Interview: Don Brash, National party leader

Don Brash

With the election announcement imminent, National Party leader Don Brash spoke this week with senior journalists from the Herald's Parliamentary team: John Armstrong, Audrey Young and Ruth Berry. An edited version of this interview was published in today's Weekend Herald.

What is the most pressing reason why someone should vote National?

I think the country is at some risk if we continue on the direction we are going currently. I think the economy shows every sign of slowing down, not just cyclically but also in trend terms, and if that happens the gap between our income levels here and the levels in Australia will continue to widen, and that, I think, poses very serious risks to us. In addition, I think there are serious issues around the need for improved education, serious issues around welfare reform, around the treaty, and around law and order. I think all of those issues justify asking for the party vote for National.

National is fighting this election around five core issues which you've mentioned. Isn't it the case that these issues were chosen following the party's focus group research, and National is just cynically pushing the buttons of middle New Zealand?

No. If you look back to my first speech in the general debate after becoming the leader at the end of October 2003, I listed all five of those issues as the ones which drove me. The law and order one was actually a more general one, talking about security, both internal and external. But I think all five of those were in that speech, and I had done no focus group polling at all.

Can you briefly outline your vision for a better New Zealand?

I want a New Zealand where every single child is loved, every single child gets top-quality education, every single adult gets the opportunity of employment and a satisfying job and has adequate access to good-quality health care, a society where people are free to make as many choices as they can for themselves and live comfortably with their neighbours.

National claims to speak for "mainstream New Zealanders," which suggests those with a minority or dissenting view are going to be on the outer if you win the election. Is this not National using the politics of division to win votes?

I think my understanding of a mainstream New Zealander is someone who gets up in the morning, provides for his or her own family, cares about the education of their kids, takes responsibility for their community, and those people therefore can be from any walk of life, either gender, or any sexual orientation, indeed any race.

Does that mean you have to have kids to be part of mainstream New Zealand?

No, it doesn't. People who don't have kids, of course, are not concerned about the education of their kids, but they are certainly concerned to ensure that the society has a good education system.

What is the first thing you would do as Prime Minister after selecting your Cabinet?

I think probably try to communicate to the New Zealand people what the top priorities for a Don Brash-led Government would be, and I guess that reflects the fact that unless the Government does bring the public with it, it isn't going to fundamentally endure the things it does want to endure.

National has invested a lot of time and energy painting Helen Clark as someone who cannot be trusted. Why then is she still the overwhelming choice of voters as preferred Prime Minister?

I think partly because people haven't yet seen much of the only viable alternative. Most people don't know much of me. They've seen Helen Clark as leader of the Labour Party since 1993. I think she's been leader now for 12 years. I think they've seen a lot more of her than of the other option. But, on the Fairfax poll, I think, the other day, only 39 per cent of the public in fact saw her as the preferred Prime Minister despite that 12 years in her office, in her role, and one could well argue that's a relatively low figure. It is in fact almost exactly in accordance with the people who want a Labour Government.

What are her strengths?

She is clearly intelligent. Um ... I'm struggling.

Her weaknesses?

I think she is a person who is willing to compromise fundamental principles in the interests of political power. I think we've seen that very clearly in the last 18 months. She's changed direction quite radically on a whole raft of policy issues. I guess the most obvious one for me, after becoming leader, was the old Treaty of Waitangi issue, which she initially denounced my position as fundamentally racist and divisive, but then, all of a sudden, decided that what she meant all along was that she agreed with that, too. So I think that worries me somewhat, that she is willing to make quite fundamental compromises for the sake of maintaining political power.

Isn't that the exact thing that you are accused of yourself?

Some people accuse me of that, certainly, but I can't think of any fundamental principles that I have backtracked on. Can you think of one important fundamental principle which I've reneged on?

What about when you were Reserve Bank Governor - didn't you advocate renting over home property ownership?

I am astonished how widespread that myth is. I've given speech after speech debunking that. Now, I don't know if you have time to listen to the reason why it is widespread, but I gave a speech in 1989 on inflation to a very large Rotary conference, and I talked about how inflation expectations are still deeply ingrained in New Zealand. Someone challenged me from the floor and I recalled that I had - since my marriage broke up - been living in a rented apartment in Wellington.

I was approached by a real estate agent, who said: "Look, I've got just the place for you. $300,000."

I said, "Great. Sounds very good." I said, "Look, at 15.4 per cent mortgage rate it's going to cost me $46,000 in interest a year, plus rates and insurance. That's $1000 a week. I reckon I could rent the same place for $500."

He said: "Yeah, but at the end of the time you own it."

I said I would only own it if, in addition to the $1000 a week of interest, I pay off some principal.

And then he said: "Prices go up."

I said: "I'm in a terrible dilemma. If prices don't go up by $500 a week, being the difference between renting and paying interest, I am seriously out of pocket. If they do go up that much I'm seriously out of a job."

It was meant as a joke to illustrate a particular point, but ever since that point - I mean, Tom Scott likened me to - no, I think it was Bob Jones who likened me to Pol Pot, ruining civilisation as he knew it. But that particular myth - that I was totally opposed to home ownership - has just hung around like a proverbial. But it's not true. I have owned a house myself almost my entire adult life, except for that brief period after my first marriage broke up.

What about civil union? It could be said that you changed your stance on that.

On civil unions I said, "Look, this is such a profound change in our social institutions I think this ought to be decided by referendum." I said in the speech, which I gave in the second reading, that in that referendum I would vote in favour of allowing civil unions, because I believe that to be appropriate, and I had voted for it, of course, in the first reading. But I didn't change my view on civil union legislation; I simply talked about the way in which they should be brought into to being. I didn't hide that fact.

Imagine for a moment you are a 20-year-old student with a large student loan and landed with the burden of meeting the retirement and health costs of the baby-boom generation. How do you justify to that person why a baby boomer like yourself currently earning $200,000-plus should get a tax cut?

I think reducing the tax burden which New Zealanders carry is important for two quite different reasons. One is that there are a great many New Zealanders who are struggling at the present time. The last 5 or 6 years, despite the economy growing quite well, the post-tax income of the average household has barely moved - the post-tax real income after adjusting for tax and inflation. I think there are a lot of people under quite a lot of pressure. That would have been more visible if we hadn't had house prices going up and making people feel wealthier and so on. I think the other issue is relating to incentives. If we want people to take responsibility, invest, work harder, etc., then the important issue is to reduce the marginal tax rate which people face. I think if we do that, we make New Zealand a more attractive place for New Zealanders to stay and live and work in, and encourage our growth rate, so close that gap with Australia.

Surely the notion of tax cuts can be funded by trimming the administrative spending by Government departments. It's just a convenient fiction and the reality is that the private sector efficiency of the modern public service means meaningful savings can only be made by cutting services.

I think you are absolutely correct that you are not going to get any meaningful tax reductions from, let's say, abolishing the Ministry of Women's Affairs. That doesn't give you much flexibility at all. But it's my absolute conviction that in recent years there has been enormous expansion of quite wasteful Government spending. I guess the best recent illustration of that was the Trevor Mallard report on Monday of this week where it is clear that literally hundreds of millions of dollars have been squandered on very low-quality tertiary courses. It is very clear also that in the health sector we've seen huge expansion of Government spending in that area, with really very modest improvements in health outputs, particularly surgical operations which ... have risen to a very small extent over the last 4 or 5 years.

Are there any other areas?

I don't have any doubt at all that there is quite a lot of waste in the system. We know that the number of public servants in the core bureaucracy has gone from 30,000 to 38,000. It is not at all clear that that additional hiring was well targeted or warranted. We know that the Treasury itself has suggested that much of the hiring that has gone on in recent times has been out of sync with the Government's own priorities, so I don't doubt there's quite a bit of capacity to phase in tax reductions. Let me say "phase in", because I'm the last person who wants to reduce taxes in such a way that you're either forced to make significant cuts in Government services or in such a way that we will prompt the Reserve Bank to push up interest rates.

Which is the real Don Brash? The one who used to make all those speeches about the need to sell State-owned enterprises or the one who has bowed to electoral pragmatism and is not going to sell?

Both are the real Don Brash. The reality is that I don't think anyone seriously contends that Government-owned enterprises are more efficient than privately run businesses, but at the moment the pressure to sell Government-owned businesses simply does not exist. The only significant Government-owned enterprises still in Government ownership, only significant SOEs, say, are the three power generators. In that area, as John Key said in his speech some months ago, the primary need is to get the regulatory structure right before anything is done at all with the ownership of those enterprises. And what John said, with my full backing and agreement, was that for that reason we would not be selling any of those three, at least during our first term of Government.

You have refused to be drawn on whether New Zealand would play a military role in Iraq under a National Government on the basis that you do not have enough information in Opposition. Don't the voters deserve a better answer than that?

Well, I don't think I can give them a better answer than that. The reality is that in Opposition we do not have access to Foreign Affairs advice, Defence advice, Intelligence Services advice, in the way that you do in Government. As of necessity you have to hedge your position somewhat. I've made it clear that on the basis of what I knew at the time - it was October 2003, I think, that I was asked - my sympathy would have been for participating in the invasion of Iraq. Whether on the basis of fuller information that would still be my position I can't sensibly say. But the reality is that the difference between Labour and National in this area is actually quite slight. I mean, Labour has had troops in Afghanistan, at least still has troops in Afghanistan fighting al Qaeda terrorists and Taleban as well. Labour had engineers on the ground in Iraq post the invasion. Yes, they didn't take part in the invasion, but they're certainly taking part in the reconstruction of Iraq. And I suspect that Arab terrorists don't pay much distinction between whether they were there during or after ... What I said in October [2003] was that I think I would probably have done what George Bush did at that time. I'm saying at the moment that I don't have all the information available, but that would have still been my inclination.

Beyond tax, we have not seen much in the way of new economic policy from National. Would you take a less hands-on approach than Labour, say, for example, by abolishing the Ministry of Economic Development, especially if you believe there is too much bureaucratic waste?

No, we don't plan to abolish the Ministry of Economic Development. I think there are some aspects of its programmes which we will want to look at. When you say you haven't seen much in the way of economic policy from National I would actually contest that. To me, there are two kinds of economic policy: there's the macro stuff and the micro stuff. The macro stuff, I think it is fair say, we've got an inflation framework, monetary policy framework, which is pretty good, agreed basically across the Parliament. I think most people feel that reducing public sector debt was a good thing to have done. I think we've made, over the last 10 or 15 years, very substantial progress in that. We've abolished import controls and most protection, and that's also very much a multi-party consensus. So macro stuff is pretty much agreed. The debate at the moment is around the micro stuff. The regulatory stuff, the Resource Management Act, roading, infrastructure more generally, compliance costs, HASNO legislation, the Land Transport Management Act, all that kind of stuff. Employment law, Holidays Act, those are areas where we've made a lot of comment. Roading is just one example of that. I think we're making a speech on the Resource Management Act next week. So I would argue that to the extent that the economy is affected by those sort of micro issues, we've actually said quite a lot.

But in general would you be more hands-off?

As compared with Labour I think the answer is yes. The constant refrain I get from people, not just in the business sector but indeed across the whole society, is that Labour has become very much interfering, regulating, and so on. I got it the other day from someone from the Aged Care sector, where they said that the number of repeated audits they get constantly in the Aged Care sector is extraordinary. I was told that secondary school principals estimate that it takes 35 working-days a year to fill in the forms that the Ministry of Education requires for a secondary school. So I think we do have too much regulation, too many compliance costs.

Are you going to appoint a Minister of Maori Affairs?

We haven't decided not to at this point. I suspect that in the short term the answer is yes.

Why?

I think there are still a lot of things to sort out in that area. Clearly we want all New Zealanders treated as equally, but that's not where we are currently. So there are issues to be resolved before we get to where we want to be.

Will you axe Maori Television?

No, at this point we don't plan to axe it. I think what we have said in the past, once it was established, let's wait and see whether it can justify its existence. If it can, well and good; if it can't, then that's a different story.

The centre-right needs to muster every vote it can to win power. So why is National refusing to help Act?

Your premise is certainly right. The centre-right does need to muster every vote it can. The difficulty, I think, is of course that every vote we pass to some other party, whichever party that is, is a vote which National doesn't get, and that of course doesn't help the centre-right at all. If we simply drop National's vote from 42 to 37, let's say, and push Act up by 5, its no net addition to the centre-right vote at all.

Which is your preference after the election: a National-New Zealand First coalition Government or New Zealand First voting confidence to a minority National Government from Parliament's cross-benches in return for a list of policy concessions?

I don't think I can answer that one. It depends very much on how many seats National gets, which in turn depends on how much of the party vote we get. My first preference, of course, as I am sure it is of Helen Clark, is to form a Government without the need for a coalition partner or, indeed, for some specific arrangement. Realistically in MMP we don't think that will happen. We hope it will, but the extent to which we can deliver on our manifesto commitments clearly depends on our party vote. The more party votes we get, obviously, the better prospect we have of delivering, that National delivers.

Would you tolerate Winston Peters watering down National's plans for tax cuts in exchange for New Zealand First support in forming a coalition or minority Government?

I think the public would expect us to deliver on our commitments on tax relief, and I think if Mr Peters couldn't support the thrust of that - I won't say every single detail - but the thrust of it then it would be very hard indeed to form a Government with him.

Can you expand on that?

I think a tax relief package for New Zealanders is clearly a very important part of the National Party's programme. If we get 5, 6, 7 times as many votes as New Zealand First gets in an election, I think the public would expect us to deliver on most of our policies. That would certainly be one of the ones I think we have to deliver on.

Do you rule out working with the Maori Party in coalition?

I think that's a question you would really have to ask Tariana Turia. I find it very hard indeed to see how she could work with the National Party. We propose to abolish separate Maori electorates. We want Maori New Zealanders to be treated equally to non-Maori New Zealanders in a legal sense, and she has a totally different vision of New Zealand's future.

But if she said yes, what would you say?

If she can accommodate our policy on those issues, and that is a very important proviso, then we would work with anyone who shares our values. I mean, there are some aspects of what she says which are consistent with what we are saying. For example, we want parents to have choice where their children go to school. That's certainly consistent with what Tariana Turia wants for the Maori Party. So there are aspects of the Maori Party's policy which are not inconsistent with ours. But there are also some fundamental differences which would make it very difficult for them to work with us.

Would she have to sign her own death warrant i.e., agreeing to the seats going - in order for you to work with her?

I think New Zealand has had Maori electorates for almost 140 years. Their logic, particularly in an MMP environment, and even not in a non-MMP environment, is very, very hard to sustain, so I don't think we could compromise on that.

So would that also be a bottom line in a coalition with New Zealand First? ... New Zealand First's position was, even though they don't support the Maori seats, its up to Maori to decide when they should be abolished, not up to the National Party. Would that be a coalition breaker?

Well I don't want to conduct every detail of these negotiations in the media but I think we would have considerable difficulty with that.

You couldn't make it a coalition breaker for Maori Party and not for New Zealand First.

From what you are saying, New Zealand First don't want the Maori seats but want Maori to decide that. We are saying we don't want Maori seats and we want Parliament to decide that. So that's a different situation to where the Maori Party is. But all of these things are gradations. Some things we could simply not accept in any plausible coalition arrangement and retain credibility with the public. Other things you might be able to adjust.

Will Katherine Rich be in your Cabinet? And doing what, exactly?

Well, I haven't discussed that with her at this point, so I don't want to announce that specifically. But she is No. 10 in our caucus now. She is a very hard-working member of the caucus. And I don't doubt that she will have some kind of serious senior, I guess is the right word senior role in the National-led Government.

Is Lynton Crosby's firm [adviser to Australian Liberals and British conservatives] advising National?

What's our answer to that one? [confers with adviser Richard Long]. That's a party issue, not a caucus issue.

Yes, but you are the leader of the party.

I know Lynton Crosby has not been contacting us at all. I've never spoken to or met Lynton Crosby. To the best of my knowledge he is not involved.

To the best of your knowledge he is not advising National?

That's correct. I don't know about his firm. That's something you'd have to check with [party general manager] Steven Joyce on.

You've only been in Parliament for three years and Helen Clark had been in Parliament 18 years before becoming Prime Minister. Do you have the requisite political experience to be the next Prime Minister?

I believe so, yes. Clearly I have not had Helen Clark's experience in Parliament. But I would stack my experience in the real world up against Helen Clark's experience in Parliament without hesitation. I have been of course 14 years in the Reserve Bank, roughly coinciding with the period she has been in Parliament. During that period I learnt a great deal about the New Zealand economy, and about the public sector and how it operates, indeed about politics and how that operates. Prior to that I had been in an extensive range of private sector activities: director of a carpet company, running an orchard, running the Kiwifruit authority, etcetera, so I don't doubt that I have requisite experience.

Would there be any justification for anything to do with your personal life becoming political fodder in the campaign.

I don't think so. The fact that I had a broken marriage and remarried is public knowledge. It was written up in my biography. I'm therefore not someone who is going to run aggressively on family values. I can't afford to do that given that history. But I don't think there is anything else which I am likely to feel awkward about.

Are you prepared for the level of scrutiny you are about to come under in the election campaign or can nothing prepare you for that?

I suspect nothing prepares one for that entirely.

Labour is saying that people are now expecting a tax cut of between $30 and $50 a week.

Labour's gameplan obviously is to talk up the size of that so that people feel disappointed when it happens. They know that for some people it is almost impossible to provide a tax reduction of that magnitude. But I can assure you that any tax reduction we provide will look extremely generous compared with 67c a week in three years time.

Is it correct you have refused media training?

"Have I stopped beating my wife" kind of question. No, I haven't actually been offered a lot of media training. That's why its a "Have you stopped beating your wife" question. I have at various times in my life had media training, starting from the early 70s when I was general manager of Broadbank. I have had occasional media training ever since. Since becoming leader I've had two sessions that I can think of, I think only two, with people who have wanted to give me some advice on either giving speeches or dealing with the media.

What mistakes would you own up to since becoming leader of the National Party?

I have difficulty answering that question ... I should probably have accepted Katherine Rich's resignation from the social welfare portfolio when she first asked to be relieved of the portfolio, which was months before Orewa. She wasn't very happy continuing with the portfolio. She agreed to continue for a while until the election date but in retrospect I should have accepted that at the time. So I've made a few mistakes obviously, but none that I feel hugely bad about.