English emerges smiling from global meltdown

VERNON SMALL
Last updated 05:00 17/05/2014

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The final judgments aren't yet in on Bill English's sixth Budget, but he is already eyeing another three - and will start planning his seventh in a few weeks.

Labour Party leader David Cunliffe joked yesterday that the best thing about the Budget was that it would be English's last.

Whether the man from Dipton gets to drawl through the 2015 version depends on the outcome of the September 20 election - though he says he is up for another three.

But with two terms as finance minister under his belt and success in returning the Budget to a surplus, he is already being ranked up there with the country's most accomplished finance ministers of recent times.

Where Budgets were once a one-year event, they are now rolling four-year efforts.

"We'd expect . . . the first discussion about the 2015 Budget in the next few weeks," he said yesterday after another round of media calls explaining and defending his Budget.

Part of his success he puts at the feet of his team, including those public servants who, despite being squeezed by the Key Government, adapted quickly from the big-spending years before 2008 to the tighter times since the global crisis. They had delivered on English's state sector mantra: "More for less."

Helping sell the new direction was Prime Minister John Key, who English once said jumped from cloud to cloud, leaving him to grind away in the engine room.

He has since settled on a more diplomatic version of their roles, saying Key goes about his work "with his signature confidence".

Donal Curtin, a former BNZ economist and expert adviser to Parliament's finance and expenditure committee, said English was the latest in a string of highly competent finance ministers that the country had been lucky to have.

All had contributed to fixing up the legacy of big deficits and structural imbalances left over from the Muldoon years.

All have also faced a major challenge. For Sir Michael Cullen it was the "tech-wreck" and the bursting of the dotcom bubble.

Bill Birch faced the Asian financial crisis, Ruth Richardson a bad recession, and Sir Roger Douglas the 1987 sharemarket crash. But English had faced "the mother of them all", Curtin said.

The global financial crisis was the worst economic meltdown in living memory.

"The 1987 crash was a a blip on the charts by comparison."

On top of that, the Christchurch earthquakes dealt a massive hit to the government books. "The mythical observer arriving from Mars who saw the accounts in balance after two thumping great shocks like that - you'd have to say someone had navigated pretty smoothly through that."

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Curtin said: "In the pantheon of recent ministers he's a conscientious and hard-working minister."

Nor could he recall any of English's Budgets being "a real turkey that laid an egg".

He points to the high level of trust in National's economic management in the latest stuff.co.nz/Ipsos poll as testament to English's achievement.

Wellington economist Brian Easton, who like Curtin has observed decades of Budgets, also stressed how lucky New Zealand had been with recent finance ministers. But while he described English as "perfectly competent", he is also strongly critical of some aspects of his stewardship.

In particular, the 2009 personal tax cuts were put in place under pressure from within National and were too big. English had been trying to pull the accounts back into balance for the following five years, Easton said.

Easton also believed the squeeze on the public sector and deregulation had created stresses that would only emerge when something went wrong - "and goes wrong big".

He pointed to past examples such as the Cave Creek platform collapse, safety failures at the Pike River Mine, leaky homes, design faults with the CTV building, recent deaths in the forestry sector and the collapse of finance companies.

Easton said a close relationship between the prime minister and the finance minister was crucial at the heart of a good government.

Helen Clark and Cullen, and Jim Bolger and Birch worked very well together.

Sir Robert Muldoon, who was prime minister and finance minister, "worked shoulder to shoulder with himself"'.

But problems blew up when splits opened up between David Lange and Douglas, and Bolger and Richardson.

English was probably getting the same advice as Cullen did from officials to run a big surplus, Easton said, and Key seemed to wrongfoot him by talking about a tax cut ahead of the Budget.

To Easton's mind, Key is "one of the flakier prime ministers" and "is not quite as solidly behind Bill English".

On current polling, though, it is odds on Key will form a government after the September election and will again turn to English as his finance supremo.

That will give English the opportunity to build on his legacy with a seventh Budget and another surplus, some time next May. If so, it will be a familiar routine for the father of six.

On Budget day a lunch with wife Mary, their families and friends in his room is squeezed between a press call at the Budget lock-up and his speech just after 2pm. (English jokes that having a bunch of friends around helps fill Parliament's public gallery with allies.)

After more media calls it is back to the caucus room for a meal with his fellow MPs and then on to celebratory drinks in his office.

- The Dominion Post

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