Post-Cabinet Press Conference: Monday, 15 May 2017

Have you spoken to Alfred Ngaro about his comments, and do you think he should apologise to Willie Jackson and the community organisations he mentioned in that speech?

I have spoken to him. He's, I think, made a number of apologies. I don’t think he has to apologise to everyone who didn’t like his comments, but, you know, we've made it— I've made it clear to him that, in the first place, some of his comments are wrong, particularly around partnership schools, because Ministers aren't involved in the decisions about which schools are in partnership schools, although it is good to see that Willie Jackson is, having made no progress with the leader of his own Labour Party, now wants to meet, apparently, with the leader of the National Party so that he can get more partnership schools put in place.

Are you going to review Alfred Ngaro’s funding decisions, to check there has been no political interference in that at all?

Well, I've asked DPMC to have a look at that. He hasn’t been involved in any funding decisions, so I’m not concerned about it.

Community organisations say they feel, not just from what Alfred Ngaro said, but they say they feel in general like there's a theme that they shouldnt speak out against the Government or they may lose contracts. What do you say to them—those who feel like that?

They've got no reason to feel that way. Look, they are often involved in, you know, tense negotiations with Government agencies, and there'll be differences of view about the nature of those things—those agreements—but they've always been free to say what they want about Government policy. We're always working with organisations who disagree with some aspect of Government policy or disagree completely with the Government. So we're pretty relaxed about it.

Can you reassure them, then, if they do speak up for whatever reason that they won't lose contracts or whey won't be not considered for contracts?

Of course we can reassure them of that. Our focus is that they need to be able to—we’ve got to bear in mind here the Government is increasingly focused on getting results, and that means that organisations Government works with need to be able to demonstrate the capacity to achieve results and be able to show that they're able to use the public funding for that purpose. So sometimes that'll create tension. So I don’t think we should pretend there won't be differences of view about things that matter to Government and matter to them. But there's no constraint on them expressing political opinions of any sort, and they regularly do. I mean, the area of housing is a good example where the Government's making, you know, arrangements every day to spend $300 million with housing organisations who’ve been very vocal about the emergency housing situation.

Are you worried about the prospect of a new missile from North Korea, and what's your message to Japan going to be on North Korea when you're there?

We'd be concerned about more provocation from North Korea, and provocation seems to be what's behind the most recent launch. I'm sure that we share with Japan the view that we want to see this tension resolved without conflict, and we're, again, putting some confidence in the fact that the US and China, in particular, seem to be working alongside in order to achieve some kind of resolution without conflict.

But do you think Russia and China could step up and deal with [Inaudible 16:10:00]?

Well, look, anything they can do to head off further provocation from North Korea is welcome, and, you know, we'll have the opportunity to discuss with the Japanese what their views are on it.

Should Russia and China put more pressure on North Korea?

Well, the indications are, in the case of China, that they are putting pressure on them. I think you've seen that from statements made by the Chinese Government and actions taken by them. So we welcome that.

Just back to Alfred Ngaro, did he offer his resignation to you?

No.

Did he apologise to Cabinet at all?

Yes.

Do you have any idea what led to his comments? I mean, they seem extraordinary in any context, and the thinking that goes with them is quite worrying. Have you got any insight into what led him to make those comments?

Oh, 1 think just partly—probably partly a lack of experience. But it's not how the Government works. I think past Governments have worked that way, but this Government doesn’t.

Media; How much experience do you need to not know not to do that, though?

Well, you need the experience of working with people who disagree with you openly and vigorously. But, look, he’s a Minister, actually, who's built up a good connection and quite a bit of trust with the voluntary sector and in his recent activities with social housing, so there's no indication that he has made decisions or actually done things that I think would be inconsistent with how the Government deals with these organisations.

At what point do you draw the line—to threaten improper use of political power or the actual improper use of political power?

Well, in the end what people do is what matters the most, and every indication from Alfred’s conduct as a Minister is that he is respected for his knowledge of the issues and has built up good relationships with the non-Government sector, particularly in the housing area.

The former chairman of Australia - New Zealand Business Council Kerry McDonald has called out New Zealand officials for not putting enough effort into maintaining a good relationship with their Australian counterparts. How good do you think the relationship is?

Look, we have a very deep operating relationship with the Australians, which works day to day, week to week, month to month. There's ongoing discussion about all sorts of issues and a lot of practical decision-making, so I'm not concerned that that’s under any kind of threat. It proceeds in the manner that it has for the past decade that I'm familiar with it. With respect to maintaining a relationship, it's always the task of the smaller partner to do more of the work, and in my view New Zealand has done more of the work in the relationship and will continue to do so.

Prime Minister, did the Salvation Army manufacture the homelessness crisis?

Ah, no, but they certainly drew attention to homelessness.

OK, so was Alfred Ngaro wrong when he quoted you and said that you had spoken to the architect of the homelessness crisis?

Well, look, I can’t remember exactly the detail of, you know, all the things that have been said. As a finance Minister, I took it upon myself to keep in touch with a whole range of the groups that Government works with, including the churches, with whom we have regular meetings, and the Salvation Army, because I've known, particularly, Major Campbell Roberts for a long time, and he was part of the original housing reform group at my instigation. So I maintain a relationship there, and the Salvation Army was pretty open with me that they were keen to draw attention to issues of homelessness, that they felt they'd been successful in doing so. I think it always works on these issues to make sure people are very well-informed about what the Government's doing.

So did Alan Johnson ever tell you that he was the architect of the homelessness crisis?

Well, I prefer not to go into detail of the conversations I have with individuals in that manner. All I can say is the Salvation Army have a role, which I think the public's used to, and that is to draw attention to where they think there is need. And I'd have to say they've engaged constructively for a number of years now on, you know, upgrading the services around housing, whether it's social housing or emergency housing.

Usually, I wouldn't ask you to go into the details of your personal conversations, but Alfred Ngaro has—he said that that was the conversation that you had. Can you verify whether that was what happened?

Well, as I've said, I'm not going to go into the detail, but I've—I can tell you that I've maintained an open relationship with the Salvation Army for a long time now, actually, and had a couple of meetings, I think, with Alan Johnson. He’s a very well-informed policy person and certainly did instruct Minister Ngaro to ensure that he understood what they were on about and that kept them well-informed about what the Government's doing.

Did you tell him to get close to Alan Johnson? That's Alfred Ngaro’s words.

Well, as I said, I instructed him to make sure he understood what they're on about and to make sure they understood what the Government was doing.

Would you characterise Alan Johnson now as the architect of the homelessness crisis?

Well, you'd have to ask Alan what role he thinks he played. As I said—

Do you think he was the architect of it?

Well, look, the issue is—the core issue is: are there people who have real difficulties finding housing? And the answer to that is yes. That's why we're spending $300 million creating 8,000 emergency housing places.

Mike King has said the suicide prevention panel is deeply flawed. What's your response to that?

Look, Mike's been a very committed, highly motivated anti-suicide campaigner, and he has a particular style in which he does that, and I'm not surprised at all that he finds the Ministry of Health way of going about things, you know, not necessarily to his liking. And it's just different views about how to achieve the same thing.

What's the Ministry of Health's way of doing things, then? Why is it different from his way of doing things?

Well, because the Ministry of Health—part of their role, as a Government agency, is to set out strategies so that everyone understands where they fit into it and what they are trying to achieve. You know, Mike works in a much more direct way that, in any discussion I have had with him, he is highly motivated about, and appears to be quite successful, but he can’t do everything. It does need a range of people to work on suicide, and, generally, we've found with either, you know, suicide awareness or ageing populations or whatever some overarching expression of what we're trying to achieve through a strategy can be effective.

But Mike King’s whole point is that you can’t understand what the Ministry of Health is doing. That's Mike King’s whole point.

Yeah, well, look, I'm not surprised that there’s a range of opinions about the exercise and what might be the content of it. These are things—this is an issue people care about a lot. A lot of people have experience of it. A lot of people are involved and anxious and committed to trying to reduce it, so I wouldn't be concerned at all about a range of opinions, and I'm sure that, you know, Mike's, over the years, had plenty of opportunity to express that opinion, and he’s probably had some influence because of it.

So you're not concerned at all that he’s made those comments and that he’s left this panel?

Well, look, in my view, it would be better if he stayed. I mean, I know Mike and I know the direct and committed way in which he works, and I would’ve—if someone had said to me “How do you think Mike King will go on a Ministry of Health panel?”, I would have said “I think both parties will struggle with that.”, just because he has quite a different style. And it’s got its place, it's very effective in the way that he does it, and it probably doesn’t suit him sitting around in meetings talking in generalities.

So why was he appointed in the first place, then?

Well, I think they probably thought he’d have a constructive—you know, something—constructive contribution, and I'm sure he’s made a constructive contribution. But, look, I wouldn't criticise him at all for deciding that he didn’t want to continue with that process.

But his biggest concern was with the draft report that went through and the fact that a number of recommendations made by that panel were not picked up, including the target, which the Government decided to drop, in terms of reducing suicides. So is that panel—is it toothless?

Well, look, you'd need to talk to the Minister about how the recommendations are being handled. People go on panels with the best of intentions. I would—I always think that officials should wrestle with different points of view and not just eliminate them from reports. I don’t know what's happened in this case at a detailed level, but, again, I'm not surprised that there may be a range of views about what goes in a document about suicide or suicide prevention or mental health, whatever the scope of it is.

Is there a way back from this, though? It's obviously a huge loss to have him gone from the panel. Could he be talked into returning? Could some—could Dr Coleman, perhaps, sit down with him?

Well, look, that's—that’d be up to Mike, I would say, but there’s nothing to prevent him getting his opinion across to politicians and anyone else who will listen. He does very— he does great work. It’s very valuable work. I'm sure he’s saved lives with the work that he’s done, and so we should—you know, they should take some notice of what he says.

Some of the wording that he took issue with was statements such as “Building positive wellbeing throughout people’s lives”. What does that even mean?

Well, again, I wouldn't want to deal with the statement out of context. What I think—what you—you’ll be familiar with these higher-level strategy documents, and, you know, sometimes you'd be surprised to find that the statement of the obvious is something that gets lots of—holds lots of—you know, a sector can bring them together because they sign up to the statement of the obvious. So it is as much the process as the statement. But, look, you're best to address any questions of detail about that to the Minister.

Is that statement that you just gave—is that a good example of what you once called Public Service waffle?

Well, again, you have to look at the context, because, you'd be—as I said, you'd be—I'm surprised sometimes about how sector groups find statements of the obvious as statements that recognise their concerns, something they can all sign up to and agree on that makes the more nitty-gritty stuff easier to deal with. But, in this case, you'd need to talk to the Minister.

Amy Adams’ social housing announcement tomorrow—how many houses are we going to see involved here? Is this a Hobsonville redevelopment company scheme or is this just a Government State house - building one?

Well, it's essentially—uwell, look, the details about it will be announced tomorrow, but the—it's essentially the plans, or the next stage of the plans, for the very large Government-owned housing estate.

Righto. So will it be only State housing, or will this be including housing that will be sold off to the affordable market or into the private market, like is happening up at Hobsonville?

Well, again, the announcements will be there tomorrow, but a simple way to think about it is the Government owns land that’s currently got 27,000 houses on it, in Auckland, and there’s room under the Auckland Unitary Plan to build 60,000 houses on that land. And the Government won't need them all.

There's a Deloitte report out today which recommends trialling a child benefit for New Zealanders. Is that something you'd consider?

Oh, look, I haven't seen the report, so I can’t really comment on that.

Do you like the idea of a guaranteed child benefit?

Well, we have—I mean, if they mean the old-style universal family benefit, then were not going to be doing that. If they mean a more targeted one, then we've got that through Working for Families, the family tax credit, and the in-work tax credit, which is, you know, targeted on working families. So I'm not exactly sure what they mean.

How prepared do you think New Zealanders are, by and large, to cope with a sudden drop in income?

Oh, some are, some aren't. What we can do for a lot of them is, in the next few years, deliver much more real-time information about the mix of their private income and their entitlements. The tax system is based around a year, and at the moment, you can be making decisions or facing consequences of a loss of income which don’t become apparent for 12 to 18 months. And part of the benefit of the complete redesign of our tax collection system, which is going on as we speak, is that people will be able to have much more like a real-time balance and, therefore, understand the consequences of loss of income or taking another shift or the relationship breaking down or whatever—whatever change in circumstance is going on.

The regional conference at the weekend passed a remit to make the registration on drivers’ licences for organ donation legally binding—couldn’t be overturned by the wishes of the family. That's something you're in favour of?

Oh, look, there’s ongoing discussion about it. It's a pretty vexed issue, and these decisions are always easy in theory until you have, you know, someone actually dying and people under pressure to make quite quick decisions about organ transplant. So I wouldn't, you know, venture a half-formed opinion on it. There's ongoing policy discussion about it.

Doctors say that they wouldn't be comfortable enforcing it. Would that have an outcome on the policy discussion? You know, are you likely to take that into consideration when they consider it as a policy?

Well, yes, they would. I mean, the doctors’ view, I understand, is one of the influences on the current public policy, so I'm sure that'll be part of the ongoing discussion.

Are you concerned about North Korea's inclusion in the Belt and Road Forum?

I'm not aware of the terms—whether they're included or what the terms are there—so I couldn't comment on it.

They're one of the countries that were invited to attend, to try and get on board with Belt and Road, which we, obviously, have already signed up to. Do you think it sends the wrong message, though—to, on one hand, denounce missile strikes and, on the other, encourage them to get on board with a programme like Belt and Road?

Well, look, you'd need to get a sense of proportion about it, wouldn't you? You know, we are keen to see what we are seeing, and that is China playing a key role in trying to resolve these issues around North Korea and its provocative missile programme, and resolve the issues without conflict. Now, you know, it’s up to them to make the judgments about the balance of the relationship. They have the closest relationship to North Korea of pretty much anyone. It’s not easy for us to understand all aspects of it, so I'd be reluctant to make a judgment about that particular item. We are keen to see them play an ongoing, positive role, and it appears that they are.

So if China wanted North Korea to be part of One Belt, One Road, that would be something that you wouldn't feel that you would need to oppose, or you wouldn't comment on that?

Well, it's—I mean, the question is about their attendance at a meeting, so I wouldnt want to conflate that into an understanding of China’s policy about it.

You mentioned on the weekend—you talked about the relative performances of the Australian and New Zealand economies. Is the Government still looking to close the gap in wages? Has there been any progress there?

Well, I think what I focused on was the change in the migration flows. You know, the comparison of the economies is a bit complex. The high-level numbers look pretty good, look fairly similar, like GDP numbers—although Australia’s are a bit lower at the moment— but the measures of employment are significantly different, and as we know, there’s less of a safety net than there used to be 20 years ago for New Zealanders in Australia. So we're focused on the flows. I think, over time, it's—you know, if we can keep providing sound— you know, stable Government and with a strong focus on an ongoing programme of microeconomic reform, as we have in the Business Growth Agenda, then we have the opportunity for that gap to close up a bit.

Because it hasn't closed up much, has it?

Well, the after-tax pay has, and over the next few years, as we have surpluses and they have significant deficits, which they're struggling with and they're raising revenue to close, the opportunity is pretty good to close up that gap further.

Is the Government still committed or looking at closing the gap—getting rid of that 30 percent gap between—through tax wages?

Yes, and we believe that, on an after-tax basis—and this is where the advantage of surpluses means that you can make progress after-tax as a—you know, Government finances being a contribution to making progress.

This ransomware attack, Prime Minister, over the weekend, CERT are saying today they've received some reports, or were concerned, that some businesses might've been affected here. Have you been able to get any more information as the day went on about whether New Zealand businesses were affected? And what about, I mean, New Zealand Government agencies—have any of those been affected?

We haven't heard of any yet. [Interruption] Sorry, and just bear in mind that while this is a high-profile cyber-attack, actually, agencies here are dealing with cyber-attacks 24 hours a day.

How well prepared is New Zealand for this kind of attack, would you say?

Look, I think, at the Government level—at the level of having policy in place and the right kind of agencies in place, we're well prepared, and we've spent quite a lot of time and money over the last 4 or 5 years building that up, but, of course, the vulnerability can come through individual businesses, through software packages, even from reputable providers like Microsoft. So you're always vulnerable, and you have to always be vigilant.

Do the authorities report to you about how many of these kinds of cyber-attacks they catch, or foil, day by day?

Yes, there is reporting. I'd just have to check exactly the nature of the reporting, but the impression it conveys is that there's 24 hours a day, 7 days a week attacks both on Government and private sector systems, and they, you know, sometimes succeed.

Where are they coming from?

Well, as far as I understand, all the usual sources.

Foreign Governments?

Yeah, what are the usual sources, and when have they succeeded?

Well, the same ones as, you know, around the rest of the world. But, again, I wouldn't want to—it'd be better to go and look at all the detail before making further comment on it.

Just on Mike King again, he and others were advocating for a 20 percent reduction in suicides over 10 years, but that's not included in the draft strategy. Do you think it should be?

Well, I wouldn't want to leap into that debate without understanding the discussion that’s gone on before it and the expert advice that would go with it. I can understand why a target would be challenging, just simply because suicide is pretty difficult to predict.

Do you think NGOs like the Salvation Army need to be mindful about the working relationship they have with the Government?

Well, I don’t know what you mean by “mindful”. I mean, they—in our experience, they work constructively with us on trying to achieve results for people they care about, and, whatever their criticism of Government, if we're putting $300 million up to deal with emergency housing provision, they don’t—you know, they engage. They don’t say: “Well, just because we don’t agree with you, we're not going to do deals with you.” Of course they do. And I think as—in that sense, you know, people have every right to criticise, but if they're focused on the results, then they can work with us and we can work with them.

That quote, “mindful”, is from Alfred Ngaro, when I asked him yesterday to explain what he meant, and he just said, you know, organisations like that need to be mindful about the working relationship that they have with the Government. So does that mean they've got to be careful about what they say publicly?

Oh, look, I assume he just meant that you need to—they need to have some kind of trusting relationship. I mean, in the end, if you're handing over public money that’s done on contractual terms, those negotiations are often, you know, a bit tense and a bit tough, as you'd expect, but—in the case of emergency housing—quite successful. We've been able to, with the assistance of the NGOs, get up and running fairly quickly in about the last 15 months, starting with Paula Bennett's work before last winter—get up and running, you know, as we said, places for 8,000 people. I mean, it's been a massive and successful effort, and they all deserve credit for it.

How would you describe what he did? Would you say he misspoke?

Well, I'd say he just misjudged it. I mean, some of it was wrong, as I said, about partnership schools. Otherwise, it's just a Minister learning how this Government operates. When Ministers move into the social sector as Ministers, they need to be ready, willing, and able to take criticism every day from organisations that they're dealing with. Because there’s always more need that you can meet, and there’s always differences of opinion over how to meet it, and Ministers adjust to that.

Did you promote him to Cabinet a bit too early, do you think? Is he not ready?

No, I don’t—Il don’t agree with that. I think he’s done a very good job as a Minister.

Do you think his comments might have been reflective of the way he would have operated had he been involved in any sort of funding decisions?

Well, I wouldn't want to hypothesise. I mean, it might just reflect a bit of pressure from criticism. As I said, Ministers do have to adjust to the fact that theyre working in sectors where they will be criticised all the time. But if they stay focused on getting results, as the Government does, then they'll find that they can engage constructively with anyone, because people who are criticising the Government or its policy, I've found, are doing so because they're motivated about people they care for. And if we set that as a common objective, then you can get an awful lot done despite the disagreement.

But you must have had some concern, otherwise you wouldn't have asked DPMC to look into it.

Well, that’s just simply because it was a question—a fair enough question to ask to make sure. I'm quite happy to do that, but I've not been concerned at all. Ministers are quite arms-length from a lot of these processes, and there’s—II wouldn't be concerned about what decisions a Minister might have made about a contract. They very rarely—they don’t often make decisions about actual contracts.

Those comments weren't made, though, under the pressure of a media stand-up or with protests going on criticising him then and there. They were made in a completely different context, when he was just speaking freely about his thoughts on policy. Doesn't that make it worse?

Look, the comments were, as I said, in some respects, wrong, and other respects, quite misjudged. A new Minister, I think, getting used to an environment where criticism is quite normal, and he’s recognised that Government does not work that way. I've made it clear—I think the track record of this Government is very clear. We have worked, particularly in the social area, successfully with some quite new approaches, with a very strong motivation that we share with all these groups, to do a better job for the most vulnerable. So, you know, the comments let the Minister down, because he actually performs very well as a Minister, and would give those organisations the wrong impression about how the Government works, and I think a lot of the organisations know that’s not how the Government works, because they've had the experience over a number of years of working with us.

Look, I've spoken to a number of organisations today, both on and off the record, who say this is exactly how they feel—that they do fear speaking out. So why would they feel like that if there wasn’t—you know, they've been in meetings where they've been told by managers: “Be careful what you say.”

Well, managers aren’t Ministers, and I'm accountable for the Ministers. And so that’s what's worked with Minister Ngaro. I mean, he’s dealing with the accountability to me for what he says and for what the tone of the Government is. And, of course, we expect Ministers to transmit that through their agencies.

Isn't it necessary, if you're going to make social investment work, that people actually trust that they can deal with the Government openly without these sorts of threats in public [Inaudible 16:37:08]?

Yes, and I would say that they generally do. I mean, if you think of the—Ill just give an example. Ministers Adams and Tolley have worked through a couple of years of intensive discussion over family violence, with organisations that may or may not support the Government. That's been very constructive, at times tense, but is fundamentally altering how we deal with family violence—the same with dealing with vulnerable children. I mean, we've dealt intensively for a couple of years over issues people really care about and done so constructively, including with criticism along the way. So I think our track record shows that because we take the issue seriously we can share a sense of purpose with these organisations, and we've made more change in the approach to social issues than any Government in the last 20 or 30 years. And there's a lot more to do. So I think these comments are unfortunate in that environment, because they are not characteristic of how the Government works.

Afghanistan—have you any indication, informally or formally, that you're going to get a request for more troops to Afghanistan?

No, I haven't.

You haven't discussed it with Malcolm Turnbull, who's considering it?

No, I haven't.

And what about your defence Minister, who’s been to Europe? No suggestions from NATO that an invitation will be coming?

No, I haven't had any advice to that effect. That's not to say it's not going to happen, but I haven't had any advice or any indication at the moment.

Just back on Alfred Ngaro. He’s only been in the job for a couple of months in an associate capacity. How many decisions has he made? I mean, you're auditing the decisions he’s made. Has he made any?

Well, we're not auditing; we're just—my advice is that there’s—he hasn’t been involved in any decision about any contract, and some of them he certainly wouldn't be. He has nothing to do with partnership schools, for instance.

So what are you looking for in the—

Well, we're just going back and checking, because it seems a logical question to ask. But I'm not at all concerned about it.

OK, do you know he hasn’t made any big decisions? Is that just a whitewash?

Well, no; it’s a fact.

So you're checking nothing, though—there’s no decisions that he’s made.

Well, if there’s no decisions that he’s made, then it's going to be hard for you to show he’s made some bad decisions, isn’t it? OK? Thank you very much.

Just on John Oliver, Prime Minister. You might remember last week you said that some of the stuff—that he wasn’t very funny. Today, or overnight, he’s come out with a new serve against New Zealand, taking you to task over that and seems to be opening up a bit of a war with you, making fun of your “walk-run” and your spaghetti pizza Facebook posts. What would you like to say to John Oliver? Are you concerned about this at all?

I'm not at all concerned about it. It may assist New Zealand's international profile and help tourism and trade and even relationships with the US.

And were all of those things in mind when you said he wasn’t funny?

Well, you know, he’s the risks of any comedian. Sometimes he strikes gold and sometimes he doesn’t. But I hope he’s doing a good job with the next round.

Just one last question about the trip to Japan: do you have any particular targets in mind of what kind of extra access you would want for our farm products to the Japanese market, beyond what they've already indicated? Is there anything new that you want to put on the table?

Oh, look, the discussion will be a discussion about advancing TPP in its current state rather than further trade negotiations. OK? Thank you very much.

[End time: 16:41:20]