'THE NATION'

JOHN WHITEHEAD
Interviewed by SEAN PLUNKET

Sean Retiring Treasury Secretary John Whitehead joins us now, good morning. John did you need faith to get you through that 30 plus years in the Public Service?

John Whitehead – Retiring Treasury Secretary
Oh it's part of whom I am, it certainly helped me on the way through, yeah.

Sean Give me an example.

John Well I guess you’ve gotta have a belief in what you're trying to do, and for me actually it's all about people at the end of the day. Even as a Treasury Secretary that’s what your job is, to try and make life better for people, and my faith has been very central to that.

Sean Has it helped you to deal with some of the conflict obviously that you’ve been involved in, and I look at that piece I can't imagine what it would have been like trying to mediate between Lange and Douglas when the wheels came off there yet you were right in the middle of that.

John Well I'm not sure I'd say I mediated, but I was there I think probably as someone that they both trusted as a public servant, and yeah I think it helped me keep calm, yeah I think that’s certainly true.

Sean Tell us about those conflicts. Was it something that emerged quickly and flared up and obviously had the consequences that it did, or was that a slow building conflict that you would have watched develop over time?

John I think it was more of a slow burn you know, actually both politicians I think had in many respects a lot of similar objectives but they differed over the means, and over time I think they just became too big and irreconcilable, and David Lange particularly, who's a person I greatly admire, had a concern that people that were in a vulnerable situation would be left without protection in the future.

Sean Are David Lange's views perhaps more in line with your faith and your idea that people came first than Roger Douglas's?

John Well I ha professional views and personal views.

Sean Well share a personal insight with us.

John Well I think actually sometimes you need a bit of tough love if I can put it that way, and that actually is part of the role of Treasury, it is to ask the sceptical questions, it is to probe and say well what if, or is there something else that could be done, or what will be the side products of this particular policy.

Sean Were you saying Lange wasn't up to tough love?

John Oh no, he could ask tough questions too.

Sean Did you think things had to end the way they did with those two? Was there any way out?

John I think it would have been pretty hard long run to go any other way.

Sean Interesting, you’ve worked with them, you’ve also worked with a National government, is that because perhaps your faith in God is stronger than your dogmatic or ideological belief in any particular economic theorem?

John Well I mean I've always tried to be professional I suppose and I mean the job of a public servant is to advise free and frankly and then help governments implement their policies, and to do so enthusiastically. So I guess that’s been the driving thing for me.

Sean So you can be enthusiastic about any sort of government and any sort of government policies?

John In a professional sense yes.

Sean And that may have something to do with your longevity. Do you think it's right to say when you took over Treasury that it was an institution that was not trusted by Labour, I mean Michael Cullen said it wasn't, it's certainly been vilified by the left more than the right from time to time as being very dogmatic, as being champions of the far right or of the free market and its extremes at the expense of people. Do you feel that it had huge image problems when you took over?

John Yeah I think we've had a longstanding image problem, because actually the organisation I've led is actually an organisation with very bright people, very analytical people, but actually quite compassionate people, and I think that image hasn’t always come through. I mean we are really concerned with a lot of broader aspects of people's lives and making them good. So yeah I think we did have a problem and we had to earn that government's trust as we've had to earn every government's trust.

Sean How did you do that with Labour?

John I think really trying to approach it very professionally, I mean to give advice, to keep being free and frank, I mean it's no use having an advisor that just tells you what you want to hear, and I don’t think we ever did that, but at the end of the day to try and help that government implement its policies.

Sean Fair to say also though that Treasury often gets it in the neck when governments need a scapegoat in the public service. You're an easy target.

John Well that’s part of the fun of the role I guess isn't it?

Sean You talked about being full of good analysts. Professor John Gibson of Waikato University would say that actually under your watch Treasury might not be as bright as it once was. In fact he said senior management check which way the wind is blowing before taking a position and will even disassociate themselves from research done in their own department, and he says that compliant Treasury model has been hugely costly to New Zealanders. That’s on your watch, what do you say to him?

John I just think he's totally wrong. The Treasury is a place where there's really vigorous debate and it occurs frequently, there's a lot of challenge, but he's probably referring to some of the debate we had on savings, where there was some very good research published on people's individual attitudes to savings and why they did, that informed the broader view. Senior management actually doesn’t tend to really drive the fundamental policy.

Sean Why did you clean out our four deputy secretaries when you arrived then?

John Well I think clean out is far too strong a word, and it wasn't when I arrived. They were very very good capable people, but after the change of government and new policies and so forth, and a new direction we needed a change of leadership, and that was around the leadership…

Sean Which kind of gives the lie I'm sorry John to the idea of the impartial Treasury. If you’ve gotta change your staff when the government changes that tells me that you're not giving advice that is unpoliticised or is entirely pure?

John No I wouldn’t want to mislead you. It wasn't driven by a change of government, it wasn't driven by politicians. What it was driven was by a need for a different direction and different leadership in the organisation, all of those.

Sean Which was predicated on what? A change of government?

John Oh policies were different certainly, but I think it was more from the point of view that times had changed and we needed a fresh face at the top of the Treasury, and my leaving now is also part of that process.

Sean You also turned round entirely the philosophy on savings didn’t you?

John I think over time we've changed our view on savings, that’s right. We started off with a view that it was fundamentally just a story about public savings, and I think we're very clearly of the view now that it's a story about national savings.

Sean And we have undoubtedly some serious issues to confront in terms of that, and I put it to you that while I know Treasury is concerned about these issues it is often left to other groups and I'm thinking about the Savings Working Group that Kerry McDonald's headed, other organisations to really ring the alarm bell on such big issues, loud and clear. Do you think Treasury needs to be more involved in those very big picture discussions than it is right now, and do you think you have been too timid and not been forthright enough about the risks to our economy of not taking serious action?

John Oh I think we've been very forthright and I think you know I've been criticised for going public on some of those issues. I've walked up and down the country explaining the position I think we're in. Those kind of working groups I think are a good innovation. I think it's where you get people from the private sector, from the voluntary sector involved with the public sector, and Treasury has been involved right in the midst of those kind of processes, the Savings Working Group, the Tax Working Group. In fact I don’t think they would have done nearly as good a job if Treasury hadn’t been part of the process.

Sean Alright, Treasury we just note has not been part of the process in terms of whatever cost benefit analysis has been done for the Broadband roll out. Why weren’t you asked for your input on that?

John Well I think – in fact we have had quite an input in the process as it's gone forward, but as I said before our role is to advise freely and frankly and then to help the government implement its policies.

Sean Joyce said you were cynical about it, did you give him a cynical report on the costs?

John I think I'd use the word sceptical, it's Treasury's job to be sceptical.

Sean So do you support the four billion dollars 70,000 jobs or not?

John It's the government's policy and we've actually helped them implement it and actually I think we actually advised the government in terms of these final stages that what the Crown Fibre Holdings Company had done in terms of its analysis of the proposition was in our view very resourceful.

Sean So you support the idea of four billion dollars a year, 70,000 jobs?

John We haven’t actually done that work ourselves, but we recognise that the decision that they’ve taken is the best to meet the government's objectives.

Sean But you are not going to say that you agree with those figures that the Minister's told us today?

John Well as you said we never did a cost benefit analysis, because by the time the government came in ….

Sean Have you ever analysed the reports that he was talking about today?

John Yeah we commented on them.

Sean And what were those comments? Were they positive or negative?

John Oh I think as time's gone on we got more positive about this because I think as we've got into the details I think there's a lot to be said for it.

Sean Alright, well just finally on that, would you have liked to have been asked to do a full cost benefit analysis?

John Oh I think we always like to advise yeah.

Sean Alright, so you're disappointed that you weren’t?

John Oh – that’s life.

Sean Do you leave this job, do you depart this job and thinking in particular of your faith and your belief that this is about people and making life better for people, do you depart this job, or your time indeed, your entire term in the Public Service, feeling that there is something major left undone, that somehow there is an issue or a policy about our economic life or wellbeing in this country, that has not been addressed the way it should have, and that you haven’t made the contribution you wanted to?

John Oh I think there's always more to do, and I've had a really privileged time. I mean I've enjoyed my role immensely and I've worked with some incredible people, and I'll include politicians as well as public servants in that process, but yes there is a lot to be done still. I mean I gave a speech on Wednesday I think it was about living standards in New Zealand, and I think if you look around we've got a country which has so much to recommend it, and such a positive future, but we've got some issues. We've got debt, we've got lower growth than we would want longer run. We've got some issues around social under classes. We've got environmental issues, and those are the sorts of things that I think going forward we want to focus on.

Sean Would you like in future, and I know you’ve talked about the living standards framework, would you like the Treasury to be seen as an if you like a broader church within the Public Service, one that isn't just measuring GDP and figures on a piece of paper, but can in fact have some empirical measure of how good life is in this country, and whether or not we are moving forward as a people?

John Well I think that’s part of the story that we're telling, and I guess my message last Wednesday was actually that is the kind of stuff that has informed us for a long time, but I think people have always been rather doubtful about that, and our image hasn’t helped convey that. We're seen as the organisation worried about the dollars and it's actually much more than that.

Sean Are you optimistic for the future for New Zealand economically, and therefore socially?

John Yeah I'm incredibly optimistic about this country, cos I just think it's got some great people and it's got great flexibility, and when you look at what the world is going to demand out there in the future there's a lot of the things that we produce…

Sean So we can catch Australia?

John Oh I think we can yeah yeah.

Sean Give me a tough rating?

John Oh I think it's pretty tough by 2025, I don’t think there's any doubt about that, but who knows, could be soon after that.

Sean John Whitehead, I think thank you very much indeed for your time today – retiring Treasury Secretary John Whitehead.

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