On The Nation: Lisa Owen interviews Jacinda Ardern
Headlines:

Labour leader and Prime Minister-elect Jacinda Ardern says her government will have a range of targets similar to Better Public Service targets that will be reported on annually - these could include things like environmental measures, homelessness and child poverty.

Ardern says Labour’s immigration policy remains unchanged in its coalition agreement, and the net number of immigrants will be unchanged.

Ardern says she’ll review the system of block offers for oil drilling, saying fossil fuels are not our future, but regions have to be transitioned away from them, rather than anything jarring. She says the upcoming round of block offers could be the last.

Lisa Owen: Less than three months ago, Jacinda Ardern became leader of the Labour Party. Next week, she’ll be sworn in as prime minister. Winston Peters may have made his decision, but there’s a lot more detail to come out about how the coalition deal will work. I asked Jacinda Ardern how she would describe the government she’s just formed.
Jacinda Ardern: I would call it an active government. One of our key focuses will be making sure that we don’t leave anything to chance. One of the concerns that we’ve had for a long time is that we have an economy at the moment that is not serving all New Zealanders. People are not feeling the benefits of any form of prosperity; wages aren’t keeping up with inflation; the cost of housing is outstripping most people’s reach. And what is the point, for instance, of economic growth when we have some of the worst homelessness in the developed world? Our plan is to be an active government, one that’s focused on ensuring people have decent jobs, decent housing, and hope for the future.
I want to talk a bit about that in a minute. But first off, let’s just deal with some of the practicalities. You’re now in an arrangement with two different parties, and they have two different deals, as such, so how will you deal with them? Will they be dealt with differently, New Zealand First and the Greens?
Well, we do have different agreements with both. Of course, one is in a full coalition arrangement with a different set of policy objectives that we have agreed to pursue together. The Greens have a confidence and supply agreement, again with their own policy agenda that we will pursue together. But what I hope people will see when we release those full agreements in full is that there is synergy between those agreements, that, collectively together, we are focused on improving our environment, improving the outlook for families and their future, making sure that New Zealand is a place of great opportunity.
Are you all equals in that arrangement?
Oh, look, certainly there are differences in the way that each party plays a role in the government that they are a part of. So, for instance, a coalition agreement – by default, collective responsibility provisions apply to that party as a coalition member. Confidence and supply – collective responsibility applies to where ministers are serving. So by default those arrangements are different. But in terms of the way that I will work with both leaders, that relationship will be exactly the same. It will be a relationship of respect. We will work closely together from the very beginning when we are crafting our agenda and developing the kind of government that we’re going to be.
Yeah, and the arrangement that you’ve just outlined there and how you’ve explained it means that on many issues, everybody is going to have to be consulted as to what they agree with or what they don’t agree with outside of budget decisions – you know, confidence and supply. So is that going to slow down lawmaking, do you think?
No. In fact, that’s not new. That’s simply an MMP environment. Governments since 1996 have been required to work in that way. I’ve worked in a government that has had those kind of protocols in place. One of my roles was consulting other political parties to ensure that support was there to pass a legislative agenda. That is absolutely not new. What has changed over time is the way that those relationships have evolved. The processes, I think, have become a lot more refined. We’re probably a lot more effective and efficient in the way that we conduct coalition governments now, and certainly you’ll see that I think we will make sure that we run a very efficient, effective government.
You mentioned this idea of spreading the gains, the economic gains, around. When Winston Peters announced that he was going with the Labour Party to form a government, he talked about the fact that capitalism had failed for many New Zealanders. So I’m wondering, on a scale of 1 to 10, 1 being a complete disaster and 10 being a rollicking success, where are we at with capitalism in New Zealand?
Well, of course it all depends on proactive a government is. When you have a market economy, it all comes down to whether or not you acknowledge where the market has failed and where intervention is required. Has it failed our people in recent times? Yes. How can you claim that you’ve been successful when you have growth roughly 3% but you’ve got the worst homelessness in the developed world? How can you claim that growth is making people feel prosperous when most people’s incomes aren’t keeping up with inflation?
But how much of a failure is it?
So the measures for us have to change. We need to make sure that we’re looking at people’s ability to actually have a meaningful life and an enjoyable life where their work is actually enough to survive and to support their families.
But can you quantify where we are at with that, then? If it’s failed, how much of a failure is it? Where are we on that spectrum? Need a few tweaks or need a complete overhaul?
Oh, look, I would say– I mean, we campaigned on the tweaks that we believe are required, but on my measure, if you have hundreds of thousands of children living in homes without enough to survive, that’s a blatant failure. What else could you describe it as?
So, you talked about child poverty there. National had said it would commit to raising 100,000 children out of poverty. Now that you’re going to be in charge, are you going to be more ambitious than that 100,000 target?
Oh, I’m ambitious that we eradicate child poverty. There should be no place in a wealthy society like ours for children to grow up without their basic needs being met.
That’s not going to happen overnight, though, is it?
Yeah, obviously.
So in terms of meeting milestone, first term, second term, where would you be at with the numbers about what you want to achieve?
My expectation is that our families package, which we will be introducing as a matter of priority will have the effect of lifting tens of thousands of children out of poverty. From there, though, I want to establish clear targets. We’ve always said that we want them put in legislation, and every year we will then report, as part of the Public Finance Act, on how much progress we’ve made. So, I can say now that, yes, I wanted to match their 100,000, but I want incremental goals to hold us to account. In my mind, some of the targets that we’ve set ourselves, some of the goals that we measure ourselves on as a society, don’t take into account the effects on individuals, on their wellbeing. This will be a government that takes into account those markers, and the wellbeing of people will be my sign of success.
So do you think those incremental targets, that you will know those or will know those in the first hundred days of government, or…?
Oh, certainly. My plan is to introduce the legislation – it’s already drafted – which sets out what our measures of poverty will be. That’s been an often-disputed issue. We will finally have some agreement that will be in law. From there, we’ll go ahead and set those targets. Certainly it will be a matter of priority, but the legislation comes first.
OK. So, another area that helps the low-income families is the minimum wage. You set a target – Labour set a target – $16.50 in the first hundred days. Winston Peters, he likes round numbers; 20 bucks is what he had in mind. Where have you landed on that?
Yes, I don’t want to pre-empt the release of that agreement, but it is fair to say we have absolute common ground when it comes to wanting to see the wages of our most vulnerable lifted.
So maybe give us this much? Have you upped the ante, then?
It was a strong focus for Mr Peters. It was a strong focus for us. You’ll see change in that area.
So change above the $16.50 in the first hundred days?
You’ll see change in that area. Look, we have to make sure that we balance the need to see that wage increase whilst at the same time ensure that we give enough notice so that we can ensure the cushioning for those who are paying those wages. $16.50 is our first step. We’ll look to move beyond that over time.
So have you given him a timeline for the $20 an hour that is ahead of the one that you had set yourself?
Again, all will be revealed in the not-too-distant future.
We’re impatient. We are impatient. Another issue that mobilised voters, arguably, was housing and the lack of affordable housing. Another thing Mr Peters said in his speech when he announced he was going with you is that building affordable houses would be a priority for him. So when do you intend to start construction on KiwiBuild?
And, look, we do need to get started right away, of course. We spoke over the election about the fact that this would phase up over time. And it’s not just KiwiBuild. For us, it’s also making sure that we start building those state houses again; we’ve lost stock. And we’ve set ourselves a goal of at least 1000 a year. First step for us is getting a form of affordable housing commission up and running.
And you have committed to that in your first hundred days?
And that’s the first step. Before you are able to start getting the hammer out, you’ve got to make sure that we’re able to do the overall planning that will be required.
So how long after that, do you reckon?
I haven’t got a date to give you, but if you set yourself a target, as we have, of, on average, 10,000 houses across 10 years, then we need to get started pretty quickly.
So how many do you think you will build in your first year, then?
Over my recollection over the first three years is that we are scaling up. My recollection is that we moved up to roughly 20,000 over the first few years, and beyond that it will then move at great pace and at scale.
So also around foreign buyers, part of the motivation for shutting down foreign buyers of our houses, is to bring the price down of housing. So do you have an ambition for how much you want to bring that price down and over what period of time?
That was about making sure that we had measures both on supply and demand. But the point that I’ve made continuously during the election is that one of the reasons that the average house price sits where it is is just the nature of the housing stock we have. We in Auckland, for instance, are just not building affordable houses. The average house that’s being built in Auckland, so where we’re increasing our stock, are houses that are closer to 200m2 than 100m2. We can make sure we bring on-stream affordable housing without having the effect of dropping significantly the value out of people’s existing homes. It’s all about the nature of the stock that we’re building and the fact that we are under-producing the houses we need the most.
But if you build more stock and there is more supply, there will be an adjustment in house prices overall. You know the basic economics of it. So what do you anticipate that that drop in housing– that price that you might be trying to achieve?
I have an expectation that there’ll be a cooling in the existing market. But as I say, our view that we absolutely maintain is that we’re bringing on-stream a section of the housing market that is undersupplied and that we don’t expect to see a dramatic drop in people’s housing values.
So it’s cooling, like, 1%, 2%?
Yes. Yeah, and at the moment it’s cooling because we’re seeing potentially that easing off by meeting the fact that we’re easing off a bit of demand. It’s not clear whether or not that will be sustained. We believe that if we want to make sure we’re addressing the issues we have, it is about addressing supply as well.
OK. So part of that is also immigration numbers, the number of people coming into the country and demand. And you and your coalition partners are kind of at odds on that when you look at the policies. Winston Peters wants a considerably higher drop in numbers than you have specified, and the Green Party actually withdrew their policy around immigration at one point. So where’s the sweet spot? If Winston Peters wants 10,000 people a year – and we’ve got about 73,000 – and Labour were saying maybe cut it about 30,000, where is the sweet spot?
The sweet spot is acknowledging that we have pressure on our infrastructure. And I think, actually, that is common ground between all parties that will form this government because there is undoubtedly strain based on the fact that we have had a government that’s entire growth agenda has been based on population growth rather than focusing on making sure that we move to a productive economy.
But when your agreement comes about–
Our view is that it is about the settings. It is about making sure that we are meeting the skills gaps that we have – and we do have them in New Zealand – meeting those skills gaps by making sure that we are undertaking those work tests, by making sure that our export education industry isn’t exploiting people, and by making sure that people on temporary work visas aren’t exploited either. That’s the area we’re focused on, and there’s agreement there.
So when the deal comes out and we look at it, will there be a number? Will we look through those papers and there’s a number that you’ve agreed on?
You’ll see that Labour’s policy remains.
In terms of the numbers, not just the contest? Because you’ve always talked about quality of people coming in and raising the quality and skill level, but what about the number coming in? Will there be a number?
Labour’s policy remains absolutely unchanged. As a result of these negotiations, our policy remains.
So no shift in numbers, no shift towards Mr Peters’ 10,000? You’re exactly where you were prior to the election?
Labour’s policy remains in place.
And the numbers of immigrants coming in will be unchanged?
Will be the same.
Remain unchanged. Okay. Are you anticipating that we will have a more, kind of, nationalistic economic policy under this government?
If that’s the way you want to describe a government that’s going to be active and focused on making sure that we have jobs in our regions, that we have infrastructure that’s well supported and that we’re growing our economy by ensuring that we are investing in our people, then that might be the way you describe it. I describe it as a proactive government – one that’s focused on people.
Do you think that that has negative connotations?
No, not necessarily. Not necessarily. I think there’s nothing wrong from saying that, actually, there are interventions that are required and that we should be making sure that we are focused on generating well-being for New Zealanders.
So in terms of, maybe, some of the interventions you’re talking about, one example of, perhaps, one that Mr Peters favours is having a look at the Reserve Bank Act, and he would like some levers to control the value of the currency. You have said that you’re looking at that act already. Is that a specific thing that you’re looking at doing?
Again, it’s something that I want to leave for the announcement of our agreement on Tuesday.
You’re not ruling it out, though, are you?
I’m not ruling it out. We have had a policy around reviewing the Reserve Bank Act.
Okay.

Welcome back. You’re with The Nation. I’m talking to Jacinda Ardern, the Labour leader and our Prime Minister-elect. Water tax – Winston Peters, well, he doesn’t want one. So is that it for the water tax…
No, he doesn’t.
…in terms of on farmers?
No, he doesn’t, and he made that very clear both during the election campaign and he made it clear during the negotiations. Again, the driver for Labour in raising that issue was around the issue of water quality. And, again, you’ll see absolute agreement between our parties on the need to improve water quality. For us, it was all around the way that you reach that goal. You’ll see in our final agreement the consensus we’ve reached in that area, but it is fair to say Mr Peters advocated strongly on that issue.
All right. So if it’s around water quality, one of the issues that’s been raised is irrigation. Now, the National government spent about $400 million from asset sales – 90 million in the last budget – on subsidising irrigation schemes. Are you going to can those kinds of subsidies?
Look, our policy has been to cease the ongoing investment in those irrigation schemes. But where they already exist, we absolutely accept that there is a role that they have now been built into the well-being of those areas and regions, but those subsidies will not continue.
And your agreement that you’ve reached – does anything around the irrigation systems change?
You’ll see when they’re released the consensus we’ve reached on the way to manage those irrigation schemes going forward.
So if it’s about water quality, then, how are you going to manage that?
Of course, the issue of the water royalty was about questions around water use and land use and putting a price on that. But, equally, issues around nutrient levels and the standards that are applied to water quality are incredibly important as well. Enforcement’s incredibly important. Those were elements that we also talked about during the campaign that just didn’t generate quite as much discussion. We’ve formed a view collectively around what requires emphasis and focus if we are to lift our water quality in New Zealand and make sure that our rivers are just swimmable again. Bottom line, though – if you stop polluting rivers, they heal themselves.
So, you’re going to have climate commission, and there is a bit of divergence in what the three parties believe is a good idea. ETS – Winston Peters, not so keen on it; the Greens, not so keen on it; you’d like to keep it in a slightly different form. But a commission – would the recommendations of that commission be binding on the three parties?
All of us have agreed that if we want to make sure we make progress on the enormous challenge of climate change, that we do need an independent body that is holding the New Zealand Parliament to account on the progress that we’re making, to the goals that, actually, we’re all signing up to. So, yes, we all agree an independent climate commission – one that gives us guidance, that actually suggests whether or not we’re following our own carbon budgets and whether we’re on track to the collective goal we’ve set ourselves of net zero carbon emissions by 2050, that we’re on track to achieve them. So, again, that guidance really helps bring together consensus on how we’ll achieve that goal.
There’s a difference, though, between guidance and being bound by something, isn’t there? So if this commission tells you that you need to be doing XYZ, are the parties signed up to move forward with those recommendations?
We’re building the commission together. That’s something we designed together. I think you’ll find, though, that once you’ve got the goal in place, it all then comes down to the mechanism. And we can have a conversation around mechanism, but as long as we’re all signed up to the fact that we are collectively focused on the goal of net zero carbon emissions by 2050, everything else then just becomes your mechanism to deliver that goal. The climate commission will play a role in that; carbon budgets will play a role in that; the Net Zero Carbon Act will play a role in that. We’re all committed to each of those elements.
And given the commitment that you expressed during the campaign, saying that climate change is the nuclear-free moment of your generation, is the Climate Change Minister going to be in cabinet?
No. But I don’t think that’s a measure of the seriousness with which I’m taking this issue. I need to play to the strengths of the team we have together. No one will question the strengths that the Green Party bring to this issue. Nor will they question the dedication that the Green Party will bring to this issue. My focus was bringing the best talent to the table, giving jobs to those who bring a huge amount of experience and making sure I utilise that best. That was my focus.
You don’t think it devalues the position by having it outside of cabinet?
I do not. I’m absolutely—
Why don’t you think that?
Because, as Prime Minister, I’m committed to climate change. Regardless of whether I hold that portfolio or not, this is an issue I’m absolutely dedicated to. I will work closely alongside the minister who holds that portfolio. But just because that minister sits outside of cabinet is not a reason in my mind to deprive them of the opportunity to use the experience they bring.
So can you explain to us why the Greens are outside of cabinet? Was that your decision? Was that what Mr Peters wanted? Or how did it come about?
There’s a range of reasons why different agreements suit different parties’ needs, and, ultimately, I’ve left the Green Party to speak to their own agreement in that regard. My view is that—
So they’re not outside because Mr Peters—I mean, he’s done it in the past, so did he specify in your discussions that he wanted them outside?
Again, I think it’s for the Greens to speak to the reasons why confidence and supply works for them.
You’re the boss, though. You’re the prime minister.
Indeed I am, and I preside over a government that is made up of three independent parties who have built consensus around the issues we will collectively pursue. The fact that we will work together collaboratively does not diminish the identities of those parties. There are a number of reasons why confidence and supply is a form of arrangement that will suit the needs of particular parties and why others will prefer coalition. I have no trouble, and I do not question my role or authority simply by allowing a party to speak to that issue themselves.
Okay. So, there’s an announcement due in the next few months about who is going to be given the contract opportunity to drill for oil both onshore and offshore. Are you going to go ahead with those Block Offers?
Look, those Block Offers and their popularity have diminished over time. It’s become less economic, particularly for offshore. We’ve been clear that we need to ensure we’re moving towards just transitions. It is a process for New Zealand to acknowledge that our future is not in fossil fuels. But we will…
So you’re going to can them?
…not be doing that in a jarring way. We’ve been very clear that as a Labour party, our duty and responsibility is to transition those regions and the workforce that have previously been reliant on those areas in a way that means that we plan for the future for those areas and that workforce.
So this Block Offer – will this be the last?
Again, I’ll be reviewing more of that when I’m in office. It’s not where our future lies, but my plan is to transition our regions, not to jar them.
But you haven’t ruled out the possibility that this Block Offer will be the last?
I haven’t analysed that Block Offer from a position of office.
Okay. So, you said publicly that these coalition talks were robust.
They were.
Yes. And I’m imagining that there’s compromise on all sides.
Mm.
So what did you have to give up?
Look, the moment that you’re sitting at a table, you’re acknowledging that you’re going to give up seats, that you’re going to— In some cases, actually, where you agree, you’re going to give up acknowledgement of that fact that your policy’s very similar; you intended to do the same thing. But you’re acknowledging that other parties share those ideas and that they’re the ones that prioritised it and therefore they’ll be the ones acknowledged as having delivered it.
But can you tell us one thing you gave up?
On Tuesday I can.
Okay. Well, the other thing is – why do you think that--? Or what was it that you offered that National didn’t?
Change.
And do you think it’s a concept and an idea rather than a material thing that you were prepared to give?
I think it’s both. Change is not a sentiment, although it certainly can start to feel that way in the midst of a campaign. The change we were talking about was meaningful. It was change for people’s lives for the better. It was about decent housing, being able to go to the doctor when you need to, being able to swim in a river. It was meaningful, material change.
Do you know whether you offered more policy concessions and more cabinet posts and things like that? Do you know that?
I certainly have a sense that Mr Peters chose the option that was policy-focused rather than position-focused.
Okay. So, the National government, well, they liked measuring different things, progress, in some ways. They had better public service targets. Will you keep some kind of measure like that?
Yes, we will keep measures, as I’ve said — measures around things like child poverty, measures around things like water quality.
But in addition to that?
For me, the measures of success will be both environmental and social. What I’d like to see us do is as a nation have a set of measures that we use consistently so that the public can hold us to account. But as I’ve also said all the way through this campaign, the measure of success to me is not how a financial commentator or an economic commentator from abroad views New Zealand, but how a New Zealander feels about their state of affairs, their hope and chances for the future.
You have outlined, obviously, child poverty is one measure. What are the other measures that you think would be appropriate for your government to be judged on — actual ones that you can measure?
Yeah. As I say, I do want to develop a scorecard that will mean that we no longer debate things like measures of homelessness and housing-related measures.
What housing-related measures are you thinking about?
Or homelessness in particular. That’s an area where there is just no consensus. Every time we have raised the number of homelessness, it’s been disputed. So we do need consensus around those, and, again, so we can hold ourselves to account. I also want environmental measures. Those are things I want our executive together to work through, because those will be the things I will be seeking us to openly report on annually.
So, have you got an idea of how many targets that you think will be realistic?
I’ve not predetermined those at this stage, again. Something I want to develop with our executive.
Okay, we’re running out of time, but I want to know — aside from Winston Peters, who has most impressed you from the New Zealand First caucus?
Oh, do you know, I actually had a good working relationship with a range of their members before going into those talks. It certainly provided an opportunity to spend more time with Mr Peters. His absolute focus on policy outcomes was impressive. I also have a great affinity for the passion that Tracey Martin has for children’s issues and education — a lot of common views in that area between us too.
And the Green Party, discounting James Shaw?
Oh, I had engagement both with James Shaw and Eugenie Sage through that process. Both incredibly impressive individuals. A huge policy focus. We’re going to make a great team.
So are you leaving them entirely to decide who will hold the positions that are allocated to their parties?
Oh, look, you’ll see from the portfolio allocations that already are being talked about for those parties, you’ll see that there is a bit of a suggestion who will hold those. But, of course, that was a conversation.
But you have no veto?
No, as prime minister, absolutely, but I made that a conversation between leader to leader.
So what if they come to you with someone that you don’t think would be suitable for the job?
Again, it was a conversation we had about utilising the experience and expertise in that caucus to the best of our abilities and making sure that we were matching portfolios to that. Again, it was a conversation.
So have you already ticked off their choices?
That makes it certainly sound like it was an arbitrary process.
No, no. I don’t use that phrase flippantly.
It is the role of the prime minister to play a role in who is appointed to those positions. But, of course, a leader of a party knows their people best, and so I made a conversation that we were both comfortable with.
So are you pleased with the choices?
Absolutely.
Thank you for joining us. Much appreciated.

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