Kiwis need to lighten up and try some constructive debate, John Whitehead tells Brian Fallow.
Soft-spoken, well-mannered, considerate and thoughtful."
That is Secretary to the Treasury John Whitehead, as characterised by his predecessor Alan Bollard in his book on the global financial crisis, when the two worked closely together. Bollard might have added "good-humoured".
Frequently during a valedictory interview, as he prepares to leave the Treasury for Washington and a two-year stint as an executive director of the World Bank, Whitehead laughs.
At one point he almost bursts into song. "Regrets, I have had a few ..."
Too few, it turns out, to mention.
Whitehead has headed the Treasury for more than eight years.
He joined it in 1982 after training as a mathematician and economist and has worked there ever since, apart from a stint between 1985 and 1988 working in the office of Prime Minster David Lange, followed by four years as economic counsellor in the New Zealand High Commission in London.
"I was sort of the go-between between David and Roger [Douglas]. That was interesting."
That period of rapid and radical economic reform was also famously marked by a deteriorating relationship between Prime Minister and Finance Minister.
It left Whitehead convinced of the importance of arrangements that allow people to work effectively across the frontiers between agencies. Never was that more important than during the global financial crisis, when the Treasury and the Reserve Bank over the road worked closely together.
To a degree, the Treasury was ready for the crisis, Whitehead says.
"I guess, like everyone else, we didn't pick the particular events. But we could see risks out there and did remark on those at the time. And we had done a bit of work beforehand on what were some of the things you would have to do, if you had to step in to rescue part of the financial sector."
The fact that the crisis peaked during an election campaign, when Parliament was dissolved, made things more difficult.
"Generally the politicians were very good. We recommended to the Government of the day that we should talk to the major opposition party. They agreed and that gave us a bit more confidence.
"You were very aware that you were providing advice when decisions had to made very quickly which could really affect the lives of people going forward.
"In my worst nightmare I never imagined I would one day sign $125 billion of government guarantees [to the banks and other lending institutions].
"We were aware that would have its downsides - risks and costs and distortions - but it was a case of that was what you really needed to do at the time."
All in all, a "difficult but fascinating period" and one New Zealand came through remarkably well, considering its vulnerabilities, Whitehead says, in part because of years of fiscal surpluses and paying down public debt.
"That has been so important in providing a buffer against events like that and also of course against natural disasters, so that you have got that capability to respond when those things happen," he says.
In a flurry of speeches six months ago he unburdened himself of some views on reforms he would like to see - along lines former Finance Minister Michael Cullen once described as ideological burping.
Superannuation entitlements and student loans were among things the Government needed to look at in the context of lifting the economy's growth rate, he said.
So were the shortcomings of the education system, the large and growing proportion of working-age people on benefits, the company tax rate and such regulatory regimes as the Resource Management Act and the Hazardous Substances and New Organisms Act.
Some people said, "well, he can speak his mind now because he's leaving" and, when the speeches stopped, "he must have been told to pull his head in".
Whitehead laughs at both suggestions.
"Under successive Governments I have never had anything I said censored at all. Ministers have been very generous with letting us go public and try to inform the debate." But there is line to be drawn.
"When it is known the Government has a decision coming up, we would not get out there and try to corner them some way or narrow their options. An example now would be on mixed ownership [of state-owned enterprises]. We have been pretty careful on what we say and do on that."
Like any chief executive, much of Whitehead's focus has been on the culture and capabilities of the organisation he heads.
"One of the real strengths of the Treasury has been young people coming in with new ideas. It's the kind of organisation where you find you are challenged by people very quickly. One of the things I have tried to do is keep that open atmosphere within the organisation where people can say, 'I think you are wrong', or 'you are missing this risk or this opportunity'."
Scepticism is a core competency of the organisation, he says.
"You need that. You need an organisation that says, 'Yes but' or 'What about' or 'Have you thought of this?' - those sorts of questions. But sometimes that can get in the way. One of the things I have pushed is for us to get more solution-focused as well. Not just to criticise but to put things on the table and have them criticised, and work more co-operatively towards solutions."
The public perception of the Treasury is of an organisation focused on the dollars.
"We actually take a much broader perspective than just money. It is ultimately about people and their welfare."
New Zealanders, Whitehead thinks, are too prone to taking a dour and downbeat view.
"I think there's a need for more optimism and confidence in ourselves as a country. We have got incredible resources, incredible flexibility," he says. "When we are debating something as a country we are a bit inclined to erect barricades and throw missiles at each other, rather than look for a way forward that can meet some very genuine interests that to a large extent a lot of people would share - whether it is environmental, social or economic."
In fact, Whitehead says, in international satisfaction surveys New Zealand scores well.
"We have a very high rate of people who say they are satisfied with their lives, and it has been growing. Actually a higher proportion than Australia. But when you listen to our debate on public policy issues you wouldn't know it."
Shift to a more constructive and informed debate, he says, and there would be no holding us back.
Brian Fallow is the Herald's economics editor
