Q+A Panel Discussion With Mike Moore & Fran O’Sullivan

Sunday 5th April 2009

The Panel Discussion has been transcribed below. The full length video interview with Bill English and Helen Clark & Peter Davis and ‘The week that was’ with Paul Holmes, Therese Arseneau, Mike Moore and Fran O’Sullivan can be seen on tvnz.co.nz at:
http://tvnz.co.nz/q-and-a-news

Panel Discussions Led By Paul Holmes

(Response to Bill English interview)

PAUL Now to our political panel, Political Scientist Therese Arseneau, Columnist Fran O'Sullivan and the former Prime Minister and former head of the World Trade Organisation Mike Moore, Let's do a quick round robin, so what tweaked our interest in the Bill English interview there particularly. Fran you first.

FRAN O'SULLIVAN – Business Columnist
Well first of all I would say tax cuts round two three or off, or deferred will the way they’ll use it in the upcoming budget, if they happen at all they will be less so than what's currently down there but I would say no. The second thing is what is the story, the new New Zealand story that is going to be marketed internationally to ensure we get the 40 billion of cash over the next little while to fund this big debt pile that sits there, and that’s interesting, I think the first part of that started in the interview that John Key did with Mary Kissle from the Asia Wall Street Journal where he crafted a story about little New Zealand busy you know really tackling things in the way that happened in the 80s rather than doing a big debt explosion. Well in actual fact we are getting the debt explosion, but it's the start of building that story which is very different to the other nations out there.

PAUL Yes the debt of course and financing it – this has come like a freight train out of nowhere too hasn’t it. Mike Moore what intrigued you about that interview?

MIKE MOORE – Former Prime Minister
Well I think it's a pretty heroic assumption that we won't have credit rating problems and goes to the core of this issue, whether you believe the crisis we're going through is a typical cyclical crisis or a structural crisis. A typical cyclical crisis would be just a big Asian crisis, just a big default that the world hasn’t substantially changed, I think it's more structural as well as your typical fall over. For example Eastern Europe will go through a similar process as the Asian crisis, let's hope he's right, but I think it's still rather heroic to say it's business as always – it's not business as always.

PAUL No this is a watershed moment that’s right, and of course what Guyon was saying at the top and he was repeating what John Key was saying to the Australian Prime Minister and to Gordon Brown which is that as some of those big banks in the States in North America in Europe and in Britain become more nationalised they're gonna start looking after their own people first.

MIKE Yeah called economic nationalism and protectionism which they've been saying they're not doing but of course they will do.

THERESE From a political point of view I actually thought that Bill English did a much better job than John Key did a couple of weeks ago of articulating you know the complexities of what they're facing, you know that there are long term issues, there are short term issues, that their plan has to take into account both of those, and I actually thought he did a better job of that than John Key.

PAUL He did a good job but you'd expect a Finance Minister to be laying it out quite seriously wouldn’t you, Prime Minister I spose to a job to some extent is talking the place up, but anyway let's have a look at what – I mean you mentioned John Key a couple of weeks ago and I think the impression was he didn’t really paint that vision, here's what he said on this programme a fortnight ago –

'No I think in a year's time we'll be coming out of it so we'll be looking back on the fact that 2009 probably at least two and maybe three of those quarters would have been negative contraction for the economy.'

So that does contrast doesn’t it to what Bill English is saying, no it will not be a year.

MIKE Well I think it's beating it up a bit, I mean there's probably a six months 12 months gap here but the leader has to be the Happy Warrior and you know if the leader looks as though they’ve got influenza the rest of the place will fall over with typhoid, it's the nature of leadership.

PAUL Here again is what Bill English was saying this morning –

'The Prime Minister has always had a very positive view about New Zealand (but is he wrong) – well let's see I certainly wouldn’t want to say he's wrong but he's setting a high hurdle here and it's our job as a government to meet those expectations, that’s a feature of John Key's leadership, I mean he is saying to me we want the policy settings that are going to get us aggressively out of here.'

Nevertheless he probably should have said no the Prime Minister's right shouldn’t he?

MIKE I thought he did quite well he's learning how to be number two with a bit more dignity. Hard job to do.

PAUL It is a beat up to say there's a split there really, but of course it is.

THERESE I think it is. I think it's interesting, you look at the two of them, the truth of the matter is nobody knows when we're gonna come out of this recession and I think there is also two schools of thought now and in certain sectors, and I think it tends to be more domestic sectors, and the in building sector, the sense is that we're in for the long haul, export sector is thinking that perhaps we can come out of this more quickly. The reality is what we need from the government, this is not an either or proposition, they need to be preparing for both of those scenarios and what we need from both of those top leaders in National is an understanding that they have a plan that they are working on both of those scenarios.

FRAN Yeah I'd like to jump in there, I think there is creative tension is how I would describe it best between John Key and Bill English and the interesting things here is if you hark back just several weeks ago the cycle way was you know number three of these big issues that came out of the Job Summit and now we've had the lowering of expectations like maybe there might even be one million but there'll certainly not be 50 million in the budget and if you talk to Bill English his big job is to haul back Mr Key to what is actually feasible financially.

PAUL And of course that was the one time he grinned at you in the interview and he said Treasury are always giving me the hard line, and so that goes on – we'll discuss the Super Fund whether there's gonna be a suspension there of the Super Fund. Here's Bill English on that cycle way –

Guyon: 50 million dollars was the back of the envelope calculation, are you prepared to spend much more than that on this project?

Bill: Well we won't be spending 50 million dollars on it this year or next year or the year after.'

There you go, so that’s not gonna happen quickly is it, so I think we can take it from that they cycle way will be well on the back burner. What about suspending contributions to the Super Fund, Mike Moore you're a shrewd politician, a veteran politician, do you read a suspension into what the Minister was saying?

MIKE Yes I do, I do read a suspension.

FRAN Yes absolutely, and again I think what we've had is the lowering of expectations around the budget, but what Bill English is doing is saving that story so he can craft it in a story which says here's the new figures, here's the reality this is what we've had to pull back and it's a story that’s both domestically and as he said before externally to the ….

MIKE But there's the thing with a suspension you're obliged to catch up, so that’s a debt to expenditure two years out, three years out, if he suspends it for one year it can be very easy to suspend it for two, and then he's up against the wall where it's going to be a huge liability in four or five years unless he wants to walk away from what was one of the finer things the Labour government did. It's a way of screwing the system in four or five years cos a lot of them didn’t believe in it to begin with.

PAUL Well yes and of course what you're saying is if you lapse too long it becomes very expensive to catch up. What about G20, Dohar, Dohar, Dohar, when are we going to see some relief there can you tell us very briefly?

MIKE You're not for a while, I mean this is heartbreaking, there's a meeting in June July of the G8, that’s when it perhaps can get back on track but the truth is the last G20 not this one all the governments promised not to introduce protectionist measure, 17 of the 20 have, this is very dangerous time. Now it'll be June July at a G8 where perhaps you can get it together again, this is one of the great heartbreaking follies of the last decade.

PAUL The drifting into nowhere of the Dohar he's talking about. G20 though surprising …

FRAN Well in terms of that I think it was very interesting that Pascal Limy the Director General of the WTO did come through New Zealand recently and that letter that John Key wrote to Gordon Brown, copied also to Kevin Rudd, asking for them to adopt the texts that are already on the table at Dohar that was very much provoked by you know the round the world trips that Limy has done but he's been trying to get it on there but you know really what it is is just Obama's signature attached to what was basically said last November in Washington, and it's not a good deal.

MIKE I've sat at the G8 meeting from the WTO at the table, this is best endeavours, you know this is work in progress, and bluntly we're not going to see much traction for the next five or six months which is very bad.

THERESE Well actually I'd be interested in going back to the Bill English interview versus John Key just to finish off with one comment there. They need to get their message together I mean it looks confusing to the public to have one looking so positive one looking so dour. The second thing I would say we will be watching very closely the budget coming up because…

FRAN Can I jump in – but think Blair Brown, I mean Blair out there you know the big talker up and Brown very focused on delivering the numbers.

THERESE What they need to show though is they understand that this recession is complex and their response to it is complex.

PAUL Oh well I think they're showing that aren’t they, John Key talks it up he's the Prime Minister, English look dour and he's the Finance Minister.

THERESE Can I say one other thing though too the budget's coming up he was questioned about perhaps having to break promises or not do exactly what they campaigned on, politically that could have a cost but I think ultimately…

PAUL But again people understand that don’t they?

THERESE Ultimately I think they do because circumstances have changed and keeping the promises will make the circumstances worse.

PAUL Exactly everyone around the world…

THERESE But it will be a sign of the leadership if they can actually explain that to the public.

PAUL Exactly, all I've gotta say is the whole world is a nut job at the moment.

*****

Response to Helen Clark interview

PAUL Mike Moore has dealt no doubt with some of the people and types of people Helen Clark is going to be coming up against or working with at the United Nations but interesting Peter's remark about the rejection. It was said that she did feel terribly rejected I spose after nine years you would feel like that.

MIKE Yes and I know about this you know, but then again I always sought rejection so I was never disappointed, of course there's an emotional feeling but she said leaving New Zealand was an important thing, and she's right and I'm pleased she's got the job and I'm pleased in a way she's going, there's a lot of comments – oh how come New Zealanders get all these jobs overseas –one of the reasons is we want them.

PAUL And one of the reasons is we're probably so competent and we're good at them yes and we door knock for them. I mean you’ve seen Helen Clark in fora overseas and you’ve seen her working rooms, I mean she really has always been very good at developing the international contacts hasn’t she.

FRAN Yes she has but I think it's more than just you know meet and greet and all of that, I think where Helen Clark has scored is she's also made a contribution and I saw her for instance one example chairing the OECD ministerial in Paris in 2003, and that was probably her first forum where she brought together a number of players, it was after September 11, there was a big you know fracas going on between Europe and America at that stage over the invasion of Iraq which had just happened but she brought together some disparate players to talk about what they could do to move economies forward and particularly also on the trade dialogue, so she chaired that, other actors paid tribute to her, so I've seen it there and I've also seen her at APEC where she has quietly moved a number of issues on to the agenda, for instance climate change in Korea, it wasn’t on the agenda, Australia claimed credit for it later but she put it there.

PAUL Yes and she learned to work with George W Bush I mean they diametrically different aren’t they but she said no Bush is fine he's got a nice sense of humour and you can deal with Bush. Therese that question about democracy I'm sure you’ve thought about it through much of your career whether democracy works for everyone in the world. Here's what Helen said very diplomatically about that –

'it's a bit unrealistic to think you can transplant the institutions and history we've got that underlies our institutions just holus bolus into countries with a different history.'

What about the policies of that, we're very diplomatic aren’t we having laid down the law to Fiji.

THERESE Well I think democracy is not perfect but it's just better than all the other systems as you know a well known paraphrase of a quote. The interesting thing from what she said I think is that in terms of her role she has a real chance to go into countries and lay the roots for a healthy democracy, you can't just impose it from on top, it's what we call a civil society, you have to get the fundamentals there first before democracy will really take, and that’s where her job is really important.

MIKE Democracy's more than a vote, the biggest tribe wins, so what, it's the rule of law, independent courts, separation of church and state, freedom of religion, freedom from religion, sanctity of contracts, properly rights, civil society and all the evidence shows the more democratic the society the better the economic response when you get that formula right and the UNDP is doing some of this work and assisting in places like Timor and elsewhere.

PAUL So what's she gonna find when she gets to the United Nations is notorious, I mean I knew some people once worked for the United Nations in Vienna and the biggest thing on their conversation at dinner was that next week the Commissary's got Argentinian chilled beef coming in, you know what I mean.

MIKE Well you were meeting with the wrong sort of people.

PAUL But I'm sure there are career people there who are not gonna want the cage rattled Fran what do you think?

FRAN Well that’s right and it was interesting that she said she's been empowered to do exactly that by Ban Ki-moon the Secretary General. I'd like to just go back, I think she will shake it up and she's had that track record in New Zealand but one thing that struck me from that interview was that slight disconnect about not understanding why Helen Clark was voted out despite being competent, and to bring to the point one of the issues really was this issue about democracy in New Zealand with the Electoral Finance Act, that and together with Winston Peters that long running scandal that basically cost her her leadership here.

PAUL Cost to the leadership, cos to the job, that’s right.

FRAN So she managed to stay in power, keep her government together through to then but actually lost to the election, actually lost big time really.

PAUL Alright so that’s enough for the panel on that. The House is sitting for another week before the Easter recess so what should we be looking for this week, Therese what are we looking for this weekend, the politics in this short week?

THERESE I'm looking forward to hearing what the Cabinet thinks about the report on the super city of Auckland and we've already seen Rodney Hide stick his hand up and say he doesn’t think it's crisp or clear enough, I'll be very interested to see what he means by that cos there are lots of issues still to deal with.

PAUL The word the report is a bugger's muddle has been used to me by a person of some authority, so you think we might see some clarity there?

THERESE Well I think it's gonna take a while but I understand though that the Cabinet will be looking at it on Monday.

PAUL Are they gonna rattle the cage though on that before Mt Albert bi-election, I wonder, interesting thing, Mike what would you look forward to?

MIKE I look forward to Sir Paul Holmes announcing his candidature as Lord Mayor of Auckland, I would have thought on that report the government's gotta come down real firm on having appointed members of a City Council get some blue water between that and the Maori Party etc and I look forward to some diversions and more leaks about the budget.

PAUL Do you want me to make announcement?

MIKE Not yet mate.

PAUL Not ready, too early. Fran?

FRAN Well just looking a little bit further ahead to Easter weekend coming up John Key will be heading off to the East Asia summit which was sposed to have happened last year happening now finally and one of the big issues there and it's going to be a big issue for how he plays things out is the fact that China is very strongly advocating for the American green back not to be the major currency of the financial system and also trade but for a new supra currency to come through, he's also then going on to China and it's instructive that this is his first major offshore visit offshore to other than an APEC or something, and he's off to China and following in Helen Clark's tracks is the person who scored the FTA last year, but coming at a time when there's been the squabble over the Sanloo and all the rest up there, the milk powder scandal, so a big issue for him.

PAUL Yeah big issue and of course I think in Shanghai he's going to be opening a Trade and Enterprise kind of New Zealand centre.

FRAN That’s right, possibly with your olive oil.

PAUL Possibly so.

End of panel discussion

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