated loan repayment time has decreased since 1999; (The estimated median loan repayment time is now under 6 years, (for those who left in 2003, half will have repaid within 5.8 years for men, 5.7 years for women);
Labour has capped tuition fees for tertiary education. This move, together with increases in the student loan scheme and the interest-free policy, has contributed to a rise in the number of students attending tertiary institutions;
If you are based overseas, Labour has introduced a repayment holiday for up to three years and that means that no compulsory repayments are demanded if you are having your O.E.

In politics, governments have to make choices across a vast number of demands within the community every day.

Labour’s choice has been to use its annual budget each year to increase funding for New Zealand universities to assist our institutions to remain competitive in delivering high quality education and to increase funding for students because Labour believes these investments offer not just private gains to the individuals and families that benefit, but nation-wide gains in terms of creating a fairer, better educated and more economically competitive society.

Budget 2008 will continue on that record.

3. What other policies will Labour be offering this election to help with the issue of student debt?

Labour’s 2008 election manifesto will be finalised in the next few months, after consultation with the public and sector groups, and individual policies will be released during the campaign period.

Even at this early stage, however, it is clear that there will be clear differences between the two main parties. One is that National will out-bid whatever policies Labour delivers on the personal tax front. The second is that National is committed to the Crown running higher debt levels than the Labour-led government.

Both of these things mean that if National were to lead the next government in New Zealand, it would be an administration required to reduce some of the big ticket items of the Labour-led government. So if it is a National-led government, then that means cut-backs in education, health, superannuation and social security relative to what is being delivered by Labour.

4. There has been a lot of talk about the possibility of an economic downturn, spurred on by problems in the American economy. How does Labour propose New Zealand respond to the challenge of a recession? Is there anything the Government can do?

There is no question the global economy is in a challenging period in the wake of the dual impacts arising from the sharp weakening in the United States economy and the sub-prime “credit crunch” which has pushed up the cost of borrowing across the world as commercial institutions demand higher returns on lending – that means people re-setting their fixed term mortgages in New Zealand are feeling the effects.

On top of that, another trend in the international economy is sky-rocketing commodity prices. This has delivered a significant step-up in international prices for basic commodities including meat, bread, dairy and oil and it is driven, in part at least, by increasing demand from the rising economies in east and central Asia and in south America.

These major trends in international markets go a long way to explaining why the Treasury and the Reserve Bank are forecasting that our economy’s rate of annual growth will be materially slower over the course of 2008 than the very strong rates of annual growth New Zealanders have become accustomed to since the start of the century.

Their view is that the current slowdown is a cyclical adjustment before the country returns to the rates of growth that we have become accustomed to.

A cast-iron commitment that you have from Labour is that we will not do what National did when it was in government during the Asian economic slowdown in the late 1990s or the recession in the early part of that decade.

Labour will not use the excuse of a slow-down to hurt students, pensioners or those relying on support from the government.

Labour will not defer investments in this country’s long-term future, such as in the transport sector or in securing the future of universal NZ Superannuation, just because we are going through a temporary slow patch.

That is the difference between Labour’s record and the record of the current front bench of the National Party when they were tested in government.

5. In relation to the question above, as the cost of living continues to rise, what will Labour do to help those on lower incomes who are struggling to make ends meet? How does this differ from the policies of other parties?

In simple terms, Labour’s record is the opposite of National’s when it comes to protecting the financial interests of the majority of New Zealanders who are on middle and low incomes.

Just one example of this, which flows through to the wider community including tertiary students with part-time jobs, is that the Labour-led government has each year increased the statutory Minimum Wage by more than the rate of inflation.

Budget 2008, with its programme of reductions to personal taxation, together with the policies that the Labour Party will put to voters in Election 2008, will again underline how Labour’s policies are designed to promote the interests of the majority, while National’s interests are designed mainly to benefit the minority at the higher end of the household income range.

6. The issue of the gap in after tax wages between New Zealand and Australia has been a cornerstone of the campaign’s of National and ACT. According to a press release by Bill English in late March, the gap in after tax wages between the two countries is now at 34%.What do you think has caused this wage gap to open (beginning in 1984) and to grow to as large as it is today?

Mr English’s comments do not take into account the most significant change that has been made to the level of taxation on families with children in New Zealand in a generation.

Labour’s Working for Families’ package of tax reductions for families with children has significantly reduced the level of tax paid by a vast majority of such families, a programme that National has refused to sign up to although it refuses to elaborate on its own precise plans prior to people casting their vote in the election.

If you leave aside Working for Families and simply look at moves in gross incomes across both sides of the Tasman, then official statistics indicate that the wage gap between Australia and New Zealand was 18.9% in inflation-adjusted or real terms in 1990, when National got elected, and it grew to 28.4% by 1999, when National lost. That is about a 50% increase or widening in the gap during the National administration

Since 1999, the widening gap has been stopped in its tracks – the gap widened from 28.4% to 28.8%, that’s a 0.4% change, under Labour.

Moves by this government such as its heavy investment in up-skilling and progressively raising the minimum wage, labour market reform to encourage trade unions and business sector groups to work together to leverage more out of competitive advantages, plus the fact that New Zealand’s economy since 2000 has grown faster than the average of the O.E.C.D. group of developed economies, have assisted to stop the rot on that front.

Other Labour measures, such as modernising our paid parental leave, annual workers’ paid leave entitlements and free preschool education, also make New Zealand a more competitive society in its contest to retain and attract workers in an increasingly borderless world.

(It is also worth noting that tertiary students with part-time jobs are also better off because the government has increased the amount students can earn while receiving a full student allowance (now $180, was $135 per week) and introduced a dollar-for-dollar abatement beyond the $180 (was a cliff-face: $181 meant no allowance).

7. What will Labour do to close that gap?

Labour’s programme has stopped the rot. Measures introduced in April (cut to the company tax rate, measures to facilitate firms’ research and development and the expansion of the KiwiSaver scheme to include employer contributions to workers’ personal savings) all act to further improve our competitiveness as a society and economy. The programme of personal tax reductions that will form a part of Budget 2008 will further assist New Zealand’s performance.

8. Roger Douglas in particular has made closing the wage gap a major theme of his campaigning this year, criticising you in particular for your refusal to cut tax in the last few years, at a time of large Government Surplus. He referred to you as “one of the poorer ministers of finance in the last 50 years”. How do you respond to those comments?

Mr Douglas wants to be the Finance Minister in a future National-led government – the record of the 1990s is that the policies that Mr Douglas was a champion of in fact led that dramatic widening in the gap in wages across the Tasman that he now laments.

This Labour-led government has indeed utilised a portion of its surpluses in recent years to invest into the New Zealand Superannuation Fund – that fund is to protect the future retirement of currently working New Zealanders.

This Labour-led government has indeed utilised a portion of its surpluses in recent years to undertake an very wide investment programme in transport and other infrastructure, in promoting research and science development, in export promotion and in skills and education.

Most non-political analysts of the drivers of productivity over time would agree that investment in skills and innovation, increased access to overseas markets, infrastructure and significant moves to make the company tax rate, R&D and depreciation regime more competitive, are critical factors that will drive New Zealand’s non-inflationary trend (or “potential”) growth rate higher over time because these are key ingredients of raising our competitiveness as a place to do business.

9. Just one more question on the wage gap. I recently interviewed Don Brash, in which he argued that “Since it is growth in productivity which ultimately determines living standards, there is no earthly point in governments talking about reducing the flow of New Zealanders across the Tasman to take advantage of much higher after-tax wages and salaries there unless they also have a clear plan of how they are going to raise productivity growth.” Do you agree with Dr Brash that productivity growth needs to be higher? What can Labour do to increase productivity growth?

Strengthening the productive capacity of the economy is critical to New Zealand’s long-term competitive position as a place to do business and as an attractive place to work and raise a family.

That is why National’s record in government in the 1990s, when it choose to under-invest in roading and other key infrastructure, when it choose to do nothing to cut the corporate tax rate or improve our R&D competitiveness, undermined New Zealand’s competitiveness relative to Australia.

Labour’s social record of improving the rights of workers to modern paid parental and annual leave entitlements, and progressively and consistently raising the legal minimum wage and involving trade unions and business sector groups in an intelligent partnership in the government to leaverage more out of competitive advantages as a nation, assist to make New Zealand a more attractive place to work and live.

National’s failure to address these issues in the wated decade of the 1990s helps to explain why the gap in conditions and wages between Australia and New Zealand widened so dramatically between 1990 and 1999.

10. Labour receives strong support from working class voters who often suffer from moves to increase worker productivity (such as many of the 80’s and 90’s free market reforms) can Labour really make major progress on increasing productivity growth without hurting its core vote?

The record of the 1990s is that social inequalities rose dramatically at the same time as the National government of the time significantly under-invested in infrastructure, in skills, in research and development and in higher education.

A tragedy of New Zealand in the 1990s is that is was a period of deep social divisions and economic policy unfairly penalised those on middle and lower incomes to the benefit of those on higher incomes, at the same time as we failed as a nation to invest in building up the productive capacity of our economy.

Societies can spend an awful lot of energy wasted on internal disputes when divisive policies are implemented by their governments and National’s record in the 1990s is one of divide and rule policies that benefited a minority over a majority, leaving too many behind, co-inciding with a period of relative economic under-performance as measured in the widening gap in wages versus Australia during the period.

11. Obviously Tax Cuts have been a vital issue in the election campaign so far. How do you respond to the criticism that Labour’s decision to announce Tax Cuts in this year’s budget, after cancelling earlier tax cuts, is nothing more than political manoeuvring? Why not give tax cuts before election year?

Labour’s record in its first eight budgets has been superior and broader in scope than National’s nine budgets in the 1990s.

To date, Labour has reduced taxes to the value of around $4.5 billion a year to the benefit of families with children (Working for Families), R&D tax credits and changes to depreciation regime, moves to encourage a personal savings culture (KiwiSaver), the reduction in the company tax rate by ten percent (to 30 per cent from 33 per cent) and other measures covering savings vehicles and earnings on offshore investments.

National’s nine year record was that it did not do any of these things.

National’s record is that it choose what it perceived was the most politically advantageous route of promising personal tax cuts as it approached its second election in government (1996) and its third election in government (1999).

Budget 2008 will include a programme of personal taxation reductions that will build on all of the other changes already in place to assist families with children, to promote a stronger personal savings culture and enhance our economic competitiveness.

12. The Electoral Finance Act has been one of Labour’s more unpopular policies, and a lot of that has been put down to drafting errors in the first draft of the bill. There has been talk of possible reforms to the Act, do you support reforming the Electoral Finance Act? If so, what changes would you like to see?

Labour believes that it was inherently undemocratic that in the 2005 election large amounts of finance were thrown about trying to influence the election in National’s favour and that those that financed the campaign hid their identity.

Labour believes that was undemocratic because voters has no way of knowing who was behind the campaign, what their agenda was or if National had made any deals with those wealthy backers.

Labour believes that New Zealand should have more transparency around these issues to keep us up to date with other modern democracies and we are always open to genuine proposals on how to improve on the law.

13. Bernard Hickey, a Fairfax Financial Commentator recently criticised New Zealand’s high levels of Government spending, and its effects on the economy. According to him “Government spending is growing at a rate of 9.8%, which was more than twice as fast as revenue growth at 4.5% and twice as fast as estimated nominal GDP growth at around 5%. The government is eating the economy.” This is a common criticism of Labour, especially from National. Does Labour agree Government spending is too high? If not, why not?

Labour’s fiscal strategy is published once a year in the Fiscal Strategy Report.

Over the past eight years, a key priority has been to reduce the Crown’s gross debt levels down to 20 per cent of GDP (from above 35 per cent when National left office in 1999) and to build-up financial assets in the New Zealand Superannuation Fund.

Labour is the first government in New Zealand’s history to be in a net positive financial asset position. Having more financial assets than liabilities, Labour believes, positions New Zealand very competitively ahead of known future challenges including population ageing and global climage change.

Consistent with these efforts to strengthen the Crown’s financial position, Labour’s fiscal strategy is also to maintain the Crown’s spending and revenue levels at broadly stable levels as a ratio to GDP across economic cycles.

Labour pleads guilty to the charge that we have since 1999 very significantly increased spending in public health and education, skills and superannuation, and in infrastructure. We had to reverse an investment deficit that we inherited upon entering government and we have successfully done so.

National’s relentless campaign against “government spending” is just code language for its hope of returning to under-investment in infrastructure, health, education and NZ Superannuation if it ever returns to the Treasury benches.

14.Anything you haven’t told any other media people, so tha I can say I was the first to find it out? Maybe an announcement on the specific nature of the Tax Cuts? An Early look at the budget? Canta loves bragging rights.

Labour believes in fairness – information has to be released to everyone at the same time so every has equal access to the information that might impact on their lives. But here is an insight that many have missed and for Canta to expose: National’s agenda is divide and rule. In the 1999, 2002, 2005 and in the upcoming election, its strategy is based on trying to win over a majority against a selected minority (“mainstream New Zealanders” versus the rest, “Kiwis versus iwi” or it latest trick – open season against “State bureacrats”.

Labour’s Budget 2008, in contrast, will again be about how to strengthen all of our futures.

Policy and the Nats: At last they meet.

“Getting on with the business of governing”

It’s a phrase that’s been repeated over and over by the Labour Party in the first few months of this year. It refers to a strategy of big Government policy initiatives, rolled out one after another. Labour, trailing in the polls, wants to use the advantages of incumbency as much as it can. The results have been impressive; we’ve seen major policy announcement on Youth Crime, Housing Affordability, Asset Sales, Research and Development, Tax Cuts promised, major steps towards a cap and trade system for Carbon Emissions, as well as highly touted results in decreasing child poverty by around 70% since 2004. Strategically these announcements, so well timed to build on each other, are an attempt to create the image of a Government working hard for New Zealanders. A Government with big ideas and important plans for the future.

However, they also have another effect. They are an attempt to highlight a major difference between National and Labour. Since John Key took over, National has been criticised for being light on policy. Instead they rely on attacks on the Government, and a charismatic and affable leader to win votes. Labour has heavily criticised National for what they perceive as a lack of ideas and a lack of firm convictions. Helen Clark recently called them an “empty brand”. In her eyes, National doesn’t really believe in anything except winning power.

Recently however, National, slowly but surely have been releasing policy of their own, and the results are very interesting.

Last year we saw National make a few baby steps towards announcing substantive policies, with disastrous results. Key faltered hugely when announcements on health showed that GP fees would be rising under National. Labour, and especially Helen Clark who once helmed the Health Portfolio, sensed weakness and pounced. National was left with egg on its face, while Labour was trumpeting “Party Vote National=Unaffordable Health Care” at the top of their lungs.

This year however, National seem to have smartened up, both in the policies themselves, and the way they are released.

The first major announcement came in Key’s much talked about “State of the Nation” address, where he promised a strong crack down on Youth Crime, including the infamous “boot camp” idea.  The Policy was VERY well received, with editorials all over the country singing its praises.

In a deft strategic move, Key then announced the creation of a victim’s compensation fund, to be funded out of a new fine of $50 to anyone convicted of a crime. This was classic compassionate conservatism, painting National as tough on crime, while still looking after the victims. A sure vote winning stance if ever there was one.

More recently, Key gave a speech to the Sensible Sentencing Trust, a powerful lobby group that advocates for the victims of crime. In his speech he unveiled a number of very good initiatives on Crime. These included the announcement that National “will fully fund under-18-year-olds to take part in that education – but it comes with a catch. If they fail to take up their entitlement they will not be eligible to receive government income support.”

This is a great policy, as it shows National is striking a good balance between incentives and punishment, avoiding the negative and aggressive campaigning on crime the right is known for.

In addition Key announced a “spotlight sentence”, monitoring of youth offenders which will require “will require them to comply with a court-ordered contract.  This contract will set out the court’s expectations of the offender, including, for example, curfews, an end to gang involvement, regular school attendance, and compliance with drug treatment programmes.”

On top of this, Key also announced that National would scrap Labour’s controversial reforms to the bail laws, which has seen it easier for offenders to gain bail and parole. Key cites as a reason these changes are needed

“The awarding of bail last December to a 16-year-old who was released to his mother’s Matamata home while awaiting sentencing for aggravated robbery.  When police did a bail check on a Saturday night he wasn’t there.  He allegedly raped a 15-year-old girl that night and was bailed again”

This is classic opposition politics. Key has identified a very unpopular Government policy, shown the public why the policy isn’t working and produced a clear way to solve the problem. It’s a simple offer for voters: If you’re sick and tired of reading stories in the paper about people reoffending while on bail, vote for National and we can provide a solution.

Crime is a very emotive issue for a lot of people, and with high profile violent crimes like the Marie Davis case grabbing headlines, National’s strong policy position on Crime is a real benefit to the party.
National it seems are slowly learning the art of announcing policy. As well as crime, they recently announced a 1.5 billion dollar fibre to the home broadband investment, which has been widely praised by a number of industry groups as visionary. Labour has however criticised it for being anti competitive, since Telecom will benefit far more from the policy than any other internet company. Despite flaws, National’s broadband policy seems to have been well received by the public.
If National can keep up this standard of policy, they close down one of Labour’s favourite avenues of attacks. They can show the public they aren’t an empty brand, but a group ready to lead the country. This puts the Government, already behind in the polls, in the tricky position of convincing voters that after 9 years in power, a struggling economy and numerous scandals, they still have a better plan for the country. National is benefitting hugely from the fact that after 9 years, many people feel it might be time for a change. More strong policies will make National appear a serious alternative to the Government, rather than just “Labour-lite”.