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AGENDA Presented by RAWDON CHRISTIE POLLING HIGH What's next for National?
RAWDON Polls, policy and leadership, what's next for the National Party? John Key joins One News Political Editor Guyon Espiner live from the National Conference in Auckland now.
GUYON Well John Key let's start with the economy, I mean we're in the largest economic expansion that we've had in 60 years, Labour's halved unemployment from when National left office, why would people want to take a risk and switch to you? JOHN KEY – Leader, National Well I think a few things Guyon, I mean firstly the growth that’s been taking place in New Zealand has been universal round the world, so you’ve seen that in Auckland, the UK, the US, there's nothing very special about what's happened in New Zealand. I think secondly the New Zealanders have got slightly wealthier with real growth but the truth is that most of their growth has come from debt that they’ve consumed themselves. So what we're seeing under these very high interest rates that Michael Cullen has created is the situation where they're now really feeling the squeeze and we're seeing that in the housing market, we're seeing it in their ability to pay their credit card bills. GUYON And they are two of the key things aren’t they that you’ve just identified, interest rates and the housing market. What would you do to try and get us out of this high interest rate high dollar bind that we we seem to have worked ourselves into? JOHN Well there's no question that what's driving those interest rates is inflation and that’s because we don’t have capacity in our economy that’s around skills, that’s around infrastructure, whether it be roading, public transport, energy, water, you name it. So we've really got to – if we want the economy to go faster and raise that speed limit we absolutely have to grow the capacity and that’s the real challenge I think. GUYON What about those two specifics Mr Key, the dollar and inflation, you’ve previously targeted government spending on that saying that’s the main driver, is that still your position? JOHN Oh there's no question that’s been a big driver, look Michael Cullen wrote to his cabinet colleagues at budget time when he was putting down his budget in March, he said look if you spend more money than is allocated interest rates will be higher, exchange rate will stay higher and the reality is that he went on to spend an additional billion dollars. GUYON So the government has spent too much in your opinion, the government is spending too much money? JOHN Well there's no question that they’ve spent too much, I mean we would argue very strongly some should have gone back in tax cuts, but also it's the quality of spending, it's the lack of competition in our economy, so I don’t think there's any doubt Michael Cullen's gotta take some responsibility here. GUYON Okay well that’s the inevitable question though isn't it, where do the cuts come from, I mean let's have it, where is the money coming from, where are those cuts going to come from? JOHN Well let's get a few macro facts on the table. Over the next five years the New Zealand government will spend approximately 330 billion dollars, so there's plenty of capacity in there I think to spend money more efficiently and to frankly spend a little less and that will allow us to fund a tax cut programme. GUYON Okay spend a little less on what? JOHN Well to go back to our 2005 campaign we rolled out a plan that was a highly effective tax cut programme around about $45 a week for the average New Zealander. GUYON Spend less on what government programmes. JOHN Well we'll increase government spending but at a lower rate. GUYON That’s the same as a cut though isn't it Mr Key, because if the population is growing and your spending is not growing with it then that’s a cut. JOHN Well I wouldn’t necessarily say that’s the case, I mean what you’ve gotta do is give value for money and if you go back and have a look at the health system under Labour, they’ve certainly spent a lot more no one's arguing that, but it's gone into building the bureaucracy, it's gone into building inefficiency, and we've now got a situation where productivity is virtually at a standstill in the private sector in New Zealand and frankly it's negative in the public sector. GUYON Okay so would you spend less on Health than Labour is spending? JOHN Well we're not anticipating making cuts in Health and Education, we don’t need to, we are arguing about growing government spending overall at a slightly lower rate, and Bill will ultimately as Finance Minister determine those parameters, but as you saw in 2005 we provided a lot more detail around what the surplus would look like, about where we would trim areas of waste that we thought in government expenditure well and truly before the campaign and well and truly for New Zealanders to see where they were coming from. GUYON Okay you mentioned your tax cut package, obviously that was a big big issue at the 2005 election and I'd imagine it will be next time, if you had pumped what 3.9 billion dollars I think your tax package was, that would have been disastrous for inflation surely? JOHN Well I don’t agree with that on a number of fronts, firstly you’ve gotta remember that the fiscal impulse from Michael Cullen, the amount he was stimulating the economy has been pretty strong, so that’s the first point. Secondly we'll be rolling our tax cuts plan over a period of time and it's not a big bang approach we've never argued that, and thirdly there's no direct correlation between actually a tax cut and inflation. GUYON How can you argue that government spending is inflationary but it's not inflationary to pump money into the economy by giving tax cuts? JOHN Because where Michael Cullen spends a dollar it physically goes into the economy, when you have a tax cut that’s not necessarily the case, some of it's saved, some people actually just don’t borrow as much as they otherwise are doing because they have the cash, so you know and secondly you have the supply side effects where you actually stop people leaving so you have greater supply of labour. I'm not at all convinced that a tax cut programme has such a disastrous effect on inflation. GUYON This whole argument the last couple of months about the high dollar and high inflation has really rammed it home to Kiwis that we are largely in the hands of the international money markets and the ebbs and flows of currency, does your previous job as a currency trader make you vulnerable politically on this issue? JOHN Oh not at all, look the fact that I might have a good understanding of financial markets, the fact that Bill English and I are both experienced in economic matters as opposed to Helen Clark and Michael Cullen, I think has been very well received by New Zealanders because we've got a few things going on over the next few years, we've got great opportunities… GUYON But that’s what you used to do though isn't it in a former career, that’s what you used to do, you used to trade on other people's currencies and make your money that way and that’s some of the damaging effect that we're seeing on people's mortgage rates etc. Won't they be looking at you and thinking is this the sort of guy I want to be Prime Minister? JOHN No not at all. Firstly you’ve got to understand that I built and ran very large global businesses and they were in the financial markets across the board. Secondly you know the financial markets play a crucial role in our economy they provide liquidity. What's driving up that exchange rate is a weakness in the US dollar and high interest rates and we know where those high interest rates are coming from, they're coming from pressure put on by Labour government, so the fact that I might understand the economy I think New Zealanders will welcome because they’ll want somebody at the helm of the country who actually can deliver prosperity and understand what's gonna drive the international marketplace to which we are inextricably linked. GUYON Let's look at one of the moves that the government tried to reduce this inflationary pressure, Kiwi Saver, now we know you'd keep mark one, what are you gonna do with the compulsory employer's contributions? JOHN Well that’s the area that we're going through at the moment. GUYON You’ve had quite a while, they’ve had a couple of months, as you say you and Bill English are both well versed in finance, what is your feeling at the moment are you going to keep it, I don’t need all the detail, but are you going to keep – are the workers in this country going to know that their bosses are still going to front up with a contribution? JOHN Well firstly we have had two months but you’ve gotta remember that Michael Cullen's sprung this on all New Zealanders, we're out there consulting with businesses, I've been pretty surprised with the low take up rate of Kiwi Saver and it has confirmed what I actually said in my budget speech, which is for the vast bulk of New Zealanders they're not going to be part of the scheme, so yes we're quite keen to design a scheme which is actually better than the existing one and my own personal belief is that that’s possible Guyon. GUYON You're quite often referencing Bill English and I know the two of your are working closely together in the finance and leadership roles, are you worried that he might overshadow you in any sense, in that finance role, I just looked at your website and I looked for speeches on finance, there's not one speech up there on your National Party website from Bill English, I'm just wondering whether you're concerned that he's overshadowing you? JOHN Oh not at all we have a great relationship together, I see him as a huge asset, he'll be Minister of Finance in New Zealand, and he'll be calling the shots financially, but the fact that we can have a good conversation together and talk about the issues that matter I think is a real advantage because that’s certainly something Helen Clark and Michael Cullen can't do. GUYON He said in a North and South interview that while he grinds away on policy you float from cloud to cloud, what do you think he meant by that, is that a compliment? JOHN It was a compliment actually, he was asked by the Herald in an interview we did and he said quite clearly look I've got a pretty optimistic sunny personality and that’s exactly what he meant and that’s true, I am a very positive person and even as Opposition Leader I don’t think I've adopted the approach that a lot of opposition leaders do and just absolutely bag the government, I've actually focused on what I think is gonna be the best bits of New Zealand and how we can improve them. GUYON Are you convinced that Bill English still doesn’t want to be the leader of the National Party? JOHN Oh absolutely, if Bill had wanted to be the leader quite frankly he wouldn’t put his name up to be Deputy Leader, because go and have a look at the history and if a leader fails the deputy leader is collateral damage, so there's no question that Bill doesn’t want to be the leader, Bill wants National to be in government and we're gonna work very closely together to make sure with the caucus that we earn the right from New Zealanders to do just that. GUYON Have you ever had a conversation with Bill English and discussed a scenario where he may take over as leader one day? JOHN No I haven’t. GUYON Did you have a discussion like that with Don Brash, did you and Don Brash get together and he actually said while he was leader that you would take over one day even if he won the prime ministership? JOHN Well yes he did have a conversation of sorts with me like that. After the election he indicated to me it was extremely unlikely that he would stay and fight election 2008 and that he favoured me to be the person to take over for the party. Now the reality is that’s not his choice, that’s the caucus's choice. GUYON So there was a deal in effect Mr Key whereby Don Brash said even if he won he would hand over control to you? JOHN Oh sorry no I misunderstood the question, no not if he won, no, if he won he would have stayed and been Prime Minister, I'm talking about post the result when we didn’t win, he indicated that was unlikely, he didn’t say categorically he would move on but he said it was fairly unlikely he would stay. GUYON And what about yourself, is this a one shot for you, I mean if you don’t become Prime Minister will you quite parliament? JOHN Well firstly I don’t have a plan B. GUYON You must have a plan B, you’ve spent your career making some pretty good calls in terms of the financial money markets you must have thought about that? JOHN No I don’t have a plan B and the reason I don’t have it is, my entire energy is focused on winning this election and being an integral part of that team. We're there to win, you know we're not there to sit around and contemplate all sorts of other things that might happen and frankly we'll take every day as it comes, but we're out there earning the right to be the next government of New Zealand and there's a lot of work to do and we're a long way to go before an election. RAWDON We'll bring in the panel here because there are a lot of questions to ask. We've got John Key on the dawn of the conference. Vernon, economy's gonna be the key? VERNON SMALL – National Affairs Editor, Dominion Post Yeah I think so, John you were telling Guyon that you were looking at the spending going forward. The government's been routinely putting about 750 million aside for health, are you going to put the same sort of amount aside? JOHN Well in the end Bill will have to work through those numbers, I mean it's just too early to commit to that Vernon but you'll remember in 2005 we put out what I thought was a very detailed plan, we showed the level of the anticipated surplus, the level of new government expenditure and what that meant and where we would make savings from existing baseline expenditure, so we will do exactly the same in 2008 and I might add that’s a whole lot more than what Labour did in 1999. VERNON I mean I only asked because in the House as you know perfectly well because you’ve been doing it, you’ve been thrashing Michael Cullen and Bill English as well has been having a go about the government being both miserly with tax cuts and running big surpluses and at the same time spending like mad and driving our mortgages up, are they misers or spendthrifts? JOHN Well they're both. VERNON How do you explain that? JOHN Well it is quite possible to explain that Vernon. Firstly if you have a massive new amount of tax coming at you it's quite possible to increase government expenditure enormously as Michael Cullen has and also possible to run large surpluses which is exactly what's gone on. I mean our view is the same approach in New Zealand should have been the one that was adopted in Australia and that was they’ve used the last five or six years to build competitiveness in their economy to lower their tax rates. I mean we lose 760 Kiwis a week to Australia, why do they go – because their after tax wages are much greater and that’s because productivity's higher and because tax rates are lower, and we know that and so if we want to deliver that in New Zealand that’s the programme we have to adopt. VERNON So how do you get from this situation to a situation where you’ve got smaller surpluses, you’ve got tax cuts and you haven’t pushed up inflation? JOHN Well I don’t think we will push up inflation, I mean what's driving inflation is that our productivity is on an all time low in the private sector since they started measuring it and in the public sector it's negative, and so look how do we build non inflationary growth, the answer is build capacities, and so you know … VERNON Well I was asking how do you get from here to there? JOHN Well it takes time Vernon, there's no silver bullet here, that’s really the whole point, I mean Michael Cullen's had eight years to really transform the New Zealand economy and make a step change and frankly hasn’t done that, and I think when people look back on it they won't remember Michael Cullen as being the great Minister of Finance that oversaw a period of time where there was growth in the New Zealand economy that came largely from not what he did but what he inherited, they’ll remember Michael Cullen as a man who missed the opportunity. RAWDON Tracey there's a great deal more to sift through than just the economy, I wonder if you want to put something to John Key? TRACEY Well I guess there's the growing criticism John that people aren’t sure quite why it is you want to be in government, they know you want to cut taxes but slowly and incrementally, but there's sort of a bit of an emptiness around everything else. JOHN Well I disagree with that actually Tracey, I mean firstly there are an enormous amount of differences between Labour and National. I mean National fundamentally believe in individual choice and freedom, so they basically believe in that principle. We believe in making sure that New Zealanders can run their own lives and not be told by the government what to do. We unquestionably will take a harder line on areas like law and order. So there are a lot of differences, I mean when you run a larger tax cut programme, smaller government, you ultimately leave people with more choices in my view, so we have a very different style of operation. TRACEY I'm not sure that people are aware quite what more choices means, I mean does it mean user pays or privatisation or you know? JOHN Well let's take ACC, we will introduce competition, we don’t think the state should be a sole provider. Let's look at Health, we think that there is the capacity to use the private sector in Health, not to replace the public health system but at the moment we don’t actually do that, we don’t have a private sector infrastructure asset class in New Zealand like they do in Australia. RAWDON John quickly before you get back to the conference, I referred in my introduction to Maurice Williamson's comments, what's his future in the party? JOHN Oh look his future's very bright in the party and I think that was a very unfortunate comment, I've made that quite clear. I don’t think there was any malice intended from Maurice, he's a person known for having pretty colourful language sometimes, but quite frankly yeah I think that comment was offensive, I've made that clear and on behalf of the party I regret that comment to the Jewish community, but at the end of the day we're gonna move on from there. RAWDON And you're happy taking people, senior ministers through who might make comments like that? JOHN Yeah and I think Maurice has made it clear that he finds that statement in hindsight a little regrettable, he's said that on television, that’s the end of the matter. RAWDON Fair enough. Thank you very much John Key from the National Party Conference. Guyon what have we learnt? GUYON Well I think we've learned really that the pressure is now finally coming on to John Key just to when you get into specifics, you heard him on the economy there, you know what is it, is it the government spending too much which is driving up inflation and where would he make those cuts, so gradually that’s going to sort of like a water torture thing be eked out of him and I think that that pressure and that targeting is really starting to increase on him now. RAWDON Cos he won't get a lot of targeting over the weekend, however come next week the pressure's gonna raise quite significantly isn't it? GUYON Yeah well these conferences are very much also for the supporters, for the delegates to make them feel good, and to make them go out and do the foot soldier work for the party, so a lot of that will be the ra-ra sort of stuff, you're not going to see a lot of that detail, and you know he's basically wanting to keep his powder dry fearing that his opponents will steal his policies, but it's an uncomfortable position to be in, not to be able to give specific answers because it doesn’t look good, the public's asking, the journalists are asking if a politician's to dissemble like that it's not a comfortable place to be in. RAWDON We want answers don’t we. SPYING IN NZ What makes a traitor? RAWDON New Zealand's not known for being a hotbed of international espionage but according to historian and journalist Graham Hunt we do have a rich history. Drawing on recently released files from the Security Intelligence Service, Hunt has just written a book called Spies and Revolutionaries, a history of New Zealand's subversion, and he claims to have finally laid to rest the controversy over whether prominent civil servant Bill Sutch was guilty of spying for the Soviet Union. Graham Hunt joins me now. Well here's the book, it's about New Zealand spying but it's will 300 odd pages long, is there really that much to our history? GRAHAM HUNT – Historian and Author Well there's probably more to the history really, I mean we only know what we can see in the files and there are people who we suspect of spying and who are in the Russian service in particular and probably these days even in the Chinese service, but of course we don’t know about them and you can't run rumour you’ve got to base it on documentary evidence or at least fairly strong leads and so what I based the book on is information that I've gained from public sources, but also talking to people who were in the know and I think it's easy now from the demise of the Soviet Union to know how the Russians operated in New Zealand and they did have links here, they did in Australia, they did in Canada, in fact right round the Commonwealth they were able to obtain secrets by deception and spying. RAWDON I thought all the spies were Champagne Charlies being groomed at Trinity College in Cambridge, the likes of Blunt and Burgess. GRAHAM Well we had one of our own of course in terms of Paddy Costello, a very bright spy and diplomat who was at Trinity College and was recruited by Blunt into the Soviet service. We had Ian Milner who was at Oxford a Rhodes Scholar who was an active Communist and spied in Australia for the Russians and we had Bill Sutch of course who did his Ph.D at Columbia and spied for the Russians and had a long period of involvement with the Russians, a great admirer of Stalin and the Russian system. RAWDON These guys weren’t your sea workers your miners, these guys were from relatively privileged environments, so what was in it for them? GRAHAM Well I think there was an intrigue, these were the brats, these were the people that had the chance to enjoy a university education in a foreign country when most New Zealanders didn’t go to high school, these were the brats who went to university when 80,000 New Zealanders were unemployed in New Zealand in the middle of the Depression. Now what they did to help workers goodness knows but they somehow found it rather intriguing to embrace the causes, there was an excitement about the Communist Party when the world economy was collapsing, at least they thought it was collapsing, but one has to ask you know by the mid to late 30s when Stalin was conducting show trials and purges and a campaign of terror against his own citizens, surely they must have realised that simply the soviet model wasn’t appropriate, why didn’t they give it up? The fact is they didn’t give it up they were committed to a lost cause but one that was disastrous not just for New Zealand and Australia and Canada, the United States, but disastrous really for the Soviet Union itself. RAWDON Were they sucked into the romance of espionage, cloak and dagger, I mean or was it a great deal more grotesque than that?
GRAHAM I think there was a bit of romance attached to it and certainly in the mid 30s the concern over the future of Spain and the coup against the Republican government was a big issue, people felt that this was a battle between democracy and fascism and there's no doubt that was a motivating factor, but it still doesn’t excuse the fact that these people were intelligent and they were prepared to cheat on their own country, betray their own country in the interests of a foreign power. Now that is despicable behaviour even by the standards of a government servant. RAWDON You get quite passionate about this, was that despicable. I think you describe the boys' club from these guys, you actually use the word putrefying in the book, you know it's almost like you're quite angry that these guys did this? GRAHAM I mean people who want to join the Community Party, wave their flags and march, good luck to them, they nail their colours to the mast, but what is unacceptable are people who use the system and particularly the British class system that got them into the Foreign Office or the BBC or to other government departments by virtue of going to Trinity College and Cambridge and speaking with the right accent, these were the people who took the advantage of the free market system, the western system and then betrayed it. Now that really is despicable behaviour. RAWDON Let me talk about Bill Sutch, a respected civil servant, you are convinced that he was a spy? GRAHAM Well he wasn’t respected by me and he wasn’t respected by many of the people whose businesses he helped destroy by the wall of import protection that would grant a license to one person and not another, I mean he was the last of the real central planners and you know he was a great writer, a person who was respected by many people but not so much now, that level of respect has declined when the facts have come out that he was spying for the Soviet Union, we're not just talking about breaching the Official Secrets Act, of course he was acquitted of that, we're talking about a behaviour over a long period. RAWDON But he was acquitted wasn’t he, so… GRAHAM Well he was acquitted because the evidence wasn’t presented, the information he gave to the Russians was not presented in court, people said well what secrets did we have to give. RAWDON He did have secrets which he did hand to the Russians? GRAHAM He had secrets and probably the secrets were dossiers on a number of prominent people, journalists, politicians and so on. What the Russians wanted and we know this from the Petrov case in Australia, they wanted intelligence on the sexual interests of MPs of journalists, where they gambled, whether they might be susceptible to Russian influence, whether they had some sympathy for the Russian cause. Now that sort of information the Russians couldn’t get themselves and they're still collected, and most countries do, they like to know the nature of the people they're dealing with. RAWDON This wasn’t about stealing defence plans? GRAHAM It may well have included that as well, but it's to do with issues of public policy, knowing the sort of public servants who you might be able to push in a certain way, who might be sympathetic to Soviet interests, and certainly we have people like Jack Lewen the government statistician who I have to say was a paid up member of the Communist Party in 1942, never admitted that he said he was a Fabian Socialist, he was a card carrying Communist member. People like that government statistician head of Trade and Industry, I don’t know if he was a Russian spy but I have to say he was Sutch's right hand man and he was prepared to join the Communist Party, why would be do that? RAWDON Let me touch in the SIS who obviously tried to put Sutch away for this but failed, how effective have they been in the interests of our security?
GRAHAM On the whole they’ve done a pretty good job, I mean early in Keith Holyoake's prime ministership they expelled two Russian agents, quite a skilful operation, that was 1960/61, I mean they’ve had some blunders of course, in the mid 60s they put SIS agents into the universities, and you know typically when the university student population was aged about 19 or 20, there'd be a 40 year old sitting in a suit or a tweed jacket you know purporting to be interested in politics who quite obviously was an agent and there were some embarrassing scenes at Auckland University but elsewhere as well. They monitored mostly the Communist Party and subversive movements. Interestingly today they don’t monitor the left at all in that sense and they don’t monitor trade unions because they don’t consider them to be a risk, they're far more interested in Islamists and people who don’t fit the normal Anglo-Saxon leftist mould really .
RAWDON Now I must just mention in the book that although the cold war does play a central part to it, it does go into far more modern references to spying, the Israeli spies trying to get passports, Achmed Zaoui's major front cover, Rainbow Warrior. Now Vernon and Tracey I know you won't have had an opportunity to read this yet, it's literally hot off the press but did you have any idea there was such a rich history of spying in New Zealand? VERNON No I didn’t, I must admit I've never seen a spy and I live next door to Nicky Hager so maybe they're hiding in the rhododendrons and I don’t know they're there. The think I'd be interested in from Graham's point of view is what his definition of spying is because were talking about this in the break that in Wellington you come across all the time diplomatic missions, the third under secretary for some country or other who wants to take you out for lunch and talk about the political situation, is that spying, what's your definition? GRAHAM Well you know there is a difference between spying and simply being an informant, but I think you have to look at the nature of the mission and what's being done and we had a situation in the 50s here where the Australians had broken off diplomatic relations with the Russians but we had about over 20 people in the Russian Legation in New Zealand, we had no trade with the Russians at all, and of that 20 I think I discovered that 18 were members of the KGB or some other related security organisation that they clearly were listening posts and I think in the eastern bloc countries embassies serve a function which is well beyond fraternal relations with the host country is to collect information and to an extent all the embassies do that as well, they trade information. VERNON Isn't it down to the information they collect though. I mean collecting information is what you and I do, we're journalists, where does it become wrong? GRAHAM Well I think it's when you try to persuade a person of the host country to part with information which is of a secretive or sensitive nature, it goes beyond the normal information you might get from a trade summit or talking to some form of public servant. In the end of the day if that information is damaging to the host country then you're engaging in spying. VERNON Isn't that the key, damaging to the host country, I mean we all the time are trying to persuade Cabinet Ministers to tell us things that wouldn’t be in perhaps the government's best interests? GRAHAM I have to say that you know the Americans engage in this as well, we had situations where the Trade Union Leader, Finton Patrick Walsh and the late Tom Skinner reported regularly to the US Embassy in Wellington and would give them briefings on what was happening n the Labour Party whether Harold Nordmeyer would take over from Walter Nash as leader, whether it was appropriate that Martin Findlay was left wing or whatever, that sort of information and that information of course has turned up on the public record, you can actually see it on the internet now. The Russian information's only just coming to pass but that to me goes beyond the bounds of ordinary fraternal relations with the host country. If you're seeking information that may discredit other members of the host country or put at a disadvantage then that’s spying, there's no question about it. RAWDON So Graham does that mean that our Security Intelligence Service now is focused on more than just trying to prevent Israelis stealing passports over here? GRAHAM I think they're focused really on the fundamental Islam really to be honest. As I've said when I spoke with the SIS they said they no longer monitor trade unions that they'd for 60 years that’s what they did well before the SIS began, the Police used to do it, used to go to meetings, listen to Marxist seamen or watersiders or whatever, they don’t even worry about that now, and they don’t worry about the Community Party because there is no Communist Party to worry about. What they do do is look at people who used to be members of the Progressive Youth Movement or a Communist Party who now have migrated into anti globalisation movements or peace movements. Actually the oldest protest movement in the country by the way is the peace movement, it started in 1909 and it's continued in various forms and has a lot of people who aren’t politicised in it, but it also has a lot of old Communists who've reinvented themselves because Communism's not much of a brand to have these days, it's not something you want to wear on your lapel as a lapel badge. You can talk about anti globalisation or talk about the behaviour of the Americans with impunity but you can't talk about Communism because the brand's a bit dirty now. TRACEY Do we have much of the tradition of where we have our own embassies in countries overseas, do we have any tradition of our foreign affairs staff being involved in some sort of subversive activity? GRAHAM Well I think because the ministry is so tight with its money and we don’t really treat our foreign staff particularly well we haven’t got the resources to do it, in fact the only espionage it's been engaged in that I know of of any great nature, someone like Paddy Costello who was actually spying for the Russians for the other side, but in terms of our own people, there may be in the trade area that we may have people who gain information but in the end of the day New Zealand has never been funded well enough to do that, we're part of an international spy network through our security communications bureau so we access the American information, we don’t pay for it ourselves and our timing is quite good here because we're part of a network and we can provide information what might happen in Fiji or whatever but we've never had the resources to do it properly. VERNON Do you feel the same disgust for people who betray the secrets of their countries to the Americans and through the Americans to us, cos you're clearly doing your book for the Cambridge crowd? GRAHAM I think probably not to the same extent because you have to say that you know Communism was evil and it's been proven to be evil, it's the greatest failure in modern times in terms of political belief, but I don’t think espionage of any kind is good, I don’t think that people should blab to the Americans or anyone else, I think in the end you're a Kiwi you stand by your country, you honour your country you don’t white ant it and you don’t bad mouth it, that’s what the definition of being a Kiwi is, but you know in my parents' generation people stood up for the national anthem in the picture theatres and they were very loyal, I don’t think that level of loyalty applies you know, it's no longer my country right or wrong it's my cause right or wrong, there are people who would say they wouldn’t fight for New Zealand if they were conscripted into the Army but they would fight against globalisation, they would fight against the World Trade Organisation or whatever. The global issues probably have taken precedence over nationality issues and sovereignty now. RAWDON Anything subversive or threatening about Vladimir Putin to New Zealand? GRAHAM Well of course he's said to have come here when the Mikhail Lermontov sank and you know that’s been a persistent rumour, he was a KGB operative, although the spin these days is that he was just sort of doing the accounts you know he wasn’t active, but he looks like a KGB man, he talks like one and I'm sure he is, it's interesting the new Russian Federation has continued the work of the KGB, it was abolished in 1991, but there's the Federal Security Service that does exactly the same and continues in the same way and probably employs many of the same staff, so we can expect more from the Russians, but probably most espionage work is being done by the Chinese spying on dissident Chinese here, and we know that at every defence seminar or whatever you'll have someone from the embassy will turn up and their not really interested in the Europeans they're far more interested in you know dissident Chinese and the myriad of Chinese politics in New Zealand is quite interesting, I think there's a huge amount of espionage that goes on. RAWDON So we've probably got dozens of spies infiltrated into our society or is that a bit romantic? GRAHAM I would say we would have three or four dozen that are here, I mean the time zone suits the rest of the world, we wake up first in the morning, we're a country which is reasonably easy to get information from and you know if we didn’t have spies we wouldn’t be worthwhile, I spose people say you know they obviously value us for something anyway. RAWDON Fair enough, thanks very much Graham Hunt. FINAL THOUGHTS – Guest Commentators Lessons for National in Act's blue ribbon seat of Epsom RAWDON So in Remuera they care about good looks, tax cuts, but what about Rodney Hide, is he gonna remain there? TRACEY Well it's interesting isn't it, I mean if you look at his profile this year to a large extent you have to assume he's sunk a lot of effort into keeping Epsom, but what Rodney should be worried about is that with National moving into the centre, positioning itself as a centre party he hasn’t picked up any of that vote out on National's right, and part of that is because at the same time Rodney's been repositioning himself as sort of the Mr Nice Guy of politics and able to work with everyone, but it means that he's being squeezed out and if he doesn’t win Epsom then he's in serious trouble. RAWDON He's gone if he doesn’t win Epsom? But the chances are he will win Epsom? VERNON I think he probably will, but I mean Tracey's absolutely right, the strategy he's adopted is to move himself towards the centre which probably appeals to those people who would vote for him who are National but are also perhaps Labour because they're looking for someone to vote for who isn't National, but the more he does that the more secure he is in Epsom and the less secure he is in the countryside at large and his poll rating under 1% I think at the moment. TRACEY Actually he's causing a problem for National as well, I mean National's coalition choices are looking tortuous, you know they’ve got the Green Party or the central plank of National's sort of election platform is reforming the Resource Management Act, is what can they do that is not going to alienate the Green Party, they’ve already had a test with whether or not they connect with the Maori Party over the Foreshore and Seabed bill. RAWDON Looking unlikely? So they're not gonna come in with a majority we're assuming? TRACEY It would be breaking all the record books, yeah it would be extraordinary. VERNON It might happen if the voters make up their mind they want to change the government, and when they see all these minor parties not providing the numbers for National or not being able to work with National they may do what they did in 2002 which is to start tinkering with the numbers if you like in a subconscious way, National might get in if they do that but I don’t imagine National's going to get a primary vote that gives them the majority. RAWDON Even if National get someone like Act on side it's not gonna make that much of an impact, they need what New Zealand First? TRACEY Well if you look at the 2002 election and National polled at an incredibly low rate 22%, Labour still needed to come into government with two other support parties, so that’s the possibility that National faces. New Zealand First well that depends hugely on Winston Peters and whether he stays. RAWDON He said he'll always go with the winner. VERNON He said he'd negotiate first with the party with the most votes which is well the key words are first. RAWDON So we think Rodney Hide's safe, we think that National will form a government next year? TRACEY You'd have to say that the odds are in its favour, I mean the tide just looks to have gone out on Labour, that luck's turned against it just when it starts to get a good run something disastrous like Benson-Pope happens, and John Key is absolutely charming the voters, you know they're just infatuated with him. RAWDON So what if we look at something like I mean he's taking guidance, he's been watching carefully the British situation, now David Cameron the Leader of the Opposition there has had his honeymoon period, his tide seems to be going out rather too fast can that happen here?
VERNON Yeah I think it could I mean to some extent John Key's still the sort of Ferrari in the showroom, you know he hasn’t been tested on all road conditions, so we haven’t seen him have to handle a major problem in his own party, he's handled Brian Connell quite well the rebel MP, has left him out outside the caucus and really hasn’t engaged and he's been quite tough minded on that, but yeah it could happen I mean I don’t think that the same dynamics are in play, I mean Helen Clark's… RAWDON He's got Maurice Williamson in tow as well. VERNON He does at the moment, it's a problem for today, but Helen Clark doesn’t have someone yapping at her heels the way Tony Blair had Gordon Brown, so Labour doesn’t look at destabilised and doesn’t have Iraq to handle obviously so things are a little different. TRACEY And the sort of British Labour Party has been able to re-energise itself by changing the leadership and no one's even seriously suggesting that that’s an option for Labour here, mainly for a start Helen Clark doesn’t have an heir apparent and she's still polling sort of roughly higher in a lot of polls than John Key in preferred Prime Minister stakes so she still remains their biggest strength, whereas Tony Blair was no longer – but yeah the Cameron experience is a lesson I think John Key will be watching closely. RAWDON Tracey Watkins, Vernon Small, thank you very much for coming in. |
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