I wrote a post about our priminister John Key back in July 2008 that his success should be celebrated rather than used against him in a political way as it has been with the Labour Party, the rabid left media and Labour's mates in the unions.
Wellington, New Zealand
These days, you have to travel far to find a national leader who is talking about market-based approaches to the global recession. All the way to the other side of the world.
![[The Weekend Interview]](http://s.wsj.net/public/resources/images/ED-AJ120_winter_DV_20090305125709.jpg)
Terry Shoffner"We don't tell New Zealanders we can stop the global recession, because we can't," says Prime Minister John Key, leaning forward in his armchair at his office in the Beehive, the executive wing of New Zealand's parliament. "What we do tell them is we can use this time to transform the economy to make us stronger so that when the world starts growing again we can be running faster than other countries we compete with."
That idea -- growing a nation out of recession by improving productivity -- puts Mr. Key and his conservative National Party at odds with Washington, Tokyo and Canberra. Those capitals are rolling out billions of dollars in stimulus packages -- with taxpayers' money -- to try to prop up growth. That's "risky," Mr. Key says. "You've saddled future generations with an enormous amount of debt that then they have to repay," he explains. "There is actually a limit to what governments can do."
The 47-year-old Mr. Key, a pragmatist by nature, knows a thing or two about how the public sector works. The youngest of three children, he was raised in state-owned housing in Christchurch, on New Zealand's South Island, after the death of his father. His mother worked at blue-collar jobs to keep the family afloat. Mr. Key earned a bachelor's degree in commerce from the University of Canterbury, took a job the next day at a local accountancy firm, and married his high-school sweetheart. After seeing a TV advertisement about a foreign-exchange trader, he started canvassing banks for a job. That kicked off a career as a foreign-exchange trader, with postings in Singapore, London and Sydney -- most recently at Merrill Lynch. "Bank of America," he says, with not a little mirth, "it's probably soon to be owned by Barack Ob-ah-ma!" -- emphasis on the "ah" in Kiwi-speak. His press secretary rolls her eyes.
Mr. Key's coalition government, which includes parties to the right and left of the Nationals, has moved fast to implement a program of tax cuts, regulatory reform and government retooling. He won't label it supply-side economics and smiles when I ask if he's a Milton Friedman or Friedrich Hayek acolyte. "I'm not deeply ideologically driven," he says. "I believe in good center right politics."
Mr. Key is returning the country to a formula for prosperity that's worked in the past. As in Britain, the U.S. and Australia in the 1980s, New Zealand's government implemented a wide-ranging program of economic liberalization, including deep reductions in tariffs and subsidies, and privatization of state-run industries. The plan, nicknamed "Rogernomics" after then-Finance Minister (now Sir) Roger Douglas, was akin to Reaganomics, and the island nation grew smartly.
But while the U.S. and Australia broadly continued their economic liberalization programs under both right- and left-wing governments, New Zealand didn't -- until now. Over the past nine years, Helen Clark's left-wing Labour government rode the global economic expansion and used the revenue surge to expand government welfare programs, renationalize industries, and embrace causes like global warming. As a result, the economy stagnated while Australia took off.
"We have been on a slippery slope," Mr. Key says, pointing to the country's slide to the bottom half of the Organization for Economic Cooperation and Development's per-capita GDP rankings. "So we need to lift those per-capita wages, and the only way to really do that is through productivity growth driving efficiency in the country." He talks at length about how to attract and retain talented workers. What does he think about populist arguments about the end of capitalism? "Nonsense!"
Mr. Key's program focuses first on personal income tax cuts, which -- given that the new top rate, as of April 1, will be 38% -- are still high, especially when compared to Hong Kong and Singapore. "We just think it's good tax policy to lower and flatten your tax curve," he says. "People will move in labor markets and they look at their after-tax incomes."
Cutting the corporate tax rate -- which is now 30% -- isn't as crucial just now as keeping liquidity flowing, Mr. Key argues. "A lot of [companies] won't pay tax if they don't make money," he reasons. "So they might be slightly less focused on corporate tax in the immediate future. Longer-term, they will be." Why? Corporate money is "mobile." "If you really are out of whack with the prevailing corporate tax rates, and there's been a global shift toward countries lowering their corporate tax rate, then you're not likely to attract capital, or you're likely to lose capital." Mr. Key and his coalition partner, the ACT Party -- Mr. Douglas's party -- want to eventually align personal, trust and company tax rates at 30%.
For now, the prime minister is focusing on chipping away entrenched regulations that drive away foreign capital -- a contrast to the U.S. and Australia, which are reregulating their markets in the wake of the financial crisis. "Good regulatory reform can be an important catalyst toward driving economic growth and coming out of the recession faster," Mr. Key says. His government is revising legislation meant to protect New Zealand's pristine environment from private-sector development but misused by greens to stymie all stripes of business plans.
Big government is also coming under the gun. Mr. Key launched a "line-by-line review" of every government department, and committed the government to cap new spending in its May budget. "If we want to fund new initiatives, we by definition have to stop [funding] some of the things we don't think were working. . . . We're just getting better value for money."
The Key government also is wary of climate change orthodoxy. "Half of all of our emissions come from agriculture," he says, meaning cows "burping and farting." "We don't have an answer to that. . . . So at the moment, we either become more expensive or we cut production. And neither of those options are terribly attractive." Mr. Key is reviewing the economic impact of the previous government's cap-and-trade plan. "New Zealand needs to balance its environmental responsibilities with its economic opportunities, because the risk is that if you don't do that -- and you want to lead the world -- then you might end up getting unintended consequences."
Much of Mr. Key's reform agenda hinges on his belief that he has to prepare his country to compete in the global economy. "The world, whether we like it or not, will become more and more borderless," he says. That means Wellington is planted firmly behind free trade. "The sooner Doha is completed," Mr. Key says, referring to stalled global trade talks, "the better from our point of view."
Mr. Key chuckles when I ask him about the "Buy American" provision tucked into the Obama administration's stimulus package. The previous government's "Buy New Zealand" campaign got a "lukewarm" reception, he recalls. "There are so many component parts manufactured in different parts of the world, you're chasing your tail the whole time about where something's actually made."
New Zealand last year inked a free-trade agreement with China, recently signed a deal with the 10-member Association of Southeast Asian Nations, and announced the start of negotiations with India and South Korea last month. Korea "obviously" wants an FTA with the U.S., he says.
Does New Zealand's model hold lessons for the Obama administration? Mr. Key says that might be "presumptive." But he does outline a few general lessons: "Your citizens are entitled to expect you to be realistic . . . to be specific about what it is you're going to do, what you can or can't do. And finally, I think, to be confident that you can get through it. Now there's plenty of doom and gloom merchants out there. But the single biggest risk is that everyone believes them and stops doing anything. I can't see how that helps us." What did he learn in his former trade? "It taught me not to panic."
Going forward, he worries about, among other things, the U.S. dollar's path. Like most other trading nations, the bulk of New Zealand's exports is denominated in dollars, and the country's private sector borrows heavily from offshore markets. Says Mr. Key: "For anyone trying to manage currency risk, and indeed often interest-rate risk, you know, it's not generally the absolute level, it's more the volatility that becomes the determining factor." A strong and stable dollar policy out of the Obama administration would be helpful.
But ultimately, Mr. Key says his biggest fear is rising inflation on the back of rising money supplies. "Economic theory will tell you that inflation is going to rise -- and that inflation will be exported around the world. . . . In the short term, I'm not criticizing U.S. policy: I think inflation is probably the thing that's going to be necessary to get them out of the current issue. [Federal Reserve Chairman Ben] Bernanke sort of signaled that. But longer term, inflation is cancerous to your economy."
So would Mr. Key, the onetime foreign-exchange trader, buy or sell the U.S. dollar? As we move toward the door, the press secretary steps in: That's one call that's off the record.
Ms. Kissel is editorial page editor of The Wall Street Journal Asia.
So Helen Clark told the Herald last night that national was taking a "laissez-faire attitude" to the current financial crisis.
An in depth interview with John Key, the new New Zealand Prime Minister, by John Campbell on TV3 on Sunday November 9.
The fact that Inga the Winger and Iceman Jones are publicly backing John Key, in the very centre of Labours turf should not be lost on Helen Clark, Labour and its supporters.
"We don't want our people just working in factories", said Tuigamala. "We want them starting to own those factories." They criticised Labour, saying they had undermined the moral values of Pacific people by decriminalising prostitution and allowing civil unions. More
Michael Cullen's belated move last week to guarantee deposits in the wake of a major world credit meltdown is his dumbest move ever as Finance Minister in 9 years and puts our banking and financial system at massive risk.
So the rabid left don't think John Key is going to be flexible with their Maori seats policy if it means they can negotiate a deal for form a government after the election huh?
The all important Women's vote is swinging John Keys way:
Much has been written about the current meltdown of the worlds financial markets and apart from the fact that it is failure brought on by politicians interfering in the free market, rather than the favourite whipping boy of the socialists, the free market itself, it presents problems for our new government come November 8 2008-whoever gets elected.
I have to say, given my passion for investing-some readers of Political Animal might know I write about investing and business on my Share Investor Blog -I like to dot the "I's" and cross the "T's" when it comes to disclosure.
I have to admit it I am like Obama because I have a similar haircut-it doesn't make me Presidential material though.
O.K. lets have a full look at the article that the Left is bleating about to deflect scrutiny over secret donations, undeclared funds and lies from Winston Peters and omissions of truth from the Prime Minister over Winnie's behaviour.
Here is the Obama reference in its full context where it makes sense. From the Financial Times.
But John Key, a 47-year-old former Merrill Lynch investment banker and republican, risks arriving ahead of time.
After entering parliament just six years ago he stunned many by taking over in 2006 as leader of the conservative National party and he will become the most inexperienced politician to lead New Zealand in more than 100 years if he succeeds in winning government.
“I’m a bit like [Barack] Obama. I am not institutionalised in Wellington [the country’s capital],” Mr Key told the Financial Times from his parliamentary office. “I had 18 years in the commercial world and I will be quite pragmatic.”
Mr Key said his years in Singapore, London, and New York, where he latterly ran global foreign exchange for Merrill Lynch and spent two years on the foreign exchange committee of the Federal Reserve Bank of New York, would help.
Continued
It was a small, off the cuff comment by Key, the larger part of the article mentions nothing else Obamaesque-thank god for that!!
Duncan Garner on TV3 last night is getting almost as desperate as Helen Clark.
Another fabricated non-story about Lord Ashcroft meeting John Key for dinner, and the Obamarama piece latter on in the TV3 "news".
But he conceded that his experience in finance was useful only to a point. “There are a huge range of issues you need to be across. Economics is good but it is only one part,” he said.
It is very 3rd form video studies type stuff from Garner.
c Political Animal 2008
John Key, the National Party's leader, is going to continue to give part of his salary to charity when he becomes Prime Minister in November.
Rodney Hide praised Key as a "generous Kiwi" and the spiteful Winston Peters called the gesture "politically motivated".
Bizarre coming from Peters as he generously gifted NZ$155,000.00 of stolen taxpayer money from the 2005 election campaign to 40 different charities recently instead of paying it back to where it came, and he clearly got no political capital from it!
It is not the same thing though.
No comment from Helen Clark, the wealthy property owner who only likes to give other peoples money away, to buy votes.
Related Political Animal reading
John Key's success should be celebrated
The John Key Story-Part One
The John Key Story-Part Two
Pointing fingers in the playground
c Political Animal 2008
The 2008 NBR Rich List is out. I suspect most Leftists will be looking at the list with a large amount of jealousy and an unhealthy level of suspicion.
Your Eric Watsons and Michael Fays of the list do have a huge amount of tarnish to their wealth. Watson behind more losses for investors, including the recent Hanover Finance collapse, than the All Blacks at World Cups and Fay milking New Zealand Taxpayer assets for his own personal joy, but most on the list got there because of intelligence, a small quotient of luck and most of all a great deal of hard work and stubborn perseverance.
I myself look at such people with a positive curiosity. I don't think, who did you rip off to get where you are but how did you manage to get where you are?
We got alot of political capital made today from the left, about a possible future Prime Minister, in John Key, about being at number 167 on the list with a personal fortune of around NZ50 million, but being a success in life and coming from such humble beginnings, like the number one lister, Graeme Hart, will make Key excellent Priministerial material.
Key is aspirational as Helen Clark is institutional. People like Key should be held up as examples to others of how success can come from hard work and if even if your background is poor economically, as John's was, you can still get there without having to rely on the State for life, as Clark would have someone like Key and his mother, dependent rather than independent.
In these tough economic times, that Labour have made considerably worse by their high taxes and wasteful spending, we need a leader that understands economics, markets and how business works and functions, something that is a mystery to most in the Labour Party, and especially Michael Cullen and Helen Clark.
John Key's financial acumen will be a benefit to the country and his success in life is clear evidence that he is the right man for the number one job in New Zealand.
Related Political Animal reading
Pointing fingers in the playground
c Political Animal 2008
The 2008 NBR Rich List is out. I suspect most Kiwis will be looking at the list with a large amount of jealousy and an unhealthy level of suspicion.
Rich List to 10:
1 Graeme Hart $6 billion
2 Todd Family $2.6 billion
3 Eamon Cleary $2.1 billion
4 Christopher Chandler $2 billion
4 Richard Chandler $2 billion
6 Goodman Family $1.64 bilion
7 Lynette Erceg $1.4 billion
7 Stephen Jennings $1.4 billion
9 Wade Thompson $750 million
10 Sir Michael Fay $700 million
10 Douglas Myers $700 million
10 David Richwhite $700 million.
c Share Investor 2008
The latest attack by Helen Clark on John Key has focused the spotlight on Key and Bill English and the holidays they took earlier this week.Clark said that she worked harder than the duo and was surprised they took holidays at the same time. Key and English were on holiday with their families and were taking time out with them during school holidays, as families do. It isn't a good look for our Prime Minister to have a go at a man for wanting to spend time with his family. What other way are the public supposed to look at it? It was a silly thing for Ms Clark to say, politically damaging, and shows the increasing pressure she is facing under a polling rort, a disintegrating government bureaucracy, protests and a series of gaffs by her and Ministers that have shown she isn't the Teflon Jane that everyone thought she was. It is wonderful to watch. By TRACY WATKINS - The Dominion Post | Thursday, 10 July 2008 The air above Parliament is becoming increasingly toxic as the leaders of Labour and National trade blows over the hours they work. John Key has hit back at Prime Minister Helen Clark's suggestion that National MPs worked "short weeks" and labelled it an attack on his decision to spend time with his two children during the school holidays. He said yesterday he made no apologies for being a family man. That had Labour in turn privately accusing Mr Key of "dog whistle" politics by jumping on Miss Clark's remark to remind voters she had no children. Dog whistling is a term used to refer to comments which send a coded message to your own supporters. Continued
Pointing fingers in the playground
Retreat while you are behind
Ian Wishart's Absolute Power
Phil Goff on Alt TV
c Political Animal 2008
c Stan Blanch 2008
While in her own mind and those of her Labour party colleagues, Helen Clark is still the preferred Prime Minister , the all important voters are thinking something else entirely.
This morning on Newstalk ZB Aunt Helen blamed "volatility" in the polls, when talking about the loony Greens support wavering wildly since the Heralds last poll and by implication the idea was that the poll was not to be trusted. She had another go at the paper for its poll accuracy.
This and the polls of the last 10 weeks cannot be ignored by the former high flying minister.
A definite trend has emerged and the outcome looks like a hiding for the Labour party not seen in generations.
Voters could be forgiven for forgetting about party allegiance's and voting for a winning party, National, least they waste their vote on the big loser.
Hitch your train to the wagon Abner, cause its on a non stop trip to Wellington to take out the trash.
Key Joins his party at No 1 position
John Key (right) has overtaken Helen Clark as New Zealand's preferred Prime Minister.
National leader John Key has overtaken Prime Minister Helen Clark in popularity in the latest Herald-DigiPoll survey, and his party has extended its lead over Labour to 18 points.
It is the first time since May last year that Mr Key has been ahead of Helen Clark as preferred prime minister, although his lead is only two points.
National has been ahead of Labour since Mr Key became National leader in December 2006 but apart from a surge in his popularity in May because of his role in the anti-smacking-bill compromise, Helen Clark has convincingly led the preferred prime minister polling. That has reinforced the view that despite poor party polling, she is Labour's strongest asset.
But in the past month, Mr Key and the National Party have both gone up 7 points in the survey.
Mr Key is preferred by 46.3 per cent of decided voters and Helen Clark by 44.3 per cent in the poll, conducted between February 11 and 28.
In January, Helen Clark was ahead of Mr Key by 10.5 points.
New Zealand First leader Winston Peters polled 3.3 per cent. Trade Minister Phil Goff, often tipped as the next Labour leader, scored no support as preferred prime minister.
The gap between the two main parties is so wide and coalition partners so limited for Labour - the Greens are below 5 per cent - that National could easily govern alone if the poll's figures translated to votes.
National is on 54.5 per cent (up 7 points), 18 points ahead of Labour on 36.5 per cent (down 2.2).
In the January survey, the gap between the parties was only 8.8 points.
Gender bias between the two leaders persists - men disproportionately favour Mr Key and women disproportionately support Helen Clark as prime minister.
The poll shows that voters aged over 60 have a strong bias towards National and New Zealand First.
It also shows that New Zealand First supporters have a strong preference for a coalition with National over Labour (90 per cent v 9.1 per cent) and that Maori Party supporters are not overwhelmingly disposed to a Labour deal - 57.1 per cent of Maori Party supporters would favour a deal with Labour, but 42.9 per cent would favour a deal with National.
The poll was conducted after an intense political start to the year in which both leaders made "state of the
nation" speeches and announced policies on youth crime, education and training.
Polling began after both leaders visited Waitangi, where Mr Key's meeting with Tame Iti received top billing, as did Helen Clark's aversion to Te Tii Marae.
Helen Clark hinted at media bias, saying last night through a spokesman: "Obviously the Leader of the Opposition has had a lot of publicity since the beginning of the year." She believed Labour polling was holding up and was reasonably close to the 1999 result - 38.74 per cent - when Labour took office.
"The important issue now is who has the best plan for the future," she said.
Mr Key did not believe he'd had more publicity than Helen Clark at the start of the year "and in fact she got enormous coverage from the [Sir Edmund] Hillary funeral ... not that that was political."
He believed they both received extensive, though contrasting, coverage at Waitangi.
He said he never thought his hongi with Tame Iti would damage him in the eyes of the voting public.
"I thought the mood of the nation has moved on and they started looking at Helen Clark fighting the battle that has been and gone and I think they responded positively to me wanting to engage and make a day of national celebration rather than harbouring some sort of historic dispute."
Support for the Greens is showing some volatility, falling to 4.4 per cent from 9.1 in the previous poll and 3.5 in the one before that.
New Zealand First is down 0.7 points on 2.1 per cent.
Falling below the 5 per cent threshold means neither party would win seats in Parliament unless they won an electorate.
Mr Peters has not yet confirmed that he will try to regain his former Tauranga seat, won last election by National's Bob Clarkson.
The Maori Party polled 1.5 per cent (up 0.5), United Future 0.4 (up 0.4), Act 0.4 (down 0.3) and the Progressives were unchanged on zero.
Tax cuts remain the issue most likely to influence votes, 20.7 per cent of those polled listing it top.
* The poll was of 734 respondents, and results presented are from decided voters only. The margin of error is 3.6 per cent.
