The interesting thing about Mr. Common Sense & Reliable is the body of evidence that indicates he is neither. I’m not talking about Dunne’s memorable fit of pique on election night in 2005 ….or actually I am, but only as evidence of an underlying reality, rather than an out-of-character incident. Being sensible is very stressful. ‘He seemed so normal,’ is after all, an observation that the neighbours of serial offenders routinely make.
With Dunne, it is more a case of serial identities. On the surface, Dunne can seem like a plodding, hyper-rational figure – the Ken Barlow of New Zealand politics. Yet since 1996, Dunne’s party lists have zig-zagged in dizzying fashion, often with barely a name recurring between elections. The ethnic minority line-up in 1999 for instance, was markedly different to the neo- Christian line-up he assembled in 2002. For years, Dunne has been willing to hitch his little engine to whatever chain of wagons is available, before chugging off in whatever direction is most likely to deliver him the goods.
The public has sometimes been very surprised by what Mr Sensible has actually delivered. Thanks to the workings of the television worm, Dunne hit his peak during the 2002 election campaign as the Sensible Little Chap, the moderate alternative to a dreaded Labour-Green combination in government. Ironically, the public’s sudden infatuation with United Future in 2002 did not save the system from extremism. Quite the contrary – that fling put a bunch of Christian radicals from Dunne’s fundamentalist party list into Parliament.
To Dunne’s relief, those United Future MPs have since gone down in electoral defeat and/or chosen to pitch their revival tent elsewhere. United Future now face the prospect of re-inventing themselves for this year’s election. Once again, it seems to be flip-flopping. For the past six years, Dunne has posed as the steady, reliable hand restraining Labour from going off the rails with any left wing, anti-business agenda – but in 2008, Dunne will be posing as the steady reliable restraint stopping National from going off the rails with a possible right wing, pro-business agenda.
Such a history might have left any other party in Parliament typecast as a bunch of chancers and flakes – yet the myth of steady-as-he-goes somehow endures. Beneath the surface, there is constant movement. Dunne may have been deeply involved in framing the tax outcomes announced in the last two Budgets, but barely before the Budget dust had settled, he was off wooing National for a place in its governing configuration next year.
Such elasticity could be inevitable, the ignoble lot of any small, would-be centrist party. Yet it crops up with regard to some of more the controversial issues before the House as well. In Peter Dunne, the tobacco and gambling industries have what is perhaps their most sympathetic voice in Parliament, during times of need. Scoop political editor Gordon Campbell talked to Peter Dunne last Friday morning.
Campbell: I’ve just noticed the Greens got more party votes in your Ohariu electorate last election than United Future – how did that happen ?
Dunne : Two reasons. One was the general meltdown in our vote. Second we have never, for obvious reasons, run a two-tick campaign in Ohariu-Belmont. We’ve always run an electorate vote campaign. So, we want the party vote everywhere else, but in that electorate we clearly want the electorate vote.
Campbell: What it underlines is that if United Future is a truly centrist party, it is a very small centre – just enough to support you and Judy Turner. So, how can you claim any mandate to speak for middle New Zealand?
Dunne: I think what you say is true, in a situation like 2005, when the two major parties were both strong, and that gap narrows. Inevitably, you get squeezed in the centre. But when, as in 2002 the gap is going the other way – and that looks likely to be the case in 2008 – the space opens up. We take the view – and its not a particularly comforting one, but its based on looking at similar parties elsewhere in the world – that you wax and wane, subject to the majors around you.
In that sense to come back to your question, there is a centrist vote in New Zealand, which is core – but then there are the add ons, the people who will be making the journey from one side to the other and they may want to stop off somewhere in the middle. Our place in life is to be the repository of those voters, as they make that journey.
Campbell: This time, even if National got enough votes to govern alone, do you expect they will choose to have partners, even if only to foster a sense of inclusiveness?
Dunne : I can’t speak for them, obviously. But I would have thought it would be wise to do so. The prospect of them getting enough to govern alone arte extremely unlikely – but even if they achieve that, in New Zealand’s political culture, it’s a one-term phenomenon. So I would have thought, from both the perspective of presenting a broad-based government, and from the sense of sending out the signals that you aim to be around for more than three years , you would want to do that. But that’s their call, not mine.
Campbell: If National does win this year, what would you bring to the Cabinet table that they couldn’t find from within their own ranks?
Dunne : That’s something they would have to decide…and I’m looking at bolstering our own numbers…(exhales heavily) Oh, I think I would bring something they are currently lacking, which is experience, in a number of key areas. I have the benefit of being around through a series of governments. And I think I would bring a dimension that would offer some re-assurance to the people we’ve just discussed – that a government formed by National wasn’t going to hare off down the path that the Richardson administration went in the early 90s.
Campbell: So, you’d see yourself as a brake on that sort of agenda ?
Dunne: I don’t like the word ‘brake’ ….but. yes…a reality check.
Campbell: Several parties in Parliament – your own, Jim Anderton’s Progressives and New Zealand First – were founded by established politicians. Personally, do you welcome the day when MMP outgrows this ‘ personality party’ phase of its evolution?
Dunne : Absolutely. Again, I’m only speaking from United Future’s perspective, but that is a key challenge for us – to make this party sustainable in the longer term. That’s the big test, and I’m not planning on moving on any time soon – but clearly I want to make sure that when I do, the party has some vitality. And some future.
Campbell: The consensus about you is on the one hand, Mr Reliable, Mr Sensible, and the downside is that ‘He’s boring, he’s pompous.’ Not much you can do about that, is there?
Dunne : No, but I’m going to change my name by deed poll to reflect that. Because the “ boring’ label has just… stuck. And I find it bizarre, really. It annoys me considerably. Because on the one hand, what people say they want, and they say they like is a safe pair of hands. They want to be able to get on with their own lives without the government steering a course, or telling them what to do, and without a whole lot of high wire acts. Then they get a politician who embodies that – and oh, he’s boring and pompous, and he’s not particularly exciting.
Campbell: What should the deed poll change of name be to ? Peter Sensible ?
Dunne : Well, I don’t know. If I listen to the media, it would be Peter Boring.
Campbell: The evidence for the prosecution would be the story that you started reading Hansard when you were twelve –
Dunne : Fourteen.
<Dunne : Why? ( laughs) Um, I became interested in politics from a very early age. I don’t quite know why. I think its.the Irish background, in many senses. And being somewhat rebellious.
Campbell: You rebelled – by reading Hansard ?
Dunne : I just wanted to understand the system. I wanted to get a handle on how politicians operated. By that stage, I had decided I wanted to be one. I then discovered…I thought, how can I get hold of this stuff? Someone said : you write to your MP, and Bert Walker was my MP and I got stuck on his complimentary list for Hansard. Years after I left, they still kept coming to my mother’s address.
Campbell: You’re Catholic, as are Jim Anderton and Bill English among others. How does his faith enhance Peter Dunne’s ability to do his parliamentary job?
Dunne: I’m not a dogmatic….I’m not here to say this is the official position of the Catholic Church that I’m representing, because I’m not. I think it’s the commitment to social justice, to a fair deal for people. . I’ve got a very strong belief – which I think is the biggest lesson I learned at school – in the power of free will, and our right to exercise it.
Campbell: Do you think any of the Christian-based parties will cross the 5 % threshold this year?
Dunne : No. United Future is not in that camp, not any more.
Campbell: You’ve been through your prayer meeting phase ?
Dunne : Well, we were never really in it. I certainly wasn’t. But we had some people who imagined that United Future could become New Zealand’s version of the Taliban.
Dunne : And they’ve now thankfully left to pursue their course to oblivion.
Campbell: One thing that might excite that sector has been the recent debate over abortion law. Do you think Parliament’s intentions have changed since 1977 to an extent that requires altering the abortion law?
Dunne: There is probably a need to look at it again. The problem is in doing so in a considered and reasonable environment.
Campbell: Is Parliament the best forum for doing that?
Dunne : I’m not sure that it is. I haven’t read [Justice Miller’s High Court] opinion thoroughly. But my impression from the court’s judgement is that it sending a very clear signal to the Abortion Supervisory Committee to have a look at what it does, and I think its interesting to me that the courts stop short of offering any advice to Parliament about what it should do. To me the issue is a very simple one : we have a procedure for authorising abortions. The question is whether that procedure is being followed or not.
Campbell: – Clearly, there is a subjective dimension in that assessment
Dunne: Yes, and my own view is, that in today’s circumstances for a whole variety of reasons, technology being amongst them, the procedure of a woman, her doctor and two certifying consultants is somewhat cumbersome. I think probably, you should be looking at the woman, her doctor and informed consent. I have a very strong view that – and I appreciate the moral issue involved here – but the moral issue is actually the individual’s morals. I don’t think it’s a matter of the state imposing a moral code. I mean, there is a moral dimension as to whether you should have an abortion and that issue is still there – but that’s not a call that the state should be seeking to make on behalf of the people involved.
Campbell: Or an behalf of the fetus ?
Dunne : That is the most difficult area. Who speaks for the –
Campbell: One can ask the question this way : during the first trimester, do you think the fetus does, and should have, protection under the Bill of Rights Act ?
Dunne : I think that’s where it gets very difficult, frankly.
Campbell: Is that a yes or a no?
Dunne : No, no what I’m going to say is that …a large part of me says no. Then you’re faced with the question well if you say no during the first trimester, at what point do you then make the call where the answer is yes. I think you can say, and I don’t have any problem with saying that up until, roughly those first three months period, the issue doesn’t arise. But does it automatically arise three months and one day afterwards? That’s difficult…and its where you need a little bit of sensitivity.
Campbell: So, you don’t think that the next move on abortion should be from Parliament ?
Dunne : I think the courts have drawn attention to an issue of accountability. Its for the Abortion Supervisory Committee to respond to that. If at that point it becomes clear that there’s a disconnect – or need from some policy work – then it’s a matter of the state probably looking at something akin to another Royal Commission, frankly. There are two issues here. One if the issue of abortion – and the other is the process by which conscience bills get debated in this place. And the combination of the two –unless its got a more controlled background to it – is likely to leads to an unholy mess.
Campbell : Labour has unveiled its tax package, so have you. Yours will cost, correct me if I’m wrong, $4.5 billion per year –
Dunne : Over a full year. We would phase those in from 1 April 2010. If you compare apples with apples – Labour’s package and ours – the costs are identical. What we’d do is take the tax cuts that will come in on October 1 this year, and then we’d say instead of stages two and three of Cullen, here’s what we would do from the same point of 1 April, 2010. The costs are about $3.9 billion over a full year – what we’ve added in is income splitting which is about $400 million…and [ Dunne cites a couple of smaller measures] You can do that in stages, but the core tax change [from the Cullen plan] would take effect from 1 April 2010.
Campbell: Is your opinion, is there any room for National to responsibly offer more in tax cuts than you are proposing?
Dunne : They could well come up with a different design. It would be very difficult to spend a bigger sum.
Campbell. That’s the question isn’t it? Can National offer a bigger sum than Cullen or yourself, without going deeply into debt to do so, or cutting public services?
Dunne : My view is, no.
Campbell: You’ve governed with Roger Douglas before. Would you like to again?
Dunne : No.
Campbell: Why not?
Dunne : Roger was dynamic to work with in the circumstances of the 1980s, which was big ideas, bold change et etc. The problem with Roger and the whole Act Party is that they’re trapped in a time warp, at the point when Roger was sacked. The world has moved on. The implicit mantra is that if we all went back to 1987 and picked up where we left off, things would be different. Its rubbish.
Campbell: If you and Douglas both end up around a Cabinet table after this year’s election, he’ll be on your turf. Why would people listen to you, rather than to him?
Dunne : There are a lot of ‘ifs’ involved in that question. But let’s assume for the sake of the argument, that it happens. I think the public mood has moved on from the extreme solutions that were on offer in the 80s, and the public have seen the fact that while New Zealand needed to change then…the idea now that we would now be living in some kind of paradise if we’d kept on doing the same things at the same pace for the last 20 years….I just don’t think it has any public credibility. Increasingly, he and the Act Party are seen as representing not so much the voice of privilege, but as simply the voice of a bygone era.
Campbell: In your tax cut package by my calculations, a third of your tax cuts will go to the 5% of people earning over a 100k, less than a third to those earning below 38k, and only about 16% to those earning between 38-60k that you claim to represent.
Dunne : I think it was [Stephen] Colbert who said about plucking the goose, in order to get then most out of it, for the most benefit…. and I see it very much in those terms.
Campbell: But is it fair to your middle class constituency, let alone to the poor, that the vast bulk of your tax cuts should go to those already relatively affluent?
Dunne : . You want a system that’s simple, that removes a lot of the dis-incentives, or incentives for people to avoid it. And that’s what we’ve tried to deliver. In that sense, the alignment of the top personal, trust and company is quite significant. Because that will deal to the huge, burgeoning increase in family trust and other arrangements in recent years for tax avoidance purposes.
Campbell: So you’ve shaped a package to relieve the pain in the upper income brackets?
Dunne : …..Well, its true that the major share of the benefits will be delivered to those earning over $45,000.
Campbell: I was being ironic.
Dunne : I know you were. I wasn’t.
Campbell: You’re the Revenue Minister. You got away with criticizing the tax cuts in the Budget, while poor old Winston Peters as Foreign Minister got into all sorts of trouble for criticizing the China FTA. Do you think there’s been a bit of a double standard applied there?
Dunne : No…the last three years have been a learning curve in terms of the relationship of Ministers, who are from parties outside the government. I don’t mean between Winston and me, because that’s been a good and close one. But in terms of where the boundaries are. I think the issue with regards to the FTA was not so much his ability to criticize the FTA or not – but the comment that he pulled back subsequently, about criticising the FTA while outside the country.
The rules of engagement are that we are bound by collective responsibility regarding matters relating to our portfolio. Matters relating to our agreements with the government…,that’s pretty obvious, and also when we’re overseas representing the government. So, if you take the analogy about my comments about tax cuts – supporting the tax cuts, but perfectly proper for us to say they didn’t go far enough – but I would not say that in Canberra or any other place. This is really part of a learning curve. Go back three years and people were saying these sort of arrangements couldn’t work. Now they’re being considered as the likely new benchmark for the future….
Campbell: In 1999 your party list featured many ethnic minorities, though those names all but vanished from the 2002 list. Given what you know about the vulnerability of migrant communities, do you feel concerned about the planned use of classified information and detention powers under the Immigration Bill?
Dunne : Firstly, let me say you’ll see our list this year will have has a greater share of ethnic diversity than probably any list since 1999, once that’s finalized in the next couple of months. We are wary of some of those provisions. We’re not entirely comfortable with them. We want to see where that whole debate ends up, before we go too much further, in terms of support. What I think is that the overall climate for the way in which we view new migrants has improved considerably over the years, but I think there are signs that we’re starting to slip back and see some of the old intolerances come to the fore again. Although not perhaps to the extent it was in the mid 1990s.
Campbell: Given the tendency of New Zealand First to beat the anti-immigration drum before an election – isn’t it unfortunate that the Bill is coming back at this point in the election cycle ?
Dunne : That’s what worries me a little bit. That there’ll be a whole lot of hype about and – if you add to that, the spectre of international terrorism and all that sort of stuff – there’ll be unnecessary hype about what happens. And there is this nasty little undercurrent that’s flowing at the moment, about the character of New Zealand being changed. I made the point in my speech to the conference last week, that we should embrace [changes] whole-heartedly.
In fact, I think the capacity for New Zealand to become the world’s first multi-ethnic, multi-cultural nation is great, and we should be really on that bandwagon, rather than trying to resist it. There’s this current at the moment that’s saying oh, we’re not against migration, we just want the right types of migrants, you know? That’s a bit insidious.
Campbell: If the Emissions Trading Scheme involves any extra costs whatsoever to taxpayers, would you oppose it?
Dunne : I want to know what those extra costs are, for a start.
Campbell: Understood. But from your statements, it sounds as if there is anything at all extra on household costs. you will oppose –
Dunne : If there’s anything extra that is not properly compensated then yes, we would oppose it.
Campbell: Compensated, by what?
Dunne : Well, the government talked about compensation right at the beginning, in addition to the package of tax cuts….New Zealanders generally accept the need to do something about climate change. That’s a given. They broadly accept the notion of an emissions trading regime, as ,much as they understand it. But that if you like…is a pretty general, coffee table level of support. It will diminish when people say hang on, I’m paying more for my petrol, more for my power etc etc and I’m not seeing a hell of a lot of immediate change. I’m hearing all of this external noise. And my point all along has been in terms of winning the peace, someone has to deal with that side of the argument.
Campbell: And what would you regard as feasible measures to offset these costs?
Dunne : Well, the government said initially there would be assistance. Its then sort of backed off to say it would be vulnerable households and low income people, and then it became just electricity…. and now if you look at the Budget, its electricity for Super Card holders. The forms of offset are either a top up of a tax cut…Or the government has brought forward finally from April to October the projected increase in Working for Families income. That might be the mechanism you might want to look at, over time.
The thing right now that intrigues me is that David Parker can say with absolute precision what the costs of NOT proceeding are, but ask him what the costs to households of proceeding are and you get a tirade of what a stupid question it is, or that the information is not clearly available. I think they KNOW full well, because its predicated on the cost of carbon. And the NZIER research said last year that at $15 a tonne cost of carbon its about $6 a week per household…and what is carbon now, $75 a tonne ? So the cost is already $30 a week per household, and rising.
Campbell: The logic you’re using about the ETS could also be applied to the Kyoto commitments. New Zealand has made commitments under Kyoto. The bill for them may be very high. At what point , if any, would you support on New Zealand reneging on paying that bill?
Dunne : I don’t really support New Zealand reneging on Kyoto.
Campbell: Is that an absolute commitment?
Dunne : Its pretty close to an absolute commitment. My qualifier is that with any international agreement – whether it be with the environment or labour law, or the care and protection of children – we have to make our own call as to how far we can go to give effect to that.
But in terms of being a good international citizen,,if we’ve signed up to this, I would expect us to do whatever we can to meet our commitments, subject to that we’re not running the country into the ground in the process. I don’t see – and this has been part of the political problem with this – the relevance of saying thereforewe have to be out there first, and waving the flag out ahead of everyone else.
Campbell: So you’re saying that sovereignty still allows us to set boundaries as to what our Kyoto commitment will ultimately be ?
Dunne : Yes. I’m not suggesting we start from the position of saying we’ve signed it, but it’s a load of nonsense, we’ll get out of it. But if you get to the point where you say hang on, this isn’t going to fly locally, we have to retain the right of saying that we’re not going down that path.
Campbell: United Future favours income splitting for tax purposes. Why do you think National is lukewarm to the proposal?
Dunne : I don’t know. Given the nature of the proposal we’ve put forward, its not a costly one, per se. $400 million a year. That’s aabout a cent on the tax rate. You could make it a lot cheaper – because that’s the Rolls Royce version with dependent children up to ther age of 18. You could knock the age back to with dependent children up to the age of 5, or 14, or some other other age, and bring down the cost. So, I don’t think its that issue. I can’t see that its a view about middle class wealth, or any of those things. I just don’t know why they’re lukewarm on it.
Campbell: Why not do it the way the French do it – whereby family income is aggregated and then weighted, according to how many children and how many parents comprise the household?
Dunne : Look, there are a number of issues that I think could be considered as part of the development of the policy. One is that – I think it’s the French isn’t it – that would allow single parent households to access it, by assigning one of the children as the nominal parent.
Campbell: Exactly, which is why I asked the question. That way, income splitting does not favour only the classic nuclear family. Single parents with children as well can benefit – and presumably, you wouldn’t have any ideological objection to them getting tax relief?
Dunne : No. What we wanted to do was get the issue on the table. We’ve done that, via the discussion paper, and the submissions close at the end of this month. The next phase is to develop a policy proposal that arises out of that, and from what the submissions throw up.
Campbell: Would income splitting in any way affect the eligibility to any other forms of benefit – such as National Super – or, tax credits?
Dunne: No, we’ve never seen it that if you choose income splitting – because it is a voluntary step – you forego your rights in other areas. Certainly not. We looked at that, and frankly, you just get into a minefield in that area.
Campbell: United Future is also talking about creating a new National Health Insurance Scheme. Wouldn’t it be better to use that taxpayer money to fund the public health system properly?
Dunne : The issue here is that if you take the Budget – which allowed for another 5,000 elective surgical procedures – that sounds like quite a lot. But we have over 300,000 a year. So its about a 1.6 % increase. What I’m really saying is we’ve talked about public/private integration, where you’ve got over half of elective surgery taking place in the private sector anyway. We’ve talked about that long enough. But nothing much seems to be changing.
What I’m suggesting – and the details we still need to work through – is in effect not dissimilar to what you’re saying. Use the state’s purchasing power to say OK fine, we’ve got a big block of dollars here, we will now purchase those services particularly in the first instance for those over 65 and for low income people.
We will use that purchasing power to purchase those services across the board – public and private. Because it seems to me now, that you’ve got this two track approach that’s not really working in terms of you know, the alleged integration. You almost need a big shock to make it work. You’ve got some big issues lining up that we’re not even starting to grapple with – issues around the world in terms of how you fund access to high cost medicines. And it seems to me that more of the same isn’t going to work.
Campbell: Given the relative scarcity of health dollars available to meet these challenges, the criticism you face in the meantime is that you’re simply pandering to the seniors vote. People who can afford to contribute to health insurance already do – and those that can’t, will look to a public health system. For which, under your proposal, won’t you just be robbing Peter to pay Paul?
Dunne : Well yeah…. the difficulty at the moment is the way in which the private health insurance premia are structured. It means that the very point when you hit 65 or thereabouts, as your needs are likely to be greatest, so too is the level of your premium. So, you get a lot of people opting out. What we’re saying is about utilizing resources differently.
What’s the best to do it? I’ve talked to the health insurers. Their response is.. oh, um, actually we just want bigger incentives for people to take up private insurance. That seems to me to be not quite the answer. I’m not interested in boosting the private insurance industry. I’m interested in people getting the surgery they need within a reasonable period of time. The idea is therefore of an insurance scheme – where the state would make a contribution – but in time you’d move to a contributory arrangements and the model would be very similar to Kiwisaver…I haven’t done the numbers but say, put it [Kiwsaver] up to 6%, with 2% of that is going into a health insurance fund, but we would offset that 2 % against marginal tax rates.
Campbell: Looking back to last year’s system of tax credits for research and development, is there any sign that the private sector is doing any more r&d as a result?
Dunne : Its too soon to tell, frankly. The plan was for a review after three years. There is a degree of hand-on-heart stuff about this. It is bold new territory for New Zealand to enter into. On the face of it, you’ve got to believe it will work.
Campbell: Why do you think the New Zealand business sector has been so short-sighted about the need to invest in r& d? I mean, while the government’s investment in r& d has been about the OECD average, the private sector’s level of investment is down around the floorboards.
Dunne : There are a lot of reasons, some which go back to the conditions in the 80s and earlier, quite frankly. We came out of that big incentives mentality during the 80s. A lot of people felt bruised, and sort of depressed by that. And felt that they couldn’t coped without incentives. I mean, you used to get these lectures from manufacturers over the 90s and the early part of this decade, about how they needed help to maintain their businesses – but they weren’t actually doing enough of it themselves. They were lamenting the advent of China into the market and other competitors…
Campbell: Do you think it also has had something to do with the foreign ownership of some of the assets – which mean profits tend to be paid out in dividends, rather than re-invested in r&d?
Dunne : It could have. But what’s interesting has been the reaction to the r&d tax credit scheme, which was pretty positive. The challenge will be how it works in practice, and whether the impact actually matches the original optimism.
Campbell: Do you believe that if you cut business taxes and flatten the tax scales, you will generate enough additional growth that the tax cuts end up paying for themselves?
Dunne : I think there is an argument that there’s a dynamic effect. It can sometimes be over-stated : as in, we don’t need to worry about costing these things thoroughly, because the increased growth we’ll generate will pay for it all. I’m sceptical of that argument. The effect is not as grand as some people claim.
Campbell: So, you’re saying its dangerous if [tax cutting] becomes a religion?
Dunne: Yes. And I’m not advocating a religion on tax. Its equally dangerous to go the other way, and assume there is no effect, and that these things are totally static, which is where we have been. But to go down the path of saying oh, don’t panic, if we just unlock the door here on tax cuts, then we’ll –
Campbell: Unleash this entrepreneurial dragon ?
Dunne: Right. To continue with the analogy, what you might unleash is an entrepreneurial lizard….
Campbell: Is there one thing left that you want to achieve before you leave Parliament ?
Dunne : My personal biggest ambition in whatever time remains to me is the whole question of national identity, constitutional change and the path towards a republic. On the weekend I set out a timetable by which we could, if not get there, at last resolve the issues…. by 2017.