Published in The Australian (Sydney), 6 December 2016 (PDF)
By any measure, this year was not short of political surprises, from Brexit to Donald Trump. Yet neither was as shocking as John Key’s resignation as New Zealand Prime Minister yesterday. It came totally out of the blue. No one had a clue.
When a prime minister’s party sits at 50 per cent in the polls and he enjoys stunning personal ratings, even after eight years in power, the most natural thing would be to run for office again.
Not so with Key. His resignation yesterday was a political earthquake, and just like big tectonic movements it occurred, unlike Brexit and Trump, without any warning.
Because no one expected Key’s resignation, no political obituaries were prepared. But it should not be too difficult to assess Key’s premiership. In fact, he already had first go at it in his media conference.
Asked about his legacy, Key pointed to steering New Zealand’s economy through the global financial crisis and dealing with the Canterbury and Christchurch earthquakes.
Under his leadership, New Zealand became “a more confident, outward-looking and multicultural” country.
Key’s self-assessment tells us something about his style. Rather than trying to define his time in office by some eye-catching policy reforms or projects, his measure of success was that New Zealand was doing well under his management.
Yes, management. Because that is how Key ran the business of government. Not as a Barack Obama-like orator. Not as a Margaret Thatcher-like conviction politician. But as a competent executive. In Key’s words: “I think government is a practical business. You don’t start with a blank sheet of paper; you start with the country as it is.”
Two years ago, I analysed Key’s governing style in an essay for the Menzies Research Centre called Quiet Achievers. It argued that Key’s approach was defined by preparation, patience, pragmatism and principles. Taken together, they amounted to a well-crafted, well-thought through and realistic program of gradual economic reform.
Key presided over an agenda of “incremental radicalism” — a phrase coined in Quiet Achievers. After the release of the essay, Key said he had found himself well characterised.
Yet with his sudden and unexpected resignation, Key has broken with his own ways. Then again, there is no such thing as an incremental resignation. But at least in resigning, Key already paved the way for continuity by declaring Finance Minister Bill English his preferred successor.
Key’s success as Prime Minister was unthinkable without the loyal and competent support of Bill English. Where Key was the salesman of the government’s agenda, English was the policy thinker behind it. Should English be selected by caucus, New Zealand will lose probably the best finance minister in the world but gain one of the best policy thinkers as its next prime minister.
In fact, English might actually be the perfect candidate to address the biggest failure of Key’s time in office: the state of the housing market. Under Key, property was allowed to spiral out of control, with prices in Auckland rising 77 per cent in the past four years.
Key showed himself unable, or even unwilling, to take drastic actions to correct this.
English, on the other hand, has long been a proponent of planning deregulation and supply-side housing reforms. “It costs too much and takes too long to build a house in New Zealand. Land has been made artificially scarce by regulation that locks up land for development,” he wrote in 2013.
As prime minister, English would have the authority to push forward much needed reforms in this area. In all other areas, he could do worse than to take his predecessor’s example as a guide.