John Key laid down the challenge for his second term the day after the All Blacks ground out their rugby world cup win. That, he said, was “an achievement built on courage, determination, grit and great teamwork … all values New Zealanders hold highly.”
Did we see those four qualities in National’s and Key’s campaign?
National’s win was based on: “brand-Key”, the one-of-us bloke who is plausibility personified (mostly); centrist policy, leaning a bit right, which middle New Zealand is broadly in tune with; uncertain economic times which favours an incumbent government if competent; and Labour’s not-yet-rebuilt credibility as an alternative.
This was in essence a work-in-progress election. Since governments seldom exit after one term — Labour defeats in 1960 and 1975 are exceptions — National could run a bland campaign plus scare stories about Labour and manoeuvres to get John Banks and Peter Dunne up.
The next election will be about results: what the government’s policy line is delivering, who feels advantaged or satisfied or optimistic and who feels left out or aggrieved or hard done by.
In that election voters’ judgment will be less on brand-Key and more on what has got done. That’s the job for policy wonk Bill English and project-manager Steven Joyce.
The word is that the tempo will lift this term. Asset selldowns are one part: Key and English will need them done in such a way that only a minority stays upset. Likewise the minerals and oil speedup. Broadband investment momentum lifts, too.
Public service reform will change gear. English’s Better Public Services group is aiming for groundbreaking changes in the way departments and agencies operate, not just cuts and efficiencies.
A test of the Key cabinet’s strategic capability will be whether it really resources innovation. Another test will be whether it extends the actuarially based investment approach it applied in aspects of welfare reform to confronting the long-term fiscal frighteners in superannuation and health. Education needs a rethink, especially at tertiary level.
The first term’s focus in those areas was essentially short-term: on structure, organisation and efficiencies. The Treasury’s higher-profile, English-backed approach to its 2013 40-year fiscal projections will spotlight the desirability of early — and strategic — action on health and superannuation.
Another strategic issue, figured by English in 2009, is to get the external balance of payments deficit down to the point where country net debt (most of it private) is at a level that reduces our current high vulnerability to global shocks.
That is a decade-long enterprise but if he has got the settings right we should see some progress by 2014 (though probably not enough to have stemmed migration to Australia). If not, a rebuilt Labour party could make much of a need for new thinking and will be able to point to the international ferment in economics thinking as an argument for policy change.
Not least, Labour might be able by then to make telling economic points to middling voters on the economic downside of entrenched inequalities. Once this was fringe economics. Now some mainstream heavyweights are debating it, notably last week Lawrence Summers, former United States Treasury Secretary, in the Financial Times.
Which brings us back to Key.
First, he has said he wants his legacy to be what he does for disadvantaged children. They are at the heart of the inequalities issue.
Second, there is a brittleness he needs to mend. We saw it in his lash-out at Labour when a man tried to jump from Parliament’s gallery two months back (actually on Labour MPs, not on Key) and in his over-the-top equating of the Sunday Herald with the News of the World and complaint to the police over the recording of his tea party chat. This could undo brand-Key this term because the pressures will be greater, including from the media.
Third, pressure will grow if there is a serious global economic shock and voters think he didn’t warn them pre-election.
And, fourth, Winston Peters’ resurrection may in part indicate there is space for a populist party, as in Europe and evidenced in the United States Tea Party and Occupy Wall Street movements. Key’s personal popularity may have been mopping up any such tendency but if the inequalities argument gets legs here Key’s popularity might not be enough to head off Peters or a new demagogue, with unpredictable political results.
Put all that together and ask whether Key and National would have been riding so high or some gloss would have come off if the election had been November 2012 — that is, at the end of a four-year term (which Key wants from next year’s constitutional review).
For new governments three-year terms are better because new governments usually win their first elections, so they usually get in effect six-year first terms. Key is starting on the second half of his six-year first term. Now for courage, determination, grit and teamwork?