So I went in there with the mindset that I'm not going to start throwing figures around until I'm absolutely certain [of] those figures. And probably what I should have thrown out there was the sort of income and timeframe for capital gains tax, et cetera. There were some figures that I'd used before that I could have used again. The figures are out there. The Reserve Bank hasn't taken fright. Nobody has come up with fundamental flaws.
Labour says it has a plan for economic growth. What would be the first steps a Labour government would take to kickstart the economy?
I'll be stopping dead in its tracks the asset sales process. The second thing is to get our skills training up. I want the research and development credits and I want, as quickly as we can legislate for it, the start of the first $5000 tax-free, so people have got a little bit more money in their pockets and they can be spending.
What is your message to the small business owners feeling overburdened by having to pay for Labour policies like a $15 minimum wage and rising employer contributions to KiwiSaver.
If we can get a little bit more money in the pockets of people who will spend, then that helps [small businesses]. People need a comfortable retirement. So maybe there will be some offset for a wage increase against the extra money going into the Super. That's what happens in Australia. That's what I believe will happen here. It didn't bankrupt Australia. It didn't put people out of business. It didn't lift unemployment.
What would give way in Labour's plan if the world sinks into another global recession. Is it safe to assume you would postpone getting back into surplus in 2014-15 rather than cut government spending and contract the economy further?
If the situation deteriorated sharply, of course you respond and you look at suddenly where your priorities lie. And there's only one undertaking I give: if the situation was to deteriorate sharply we wouldn't be putting the whole weight of that on low and middle income families.
You have ruled out working with Hone Harawira in government, Winston Peters has ruled out supporting you - or anyone else. So what might a Labour-led government look like?
The Greens obviously are a natural partner. But we won't make any decision about anybody else until the people have spoken other than to rule out people. I couldn't, in good faith, go in with Hone Harawira. I don't think it would be a stable government and I'm not interested in a government that wouldn't be stable. Obviously, I won't go in with Act, because I don't think they'll be there and I'm not about to have a cup of tea with Don Brash.
There is a perception that Labour cares more about what teachers want than parents because you agree with teacher unions on such issues as national standards.
I'm not being directed by any bloody union - a teachers' union or any other. In fact, the people that I quote most often are two groups. One is the principals. Because you put a principal in charge of a school because he or she has the professional capabilities and skills to run a school and to do it well. And when 98 per cent of the principals who are meeting vote no-confidence in National Party standards, you listen to them.
If you lead the next government do you promise that the size of the public service would not be cut over three years - no matter what happens?
We are going to look at making sure that the cuts that have happened don't end up costing the country more than what they actually save. But are we going to rapidly increase the number of people in the public service? No. The budget won't allow for that.
In government, you believed that extending the In Work tax credit to beneficiaries would reduce the incentive for beneficiaries to move into work. Why have you reversed the policy in opposition?
Well, in those days, of course, beneficiaries had a much better chance of getting work because it was out there and that's why the benefit numbers plummeted. The $15-an-hour minimum wage will increase the margin between benefits and those going into the workforce. So you're not losing the disincentive effect.
With respect to asset sales, most people don't know whether their power company is state-owned or not. Isn't genuine competition more important to keeping a lid on prices than who owns them?
No. I do care about who owns our strategic assets. I do care that the money they return as really successful enterprises keep coming back to us as New Zealanders. I am proud that we won those assets.
In my speech to the RSA I talked about my father-in-law Pat working on the Whakamaru dam and my wife being born in Mangakino. Pat was a strong Labour man but he'd turn in his grave if he thought those assets he'd built would be flogged off and owned overseas. I'm personally affronted when I look at the Clyde Dam and think "our taxes paid for that ... too much of our bloody taxes". Do we have real competition between the energy companies? I'm less convinced that the model actually works hugely to our advantage. I'd want to have a look at that.
You talk about the tough decisions regarding superannuation but we are going to have a huge bill for health as the baby-boomers age. No one seems to be talking about that. Do we need some initiative to address it?
I have watched as my parents' generation and their family friends have aged, got ill and died ... there are big ethical questions we have got to think about - do we tell patients that we'll have massive surgery on them to extend their life by three months? We will need to spend more. Technology will help us a bit. Drugs will help us a bit. But one of the reasons why the retirement age is going up is because I want to guarantee people the extra health care they'll need as they get older.
You have a picture of Michael Joseph Savage on your office wall. Yet you were part of a faction in the fourth Labour Government that wanted to extend free-market principles to health, education, housing and welfare? How do you square that?
No. No. No. I was never part of a group that wanted to extend free market principles. Have a look at my track record as Minister of Housing. I stopped in the tracks the sale of state houses because the pool had been diminished. I probably started the purchase and the building of more state houses as social housing than any minister did at that time.
Talking about the last Labour Government, you changed policy incrementally to avoid alienating middle New Zealand, whereas now you have shifted sharply to the left with your capital gains tax and workplace policy. Don't you risk alienating middle New Zealand?
Well, I don't know that it is sharply to the left. A lot of the support I've got are from people who I would never regard as left-of-centre but they understand that for our economy to perform better, for us to move our investment into productive areas, not leave it in speculative areas, we need to make that change. I don't think it is a left-right division. It's because it was the correct thing to do.
Now that the political relationship with the United States is going so well, do you believe there is scope for a much closer defence relationship?
As Minister of Defence and Minister of Foreign Affairs, I always said to the Americans "the day you want to send your Coastguard back to New Zealand you'd be very welcome; it's your decision". But I never said to the Americans that we are after an alliance and we will do whatever is asked of us. I fiercely believe in an independent, sovereign New Zealand.
Do you expect that the strong campaign you've run will buy you more time to remain as leader if you don't win?
When you are campaigning you only have one focus. It's on November 26 and it's how I can use every waking hour between now and then to do the best job I can. Depending on the outcome on November 27 I'll start thinking about what I want to do for the future. I hope it's the opportunity to be Prime Minister. That's what I've always been in politics for. But if it doesn't go that way, I start thinking about it then.
Name three MPs you would want to be new faces in your Cabinet.
No, I'm not going to do that. I don't appoint a Cabinet under Labour. Our party rules are that they are elected by their peers to Cabinet. But have I got a big team of people there that could be really good ministers. Obviously the ones I put on the front bench, like Grant Roberston and Charles Chauvel - they'd both be new faces in the Cabinet. But I've got another tier of people sitting behind them, any one of whom I think would be good as a minister.
Some of the obvious people there, that are new faces, are Jacinda Ardern, for example, but there's a whole group.
