Magazine article New Zealand Management

POLITICS : How to Spend Political Capital

Magazine article New Zealand Management

POLITICS : How to Spend Political Capital

Article excerpt

Byline: Colin James

John Key knows a thing or two about capital. Or does he? He seems to think political capital travels a one-way street a[euro]" down. But didna[euro]t his financial capital travel a one-way street a[euro]" up a[euro]" when he was in business?

Key is not alone among his cabinet colleagues in this one-way-street thinking. Many ministers, if they are to be bold, would like to manage by stealth, preventing political capital from eroding too much too fast.

The spectre older hands see is of polls plunging after Ruth Richardsona[euro]s 1991 mother-of-all-budgets. Bill English, then a new backbencher, was seared by the experience. He is determined not to repeat it.

Hence, he let spending rise in his 2009 budget to offset the recession. The total fiscal stimulus in the 2008 and 2009 budgets was similar to Australiaa[euro]s big-hit stimulus.

English used to be characterised as a a[euro]new conservativea[euro]. Not, of course, the kind of American hard line free-market conservatism, so often laced with old-style religion. English accepts the 1980s-1990s market reforms as a given. He assumes greater flexibility and choice in government service delivery in response to his generationa[euro]s expectation of customised goods and services. But his type of conservative also rejects radical policies of all shades.

Some read this as English holding back a more adventurous Key. But that interpretation miscasts the relationship.

As one insider puts it: when Key gets involved and interested in an idea for action, he can be a[euro]quite laterala[euro] and go a[euro]quite harda[euro]. Witness the billing in his prime-ministerial statement last month of his drive for ministers to find ways to grow their sectors faster. That sort of practical action fits the instincts of a one-time, go-getter still relatively new to the National partya[euro]s traditions and leanings. English is then, at times, the a[euro]hey; buta[euro] voice.

It was, on the other hand, English who told his tax working group to undertake root-and-branch thinking and Key who was cool in public when the group started publishing papers last winter. It was also English who, a year ago, tough-talked public sector chief executives into finding ways to a[euro]do more for lessa[euro]. He pushed the Treasury for new thinking. His departmental secretary John Whitehead then made controversial speeches and, in December, replaced the Treasurya[euro]s whole second tier of managers.

Key and English sometimes look different because they have been the lead operators in different (if complementary) spheres: English on the institutional side, getting the budget, tax and (in cahoots with ACTa[euro]s Rodney Hide) regulation nearer best practice. …

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