John Key's radical message from bold Singapore

Is John Key a radical? Sometimes he sounds as if he is. But radicalism is not a recipe for a long spell in government. So the John Key you mostly get is non-threateningly middle-ground.

This dual political personality will be on show today at the National party’s northern regional conference.

With the troops over coffee and muffins Key will be the extraordinary ordinary man, star attraction but also easygoing and superapproachable — the magic elixir of major party political leadership.

But his keynote speech will project a Key who dares to think outside the box and then to speak those thoughts.

This speech will be the second in a series intended to lay down the principles underlying his evolving economic policy.

There will be thin policy pickings. That is for next year and after. This unhurried man-in-a-hurry has understood he needs bedrock if he is to build a lasting edifice. That is the test he has set himself for his speech series.

Some doubt he can do it. He comes from merchant banking, where quick rather than deep thought is the rule: you need instinct and a taste for risk to turn acute analysis into a win and it doesn’t matter much which side of the trade you are on.

Key is still learning about building lasting constituencies. He is an ardent and quick learner who doesn’t forget. But he hasn’t consulted widely on today’s speech (though he has run it past Don Brash).

So there will be some surprised delegates when he tells them New Zealand must not compare its tax rates only with the OECD club of rich nations with their decades of welfare states. The comparison must also be with much lower-taxed but newly rich Singapore, Taiwan and South Korea, where the welfare state is limited.

Key will set out a challenging theme, which to many will sound ideological. But Key is not ideologically driven as Brash is. He is outlining what he sees as an inescapable challenge — and opportunity — which will decide our future.

Key chafes at old politics’ comparisons with what he calls “old world” economies of Europe and the Atlantic which in the twentieth century acquired large, active state programmes and taxes to match. Keep comparing ourselves with them, he will say today, and we will not develop the policies that will get us back up the OECD wealth rankings.

“When we compare ourselves with the rest of the OECD we aren�t necessarily comparing ourselves with the nimblest or the hungriest or the most determined nations nor are we even comparing ourselves with our direct competitors,” Key will say.

�We might think our tax rates are comparable with countries in western Europe but we should also look at tax rates in Taiwan or Singapore or South Korea.� These, he says, are dynamic economies with growth rates that can no longer be explained by “convergence” with the mature “old world” economies.

Key is particularly taken with Singapore, where he says “there are few half-measures and noone rests on their laurels” and which he says runs its economy like a business: a �goal, a plan and a set of policies to get there�. Singapore’s aim is to find high-value niches. So should this country’s be.

Key doesn’t like all the policies but those he does like include:

* low tax rates;

* �policies to support business, encourage individual effort and spur investment and risk-taking�;

* fast-track infrastructure development;

* a �significant emphasis on savings�, which has led to a �deep capital market and a culture of savings� (he doesn’t add that it is a compulsory, therefore tax-like, scheme, siphoning off a large share of wages and salaries);

* a huge government biotech complex and active exploration of whether to develop capability in environmental and water technology and digital arts technology (actually a New Zealand specialty, at least in film and sport);

* help to business to �develop new industries with higher knowledge-content�, coupled with insistence on owning the IP;

* 1000 young people to top world universities for 10 years;

* and a global outlook.

Key deplores Singapore’s autocratic style of government. That puts him alongside both the left and liberals here.

But where does his “new world” challenge put him?

On senior MP, while respecting his political success, says Key has not yet been tested by the media. The media focus more on the fact that he is saying something than on what he is saying.

He has also yet to work out how to bind with National’s very numerous conservatives. In that, he resembles Brash, who challenged the party in 2003 to accept a programme which would have cut government spending by 5 per cent of GDP over 10 years. In the event the party presented a much more moderate fiscal policy to electors in 2005.

Key’s admiration of the Singapore government’s “boldness” and his challenge about east Asian tax rates risks sounding a bit slick to conservatives — however powerful the longer-term logic of the comparison and however compelling his case for pre-emptive action now.

He will need to add more texture to his own “boldness” to lay the basis for convincing policy. Today’s speech does not read like the quick and populist fixes some of his colleagues go for but it does read more like exploration of a new idea than a strategic policy building block.

It is this that separates the new boy from old hand Bill English, who has been prodding MPs to develop a more strategic approach across a wide front — not least in Treaty and environment policy. The aim is to create conditions that might, for example, reel in Maori and light-green voters and even open up government support options with hitherto improbable partners.

Key’s long experience in fast-moving markets means he effortlessly appreciates the tactics in this. The challenge in his future speeches — the next is on Australia — is to turn new ideas into a strategic programme.