John Key’s resignation as Prime Minister of New Zealand yesterday was in itself a remarkable achievement for any modern political leader: he went out on top and a time of his own choosing.
Key was an outstanding prime minister and one of the most impressive political leaders I’ve ever had the honour to work with.
Here are a few reasons why:
1. People trusted him.
In the past, I’ve talked about “Three layers of risk” for any political leader.
The first question that voters will ask themselves is “do I trust this person at their word?”.
With Key the answer, time and again, was yes. Growing the son of a single mum in the suburbs gave him an everyman’s touch. He wasn’t cool, but people liked that. If anything, his dorkiness translated into empathy and sincerity.
2. He did what he said within the system he had to work with.
The second of the three layers of risk, is whether people think the leader will do what he says in this political system? Once again, Keys passes this test.
Key’s private sector experience set him up well to implement his policies, but his business experience alone didn’t do this. He had to work in system that rarely guaranteed him a majority government, but the ability to work in coalitions – from both the left and right – meant he was able to work with the system to do what he said.
3. He was trusted to look after people who slipped through the cracks.
Crucially, Key was not only trusted and competent enough to implement an agenda, but people trusted him to look after them if it didn’t work.
This means he passed the third risk test: if something went wrong he was seen as a person of character who would care and look after someone if they fell through the cracks. For a government that implemented a much-needed cut to public spending, he also managed to do it while assuring the most vulnerable they wouldn’t be unfairly targeted.
This is doubly impressive after the Christchurch earthquake, which necessitated a huge boost in government spending.
4. Handling of the Christchurch earthquake.
In 2011 Key’s government had to cope with the Christchurch earthquake that killed 185 people, destroyed homes and businesses in the South Island’s largest city.
It is the third largest natural disaster to ever hit NZ, which, for a country prone to severe earthquakes is saying something.
Key’s handling of the earthquake encapsulated the empathy and sound economic thinking the populace already suspected in him. His handling of the Pike River mining disaster also epitomised these qualities.
5. Handling of GFC.
Unlike Australia, New Zealand doesn’t have a Pilbara to boost its coffers periodically depending on the price of iron ore. Nor did Key have a luxury of inheriting a large surplus.
As a trading nation the effects of the GFC on New Zealand could’ve meant a return to severe recession of the 1980s. But the centrist government Key formed in 2008 meant the economy was able to survive and then thrive in post-GFC.
6. Made the tough decisions on the economy.
The decisions that led to the post-GFC revival were tough economic decisions.
These included raising the GST from 12.5% to 15%, and as a result he was able to cut company tax for small and large businesses. He was able to cut the top marginal tax rate to 33%, while the rate most Australians pay is at 34.5%.
Key also embarked on a program of public spending cuts, and despite the earthquake, was able to reduce government spending from 40% to 35% per cent as a percentage of GDP.
Since the GFC New Zealand’s economy has been growing at 3%, with unemployment down to 5%.
7. Could be tough as he needed with political colleagues.
Despite his nice guy image (and he is a nice guy), Key was certainly no pushover politically. In fact, Key was an extremely tough political operator and this balance was one of his great skills.
I like to use the analogy of Key as a farmer. He would allow colleagues to roam where they needed but made and made sure to protect them with all his skill and by setting clear boundaries of responsibility, but if it became evident somebody had a political disease then he was always prepared to take them out back and shoot them himself.
8. Worked in a hung parliament with minor parties.
It is baffling that Australian politicians can claim Key had it easy because New Zealand doesn’t have an upper house.
True, it doesn’t have a Senate, but it has a unicameral system that combines individual electorates, like our lower house, and nationwide proportional vote much like our Senate. The outcome of this has been a “hung” parliament since 1996.
But when he was elected in 2008 he formed a majority with Maori Party, United Front and the ACT Party effectively cushioning across left and right.
He made the same agreement after being re-elected with a reduced margin in 2011, but by 2014 almost had a majority for the National Party in his own right.
9. Focussed on outcomes, not ideology.
The reason he was able to work with minor parties is that Key was focussed on outcomes not ideology. He always had one eye on what people actually cared about and expected of government and their leaders, refusing to get distracted by ideological red herrings.
This allowed him to work with pretty much anyone on the political spectrum while still standing up for something.
10. He came back home.
In the eyes of New Zealanders too many successful Kiwis stay in Australia, London or the US. Many are deeply concerned it’s a brain drain robbing them of their best and brightest.
The fact that Key, a successful investment banker in London, chose to come back and contribute politically to his homeland was seen by many as lesson to other successful Kiwis abroad.
Plus: The All Blacks won two Rugby World Cups, including one at home, on his watch: Well, it didn’t hurt.
More from Mark Textor:
- Why business faces a reckoning on data privacy
- How the digital age is killing the old political order
- Why modern leaders need more than bold vision
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