At this point in New Zealand’s race to the polls on November 26, Prime Minister and National Party Leader John Key will cruise to second term at the helm. But his second term looks set to cut up choppy.
To the public at large and political watchers in particular, Key’s captaincy skills are still in question. At 50, does he have the nerve he had as 25-year-old currency dealer? Will his decentralised management style keep working, or will he need to exercise stronger and more definitive leadership? And, can he keep dishing out life savers to the groups on board with him, or will he need to take bigger punts?
This could prove distinctly defining election for New Zealand. perfect storm of economic, social, cultural, and environmental issues fuelled by divisive politics is brewing – as it is in many parts of the world.
If Key survives the November run he will surely need finely honed navigation skills to negotiate the rocks ahead. It might mark turning point from his first-term global financial crisis (GFC) clean-up, moving him towards strategic rebuild of the economy and reshaping of social services?
On the other hand, it may well herald turn towards Labour’s generation of younger MPs who represent, in age at least, the rising majority of the electorate. The party’s adoption of capital gains tax policy has already tossed additional interest into the race.
There is set of numbers that put Labour leader Phil Goff and his team in power. They will, however, need the Greens, Winston Peters – falling rather than rising star – and Maori party still smarting from earlier Labour insults to make these numbers.
Business leaders keep calling for vision for New Zealand. But our pick and mix electoral process makes it difficult for parties determined to keep power to declare intent and then hold the hands of cobbled together coalitions to the flame when things get hot. Key has done well to keep the lid on his collection of misanthropes for his first term.
But given the trend and latest opinion poll results, only dramatic turnaround in preferences, fired perhaps by headline event for which National gets blamed and the public outraged, will unseat Key and his team, even if their future perch on the Treasury benches is more precarious.
Some think Key’s determination to sell up to 49 percent of the nation’s state-owned enterprises comes close to threatening his tenure. But the strategy is more likely to shore up Labour’s core vote than drive voters out of National. Besides, Labour is not yet run by its X and Y generation MPs and its policy rebuild is still work in progress. That said, its capital gains tax policy is surprisingly smart start.
Playing safe
Key and his ministers are playing safe. As in 2008, they prefer to neutralise rather than take risks. They believe householders now have better understanding of, and tolerance for, government budget stringency – because they have had to rebuild their personal and family balance sheets. In any case, the pre-election impact of government stringency will be limited.
If National holds power, that will change after the election. While Key and company make much of the impact of the GFC, the work gets harder on Sunday, November 27. How Key responds will define his prime ministership and, even more important, New Zealand’s future direction.
Key faces big policy choices. It is fast-changing world and nation and his support matrix will not be so cosy. Managing the matrix will require more obvious and inspirational leadership. Is Key motivational leader? Is he transactional or transformational? Evidence so far suggests the former. Leaders can, of course, grow in to the role.
National’s incremental or deregulation by stealth strategy – asset sales programme, Accident Compensation Commission conversion to insurance company status, Resource Management Act teeth trimming and labour law tinkering have been flagged to voters for decision at the election – signals an increasingly clear direction. But these moves will at some point need more than ad-hoc reasoning to be convincing.
Superannuation and health service affordability will increasingly rankle with under-45s. And unless China falters, the Australasian wage gap will widen. Maori matters, always good for volatile debate, are on the table with the Wai262 indigenous flora and fauna claim and the constitutional review uppermost.
The Government’s “more with less” mantra will become “less with less” as our dire economic realities bite deeper over the next three years. There are limits to agency chief executives’ innovative capacities and back-office efficiencies. More voters will get less from less, trend that will drive government change constituencies for 2014.
And next year, Labour might anoint new leader who can distance the party from the Clark era, build forward-looking policy platform and solidify its vote.
Changing numbers
Will the makeup of the post-election majority change?
Key and National might, though it seems unlikely, win an outright majority in November. Even so, Key would need at least one support party sweet for third-term deal unless New Zealand throws out MMP for system favouring single-party government.
A repeat of his super-majority, as now when he can call on either ACT or the Maori party – often at loggerheads – is also unlikely. And even if he had one, could he do the cosy deals he did in 2008? Both have caught the support-party virus. ACT sacked its deputy leader, then its leader in hostile takeover. The Maori party expelled an MP.
Former National Party leader and now ACT leader Don Brash is not back in politics for the perks. He wants real concessions, otherwise he’ll keep ACT on the cross benches. Maori Party co-leaders Pita Sharples and Tariana Turia – and whoever lines up to succeed them if next term is their last – can’t leave room for the newly formed Mana Party to accuse them of selling out tino rangatiratanga, or for Mana and Labour to link them with National policies painted as against the interests of their largely lower socioeconomic constituents.
Key’s selling point is his likeability. His ability to soothe and placate works treat with lobby groups and ruffled support parties. He learns fast and (mostly) applies what he learns. He can be decisive and, knows when and how to pull rank. He binds his ministers with his decentralised management style.
In NZ Management in February last year, Key drew parallel between his management of cabinet and managing currency trading floor. collective (trading) house view is formed of the short and medium term. It must be supported by prevailing economic fundamentals and take into account what clients are thinking, but also give clients the “right” advice. Individual traders are expected to take view, but they are held more accountable for whether they are making money than whether they are holding to the house line.
So with Key’s ministers. Justice Minister Simon Power, for example, respects his leader’s capacity to trust ministers but also keep bead on them. Deputy PM and Minister of Finance Bill English described the 2009 cabinet as “loose coalition of the self-employed” with, he added this year, “a healthy balance between decisive discipline and allowing individual ministers to pursue issues they think are important”.
Key’s first-term “house view” has been incremental pragmatism – what works. It has edged toward business-friendly. It shunned big-picture goals that might make voters nervous. As one senior minister describes it: proposal is put up for debate. If it gets tick it gets done. The minister then moves on to the next proposal. Steven Joyce has proved particularly adept at this management approach.Tick-and-move-on has three drawbacks.
Squandered capital
Some ministers, like traders, squander their (political) capital. Minister for Economic Development Gerry Brownlee lost the eminently winnable debate on mining. Education Minister Anne Tolley
