It's still the economy, stupid

Last updated 17:40 11/06/2009

Last night I was in Christchurch for a public meeting on the economy organised by The Press.

We had Prime Minister John Key along, plus Canterbury Employers' Chamber of Commerce head Peter Townsend, Lincoln University chancellor Tom Lambie, Ngai Tahu kaiwhakahaere Mark Solomon, Canterbury University vice-chancellor Rod Carr, Christchurch Mayor Bob Parker, Press editor Andrew Holden and me.

We packed out the James Hay Theatre (well, we only charged $5 a ticket) and for two hours we debated the economy - how bad was it, and what could we do to make it better. You could have heard a pin drop.

Not because the audience was asleep (we had electric buzzers fitted to their seats) but because nearly 1000 people had turned up to hear what Key had to say about the recession, and how to fix it.

It's the first major public meeting Key's done since he was elected Prime Minister, and it made a refreshing change, I have to say, from talking about Christine Rankin or Richard Worth. I think Key thought so too.  

I know many of the readers of this blog claim to be heartily sick of sideshow issues (though you all read them!) and so I'm sure you'll all be clicking on this link and watching some of the edited highlights.

The night was interesting for several reasons. It was good to hear the Prime Minister explain what he planned to do about the recession in words that didn't have to be fitted into a seven-second television soundbite. Or in a dry speech to a chamber of commerce. Or in the heat of battle in Parliament.

And it reminded me that the public is interested in weighty issues and able to absorb them in relatively big chunks. They don't need stuff dumbed down, and they do care about more than just day-to-day issues that obviously still concern them.

Did they learn anything? Well, they learned Key doesn't have all the answers, although he does have a sound grip on what the problems are. He took a sound telling-off from Rod Carr about the lack of expenditure on education with good grace.

Somehow Bob Parker managed to get around $1.6 billion off Key to spend on the city, although I'm not sure Bob collected the cheque at the end of the night.

Key apologised for canning the tax cuts, though he said they would be back: "I believe in the power of tax cuts,'' Key said, almost evangelically. He spoke of the opportunities that existed in China and India, the need to develop a "China strategy'' to make it easier to do business in that part of the world, and to focus on human capital.

Key talked about food quality, water storage, regulatory reform, and the difficulty of doing more on less money. There was no silver bullet, but then I suspect there isn't one.

Overall it was a pretty commanding performance on what is easily Key's best subject, when you get him away from the sideshows and the distractions.

I thought I'd print Key's summary at the end of the night, which I think capped what was actually one of his best public performances since becoming Prime Minister.

"I think that you get elected to concentrate on what actually matters to people. And in the end my perception is when you go down to the polling booth, you vote on whether the economy is going to be managed properly, whether your communities are safe, whether your kids have got an opportunity, whether New Zealand has a health system that really works, whether you feel like you're actually going in the right direction.

"And all of the other stuff is just sort of white noise that bubbles along. And the risk for politicians is they get attracted to the white noise. It's a bit like a bar fight, you know? Everyone watches it, hopefully you're not involved in it, but actually not much changes.

"And when you go and have a look at political parties that have spent their life on those kind of salacious, scandal-based issues, their support never rises. Because you the voters want answers to real problems.

"What I say to the Cabinet on a very regular basis and to the caucus on a very regular basis is look, for as long as we stay focused on the issues that matter to New Zealanders, that we come up with solutions, that we're honest with them, we'll enjoy their support.

"And when we start thinking it's about us as politicians, when we start losing track of what matters to you then actually I reckon you will boot us out.

"I can't tell you whether that will be two and half years, or in five and a half years' time, or eight and a half years' time, or more, but what I can tell you is the simple, fastest way to get thrown out is forget why you were put there.

"And we were put there to make New Zealand a lot better. And that's going to be my intention. And that's what I'm going to deliver.''



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Murray   #1   08:24 pm Jun 11 2009

Ummmmm.... "Overall it was a pretty commanding performance on what is easily Key's best subject...." .... I would hate to watch the highlights on what is his worst subject.

He stated that he was more "optimistic" than others... but believed he would be proved right (more "optimism", I guess).

I posted on the last blog, "As far as the economy is concerned, Mr Key's standing opinion is that growth will return towards the end of the year and the economy will be in "aggressive" recovery early next year and in his opinion the tax cut programme would go ahead."

Eliminating the tax cuts, apparently his economic prognosis remains the same?

There was an apology about being wrong about the tax cuts (supposedly the April 1 tax cuts were made affordable by canning contributions to the NZ Superannuation Fund), and I guess we will have to wait and see how the rest of it pans out.

There wasn't much palaver about "catching up with Australia", but apparently we are able to cherish the fact that our unemployment is only 5% whereas theirs is 5.7%, and it sounds as though we are a lot stronger economy than the USA, because their unemployment is 9.4%.

Australia is not even technically in recession - does that mean New Zealanders are all in part-time jobs working less hours, or that two income households have dropped down to one income?

The NZ dairy farmer who has any kind of a mortgage and is facing negative income, and the 30% unemployed youth who are learning nothing will be able to be uplifted by Mr Key's undertaking to "make New Zealand a lot better" and his belief in the "power of tax cuts"

..... I am sure??

Oh, and did he mention his government was going "to reform the economy" - please tell us more ??

South Islander   #2   10:45 pm Jun 11 2009

Murray #1 I love it how you criticise every thing Key said, yet you can't come up with any ideas of your own. You even criticise him for being optimistic, what would you rather he did? Do we want a PM who stands up and says, "wow we are in a mess, and it's only going to get worse"?

I don't know if our economy is "stronger" than the US but I would say it is "sounder".

Pat   #3   11:24 pm Jun 11 2009

Key is unequalled in NZ politics at public meetings, which is a real problem for Labour.

He is also adept at taking hard questions from the floor. I saw him mid 2008 at a large meeting of Waitakere business people. I'll never forget him responding to a question about whether he would adopt Roger Douglas's strategy of scrapping Working for Families. He simply explained that doing so would instantly drive 1000's of NZ families into poverty "and I'm not going to do that".

Stormer   #4   02:30 am Jun 12 2009

Let's not underestimate the enormity of the task of transforming the economy. Firstly to even have half a chance of achieving this National are going to need some time in the seat (i.e. more than 1 - 2 terms), I guess this is why I am so peeved with Labour, 9 years of golden weather and the first storm hits and we are sunk. The issue with this is that the NZ economy is structurally weak, in order to fix this, there are going to have to be some hard decisions made on topics that would amount to political suicide. Introducing a capital gains tax is one, making Kiwisaver compulsary is another.

In addition, there are many other initiatives that will take years to implement and bear fruit. Take spending on essential infrastructure for example. From planning to construction takes years, and the funding of such is prohibitively expensive. We cannot even begin to plan for these until we sort out the funding model that will be used to pay for them.

People hit out at the dumping of the R&D credits, but having had the experience from working on both sides of the fence in tax, schemes like this are unworkable and an administrative nightmare. I am not sure of the right answer on this, however something does need to be done and the spending needs to be well targeted. Imagine how much good could have come from the $500m apparent overpayment for Kiwirail being invested into NZ start-up companies or R&D???

I am not sure if the Stuff editor will allow this, but I recommend anyone who is interested read a book called "From Wool to Weta" written by Paul Callaghan. Provides plenty of food for thought about how to transform the NZ economy and the challenges we face.

eddie   #5   07:58 am Jun 12 2009

Murray #1

And prey tell what you think Labour would have done if in power Murray?, you seem to poo poo Keys speech, tell us what you think needs to be done to get us out of the recession.....Ohhh and of course, where the $$$'s coming from and what will be cut as there isn't oodles of suplus cash any more to throw at probl4ems like the last 9yrs have been!

jennifer   #6   09:13 am Jun 12 2009

Colin, good on the Press for organising a political 'town hall meeting' for the National Party. Any other political viewpoints on the recession invited? Very 'fair and balanced'. And, please tell us about the '$1.6 billion' that Tory Bob got out of JK? Just so we can keep and eye on it and see if he actually delivers on his promises. Or were they just more 'soothing words' to the people in the room?

Sheelagh   #7   09:52 am Jun 12 2009

It obviously wasn't a Labour Party political meeting as apparently there were no KFC giveaways.

eddie   #8   09:53 am Jun 12 2009

Ahhhhh, Colin your in trouble from Jennifer, you made the fatal error of saying Key had a 'pretty commanding performance'

Now the press (and yourself) are 'tories'!! :)

Wonder what she would have posted had you blogged that Key was dismal and clueless? I suggest it would have been bouquets rather than the brickbats!, can you please inform the left, before the avalanche of 'why was Labour not there', by explaining how many 'Labour, Govt' Clark/Cullen hosted over 9yrs, or is that too simplistic?

Cullen's Sidekick   #9   09:57 am Jun 12 2009

Murray #1 - Well done Murray. You understand how our dear leader and my master ruled this country in the best of the economic golden weather and delivered nothing to the common man on the street. Simple - Tax and Spend (not wisely but waste it). Our Emperor still thinks the hard working Kiwi should get a tax break to encourage them to stay and work in this country and not leave. Labourers like you hate that concept right? Let us tax the wealth creators (aka “rich pricks”), distribute the money to the people who swindle the welfare system, let us be politically correct and go down the OECD ladder. I am not saying our Emperor is the next best thing to sliced bread - I have been saying for a long time Emperor has made many mistakes - Worthless, Legend Lee, Bakshi, Stupid Super City - these will all cost him in the long run. But in tough economic times like this, I will take Emperor and Billy boy any day to Fill Gap and David Curryleaf. I am now convinced that Fill Gap has nothing left in the brain chamber. He is looking for cheap publicity to raise his single digit profile. Jenine – thanks for pointing out that “Press” is National party newspaper. I won’t read it now.

Sheelagh   #10   10:19 am Jun 12 2009

I read The Press daily . I was completely unaware it is a National party newspaper. I wonder why I don't get it free ? Don't worry ,Cullen's Sidekick,I'll pass on any news I think you may be interested in.

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