Top two in step

John Armstrong marks the fifth birthday’ of John Key’s government with an interviewing showing how National’s leader and his deputy and Finance Minister Bill English have forged a successful working relationship.

Bill English is talking about electric fences. But not the kind used on his Southland farm.

Sitting at the other end of a couch from John Key in the Prime Minister’s Beehive office, the Minister of Finance is explaining the complex and delicate dynamics which drive the most important relationship in the corridors of power – the one between Key and himself.

He is referring to the boundaries which Key – a moderate conservative with a dread fear of losing the hearts and minds of election-determining middle-income earners – establishes around what he considers to be no-go areas for reform-minded ministers like English.

“He [Key] is very good at making it clear when those boundaries are infringed … It’s like electric fences. You hit the electric fence.”

It seems that does not happen very often. By this stage of proceedings both politicians know exactly what is and is not acceptable to the other.

Success in any relationship requires an understanding of, and respect for, boundaries.

Strenuous efforts are made to kill any suggestion of disagreement around the Cabinet table. The idea that there might be even a sliver of daylight between the stances taken by the two most powerful figures in the country can shake public confidence in a government.

In 2005, the Herald came under huge pressure not to run a story which intimated that Helen Clark and Michael Cullen were not seeing eye-to-eye over the timing of tax cuts.

When a prime minister and finance minister are in harmony, the governing party can be a formidable creature slaying all that dare cross its path. . . 

John and Bill might have disagreements round the margins but they are in step on everything that really matters.

The lingering question is how this pairing has avoided the pitfalls which have seen governments paralysed when the two pockets of power have stopped trusting one another and started undermining one another.

Told, the Herald wants to focus on their partnership before and after National was returned to power in 2008, Key turns and looks at English and exclaims “Okay, love” and laughs. English replies in typically droll fashion: “As a loyal deputy, I can assure you, it is not a partnership.” He means not that sort of partnership.

The humour, however, has an edge which leaves the listener wondering just how well the two men actually get along. . . .

Anyone who has seen them together knows they get along well.

Both have keen senses of humour and often use the other as the butt of that. Being able to do that without threatening their relationship requires genuine and mutual liking and respect.

English’s approach to reform is to make incremental changes, rather than doing it all at once.

As a young backbencher in the 1990s, he watched Richardson’s big-bang approach blow up in her face. National’s opponents claim English’s incrementalism is all about keeping the punters in the dark about his real objectives.

English denies this. “[It’s about] taking the public along, not just for political reasons, but because it’s how you win the arguments.”

Bulldozers don’t win arguments, a slower, more careful approach which allows people to see results does.

What the pair both say is that the success of their partnership is in part because they occupy the same “ideological space”. More likely, English is more ideologically focused. But – like Key – he is also a pragmatist.

Refusing to offer up examples which would be swooped on by opponents, Key says differences of opinion occur over “nuances” rather than over the Government’s direction – the case with the open warfare between Lange and Douglas.

Key says he cannot imagine how Lange’s and Douglas’s Beehive offices became so isolated from one another. In contrast, his and English’s staff are constantly in and out of each other’s offices on the ninth and seventh floors of the building. . .

It’s not just the leader and deputy who are in step and communicating properly, their staff are and do too.

English – who is careful not to talk over Key throughout the 45-minute interview – notes that important matter of “distinct hierarchy”.

“If a prime minister says ‘this is what we are going to do’, whether I might completely agree is irrelevant, particularly with a successful prime minister. If he says ‘I want this’, then that is what happens.”

That doesn’t however mean who can’t be persuaded to change his mind as Audrey Young gives some examples.

Prime Minister John Key has admitted he had to be persuaded to back off his bid to press the Reserve Bank into exempting first-home buyers from the banks’ new rules on loan-to-value ratios (LVRs) by Finance Minister Bill English. . .

But in a joint interview with Mr English this week – marking five years in power for the National-led Government – he indicated that Mr English thought taking on the independent bank would be more trouble than it was worth.

“So I took a step back from that and said ‘yeah, okay, well fine’. That’s the way it goes.” . .

“I’d be the first to admit I was a bit nervous about raising GST thinking can you actually politically sell all of that,” he said.

“Actually after we did all the modelling and we worked on it together, we were absolutely convinced it was fair and would actually work and it would deliver the sort of policy outcomes we wanted. And actually it’s definitely delivering results for the economy.” . .

People in any relationship have different ideas, it’s how differences are handled which matters.

Mr Key said the measure of any decent relationship was that you worked your way through all sorts of issues and respected each other’s views.

Mr English made much of what he described as Mr Key’s instinctive ability to communicate with the public and maintain its support, and knowing how to set boundaries in terms of policy constraints.

They cited the example of state tenants’ entitlements.

Mr Key said successive Ministers of Housing and Housing officials had wanted the income that any state tenant received from boarders to be received to be counted as income in terms of calculating entitlements.

“But my view is well that would be seen as a step too far for large families or families that are trying really hard to make ends meet.

“And in the end if they are prepared to go the extra mile of having someone live in their home and cook them a meal, they are just good New Zealanders trying to get ahead.

“It’s like the carparking [dumped fringe benefit tax] issue.

“In the perfection of the IRD officials, we should have carried on with putting an FBT on those carparks – but that’s how you lose the public,” he said.

Mr Key also indicated that he had put constraints on labour market reforms.

Both men are pragmatic and that’s one of the reasons for their success and the continuing popularity of the government.

They’ve built up trust by saying what they’ll do and doing it and taken a good percentage of the public with them.

The strong relationship between the two of them, their mutual trust and respect, and understanding of their differences and different roles have also played an important role in that.

Armstrong finishes with a couple of quotes on how they see each other:

Bill on John:

• “(John) has more ideas than we know how to handle. My framework is a bit more conventional so I spend a lot of time just dealing with issues in a reasonably predictable way but the PM is always stretching the boundaries.”

• “He’s endlessly capable of everything, I assure you – catching fish, cooking pasta, making up policy, being friends with the Queen. There is nothing this man can’t do.”

John on Bill:

• “They are quite complementary skills. I do a lot of going around the country opening things and cutting ribbons and being the kind of face of the party that’s interacting with the public. And Bill is doing a lot of the long term thinking, heavy-lifting and policy design, all the things that involve ministers … I’m kind of the retail face.”

I think John is understating the important role he plays in policy development and ensuring the government is working well.

But that ‘retail face”, the man the public see and like is a big part of his role and an important ingredient in the positive view the public still have of the government after five years in power.

#gigatownoamaru is in step to become the Southern Hemisphere’s fastest town.

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