Banks off the hook - for now

00:46, Jan 14 2013
John Banks
John Key is defending John Banks (pictured) for now. But he is far from indispensable.

You can take it from John Key that Small Business Minister John Banks has acted lawfully and behaved in a way that upholds, and is seen to uphold, the highest ethical standards.

Because that is the standard ministers are expected to uphold. Otherwise it is outski, on yer bike, or down the river in a cabbage boat.

The Cabinet Manual makes it clear ministers are ultimately accountable to the prime minister for maintaining and upholding those highest of ethical standards.

So it follows that when Mr Banks said publicly (as a minister) that back in his mayoral campaign days he kept the funding of his mayoral campaign "at arm's length" he was adhering to those lofty ethical standards, in the judgment of the prime minister.

Never mind that the police found that Mr Banks had solicited donations from Kim Dotcom and from an unnamed donor for radio advertisements and had accepted in person, in a sealed envelope, a $15,000 cheque from SkyCity's chief executive.

Although it stretches credulity, that, apparently, still qualifies as "at arm's length".


Finance Minister Bill English, deputising for Mr Key in the House yesterday, set out the two tests being applied in the wake of the donations saga swirling around Mr Banks: that the police had decided not to prosecute, and that Mr Banks retained the confidence of the highest authority in the Beehive.

What is not clear is how adherence to the "highest ethical standard" gels with Mr Key's view that the Local Electoral Act law is an ass and that you could drive a truck through it.

After all, it was Mr Banks' actions that exposed the problem; he was at the wheel of the truck that barrelled through the legal loopholes.

Just how long Mr Key will retain confidence in Mr Banks is anyone's guess, in light of the pan-media calls for Mr Banks to be stood down.

Mr Key has shown in the past how quickly he will change, when the public mood swings against him.

For now he seems willing to hang tough and preserve a relationship that delivers him the one-vote majority he needs on issues like asset sales.

That is now in law, but there will be plenty of other issues over the next two years where Mr Key will not want to rely on the Maori Party for a majority.

In the end, it is probably sensible to let Mr Banks make the call, given he is expected to signal well before the 2014 election that he will not be seeking another term. And if Mr Banks stood aside quietly, triggering a quick and tidy by-election in Epsom, the Government's majority could be restored in short order.

But it is dangerous territory for the prime minister - any prime minister - to defend an MP under a cloud, and it looks especially venal when they are key to survival.

Former prime minister Helen Clark suffered immense damage from not cutting Taito Phillip Field loose earlier. She also stood by Winston Peters when the tide of public opinion was flowing the other way, and took the consequences.

In his first term Mr Key may have been able to tough out the fallout from the Banks scandal.

But times have changed.

This week's Fairfax Media/Ipsos political poll showed the public mood beginning to sour on Mr Key - a trend that pollsters track back to the Teapot Tapes furore, which significantly sprang from that infamous cuppa between Mr Key and Mr Banks.

The Greens have already resolved to remind the voters of the link at every opportunity. For them the current administration will, from now on, be "the Key-Banks Government".

Mr Key will also be assessing the future of his limited coalition options after 2014, and may be hoping that the ACT board will resolve the problem for him; as one blogger put it "do to Banks what he did to Brash and Brash did to Hide and Hide did to Prebble".

After all, a terminally wounded ACT is not in National's interest.

It would much prefer the party either thrives, and re-establishes its core liberal principles, or goes.

The field on the conservative Right is already crowded, with the Conservatives, and to a lesser extent NZ First, fishing in a limited pool of voters that Mr Banks also appeals to.

Unless one of them slings his hook, there is a risk none will cross the 5 per cent MMP threshold.

Yes, Mr Key is defending Mr Banks for now. But he is far from indispensable.

The Dominion Post