Q+A: Panel Discussions 4 November 2012

Press Release – TVNZ

First of all, let’s start on the manufacturing side of it with this grouping we saw before. Just how tough is it out there at the moment, manufacturing and business-wise, Heather? Sunday 4th November 2012
Attached are the transcripts from today’s panel discussions.
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First of all, let’s start on the manufacturing side of it with this grouping we saw before. Just how tough is it out there at the moment, manufacturing and business-wise, Heather?
Well, I think they make some valid points, but they’re very keen to play down the increase in manufacturing and the agricultural sector, where New Zealand has always had strengths, and we’re a small country. We do have to play to our strengths. When it comes to the basic economy, the success for New Zealand is going to be in having a strong, thriving economy. In the global situation that’s tough, but I think the government could be making more gains, and one thing I’m disappointed in is there’s never any talk about tackling government expenditure because not only can we tackle the things that they’re talking about, but we can also have a look at where that expenditure is going and can it be lowered. And yes, it can, in many areas, but neither side of the fence is talking about that, and that’s very disappointing.
GREG          Mike, we heard a lot about what the problems were, well documented and otherwise. Did you hear anything at all that made you think any of these parties had anything like a solution?
MIKE WILLIAMS, Former Labour Party President
                      Yes, I did, and I think David Parker put it very succinctly. I think you do need to change the settings of the Reserve Bank Act so it does result in a lower currency, and the point that he made twice, I think, was that we are about the only country on earth that is not now trying to control its exchange. Everyone’s at it – the Americans, British, Swiss, Singapore, China. China fixes it. In my living memory, the Minister of Finance could devalue the dollar when he felt like it. So we’ve gotta look at some of those things that worked in the past but also look at the future, because there is no doubt that there is a crisis in manufacturing. I was going through a list of companies that I used to hit for money when I was president of the Labour Party, and at least six of the 20 on that list no longer exist. Now, they’re manufacturing companies.
GREG          Craig Ebert, the BNZ senior economist, says this is more turbulence than tragedy, that this has been coming for a while as well, you know, particularly since the recession. Is calling it a tragedy and a crisis overstating it a bit?
HEATHER  Yeah, I think it is, and as I said before, New Zealand has to play to its strengths. All companies have a lifespan, and companies come and companies do go. It’s a tough situation out there at the moment, so New Zealand has to play to its strengths. Does that mean that the government has to come in and be really interventionist? No, it doesn’t. There was a lot of talk amongst the three different parties about the Reserve Bank Act. The reality is that Helen Clark did nothing to change the Reserve Bank Act when she was in power for 10 years. So what’s suddenly changed since then?
JON             Yeah, they did. They changed the band.
MIKE            Yeah, they did. The band was changed.
HEATHER  Yeah, OK, the band was changed.
JON             Well, that’s changing it.
HEATHER  But basically the overall intent of the Reserve Bank Act has been in place, and I don’t think that anybody’s in a hurry to change it again.
GREG          But the bottom line at the moment- It seems to me that we wait every few weeks and we have the Reserve Bank governor go, ‘Ooh, not going to change it,’ and that’s the only mechanism we’ve got. There’s gotta be something more effective than that, doesn’t there, Jon?
JON JOHANSSON, Political Analyst
                      Well, indeed, and I think Parker made that point when the conversation turned to quantitative easing – that’s just one instrument. So I’m a bit like Mike in the sense that I think after 28 years of a model it is encouraging that the opposition is actually challenging those old assumptions. It’s about time they were. And as Mike says, you only have to look outside our shores to see that governments are actually trying to think, ‘OK, what bundle of instruments do we need to make our economies more competitive?’ On the manufacturing front, if you actually look at the curve, it’s been, like, a 10-year decline. And, OK, the global financial crisis has seen shedding of more manufacturing jobs, but my point here being is that we do need to diversify our economy if we are to thrive in the future. It’s not enough just to rely on milk powder to China and India.
GREG          OK, let’s look at the bigger picture. We’ve had the three people from the parties – interestingly, only one leader – but three people from the parties sitting there. Is this a first date looking to a possibly marriage in 2014, Jon?
JON             Well, the first date in essence was actually over the asset sale referenda, where they already have come together. You’ve gotta just – to use the prime minister’s favourite phrase – take a step back. And if you do take a step back, 2014 is going to present a novel political situation. Labour starts the 2014 campaign 20 points behind from National from the last election, OK, it’s gotta make up 20 points. So the high probability is that a combined red-green vote is going to be greater than National. So my bog-standard analysis of our current dynamic is that National cannot win the next election and the other lot probably won’t. So it’s incumbent on the parties that have that self-interest, Labour and primarily the Greens, to show the public as we get through this election cycle that they are a credible alternative government, otherwise they do get this ‘coalition of losers’.
GREG          Mike, on the other side of that, though, how weary will Labour be of the Greens’ increasing popularity perhaps undermining theirs, undermining the basis of their support? They’ve been called the natural fit before, but if they keep going like they’re going, they could be a threat right in their back door, in their house.
MIKE            Well, this is one of the great glories and pieces of interest in MMP – you are actually competing with your potential allies. And they’ll be working to move the balance between the two parties more in the way of Labour. But I was very encouraged by that, and it looked like a credible line-up to me. And people have gotta remember that the current government is actually a four-party coalition. So if you’re talking about many hydra-headed animals, there’s one there already, and it actually works as a government. It doesn’t work very well, in my view, but it does work. So I think that that kind of performance you saw is something you’re gonna see more of, and I think all of them handled it very well indeed.
GREG          Heather, I can’t imagine Winston Peters sitting there and hearing Russell Norman’s suggestion of printing money, quantitative easing or whatever you want to call it, and not having his eyes roll so far to the back of his head that they fell over the back of the couch, with the three leaders there.
HEATHER  I think there’s two things here. There’s Labour and the Greens are a block of votes, and as Labour gains some strength, and eventually over time it will do, the Greens vote will go down again. Their popularity, I think, will sink. There’ll be a rebalancing there. Just the same as there always was-
JON             Oh, hang on.
HEATHER  -with national and ACT. But just to answer the question about NZ First, I think you’re absolutely right, and they’ve always been very difficult bedfellows, no matter what side they’re on.
GREG          Jon, this would be a very difficult, you know, four-headed monster, five-headed monster, whatever you want to call it. This would be a very different set-up to National and ACT and the little parties. This is a different power share, isn’t it?
JON             It is, and that’s what I think people are struggling to get their heads around, including primarily the strategists inside the Labour Party. Because the Labour Party in essence shares more in common with the National Party in terms of long history, size, broad-based parties, what have you, they would ideally like a situation just like what National has now, where they are the strong, you know, obvious alternative government. I make the point they have to make up 20% of the vote from where they were in 2011. They can’t do an Orewa speech in the Labour Party. They can’t make up a 17 point gap just like that. So denied of that, they are facing a situation where they, plus the Greens, need to be able to present themselves as a red-green coalition. Now, if the Labour Party wants to hold on till the last minute in the expectation that it is going to be the lead thing, I think they’re in for a really bad surprise, because I think a lot of centre-left voters now are very comfortable in the Greens and aren’t just gonna go back.
GREG          First of all, Jon, with you, Sandy – that’s the first thing we’re talking about, or the first thing that’s going to be an issue. Is that going to change the face, or is it just the debate, the first presidential debate?
JON             First presidential debate got Romney back, gave Romney a second look with the American people. They liked more of what they had seen because Obama had done such a good job of defining Romney up until that moment. Sandy deprived Romney of oxygen. I personally don’t- I think the Republicans, if Romney loses, will blame Sandy. We have this irreversible momentum. I just think that’s bullshit, to be honest. Obama has never been behind on the electoral college map all year. Yes, it is very very close. I think what New Zealanders can look for on the coverage on Wednesday New Zealand time, the outer firewall, a lot of it’s on the East Coast. We will get to see early – this is Obama’s firewall – Florida, North Carolina, Virginia, New Hampshire, and then Colorado over in the mid-West. He can afford to lose all of those states, Obama, but if he wins any of them, goodnight Romney. And then the inner firewall is Ohio, plus one of Nevada or Iowa. As at today, Obama is ahead by 2.7% in Ohio, 2.9% in Iowa, 5.1% in Nevada.
GREG          Heather, let’s talk about apathy. This is something Chris Matthews was adamant wasn’t going to be the case. It’s something we’ve heard all the way through – apathy from voters, particularly black votes, as far as Barack Obama goes. Last time Barack Obama was, you know, the man, the thing, the first black president. It’s not the case now.
HEATHER  Yeah, look, it seems that neither of the candidates are particularly popular amongst the American population, and Obama’s big danger, I think, is low voter turnout. There’s been plenty of commentary about young people. They like what he’s saying. But will they actually go in and tick the box on the day? Probably not. So that’s his big danger. Just on Sandy, I think that Ohio might- Sandy might also have saved Romney, to a certain extent. His comments about Jeep making people lose jobs and then going to China was really taking effect-
GREG          He got that from his binder, I think.
HEATHER Well, it was very unfortunate.
GREG          The other thing as well, Mike, that I thought was astonishing, was that the 47% recording that we all heard, it did him a bit of damage short term, but it’s sort of been forgotten, unlike the presidential debate, which everyone keeps referring back to, that first one, where Obama blew it.
MIKE            Yes, but Romney’s also, he’s paying for earlier indiscretions. To get the nomination he had to move hard to the right, and one of the things he said in that move hard to the right was he wanted to abolish the Federal Emergency Management Agency, FEMA, and that’s being replayed back and back again, and that just looks ludicrous. Now, the interesting thing about the impact of Sandy is it probably would not have been such a strong positive for Barack Obama had not George Bush mishandled Katrina so badly in recent memory. So Obama’s looking better than Bush did.
GREG          What, potentially, let’s say Romney did come through and win it, what would that mean for us? Particularly with TPP now on the table, and we’re their good little buddies, what would that mean for us having a Republican as president?
HEATHER  Specifically with TPP? I think it will make very little difference except I think it will hold the process up a little bit. I think it will stall it.
GREG          More broadly?
HEATHER  More generally? Well, he’s weaker on foreign policy, and people aren’t sure where he’ll go on that. He’s talked a lot about Benghazi, but very little else in terms of foreign policy. I think it’s hard to predict.
JON             Big difference. The difference is it would be- Put it this way, John Key would never admit this, but I’m sure he would be quite happy for Barack Obama to be re-elected, because you’ve got the perfect alignment at the moment from the point of view of where you have the incumbent president Obama, New Zealanders embrace. We overwhelmingly wanted him to win. I’m sure an overwhelming majority of New Zealanders want him to be re-elected. And we have a government here that is bending over backwards for the Americans. Perfect alignment. Romney, all of a sudden, all the different aspects of the relationship with America, it would be a more sceptical New Zealand audience. Afghanistan, TPP. We would be more suspicious.
GREG          Jon Johannson, first of all, corporate manslaughter, that was the last point we heard. I know you have views on that as well.
JON             Well, you do wonder whether it’s gonna take that type of legislative change to really focus people’s minds on their responsibilities in terms of health and safety. Quite clearly, the Pike River is an example of ideology and cost. We ran away from our safety responsibilities.
GREG          Mike, has John Key got this wrong? Has he got the reaction, the way he’s dealt with this wrong?
MIKE            His initial response I thought was very good indeed, and he really did a Barack Obama on the whole disaster.
JON             That was probably the best of him.
MIKE            Yeah, that was the best of him. However, I think it’s got away on him and has the potential to do National  some damage. And I would make a point that we were talking about the changing orthodoxy around Reserve Bank governance. Well, I think the orthodoxy around deregulation is changing too. We have got, really, an unregulated mining industry and we’ve got a disaster out of it. At the time that river exploded, there was one mine inspector for the whole of New Zealand. Now, we need to go back to a more successful model, and I think the government is going to have to bite the bullet on something they don’t like, which is check inspectors. Now, these are workers who actually have the authority to close down a mine. They’ve still got them in Australia. We need them back here.
GREG          Heather, the two big disasters, of course, we all know about Christchurch and the Pike River mine. To an extent is it a case of Pike River mine, as far as the government’s concerned, maybe some of the public’s concerned, of ‘out of sight, out of mind’? We can see what’s happening in Christchurch, we can see the rebuild, we can see the buildings knocked down. Pike River is a different scenario.
HEATHER  Well, in part, but I think Bernie was right when he said the New Zealand public haven’t forgotten about Pike River mine. Things like the Royal Commission are gonna highlight that. The real thing, the tragedy for the families is always going to be ongoing for them. The thing is what lessons can we learn from this, and Mike was outlining some of the things that he thinks should be done. This might be a bit of a watershed for OSH, and that would probably be a good thing in the mining sector. Another thing that needs to be examined is New Zealand’s environmental policies. Should this have been an open cast mine? Should it have been closed? All of those things need to be discussed, not just for Pike River mine, but across the board.
GREG          It’s taken an awful long time, though. We’re two years down the track and it feels like nothing really has happened. There’s been a lot of jaw jaw, but not a lot’s been done, though.
HEATHER  Royal commissions always take a long time. The real thing is are we going to get any solutions out of this.
GREG          Well, I’m talking more broadly, not just about the Royal Commission. Any changes – you were talking about the inspectors before. Things changing.
MIKE            Well, I think the government’s going to have to bite some bullets it doesn’t want to. I mean, we’ve had deregulation of the house-building industry, and that’s been absolutely disastrous. We’ve had leaky buildings.            We’ve had massive deregulations of mining, and we’ve had this disaster.
JON             I mean, note who is consulting with the families tomorrow morning.
GREG          Not John Key.
JON             Not John Key. So, you know, you can’t go in there and make those sorts of commitments and then you don’t want the visual imagery of being down there with a possibly angry bunch of survivors’ families again. I mean, it’s just- It’s a lack of leadership there.
HEATHER  I think it’s a red hearing to blame deregulation for everything, though. What is actually important is the accountability that follows on from that. Deregulation in itself is not a bad thing. It’s what checks and balances are put in place so that accountability exists beyond that point-
JON             Yeah, Heather, Heather-
HEATHER –so that wise decisions can be made. And it’s very easy to insist that a government comes in and-
GREG          Jon, you’re not going to get a go. I’m getting a count in my ear and you’re not going to get a go.
JON             Can’t we just do what other countries do? That would just be enough.


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