John Key's departure: End of the Lullaby PM

by Graham Adams / 09 December, 2016

John Key’s startling resignation has been praised as showing how an unconventional politician can leave at the top of his game and on his own terms. More likely, he simply recognised ahead of other politicians and the media that the jig was up for his routine of papering over the cracks and insisting there are no real problems in New Zealand.

Key will be remembered — if he is remembered at all — for leading the Lullaby Government for nearly three terms as its immensely popular Soother-in-Chief. Elected in 2008 just as the Global Financial Crisis was unleashed on the world, our highly personable 38th Prime Minister had high hopes for his government, and his followers had high hopes of him. He was going to close the wage gap with Australia, increase exports’ share of GDP, deal to the housing affordability crisis he inherited from Helen Clark, lift productivity and “deliver the stronger economic future our country deserves”, which possibly included establishing New Zealand as an international financial hub.

And let’s not forget 12-year-old Aroha Ireland from McGehan Close, who became the poster girl for Key’s push to identify himself with the plight of the poor, and whom he took to Waitangi in 2007 in a Crown limousine.

Over the succeeding years, he hit none of his targets, and ended up demonising the poor as well. Pretty soon, he didn’t even appear to try to fulfil the promises of his campaign rhetoric. At some point he must have realised that dismissing problems and just pretending to act was the easier option. Inaction seemed to only bolster his popularity with the public so why would he bother taking a stand and perhaps court criticism?

His MO became one of soothing voters’ fears and brushing away problems. “There, there… don’t you worry your pretty little head about it…” became his underlying refrain.

In 2014, writer Gordon McLauchlan astutely summed up the contrast between Key and Muldoon for a North & South story: Muldoon exacerbated problems so he could pretend to solve them; Key pretended real problems were not really problems at all so he didn’t even have to attempt to solve them.

Typically, Key would deny there was a problem, but if criticism persisted he’d promise he’d look into it, perhaps with an inquiry. Any findings would be ignored, or at best their implementation would be deferred until the heat had died down and then quietly forgotten or watered down. A fall-back option was to say “Labour did it too.”

We saw this approach time and time again, including this year over foreign trusts. In June, even after John Shewan unequivocally declared our current disclosure regime was inadequate, John Key said his original statements denying there was a problem were correct. He also said the government would implement most of the report’s advice yet its key recommendation to extend the anti-money laundering regime to lawyers, accountants and real estate agents has been left to languish.

There were worse flare-ups, of course, that caused bigger ructions. There was the Hobbit labour dispute, and protests over asset sales and against the TPP, but generally Key proceeded very cautiously so as not to alienate his timid voting base, whose opinions he polled frequently and fastidiously, and he backed down just as soon as the polls told him to. His popularity stayed astonishingly high as a result.

The best you can say about Key is that he was a man for a particular season. We wanted someone to protect us from the economic fallout of the ruinous GFC and catastrophic earthquakes in Christchurch and a successful currency trader and financial whiz-kid seemed to be the man to do it. And he did, for a while at least, if mainly by borrowing billions and billions of dollars to soften their impact, including giving tax cuts to the better-off.

You might say Key became our talisman against evil — or as political writer Gordon Campbell put it: “Key’s the thing we hired to divert us from the bad stuff, even if that routinely consists of little more than tripping over his laces and coming up smiling.”

Voters loved Key for his willingness to be daffy in public — whether it was mincing down a catwalk or snaps of him pulling a derp-face. They loved him for his bloke-at-the-barbie persona too, even though he is fantastically rich and loves nothing better than hobnobbing with the rich and powerful — including Barack Obama and the Queen.

They also respected what they assumed was his business acumen, given that he had made many millions trading currencies and shifting a swag of businesses to low-tax Ireland. And perhaps not least that he himself proclaimed he was good at business. Opening his campaign in 2008, he reminded us of how good he was: “I’ve actually picked up a struggling business and made it grow. Helen Clark never has.”

As his years as prime minister went by, voters simply ignored the mounting evidence that he wasn’t actually very good at cutting deals as a government leader, no matter what success he’d had trading currencies.

He managed to screw up a free-trade deal with the Gulf states by leaving a 2010 diplomatic mission early (and taxpayers ended up paying for a farm in a desert at a cost of more than $11 million); he was shafted by Warner Bros to the tune of $34 million over the Hobbit; SkyCity ran rings around him over the convention centre and made him look like a muppet, as did the owners of the Tiwai Pt smelter, who hit us up for $30 million. It turned out that Key’s real forte in government was doling out corporate welfare.

Voters mostly looked the other way as dairy farms fouled our waterways, foreigners bought our houses, and the gap between house owners and those locked out became a chasm of inequality. Key also rightly concluded that only a minority would object to him expanding the GCSB’s powers, and that his disregard (if not contempt) for our democratic and constitutional institutions would not harm him either. Nor did dissembling and prevaricating whenever he was in a tight spot.

It worked a treat, until mid-2016. Then the tactics stopped working so well; the Lullaby Government began losing its touch. From the middle of this year, Key was under intense pressure to do something about homelessness, Auckland’s insane house prices and unsustainable immigration levels (that are unrivalled in the Western world apart from in Israel). Polls on these topics repeatedly showed voters wanted action.

The past six months must have been bewildering for Key. So many commentators — from the left, right, and in-between — were suddenly asking him loudly to take action on a variety of pressing issues despite the fact he had made a wildly successful prime ministerial career out of doing very little at all. 

Herald business columnist Fran O’Sullivan asked for action on the second phase of the anti-money laundering legislation (“It’s called prioritisation, Mr Key!”); financial commentator Bernard Hickey demanded a land tax like Canada’s; Toby Manhire wanted him to address child poverty that Key claimed was impossible to measure (“Get on with it!”); Andrew Little bellowed at him in Parliament: “Build some bloody houses!”

Even his political allies on the right were increasingly distancing themselves from him.

In July, Stephen Jennings — a billion-dollar, paid-up member of the Rich Listers — said we were on the wrong course and that rising house prices and immigration-fuelled economic growth were masking an underlying “iceberg that lies ahead”. He said the tax system favoured the “old and rich” and “We are sleepwalking into an economically ugly place.”

Shortly afterwards, ANZ’s CEO, David Hisco, warned that Auckland house prices and the New Zealand dollar were over-cooked and trouble was looming.

In September, The NZ Herald’s annual “Mood of the Boardroom” thought Key was too timid in tackling housing problems and charged him with being a do-nothing Holyoake-style PM who squandered opportunity.

Then, in October, new Auckland mayor Phil Goff romped home on a platform including advocating cutting immigration and doing something about the city’s traffic congestion — problems that Key preferred to ignore or, what was even more insulting, repeatedly tried to pass off as evidence of his government’s economic success.

It wasn’t just locals calling for action either. In October, the UN’s Children’s Committee said the New Zealand government needed to take urgent measures to deal with violence, abuse and neglect towards children, their standards of living, child labour, and juvenile justice.

Key started to look back-footed as he flailed about in response to critics and to bolster his support. Suddenly money was found to rid the country of pests and there were promises of more police. Rules for migrants’ parents were to be tightened. The housing crisis he had long insisted wasn’t a crisis became a crisis for him, even as he tried to convince people the situation was worse under Clark.

You could see the pressure was getting to Key. He appeared far less cocky and ebullient, spinning his tired line of “experts are two-a-penny” reflexively rather than as something he believed.

On The Nation in late November he tried to promote the success of his economic management over the past eight years, but Lisa Owen kept returning to the inconvenient fact that once immigration increases are stripped out of our GDP figures, we are standing still economically.

When Owen pointed out to him that “Our GDP per capita is lower than the OECD average by about 8 per cent, and our hourly labour productivity has basically flatlined from your second term,” Key lamely responded: “Well, again, you can pick and choose any kind of number and any analysis from any economist, and they all vary.” But he did do so without much conviction.

Perhaps that was because, as he has now confessed, he had already made the decision to retire months earlier. Perhaps it was because he knew the old magic wasn’t working so well any more. His popularity, although still very high, was gradually but steadily declining, poll by poll. The omens weren’t good, and there was the real possibility of having to do a deal with Winston Peters after next year’s election.

And so he stepped down in early December, presumably thinking not of the good of the country or the National Party that launched him into power but of his own convenience and reputation. Tellingly, when asked about his regrets, he nominated the flag referendum — that ill-judged $26 million branding exercise he vainly believed could be swung by his own charisma (and Richie McCaw’s).

There was no mention of dirty rivers, the homeless in cars, our bulging prisons, yawning inequality, hopeless productivity figures, the shameless spruiking of the New Zealand economy as the envy of the OECD, when it is nothing of the sort.

That sort of honesty may be too much to ask of a retiring politician, but don’t forget David Lange’s valedictory speech in 1996, when he apologised to those Rogernomics had left behind. Key — like Lange — is a salesman and actor at heart, but at least Lange could admit the policies he had peddled had harmed some people.

I don’t think Key will be treated kindly by history. In the wake of his resignation, commentators have struggled to find anything much to praise as his legacy, beyond settling some Treaty of Waitangi claims and giving us stable government over several terms.

In fact, he elevated dishonesty and slipperiness to the highest level of government. Not least, he saw no shame in admitting that the Official Information Act was manipulated for political purposes. His office also had a major role in the dirty politics exposed by Nicky Hager, who in 2014 Key belittled as a “left-wing conspiracy theorist” — a slur he repeated this year when the Panama Papers showed our foreign trust regime was dodgy.

Key set the tone for his government as its King of Spin. There was no truth that couldn’t be sliced and diced until it appeared to be a half-truth at best; there was no truth that couldn’t be omitted if that omission fitted his purposes. He would say anything that suited the audience he was talking to, even if he had said exactly the opposite a few days earlier. 

Key will undoubtedly collect a knighthood (which may have been his ultimate motivation in restoring them after Clark had abolished them), and slip between his homes in New Zealand, Hawaii and London. As Sir John, he will be welcomed onto company boards here and elsewhere, for fat fees.

Meanwhile, back home, whoever gets to run the country will have their work cut out cleaning up the mess John has left behind.

The era of sideshow politics and of being soothed has well and truly ended.

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