Hooton’s speech to the ACT conference

Some interesting aspects to Matthew Hooton’s speech to the ACT Conference.

This speech is about the complex relationship, that I think most of us in this room have, with John Key – and how Act might manage it better to your advantage in the future. The relationship is complex because, on one hand, John Key has massively exceeded any reasonable expectations as Prime Minister. But, in another way of looking at things, he’s also failed to live up to them.

John Key first came to prominence when he smashed Michael Cullen in the finance spokesmen’s debate in 2005, when he was broadly and largely loyally promoting Don Brash’s economic policy. And it became pretty clear he would become the next leader of the National Party when he gave an insightful speech on Singapore to the Auckland National Party conference in 2006.

To those of us in our 40s, who are now grey-haired, our political awakening had happened with the liberating social and economic changes of the mid 1980s and early 1990s. But we had to accept that if John Key was positioning himself to be New Zealand’s Lee Kuan Yew he wasn’t going to be the radical free-market liberal we might want.

But, if he were to be Lee Kuan Yew, he would be extremely ambitious for New Zealand. He would radically invest in infrastructure. He’d be an enemy of welfarism and sloth. He’d ensure New Zealand was open to the world and lightly regulated, at least in an economic if not a social sense. He’d be one of those driven, Asian-style, uniting yet transformational leaders. When it comes to the Lee Kuan Yew test, you can really only give him a “C” – maybe a “C+” on a good day.

But, on the other hand, as you get grey haired, the importance of reigniting the excitement of radical reform declines a bit. And it’s replaced with the over-riding need to keep the absolute lunatics in an Andrew Little-Grant Robertson-Matt McCartern-Metiria Turei-James Shaw-Winston Peters-Te Ururoa Flavell-Marama Fox-Hone Harawira-Laila Harre coalition out of office.

These are people who are mainlining their international trade policy from Jane Kelsey. They have been running around promoting an economic model from Tufts University, which I had never heard of, that assumes that all labour and capital is perfectly immobile. Under this model, the people who lost their jobs in 1998 at the Mitsubishi Plant in Porirua, the Nissan plant at Wiri, the Honda plant in Nelson and the Toyota plant in Thames are apparently still going to work each day, carrying their lunchboxes, and they sit staring at the machinery with which to assemble cars, and then go home at the end of the day. And they have been doing this for 18 years now, because, you know, labour and capital are perfectly immobile. Under Labour’s Tuft’s University model, no worker ever gets a new job. No machinery is ever decommissioned or used for something else. No one ever innovates or responds to new circumstances in any way. And this is seriously the sort of economic assumption that Labour and the Greens have been using to say the TPP would be bad for New Zealand. So keeping those lunatics away from office is absolutely paramount.

I don’t agree with Hooton’s assessment of what the Government has achieved – we have had welfare reform, tax reform, education reform etc. But from the point of view of an ACT voter, it is certainly modest.

The good news is that we can now see it actually working with charter schools. There are only – what? – half a dozen of them. One was a disastrous failure and they stole the money and has been shut down. A couple of them are outstanding successes. The others are doing just fine: good, decent neighbourhood schools. But the very fact they are there works as a check on the system. The teacher unions can’t get their friends in the bureaucracy to further dumb down the national curriculum, because there’s an independent free-market check, that at least some parents can access free of charge.

A good way to see charter schools.

Public policy is ultimately an averages game. What is pretty clear is that, on average, charter schools are going to teach kids better and meet community expectations better than state schools. And slowly the percentage of schools which are charter schools will grow. And that will also improve the quality of the state system. And that will progressively improve the life chances of more and more disadvantaged children. And that will enable them to thrive as people, and also to do better as part of the economy. And that will break down intergenerational disadvantage, and reduce poverty and misery. And you can see its classic John Key incrementalism in practice. And you can also see why the teacher unions need to put a stop to this right now. God knows where it could lead.

It is about direction more than speed.

Your best strategy over the next 17 months before the election is to more clearly distinguish yourself from National. David Seymour, at great personal cost, made that strategy possible when he turned down a higher-paying minister’s job to avoid being more tightly bound to National under cabinet collective responsibility. I’ve never heard of a politician making that decision before. It speaks to David’s integrity.

It does.