Lisa Owen interviews Prime Minister John Key
Lisa Owen interviews Prime Minister John
Key
Headlines:
John Key builds case for military action against IS, saying New Zealanders face three main risks: “Domestic beheadings” by returning fighters, aid workers and military personnel in the war zone and tourists caught up in “Bali bombing”-type attacks.
“…doing nothing is an option, but it would be very odd for New Zealand to be in a situation where the UK and the United States and Australia and Canada and France and Germany and Belgium and lots of other like-minded countries, the Netherlands, are all involved in some form in fighting a very serious terrorist group, and for New Zealand to do absolutely nothing”
Key points to more support for families on benefits: “what I'm saying to you is there's clearly a need to give those families more support”
Rules out benefit increases and extending in-work tax credit, but signals rent relief and money spent directly on services for the children of beneficiaries
“…there might be ways we could put more money directly into those youngsters and make sure it actually reaches those youngsters and isn't just part of an overall pot which delivers a certain level of support”.
Says the government must reduce housing as an overall percentage of expenditure for low income families: “So that's one element that we need to address, and there are things we can do there, I think.”
Says it’s a matter of when, not if, National will roll out a Warrant of Fitness scheme to all state houses: “…over time we have to move in that areas. I think we all understand that”.
Won’t commit to how much
of the money raised from selling state houses will be spent
on new social housing, but says “the key test of the
policy is to increase the overall level of
housing”
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Lisa Owen: Well,
refresh and renew was the refrain as John Key's third-term
Cabinet was sworn in this week. The Prime Minister moved
quickly to put new faces on his front bench and is keen to
stress National won't be resting on its laurels. But with
all the talk of child poverty, is he willing to heed the
expert advice? And what's he really got planned for state
houses and the SAS? The Prime Minister joins me now. Good
morning.
John Key: Morning, Lisa.
Last time you were
on this show, you said that you were proud of your
government's record on child poverty, on poverty. But you've
now identified this as a core area that needs work in this
term. So, what changed?
Yeah, so, from memory, I think
you were quoting me from an Australian article. And it was
really about the fact that— the thing I was proud of was
that we supported the most vulnerable in the most difficult
of times. So I think as I said on the show last time, when
all the cries were to cut Working For Families or pension
entitlements, we didn't do that— and welfare support. We
maintained all those. The challenge, I think, for New
Zealand is that there is a group of young New Zealanders
that are living in very poor conditions. There has been for
a very long period of time. And the question is what can we
do to address that now, we know work is by far the fastest
way of lifting those families out of poverty and into a
higher level of income. So the challenge is of growing an
economy, and that's the main focus of the tension. But I
think that there is a group we can identify where more will
have to be done both in terms of assisting those families
into work and support in the critical areas like housing for
them.
So you've asked people within your office to look
at measures, get some news. What areas are you wanting them
specifically to burrow down into?
If you sit back and
say— cos there are lots of measures of poverty, and we
could spend heaps of time, I think, as a country trying to
define what we really mean by that. There's anything from
260,000 kids on a housing sort of, you know— When you look
at it after housing costs, before housing costs, right
through to a smaller group. But I think the first thing is
to say what's the group that we're particularly going to
target? We'll go away and look at that. The second thing is
to say what drives the poverty, insomuch as they are in
poverty, what drives poverty for those families. And I think
there are some really big issues. They are housing, the debt
often that those households have. There's childcare costs,
transport costs as they move into employment. So I think you
can sit with all sorts of different programmes and ideas,
and you can certainly make agencies work better together,
but if you look at those core issues, they're the things
that are likely to make a difference to them now.
Can we
look at some of those specifics, Prime Minister, cos you
raise childcare there. I just want to put a few things to
you. So what about—? Would be prepared to provide free
after care and holiday programmes for students in low-income
areas, say?
I can't genuinely tell you today, because I
don't know. I can tell you the process I'm going through,
which is — I've gone to the Department of Prime Minister
and Cabinet, and we've chaired one meeting already with
Treasury and with officials from MSD and the likes and said
let's go away and look at those core issues. Let's try and
identify the group that we're talking about. Let's try and
identify what it would actually take to do that. How much do
we have in the way of resources? And maybe what resources
could we move around to fund some of this stuff? So that's
the sort of process we're going through.
Doing that,
then, are you open to— because the Children's Commissioner
has said that benefits are woefully inadequate, are you open
to raising benefit levels?
The main argument as I see it
has really been about whether we're prepared to pay that
in-work tax credit to people on a benefit? So those who have
children, on a benefit. And the answer to that has generally
been no. We haven't wanted to support that, because we
haven't wanted to narrow the gap between welfare and work.
And I think it's worth remembering that Working For Families
was essentially established in its new form under a National
government. Labour themselves came up with that policy, and
it was Labour that fought very strongly not to have that
in-work tax credit paid to those people. So the question is,
can we do other things for those families? Because if it's
just a matter of a bit more money on the benefit, the one
point I'd make there is that welfare broadly costs about $8
billion a year. So if it was just as simple as a bit more
cash and that was at the heart of the problem, I would
strongly suggest governments would have fixed it in the
past. It's a much more complex issue when it comes to those
families and those particular children we're talking
about.
But when you sort of say talking about countering
that in-work tax credit, what would you be prepared to do,
then? A universal child payment or something along those
lines?
There might be a range of things. If you look at
young people, what we did with the 16-, 17-, 18-year-old,
typically young mums, we've now extended that to
19-year-olds that were going previously on the equivalent of
the DPB, we did lots of things. We put a wraparound support
person, because there's tremendous frustration for some of
these families when dealing with lots of agencies. We also
gave them incentive payments as they undertook different
activities. So what I'm saying to you is there's clearly a
need to give those families more support. I can't, as I sit
here today, tell you exactly how you can do that. I can say
at a principled level, I want to maintain the incentives for
families to move into work. But there might be ways we could
put more money directly into those youngsters and make sure
it actually reaches those youngsters and isn't just part of
an overall pot which delivers a certain level of
support.
So targeted spending you're talking
about?
Potentially.
When you say that you need to keep
benefits at a level that there's still an incentive to get a
job and earn a salary or a wage, poverty expert Jonathan
Boston has said, and I'm quoting him here, 'people wholly
dependent on the benefit are 25% worse off relative to
citizens in work than they were a generation ago.' His point
being that the gap is there and it's too wide already, in
his view.
Yeah, so, if you take a look at the macro
level, what's been happening is benefits have been going up,
and we put into law that they should be adjusted by the
inflation rate, but fundamentally, you're right, the average
wage is rising. But what's also absolutely true if you look
at what's been happening over a generation, is that housing
as a percentage of the costs for those families and actually
for New Zealanders in general is rising. It used to be about
a third of disposable income. Now it's about half for a lot
of people. And that's just as true for a young couple that
might go and buy their first home. So, in a way, if you
think about the comments that Bill English made this week,
you can debate the merits or whatever, but the real point he
was making is that if we want to increase the level of
disposable income for those families, we have to reduce the
percentage of housing as an overall part of their
expenditure. So that's one element that we need to address,
and there are things we can do there, I think.
Given that
housing is one of your top priorities— Let's have a talk
about that too. You trialled a warrant of fitness across
about 500 state houses. So, when are you going to roll that
out across all your housing stock, because Nick Smith seemed
to be indicating that would happen this year? Paula
Benefit— Bennett said it was a great idea. So are you
going to roll it out this year?
I can't give you the
answer to that today because Nick hasn't come back to me to
say he'll definitely do that or he won't, and, actually, the
demarcation may change, or the responsibility may change,
because Bill [English] is now responsible for Housing New
Zealand.
But is it a serious option that you think is a
good idea to roll out?
Yes, and if you think about what
we've been doing in relation to those Housing New Zealand
homes — we've been insulating every one of those that we
practically can. There are some that we can't, and you raise
absolutely the right point, which is under the previous
government, their focus of attention was lifting the number
of state houses. Under the last six years of our government,
the focus has been improving the quality of that stock. And
so we do want to continue to improve that quality, but I
think also our big focus of attention would be to say,
clearly there's a need for more housing, but who's the right
provider of those houses? And if you come to warrant of
fitnesses, one of the reasons we were a little concerned
about rolling that out on a mandatory basis for all private
sector rentals is because there's plenty of less well-off
people who actually live in a privately rented home. We are
concerned that will really drive rents up, so there's the
counter-productive argument there.
But it is an
incredibly basic warrant of fitness list. I mean, anyone
watching this show wouldn't want to live anywhere that
didn't meet those requirements. It's stuff like having two
power points in a wall, having running water in your
bathroom. Do we not have better expectations for renters in
this country?
We should do. But, I mean, without being
silly about these things, you could probably go to a few
flats in Castle St in Dunedin that 14 students are occupying
at the moment, way above what they really should have in
there, and they wouldn't meet anywhere near the warrant of
fitness conditions. So my only simple point to you is that,
yes, I think there's a level of expectation. Yes, I think in
a voluntary basis we should embed that, and over time we
have to move in that area. I think we all understand that.
I'm just simply saying if you put a lot of costs on them, a
bit like the Treasury advice on capitals gains tax, when it
comes to renting, the impost that ultimately falls to the
renter.
Well, National is preparing to sell off up to
five billion dollars' worth of state housing. Whereabouts in
your policy did you spell that out to voters before the
election? Because when you sold off assets before, the power
companies, you may it very clear you sought a mandate to do
that. I've looked at your policy—
Well, I've never seen
a number for five billion, so I don't know where
you—
Up to — up to five billion.
Well, I've never
seen that number.
Bill English has said it could be up to
a third of your stock. So that would be a value of around
five billion.
Yeah. So let's wait and see before we all
get a little bit excited about the thing. But the
fundamental point, though, that we are making, is that we do
want the social housing stock to grow. So the point there is
— OK, how do you make that happen? So the first thing we
did last year—
But, excuse me, Prime Minister, my
question was — where in your policy did you outline
specifically that you intended to sell off state housing
stock in quite high levels? Where did you indicate that
prior to the election?
Well, it was quite clear, I think,
in our policy that we want to move to greater social
housing. So in the end, my point is — I think you're
taking a particular comment that he's made, and in the end I
can't tell you if he's absolutely right or wrong because we
haven't had those discussions yet, but what I can say is
where Bill is wanting to move is he's wanting to increase
the overall level of houses available. But what he's wanting
to do is say that the social housing sector would be a much
bigger provider. Now, the question we haven't answered
ourselves yet is — how do you do that? One way we've done
it—
But how much of the sell-off of those houses will
actually go back into creating more homes? How much of that
money will you guarantee will be spent on that?
Well, it
depends, I think, a lot on how you structure— and we
haven't done that work, but as an example, you could,
obviously, transfer some Housing New Zealand homes to social
housing providers at a certain rate. Now, that could be at a
discounted rate—
But can you guarantee that most of
that money will be spent on creating more houses, if indeed
you're selling some off?
Well, that will be the key test
of the policy, is to increase the overall level of housing.
We are less concerned about whether a social housing
provider owns that home, like Presbyterian Support or
Salvation Army or others, or whether Housing New Zealand
owns it. In fact, we'd probably argue with you that while
there's a place for Housing New Zealand, over successive
governments, it's hardly been a ringing success. I think
there's more that we can do there. Now, the challenge, as I
said, is we gave income-related rents as a new policy to
social housing providers. That provides the cash flow for
them. So the challenge here now is — how do they build up
that capital stock? What we do know is in places like
Australia, they've been very successful in growing the
overall level of stock available.
OK. I want to move on
in the time we've got left on to global issues. You have
said that we'd be surprised at the number of New Zealanders
who would want to leave this country and fight in foreign
wars. How many people are you talking about?
Well, a
bigger number than I think the average New Zealander would
think.
Yeah, but give us a ballpark.
I can't and won't
today, but I might when I give the speech that I want to
outline. That's a process I'm working through with my, kind
of, security officials.
Experts have kind of said to us
about a dozen, maybe. Is it more than that?
Um, I just
don't want to give you a number today, but what I genuinely
would say to New Zealanders is that the threat—
But
don't New Zealanders—? If you are planning legislation,
don't New Zealanders need to have an idea? So can you tell
us?
My sense is — yes, actually, they do need to have
an idea, and there will always be those that will challenge
the voracity of those statements.
So more than a
dozen?
Well, I'm not going to go into that number today,
but what I'm saying to you is it's highly probable, if I'm
allowed to, I will spell out, within a range, what those
numbers look like. There are different categories in that
group of foreign fighters. So they're people who are either
in a country overseas fighting. There are people who are
looking to leave. And there are people who are looking to be
part of the overall engagement, so they might fund those
activities. I think if you put all those numbers together,
New Zealanders would be quite surprised.
So why would we
involve ourselves? You're considering, at the moment,
whether the SAS will be involved. Why would we involve
ourselves in this war? Why would we make it our war?
So
again we're sort of jumping a bit to conclusions there in
terms of the SAS. What I would say—
If we get involved
at all, why would we?
Why would we get involved?
Yeah.
Why would we make it our war?
So there are three
things happening at the moment in terms of threats, as I see
it. So number one is a domestic threat, and they are foreign
fighters either returning to New Zealand or people that
might take actions — sort of, domestic beheading as we
sort of potentially saw in Australia. Number two is those
who are in-country — so they're young New Zealander—
Well, they might not be young, necessarily. They're aid
workers or they're even our military people that are in the
Middle Eastern countries that are associated with us. Again,
both those groups are quite small. But of the number of
foreign fighters currently in Iraq and Syria, we think that
total number is about 3000. And many of those come from
Muslim-based countries in our region. So it's regional
activity. If you take a step back to, say, the Bali
bombings, that was a terrorist group, domestic in nature. If
you look at what is possible, it is that you could see
foreign fighters going back to those countries, and they are
countries where New Zealanders are likely to holiday or to
travel, and so they present a threat. So I guess all I'm
sort of saying to New Zealanders is we need to consider what
we might do. And of course doing nothing is an option, but
it would be very odd for New Zealand to be in a situation
where the UK and the United States and Australia and Canada
and France and Germany and Belgium and lots of other
like-minded countries, the Netherlands, are all involved in
some form in fighting a very serious terrorist group, and
for New Zealand to do absolutely nothing. The question is
what we do, I think, rather than whether we do
something.
OK. So very quickly, Prime Minister, if we do
involve ourselves, whose side would we be on?
Well, we'd
be on the side of standing up against ISIL because they are
a terrorist group that in the last two years have grown in
frightening proportions. They're extremely well-funded. They
have control of about five, we think, Iraqi oil wells, so
they have lots of cash. They've been using kidnappings as a
form of financing— and ransoms, as a form of financing
their activities.
So it's about who we're against, not
who we're for?
Well, the one differentiation I'd make is
— in the Iraq war that took place in the early 2000s, that
was a view taken by the United States and the coalition of
the willing against the then-Saddam Hussein regime. This is
a situation where the Iraqi government is asking
international support against this terrorist group. And one
quite interesting thing about ISIL is that they've managed
to make themselves the enemy of people who normally don't
like each other very much. You've got Iran and Iraq, and
Saudi Arabia and Jordan, you know, Turkey, Egypt. You've got
lots of countries in the Middle East, — Israel — people
that don't necessarily always…
Who are involving
themselves.
…have warm relation with each other, all of
a sudden all oppose. And all I can tell you the build-up in
the activities of ISIL in the last two years is happening at
a frightening proportion.
All right. Thank you very much
for joining me this morning. That's Prime Minister John
Key.
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