Lisa Owen interviews Economic Development Minister Steven Joyce

Headlines:

Steven Joyce denies a deal has been done with ACT over Epsom despite John Key fundraising and Paul Goldsmith declining invitation to campaign for the seat on The Nation, says the PM will be transparent “in due course, when it suits him”.

Says it’s not his job to talk about any Epsom deal: “It’s above my pay grade”

Internet-Mana Party alliance makes no difference to National’s decisions over electorate deals

Rules out regional royalties, that were this week called for by Buller mayor Garry Howard, New Zealand First and Local Government New Zealand.

Says New Zealand First figures wrong and “it’s too difficult at this stage”

Figures out later this year will show that New Zealand’s regions are approaching 3 or 4% growth

Denies dairy and drilling opportunities are close to exhausted, says there’s “huge amounts” of growth potential that can be achieved, but agrees “most of the Waikato that can be used in the dairy sector is being used”

Lisa Owen: The report also flagged a worrying downward population spiral in parts of the country. Steven Joyce is with me now, good morning minister.

Steven Joyce: Where were those downward spirals in population because I must admit I hadn’t seen those.

We will come to that. A hundred and eighty-seven jobs gone from Stockton mine, doesn’t that illustrate how exposed some of the regions are? You know, reliant on primary industries, vulnerable to exchange rates and commodity prices, how worried are you about that?

Well every, actually the whole of New Zealand is vulnerable to various economic risks. And the coal industry has gone through, worldwide, a massive change. I mean, the coal price is now only a third of what is was in 2011 and it’s not just Solid Energy that’s damaged by that. In fact, most of the big coal companies around the world are really struggling. And it’s tough. It’s tough for the West Coast. It’s tough for the people of Buller where Stockton is located. And what that does is that you have to keep investigating your other opportunities to grow in all these regions. And that’s something we are very focused on, attracting investment, doing the right things, making the right policy decisions that encourages growth and that doesn’t actually push back the opportunities for growth.

I want to take a look at a graph that was included in the report that you’ve got there. Now this graph and we’ll bring it up on the monitor, it shows you the long term trend here outside of the big cities, it shows that trend is one of low incomes and low growth, with 50% of your regions in that bottom quarter. Do you accept that?

Well I think that it is a long term trend. I mean the big cities are growing.

But do you accept that that is the long term trend? Low incomes, low growth.

Lower incomes in some regions absolutely, other regions not so much. So Taranaki for example, which we know about the Taranaki story has got very high incomes by New Zealand standards. So you look at regions like that and you look at the regions where there have been growing incomes and populations, like Southland and you ask yourself well, what is going on in those regions. And what’s going on is they are attracting investment in particularly natural resources-based sectors that are making a significant difference. So outside Auckland, Wellington…

Yes but half are in that bottom quarter, so is that as good as it gets?

And that’s right. No it’s not as good as it gets, which is why we are doing the things like the RMA reforms that we focus on that the Opposition doesn’t like. It’s why we are very careful about carbon prices because the Opposition, the Greens, anyone at the moment want to have five times the world carbon prices into the regions. That would be a very damaging approach to New Zealand’s regions where industries are based that actually are competitive internationally around things such as the price of carbon. So those sorts of things are important.

But simply put, if you were to get another term, how many of those dots would move above the line?

Well they’ve moved. Your point is that there’s very long term stats, so we are talking ten-fifteen-twenty years.

Ten years, and you’ve been in for half of that time…

Well you need to be a little bit careful because in the data that you are using there and the report you are using was actually just after the big drought of 2012-2013. Now we all know that the economy has grown a lot faster since then. The more current data which won’t be out on a regional basis till later in the year will show that New Zealand and the regions are approaching sort of 3 or 4% growth. The regions have actually led New Zealand’s growth rate out of the GFC. If you want to look at for example employment in recent times the whole of the South Island, and not just Christchurch because people talk about the Christchurch story, the whole of the South Island has about three percent less unemployment than the North Island. And there’s actually lots of jobs across the South island. And actually the biggest struggle is to get people from the North to move South to take up those employment opportunities.

And I want to talk about that but first, your government has focused quite heavily on mining and drilling and dairy. Are we close, do you think, to exhausting the money we can make from those things?

Absolutely not. And it is important that we – But look we haven’t actually focused on those, we are focused on a whole range of things. Those are the things that the opposition have criticized. But actually we are focused on ICT, we are focused on high-tech manufacturing, we are focused on international education, we are focused on tourism. We are focused on a range of things. But the bit that gets the attention is the bit that says we shouldn’t be doing more of.

But how much is left to tap into that?

Ah I think there’s huge amounts. If you actually look at it-

If you could offer a percentage?

If you look at – well actually we have our exports double a target in the primary sector and it’s entirely achievable. And I believe we can improve our environmental outcomes at the same time as long as we do it carefully. And I think that’s the important thing

Because that report does raise the point – and it singles out Waikato – it says it’s all but tapped out for dairying, that most of the productive land is used. And it also references what was called the summer of exploration. It didn’t find anything, the summer of exploration.

Well that’s not true. The two most high profile wells didn’t find anything. But there’s a whole lot going on in Taranaki and there’s been a massive investment there. But just come back to the Waikato question for a minute because I think that’s important. Yes actually most of the Waikato that can be used in the dairy sector is being used but actually there’s massive potential for improvement in productivity across that region. We’ve had the - The New Zealand dairy industry is a story of improving productivity for 50-60 years. Things like livestock improvement, things like improvement in the sort of forage you’re feeding your cows. All those sorts of things and they’re continuing to improve. The main things that’s important is that we do is make sure we recognize that we are an internationally competitive environment. And the sort of things you can’t do, and I come back to the carbon tax, the sort of things you can’t do is suddenly walk out and say ‘ah well, we’ll tax the farmers 5 times the world price or 2.5 times the world price and don’t worry they’ll take it’. That has an impact on the regions. You won’t feel it in Grey Lynn. You’ll feel it in all the regions around the country. So there’s a number of things. It’s not just what we are doing but also what we’re saying we won’t do, that are important in terms of developing regional growth.

Just on that topic, the Buller Mayor Garry Howard, he is looking to government for some help diversifying in his region. He acknowledges that he needs to diversify. He would like you to pay regional royalties. So is that an idea that you-

Yeah, we’ve had a look at that. Sadly it doesn’t make very little difference. If you take for example the New Zealand First approach and the impact it would have on the West Coast is about a million dollars a year.

But they said that it would be $80-million in the last year that they would have got if there had been that national royalty.

No, no, no, absolutely not. If you took in terms of their royalties around 25% which is what the New Zealand First proposal is for the West Coast, is mine is saying it’s 1 to 1.5-million dollars.

So are you ruling it out totally?

We just saying actually there’s much bigger ways in which government can help and assist. And actually if you look at what the government-

So you are ruling it out, just to be clear?

Yeah, it’s too difficult to do at this stage. So the bigger question is what’s government doing overall. And actually if you look at the government investment in regions like the West Coast, we’ve just announced the new Greymouth base hospital. The government overall in the smaller regions ends up spending more per head and that’s partly the economies of scale. Auckland gets the least on a per head of population basis, the regions get the most because…

You raise Auckland, and you raised it before, about getting people to move out to there other areas. How are you going to do that? Is that your job as government to try and get people to move?

No it’s not the job to. We’re not going to throw people on a bus and say ‘right, you’ve got to go and live where ever’. But what we are saying is you’ve got to encourage people in terms of the opportunities there. And so I can tell them, anybody that’s watching at the moment who hasn’t got a job in Auckland is there’s some great jobs in regional New Zealand which can’t be filled. Things like management jobs, marketing jobs, a whole range of things.

Well you’ve got Kiwibank that’s opening their call centre in Hawke’s Bay. So should more government agencies be doing that?

We have to be a bit careful about that because actually the ones that are involved in policy, for example have to be close to the people that they are trying to influence with the policy and inform with that policy. And we’ve been through the exercise of shoving people out to the Hutt, Palmerston North in the 70s and then getting them in cars to come all the way back to Wellington again to talk.

But ones that don’t have to be in Wellington, would you consider moving them out?

Well we do do that. We try and have people as close to the areas of where their work is as much as we can. So you take for example the new Worksafe New Zealand. It’s very much involved in its regional areas working alongside businesses. The most important thing about regional economic development is to attract investment. That’s the thing because you know a few government jobs frankly, just a few in different areas, doesn’t make a lot of difference. But if you take for example Hawke’s Bay, if you can attract food processors to invest further in Hawke’s Bay that’s a real difference. And attract more people to invest for example you’ve got two big dairy factories being built in the Waikato currently. That’s good investment.

But yes, the statistics that we looked at was two-thirds for your regions are shrinking.

No, that’s not right.

Sorry, one-third are shrinking and your population gross is-

No, I don’t think that’s right either.

No, it is. One third are shrinking...

No I, that’s not right either.

…and you’re getting depopulation.

Are you talking about population? That’s not correct. The population growth, this is actually –

The age of people coming into a number of those areas is 65+.

So there’s definitely some -

So what else can you do to get people down there? What about migrants? Why don’t you send them to the regions?

But look, it’s got to be about attracting investment. Because you can say to people wherever you like you go and live there, but if there’s no work there, no new jobs, it’s not going to work. So you’ve got to say it’s about investment attraction. And that’s what we are really focused on. So we are providing certainty in terms of the way the economy is run. We are making sure that the carbon price doesn’t get too far out of whack with what happens internationally. We are actually welcoming international investment. We’re not like the Opposition when the Japanese wood processors say they’re going to spend a billion dollars on New Zealand.

That’s broad brush-stroke policy, it’s not specific to individual regions.

I’m sorry, that’s where you’re wrong. Tell that to the people in Hawke’s Bay where the Whirinaki wood processing mill has been there for 40 years, they’re the biggest private sector, don’t tell them that that’s actually just something that happens broadly and doesn’t affect them. It’s very important to them. Tell that to the people of Taranaki and the investment by Todd energy for example in Taranaki, growing their McKee field and the production station. They’ll tell you what’s real about investment in terms of jobs. Talk to the people of Pokeno about Yashili and Yili building a big milk production factory in Pokeno.

I take your point. OK, so in the time we’ve got left I just want to talk about John Banks. Senior National party figures are saying that he is an honourable man but you have a high court judge here who says that he’s knowingly falsified his electoral return. The judge rejected a big chunk of his police interview as being untrue. Do you seriously believe that that is an honourable man?

Well A, I haven’t been that close to the case and B, I’m not going to make any comments on any case while it’s sitting in front of a court. I’ve only been in politics for five and a half years but I think I’ve worked out that’s not a good thing to do. I actually know John. I’ve actually known him from before politics. And I’ve always found him to be pretty straight-up but obviously the court case is the court case.

But your Prime Minister is saying he’s honourable.

Yeah, well that’s right. You can only operate on your own experience.

So do you think it is acceptable behaviour?

Nobody is saying that it’s acceptable behavior to be found, you know, wrong in the court of law. Or. you know John, I actually feel sorry for John, sad for John in terms of what’s happened.

Do you feel sorry for him?

But I’m not excusing the behaviour or the court case. I feel sad for him. He’s a guy with a long public service career and this is how he’s going to go out, which is sad for anybody.

So is white collar crime OK?

No, don’t be silly. It’s not OK. It’s just simply, it’s sad for that to happen to somebody. What I am saying though is that the court is going to do its thing and John will have to respond to that.

So what’s National’s message going to be to voters in Epsom this time round?

National’s message to all voters over the country will be to give their party vote to National. Because fundamentally the most important thing, and I’m speaking as the Campaign Chair now, is party vote. Everything else makes no difference

But should they give their electorate vote to Paul Goldsmith?

Well no. That’ll be a decision for closer to the time. I tell you what they have done in Epsom over the last few years is that they –

But haven’t you, you’ve made the decision already haven’t you? He didn’t come on the show. He says he’s concentrating on the party vote. It’s a done deal isn’t it? Why can’t you be upfront about it?

Well firstly it’s not my job. It’s above my pay grade. It’s something for the Prime Minister to decide in terms of -

Oh you are the Chief Strategist Mr Joyce.

But no, I’m not.

The deal is done is it not? Can you not be- The Prime Minister gave an undertaking that he would be explicit with people?

And I’m sure he will in due course, when it suits him. The Prime Minister is the Prime Minister and I help the Prime Minister on some things in terms of assist but at the end of the day it’s his.

Why is there such a murkiness around this? Why can’t you come straight out and say?

No, there’s no murkiness around it at all. Nah, there’s not a murkiness. What’s murky is a lot of the other deals that are going on with small parties at the moment. I hope you’re going to be just as vociferous with Mr Cunliffe as to whether he’s actually going to work with for example the Internet-Dotcom party.

The Prime Minister has already done a fundraiser for Paul Goldsmith. He’s saying that he’s concentrating on his party vote. It seems very clear.

Well actually no to be fair. The Prime Minister has done a fundraiser for Paul Goldsmith. Ah I’m sure he has for all the candidates.

It’s for Mr Seymour rather.

Ah na na. I think he’s done one for the Act party, the same as he’s done one for the Maori party, I don’t know whether he’s done one for Peter Dunne or whatever. That’s actually something that he’s always traditionally done for people who work with us through parliament terms. It’s just a way of helping.

So Jamie Whyte, we understand that Jamie Whyte is going to come out publically and call for his resignation. Should Mr Banks go?

Ah look, it’s not my call. John Banks’ is the Act party. Jamie Whyte’s the Act party. They’ve got to make their calls around that sort of stuff. What I do know is –

But it is your job this strategy, Mr Joyce, so on that topic

No it’s not my job to have strategy for the ACT party, I mean quite truly it’s not.

No it’s strategy for your party and part of that strategy is working with Act.

And actually I’m only a contributor to that, let’s not overplay my importance.

So have you had discussions with Colin Craig for example?

I haven’t had discussions, I don’t think, with any other political party except running into Peter Dunne occasionally because I see him in parliament. That’s not, frankly that’s not my role. But again, come back to the point about the election. Fundamentally the main job for National including me as the Campaign Chair is to maximize our party vote. And we’re looking okay at the moment. We’ve got a lot of work to do.

So is it more likely in these circumstances where you’ve got Mana and Internet... Is it more likely that you’re going to be doing these deals?

I don’t think it makes any difference. I mean the people of Epsom fundamentally decided over the last three or four elections, they vote National, they fundamentally decided what they want is to vote for the electorate candidate that they’ve chosen to vote for. And they will make that call this time. The other thing you’ve got to assume around all of this is that parties can direct people. People tend to make the decisions that they want to make as voters that get them the sort of government that they want. And that’s what will happen in Epsom, and frankly that’s what till happen in other electorates around the country.

That sounds like a deal, Thank you

No it doesn’t. It’s not a deal at all.

ends

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