Agenda Transcript: Michael Cullen & Rodney Hide

LISA: The pay it back row over election spending reached a conclusion of sorts this week as Labour reluctantly agreed to do just that. According to the Auditor General's final report Labour misspent over $820,000 over half of which went on its pledge card. The Labour Party is now in full on fund raising mode, but the news is not all bleak for the government with the announcement of an 11 billion dollar surplus renewing the call for tax cuts. Minister of Finance Michael Cullen joins me now from Napier. Dr Cullen last election was seen as a bit of a two horse race, the pressure was on, how much of this spending mess stems from Labour's fear that perhaps you were going to lose that election at the last minute?

MICHAEL CULLEN – Minister of Finance
Nothing Lisa, what we did in the election was put out a pledge card which incidentally wasn’t half that 20,000 it was about 70,000 on pledge card and that’s what we'd done in every previous election and had been funded in a similar way and the remains of that and of all other parties remains except that of National, but the rules have not changed in the interim only the interpretation by the Auditor General.

LISA: Well the Auditor General points out in his report just because you did something wrong in previous times doesn’t give you the right to do it wrong again.

MICHAEL: Yes but I think if the rules are going to be changed in terms of interpretation then there needs to be clear guidance on that and there wasn’t in the 2005 report. I've got the press statements for that and it talks about simply being careful within the existing rules, which is not very clear guidance at all.

LISA: The Auditor General says in his report that there was some specific spending very close to the election in the last week, was Labour's spending part of that last minute rush, did you have any last minute spending like that?

MICHAEL: I can't recall whether we had any in that last minute, and of itself it would not necessarily make any difference to the general principles involved here. There was a range of spending, we certainly had one or two of our colleagues did some spending which was clearly outside the rules and we accept that, I think one colleague actually had a reference to voting for him on a charge for parliamentary services and that clearly was outside the rules as properly understood, but I don’t think that was in the last week.

LISA: Alright well the Auditor General singled out leaders for this breach of spending rules, he said all of it was bad but it said the leaders' offices were of most concern, so how much damage has this done to the Prime Minister's credibility.

MICHAEL: Oh I don’t think it's done a huge amount of damage at all, I mean the reason why most of that money was related to the leaders' votes is that the leaders' budgets have been an area where there is the largest amount of discretionary money which is available for communications or other matters. The National Party won't tell us what they spent theirs on, we believe it was mainly on staff and on travel associated with the election but the Auditor General didn’t look into that as the Speaker's report points out that that gives a somewhat unfair bias to the report in that regard.

LISA: What about Heather Simpson, the Prime Minister's Chief of Staff, what's this done to her reputation and how much is she going to contribute to paying it back?

MICHAEL: Well I'm not sure, that’s a matter for Heather like it is for all of us, I'm sure that those in the caucus who are cabinet colleagues will be expected to cough up more than those who are back benchers because we're paid more, it's a good old Labour Party principle that you pay according to your ability to pay – a bit of a problem I'm having explaining to some TV journalists I might say.

LISA: Has her reputation suffered as a result of this spending?

MICHAEL: I don’t think so at all, Heather and those who put together the pledge card were working within the rules as we understood them at the time, as they'd been in 2002, as they'd been in 1999, as National used them in 2002, so in our view there'd been no change in the rules. The Auditor General changed the interpretation, that’s in one sense fine, we accept that that is his ruling but we also argue that’s still contestable. We certainly had informal legal advice that the Solicitor General's opinion on which the Auditor General has based his views was incorrect, not at the time because we didn’t know about the Solicitor General's opinion and of course Jack Hodder's opinion. Don’t forget he's the man who took the ACT case against Donna Awatere Huata and won, his opinion is strongly in disagreement with the Solicitor General and the Auditor General would have come to a quite different overall view or would have had to have done if he'd been basing that on Jack Hodder's legal opinion not on Terence Arnold's. and that emphasises the lack of clarity because both are very fine lawyers, both are people I enormously respect.

LISA: Helen Clark reckoned this was an issue that people beyond the Wellington beltway didn’t really care about, how did she manage to get the public feeling so wrong, how was her assessment so wrong?

MICHAEL: Well clearly things kept developing and blowing up and it was reported all in the way as though there was some kind of deliberate wroughting of the rules, there was no deliberate wroughting of the rules, we've made that point time and time again and we'll continue to make that point, but the referee having blown the whistle, even if we disagree with the referee's decision, even if a television reply showed the decision was wrong the decision stands in our view and we now have to honour that and repay the money.

LISA: Is this a sign though that she's lost touch with her constituency and what they feel?

MICHAEL: Oh no I don’t think that’s a fair conclusion at all, most recent polling that we have access to shows Helen's numbers rebounding in terms of a very wide gap in terms of approve and disapprove while Dr Brash's numbers have worsened again after his brief revival for somewhat strange reasons I prefer not to go into.

LISA: Did the whole caucus and did all the members of the Labour Party council did they agree that this money should be spent on the pledge card, that the leader's fund should be spent on the pledge card?

MICHAEL: That’s not a caucus and certainly not of course a cabinet decision, it's not a matter that comes anywhere near the cabinet, it's not a matter of ministerial responsibility. You don’t run campaigns on the basis of caucus votes about what you spend and what you do, and the notion of running campaigns by ...

LISA: What was the general feeling, did everybody agree, did the entire Labour Party council agree that this was appropriate expenditure?

MICHAEL: Well I'm sure there was full support for the issuing of a pledge card and everybody would have known where that was coming from because it had come from exactly the same source in 1999 and 2002 and the Auditor General at the time had signed off the accounts for those years, so we have no reason to believe that there was any difficulty in that respect, and don’t forget most of the 2005 report that he keeps referring to was actually about ministerial publicity campaigns not about the parliamentary service vote.

LISA: We did ask the Prime Minister to appear on this show she declined, previously Pete Hodgson has been put forward as a spokesperson on this, now it's you, is this a deliberate strategy to insulate Helen Clark from this mess?

MICHAEL: No because the real issue now is what happens going forward and that’s primarily issues around the Public Finance Act and appropriations and I'm the Minister of Finance, I'm also the leader of the House and also the Attorney General so you’ve got a kind of three in one interview here on these matters.

LISA: So you're not trying to protect her approval ratings?

MICHAEL: No, these are areas which are primarily now within my responsibility and indeed last night in my bag I have a report from Treasury which once again tells me that we have to introduce validating legislation, that’s Treasury's clear advice because refunding the money has no impact upon the original conclusion of unlawfulness by the Auditor General.

LISA: When's this going to happen, when's the validating legislation going to happen?

MICHAEL: As soon as possible because that’s the direction from the Speaker in the report that she presented to the House because as long as that doesn’t happen then a pall is cast over the public accounts for 2004/5 in particular, but also we have significant problems around current expenditure because the test the Auditor General is now applying is actually very vague and very difficult to apply in practice. If I'd flown up to Auckland for this interview which could be interpreted as trying to persuade people that they should support the Labour Party then a question arises about whether the cost of that travel should be charged to parliamentary service or indeed in my case to a ministerial vote.

LISA: Have you got the numbers to get the legislation through?

MICHAEL: I'm not certain of that yet, I think the Greens will probably end up abstaining which disappoints me given their reaction to the Auditor General's report, in terms of New Zealand First I think the issue with them is that they're seeking obviously the possibility of a legal appeal, but I'd hope they'd recognise in the interim it's important to move in any case to rectify the issue around the Public Finance Act and the annual accounts. As far as I'm concerned this is really a confidence and supply matter because it will be an appropriation bill.

LISA: How much is it going to cost you though to get this legislation through, this is a coalition government, there are no free lunches, what's it gonna cost, is it going to mean retrospective legislation for National so it can pay its GST bill?

MICHAEL: Well National needs retrospective legislation not to pay the GST bill at all, it can pay that bill right now, what it's exposed to is a fine for having exceeded the spending on broadcasting and that’s what it's really asking to get out of, there's incredible hypocrisy here, we're refunding the money cos the referee tells us that, we will want to pass … legislation because the other referee tells us that, but National's saying no we'd actually like legislation so we can get out of paying a fine for what was a pretty deliberate tactic to squeeze more money out of their broadcasting allocation, after all – and Don Brash chaired the committee which oversaw the introduction of GST he must have known that you had to pay GST on your broadcasting allocation, what did he think – you're buying services from TVNZ and TV3 and so on.

LISA: Dr Cullen your party might be in the red but this week you announced a surplus that John Key described as the size of Mt Cook, so can we expect some election year tax cuts, personal tax cuts?

MICHAEL: That will depend very much on what the forward forecasts are around revenue expenditure coming into next year's budget. The priority at the moment is in the business taxation area, we've got a discussion document out on areas such as the corporate rates, targeted tax credits, some issues around depreciation, a whole range of similar matters and also there's a further discussion document coming out which should be before Christmas which will cover some very important issues around particularly what's called the CFC regime, the regime covering investment by New Zealand companies offshore etc, where there's a very strong consensus in the professional community that the New Zealand regime is too harsh and is probably holding back New Zealand growth and globalisation from New Zealand, so some room has to be made for that. There will be obviously issues to think around in terms of implication for personal taxation, but we will do those next year, they're not exactly technically complex it's really an issue what is the fiscal headroom at that point and the fact that we made a good surplus last year doesn’t tell us a great deal about the position in 2008/9 and onwards.

LISA: Alright let's bring our panel into the discussion now starting with John Roughan.

JOHN ROUGHAN – Columnist, NZ Herald
Dr Cullen why is this legislation going to be a matter of confidence and supply?

MICHAEL: Because it is an appropriation bill and therefore by definition I think it can be regarded as an issue of confidence and supply. It relates to the putting in order of the public accounts for 2004/5 and I keep repeating Treasury's very strong advice is that this must be passed and this is the only remedy, repaying the money in any shape or form does not render what the Auditor General considers as being unlawful lawful. Of course there's a double whammy here, the Auditor General is the person who is finally responsible for signing off the accounts.

JOHN: If it's legalised for 2005 will that affect the legality of this sort of spending henceforth?

MICHAEL: For a period John, the recommendation obviously in the Speaker's report is that a complete review is undertaken, there's one review already underway of parliamentary services which may be making some broader recommendations around the structure of the votes and funding within parliamentary services, that may have implications for the governing legislation so what we're proposing and this is consistent again with the Speaker's report to the House is an interim position through to the end of next calendar year, and I note that that doesn’t therefore run into election year 2008, which goes back to the previous interpretation that is clearly things like saying vote for me or canvassing for party members or asking for money for the party or whatever it may be, are clearly outside but more publicity work whether by means of targeted letters or by means of use of the phones or by travel or whatever it is, some pall is not cast over those, because actually I think all those that looked at the Solicitor General's report since of his view conclude as probably unworkable in practice, you're being asked to draw lines that can't be drawn. If I use my telephone – let's say I'm a back bench MP and on parliamentary services, if I use my telephone to call somebody up to talk to them about National Party policy does that mean that the entire account for that telephone is now sort of out of order to be paid which is the potential implication from that legal opinion.

LISA: Alright let's bring in Deborah Hill Cone.

DEBORAH HILL CONE – Columnist
Dr Cullen I wondered – what I hear from the business community is that they don’t want those sort of ad hoc concessions that you were talking about, they just want some more of their own money left in their pockets.

MICHAEL: Oh that’s interesting Deborah because certainly the view of many but it's not the view of those who are actually engaged in research and development at the sharp end, not the views of many of those engaged in things like export. Interestingly enough the predominant on areas such as skills, say from people like the ….Employers and Manufacturers Association. The problem we've got here is that people who make a lot of noise in the business sector around tax, those who tend to lead opinion often don’t represent those who are gonna be most important in terms of expanding the New Zealand economy from its current base. Our exporting record is very poor, we've scarcely lifted our proportion of exports over the last 25 years, so when people tell me that all we need to do is more of the same I'm rather unconvinced by that, I think those in the exporting sector who've been calling for specific assistance have probably got a stronger case. Every other country just about provides some form of assistance, we provided very very little indeed.

DEBORAH: Well it's interesting you should say that because at the Entrepreneur of the Year dinner this week John Judge who's the head of Ernst & Young, he got up and said just give us more of our money back, don’t give it to us like it's a present but just leave it with us and it was a resounding response from entrepreneurs who filled the hall. So it's interesting that you say those views aren’t what the business community thinks.

LISA: No no I'm not saying that at all Deborah, you didn’t listen very carefully, I said that those who aren’t engaged in R&D and aren’t engaged in exporting and perhaps aren’t doing much in the way of skills training just want to pay less tax, well of course they would, that’s taken for granted, but if we're talking about how do we expand the economy we've gotta get more research and development and actually the hard part of that's the development bit not the research bit and we've got to get more exporting. We cannot lift our productivity growth rate simply on the basis of the New Zealand economy, we have to in effect have a larger economic base, we should only come from a larger proportion of exporting and that base has not expanded in relation to the size of our economy effectively since the early 1980s. That’s not a very good track record. Mr Judge and the accounting firms tend to represent also the views of those large service sector based businesses who don’t do any of that stuff or don’t do very much of it, they aren’t giving the basis for economic expansion particularly.

LISA: I would like to get back to the Auditor General's report and perhaps more specifically how Labour treated the Auditor General. In retrospect do you think it was a mistake to criticise him so heavily in public?

MICHAEL: No I don’t think it was wrong to suggest that his views were incorrect. I'm trying to draw a very clear distinction this morning between attacking the referee and saying one disagrees with the views that he's arrived at, and I think it's a very very important distinction. We've got a tendency in New Zealand if we disagree with somebody's argument really you're described as slamming the person and engaged in a personal attack. I'm not engaged in a personal attack on Mr Brady at all, I'm saying I think the view that he's arrived at is wrong, and I think in large part that’s because I think Terence Arnold's legal view is contestable and has been contested and that’s not again to denigrate Terence who I promoted to the Court of Appeal and have a great deal of respect for, but lawyers can differ and the conclusions that flow from that can be very different and don’t forget Jack Hodder is quite an expert in the area of what parliament is and what parliament means, that’s the basis of which he won't the ACT case against Donna Awatere Huata.

LISA: John Roughan do you agree? How well do you think the Auditor General was …

JOHN: Oh I think he's done very well, I respect Dr Cullen's view that they disagreed with it but it worries me that Labour did disagree with it as I think it does most people. When you look at the rules in sort of plain layman's terms election spending is not supposed to be covered by those allocations and it just amazes me still that Labour still think it should have been.

MICHAEL: Lisa can I come back on that and quote to you the Auditor General's press statement he put out in 2005 …

LISA: Very briefly.

MICHAEL: 'Governments and parliamentary parties can legitimately pay for publicity and advertising with public funds.' It then goes on to say 'in my view the right time to consider a new framework for publicly funded publicity and advertising is after the general election. Any publicly funded advertising by parties that does take place between now and the election must be consistent with the existing rules' not just for Labour, it's Labour, the Greens, New Zealand First, United Future, and indeed the Act Party, all disagree with the report in that respect.

LISA: Alright the final word rests with Dr Cullen, thank you very much for joining us this morning.

LISA: Well it's been four months since a lightly clad Rodney Hide ventured on to our screens in Dancing with the Stars. Since then his profile and that of his party has been relatively low. Last month UMR poll registered just 0.8% support and in a week when a board member resigned citing the party's departures from its core values Hide raised further eyebrows when he said ACT would consider a coalition with Labour if it promised to cut taxes. It's been a year of change for the ACT Party but is it heading in the right direction. ACT Leader Rodney Hide joins me now from Wellington. Good morning Mr Hide how much of a tax cut is big enough to get into bed with Labour?

RODNEY HIDE – Leader, ACT
Oh look we can do a big tax cut with a surplus of ten billion dollars, we certainly would be looking at tax cuts across the board and getting the top rate down to 25 cents.

LISA: How serious are you though in your claim that you could work with a Labour led government?

RODNEY: Oh I think we've had Labour governments in the past that have followed very sound economic policy and we've had National governments in the past that have followed appalling economic policy. I think Helen Clark and Michael Cullen aren’t going to be there forever and hopefully that'll be an end to the ideological opposition to letting people spend their own money.

LISA: Well let's look at some of the areas and see if this is a workable, would be a workable arrangement. Do you agree with State ownership of Air New Zealand?

RODNEY: No.

LISA: Well Maori seats, what's your policy on that?

RODNEY: No.

LISA: And Labour would retain them. NCEA, would you keep it?

RODNEY: Well NCEA, we opposed NCEA bitterly, now it's in the system now and we need to try and work with it but I think what we should be doing with NCEA is giving schools and more particularly parents choice.

LISA: So one issue there where there's a talking point.

RODNEY: Let's back up the truck a bit Lisa. What's National's position on these issues?

LISA: So you're saying that you could cooperate with either side?

RODNEY: Well what I'm saying is we're not tribal, we don’t say National right or wrong, or Labour right and wrong, what we're doing is working for the best interests of New Zealand and New Zealanders and we say who's got the best policies. We know what we stand for, I've just explained to you what our policies are and what I'm interested in is what Labour and National are going to do, we've got as many differences with National as we have with Labour.

LISA: So what, are you telling me that National is moving closer to Labour all the time then?

RODNEY: Oh I think that’s very clear.

LISA: Alright. How do you think this revelation is gonna go down, this talk that you could work with Labour, how is it gonna go down with the Epsom electorate do you think?

RODNEY: Well you’ve made it a tribal thing about working with Labour, I've made it a policy issue, and what ACT has said we stand for policy, we stand for principles, we have a philosophy and we will support the parties that follow those philosophies and principles, not a particular party just because you know we think they should be in power.

LISA: But you did campaign in Epsom on the basis that a vote for ACT was a vote for a National led government.

RODNEY: That’s right and in 2005 National actually had some not bad policies, they weren't bad policies because they took half of ours and so we supported those half, what we've seen since them is considerable backtracking from the National Party. I actually don’t know what Don Brash and the National Party now stand for.

LISA: Why not?

RODNEY: Well they haven’t articulated it. They’ve been that busy arguing over the pledge card and that squabble and then saying oh well tax cuts but maybe not yet and my point at the time when they said tax cuts not yet was actually we want parties that will deliver tax cuts to New Zealand and if Labour will deliver tax cuts I'd be all in favour of that. I supported it when Labour cut the top rate of tax from 66 cents to 33.

LISA: So if it is all about policy Mr Hide what has been ACT's new and innovative policy that you’ve been working on or what have you revealed in recent times that would suggest it's all about policy?

RODNEY: We've had a great run in parliament, we put up a bill to cap local government's ability to increase rates, and we damn near got that through, it's just unfortunate that at the last minute Winston Peters went with the baubles of office and didn’t support the bill, that would have made a big difference and indeed that allowed us to have a debate about letting New Zealanders have more say about government, more say about the direction of their country through referendum about how much money government should take. On November 15th I have the most important bill I've ever had in parliament and that’s a regulatory responsibility bill which constrains politicians' ability to make laws, make regulations without actually involving the public and making it clear what they're trying to achieve.

LISA: If you’ve had such a great run why then have you had this resignation from the ACT board from Andrew Fulford, why does he and others within ACT say you're moving away from your core values, what's going on there?

RODNEY: Well you should ask Andrew that, I mean I've got no comment to make about what Andrew said, I mean I wish him every success.

LISA: Does everyone within the party agree with the direction that you are taking the party in?

RODNEY: Well look I'm sure you wouldn’t find people agreeing on the direction of any political party unanimously, people have their own views but what I have done is taken the board with me and the majority of the membership of the ACT Party and I'm very proud of that.

LISA: So after the Dancing with Stars experience you said that it was life changing.

RODNEY: That’s right.

LISA: So does that life change mean what – that you are less interested in serious politics now?

RODNEY: No I'm more interested in serious politics. I mean what I'm interested in politics now I've done a long apprenticeship and I know how parliament works, I know how select committees work, but what I'm interested in is not the day to day debate in parliament and the day to day sort of squabbles, what I'm interested in is what we can do with politicians and our positions in parliament to make a real difference to the lives of New Zealanders, and that's what that bill of mine to cap the ability of local government to increase rates was all about, that would have made a real difference and I ask you what other political party in opposition has put forward a bill that would make such a difference to people's lives and here's another bill, my regulatory responsibility bill.

LISA: Mr Hide let's bring our panel in here going first to Deborah Hill Cone.

DEBORAH: Rodney I barely recognise you on the screen there and I have to say I barely recognise ACT either. You say that you'll support – you'd work with Labour if they would cut taxes. Doesn’t it bother you if the share of GDP which is government spending is standing at 42% and that has been going up and up, does that not bother you you're still quite happy working with Labour?

RODNEY: No, I think you’ve failed to – you’ve missed the first part of your question. I'd be quite happy with Labour if they were taking that down. I think the share of GDP that government's taking should be more like 20 to 25% so 42% is outrageous, but what we have to do is get taxes down and I think it important – I look forward to the day where both Labour and National are working to reduce taxes.

DEBORAH: I mean ACT used to be the party that business people felt understood their concerns. Michael Cullen said a while ago that he wanted New Zealand to be in the top half of the OECD, well that’s not happening and now he never mentions it, but yet you'd be quite happy to work with that government?

RODNEY: Well again Deborah you're misunderstanding. I don’t think Michael Cullen and Helen Clark – I think they're ideologically opposed to cutting taxes, I think they're ideologically opposed to letting New Zealanders make their own choices, I think they're ideologically opposed to letting people spend their own money and live their own lives, but I look forward to a Labour Party that is actually a Labour Party that says yeah let's giving working people, let them keep more of their money, let's actually have an economy that’s strong and robust by dropping the top rate of tax, that’s my point. I want to see a Labour Party that’s progressive and willing to lower taxes, I want to see a National Party that’s like that too, and I'll work with anyone in parliament, I'll work with the Greens if they're prepared to cut taxes.

LISA: Let's bring John Roughan into the discussion.

RODNEY: And that’s the nature of MMP.

JOHN: Mr Hide minority parties in MMP seem to get two or three good policies out of a major party that they support in government, apart from tax cuts what are two or three policies that ACT would really like to get from a Labour government?

RODNEY: Oh a taxpayer Bill of Rights, what that would do would be to cap government expenditure, so it would hold government expenditure in real terms per capita what it is now, if we did that that would make a real difference to New Zealanders. What that would mean is that New Zealanders have a real say about how much tax government takes, so government can spend what they spend now, but if they want to increase that they actually need to ask taxpayers through a referendum that'd be a great result.

JOHN: Would that be enough to fund tax cuts in the long term?

RODNEY: Yes it would, if you held government expenditure in real terms you would have tax cuts over the coming years and you'd certainly get the total tax take down to 25% of GDP in a short time.

JOHN: And that means ACT doesn’t have to nominate any particular areas of government spending, that it would actually cut from the present level?

RODNEY: That’s right, the most important thing when you look at government and this is how the Irish did it, and I've just been to Ireland and seen you know the wonderful impact that lowering taxes generated by a minor party in coalition has provided their economy, and what they did was they didn’t cut services, what they did is they just held government expenditure so they ran a tight budget and that allowed them to cut taxes, that boosted their economy, that generated more tax revenue and allowed them to cut taxes further, so they got into a very positive cycle, a strong economy and low taxes, and I don’t see why a Labour Party should be opposed to that.

DEBORAH: Hey Rodney, you know this Labour Party you say that you'd quite like to work with which doesn’t sound anything like the Labour Party that I know, do you think there's going to be a change in leadership of the Labour Party that’s been mooted today in Fran O'Sullivan's column, do you know something that we don’t know?

RODNEY: Oh you know Helen Clark isn't going to be the leader of the Labour Party forever, I think Michael Cullen will certainly go, I think his next budget will be the last one, I think Phil Goff will write the budget heading into the 2008 election, I think there's be tax cuts in that, and I think they’ll be dumped at the next election and then there'll be a whole new leadership and what I hope is that we see a Labour Party that’s progressive and understands that you know what you were saying earlier, that if we're gonna have entrepreneurship, if we're gonna have a strong economy we've actually got to get taxes down, we've gotta get red tape down and if we're gonna have a strong social services and strong social sector it actually is about letting the private sector do its job and it is about letting New Zealanders have real choice. There's nothing anti Labour in any of that it's all pro Labour.

LISA: Mr Hide, just on the subject of leadership what if Don Brash was to go and you had someone like John Key, where does that leave you in alignment with the National Party?

RODNEY: Well I'm not really interested in who the particular people are, again I make the point I'm interested in the policies and the direction of the country.

LISA: But that could leave the two parties even further apart.

RODNEY: Well I don’t know, again I don’t know what Don Brash and John Key stand for, we've actually heard them backing away from the election promises that they said heading into the last election, and you know I want to put pressure on them to stand up for good policies and stand up for what New Zealanders need.

LISA: Alright thank you very much for joining us this morning Rodney Hide.

*****

LISA: To our panel again now. Deborah what did you make of Dr Cullen, do you think that Helen Clark is being ring fenced from some publicity surrounding the report?

DEBORAH: It's an interesting theory actually, I didn’t see anything that changed my mind that this is I just a tired government that’s lacking in energy and has sort of run out of ideas, and I mean it's almost not their fault, you get the feeling that the public and people out there feel like well you’ve had your go and are not – that they’ve almost just run out of steam.

LISA: You raised the issue of Fran O'Sullivan's column this morning saying that she thinks that basically Helen Clark is a marked woman, what do you think?

DEBORAH: Well I do think she's set a very high benchmark of being such a shrewd political operator but when she misses it people come down on her like a ton of bricks because she's made a few mistakes lately in the way that she's handled things, so it doesn’t mean that’s she's over and out I just think that that has actually been an unusual lapse of judgement on her part.

LISA: John Roughan do you think it was a bad stumble and what's it gonna mean in the long term?

JOHN: I think it is bad and I think it's bad because it shows Labour in its worst possible light, there's a kind of state dependent group of people who expect the taxpayer to pay for everything that they want to do, and I'm amazed that they haven’t just retreated from that and said okay fair cop we shouldn’t have, we should have realised, we're paying it back, it won't happen again, but instead we get this constant and got it again today from Michael Cullen, these constant excuses and explanations and saying we're gonna pass legislation and we're gonna sort of make it okay.

LISA: How do you view that in comparison to say the normal modus operandi which would be swift punishment and then move on, which we've seen in other cases with say Parker and things like that, where you’ve seen swift action and then you move on?

JOHN: This was too close to home I think, I mean it was Helen Clark and Heather Simpson, it happened right there, it's in that department that they decided that the pledge card spending and other things were covered by their allocation, they were wrong and they're in the gun on this and when Helen's in the gun she doesn’t tend to sort of back off and admit mistakes and correct things and move on as she does for other ministers.

DEBORAH: But also it underlines this government's distance from the socalled working people that they're actually meant to be representing that more and more people sense that they are in a rarefied little world of what they call the belt way or whatever in Wellington on the cocktail part circuit and are not actually in touch with the people of Manurewa for example and this I think actually just emphasises that.

LISA: John talking about being in touch Rodney Hide's declaration that he can work with Labour do you think that’s a prospect, a real prospect?

JOHN: It's an outside possibility, but I think what's he's really doing is trying to get National back on the track that he wants them on, he's trying to pull National back away from the backtracking that he sees it making in recent times and…

LISA: It's a warning shot across the bow?

JOHN: It's a warning shot to National and saying if you want to have at least one party in parliament you can rely on as a potential ally you'd better stop this backsliding.

LISA: Alright, thank you very much to our panel this morning.

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