Written By: - Date published: 11:56 am, February 25th, 2008 - 70 comments
Categories: john key, national, workers' rights -
Tags: john key, national, workers' rights
When it was revealed that John Key had told a business leader he ‘would love to see wages drop‘ it undermined everything he’d told national media about wanting to lift wages. It also had the potential to do irreparable damage to his rhetoric on tax cuts and to show him as being less than honest with voters.
National’s response was interesting. First, we had Key’s telling silence in Parliament. Then we had the excuses that John couldn’t recall the exchange, that he was misquoted, that he never said it and even that he was joking. When those lines failed, National changed tack and claimed Key had been talking about Australian wages all along.
Now the Northern Advocate has released a transcript that proves not only was Key lying, he is now on the record telling a business leader he wants to give working New Zealanders a pay cut.
The transcript has Key’s full quote as well as the question he was answering, and it clears up once and for all what happened:
During a Northland meeting on his Heartland tour, John Key met Kerikeri District Business Association president Carolyne Brooks-Quan in a café with a journalist present. Key seems to have taken little notice of the journalist, referring to him in a later media interview as ‘a young guy’.
During the meeting Brooks-Quan expressed to Key her concern about calls for employers in New Zealand to pay their workers more:
‘There’s been a lot surrounding the exodus of people to Australia that are lured by higher wages. There are some calls here for employers to pay more. What’s your take on that?
John, ever the business-friendly politician, replied:
‘We would love to see wages drop. The way we want to see wages increase is because productivity is greater. So people can afford more. Not just inflationary reasons, otherwise it’s a bit of a vicious circle as it comes back to you in higher interest rates. We really want to drive that out.’
So there you have it. John Key says his party would love to see wages in New Zealand drop – no ifs, no buts, no maybes.
Note that ‘we really want to drive that [wages rises for ‘inflationary reasons'] out’ is also a call for people’s wages to stagnate or fall while inflation decreases their buying power.
There is no plausible way in which Key’s comments could be interpreted as wanting to see wages fall in Australia.
Key has been caught lying, plain and simple. Now he has some explaining to do.
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OK, so this is getting interesting, a tape exists too. The words cannot be disputed.
So does Key really mean it? It seems so hard to believe. I’ve been trying to work through what he meant line by line. My translation is below. I’d be interested in any alternative translations that allow alternative conclusions to be dawn:
Key says: “We would love to see wages drop.”
Key means: We would love to see wages drop.
Key says: “The way we want to see wages increase is because productivity is greater. So people can afford more.”
Key means: Workers will get something as good as a wage increase if they produce more stuff, so stuff is cheaper, so they can buy more.
Key says: “Not just inflationary reasons, otherwise it’s a bit of a vicious circle as it comes back to you in higher interest rates.
Key means: Wages shouldn’t just rise because that is inflationary and creates a vicious circle.
Key says: “We really want to drive that out.’
Key means: We really want to drive out the inflationary effects of wage increases.
Yawn.
DJP, I don’t see how you can make a jump from me saying there’s room for higher wages in the profit many firms are making in NZ to the idea I want collectivist-run companies. It would be the equivalent of me assuming your position on productivity mean you secretly yearn for a Malthusian capitalism in which those that can’t compete starve to death and I’m sure you don’t.
Billy, I read this as “wages are too high at the moment, they need to come down and then only go up as profits increase due to productivity.”
IrishBill, I am not saying that that is your view. I am saying that *you* should start a company that that adheres to your ethos.. I guess rather then just telling us how a company should share its profits, show us how it could work by leading the way. I would be cool if it worked out.
I think there’s a typo in the headline of this post – It should read
“Inflammatory rhetoric proves The Standard is desperate”
Mike- are you saying John Key wasn’t lying when he said he was talking about Australian wages?
Or are you saying that he never said he wanted wages to drop, despite it being clearly on the record that he did?
Thanks, Mike. We’ll get right on correcting that.
Actually, no we won’t. Because there is nothing inflammatory or incorrect about saying Key is lying when he has consistently denied saying that “we would love to see wages drop” or, bizarrely, claimed that he was talking about Australia, only for a transcript of the interview to prove that he said exactly those words and he was talking about New Zealand.
DJP, I’m not known as a man who likes having words put in his mouth and by attempting to (incorrectly) determine my “ethos” for me you are doing so.
You should realise companies already “share their profits” by paying people. I’m suggesting that when the profits are as good as they are now they could “share” a little more, at no point have I suggested they should be run collectively. Given your attempts to misrepresent my point I can only assume that you are either incapable of understanding my position or that you are being deliberately disingenuous.
IrishBill, I am sorry that I offended you.
I get that you are suggesting that companies can afford to “share” some more of their profits. I think that the owners response will be that they pay their staff a fair wage commensurate with the value that the employee gives to the company.
Hence my suggestion to you that you would get better results if you started your own company (which can reflect your particular ethos whatever that may be).
No,
I’m saying this is a lame diversionary tactic and the kind of crap the Labour Party has to resort to because they chose to abdicate any moral high ground they had on party financing with the Electoral Finance Act.
“Stop! Stop! He’s already deeeead!!” (The horse you’re flogging, that is.)
Look, there’s no gotcha here and it’s laughably desperate. You dwell on one line in an obscure provincial newspaper where there’s nothing to suggest that Key isn’t light-heartedly referring to Australia’s wages and, if taken as you claim, is immediately contradicted by the subsequent sentence.
This has about as much traction as “the Iraq War is over”. All we’ve learned is that you have to be painstakingly clear in politics as some nutjob will always take your words, rearrange them, add or drop a few letters, and Google translate it to Bulgarian and back again to suit their own purposes.
It’s actually wilfully dishonest of you. I suspect you know that Key doesn’t mean to cut wages, but this won’t be what you represent to the members of the Labour movement.
But, in the final analysis, these tactics are exactly why National will win the election. You guys need new material if you want to reverse those poll results.
Ah, it all comes back to the EFA. I thought better of you Mike. As it stands I can assure you it’s not a diversionary tactic, at least from our end.
Let’s lay it out:
* National has a history of attacking wages.
* Now they’re complaining about a wage gap with Australia that they created and trying to get political traction from it.
* Then their leader comes out saying he’d like wages to fall, can’t get his story straight, is caught lying and attacks a journalist’s credibility.
Don’t you think this is worth an explanation? Maybe some hard questions?
whoah mike, step into the new year bro
“IrishBill, thanks I am just trying to clarify. Why don’t you start a company based on the philosophy of profit sharing and collective ownership ”
DJP you muppet, that is exactly the ethos that Fonterra is built on, New Zealand’s largest company.
As for the bullshit line that the owners of capital take the most cos they take the risks – without workers the capital owners would be fucked. Workers create wealth. Workers are also consumers, so without the money they earn your capital owners would have no-one to sell their goods to.
I suspect you know that Key doesn’t mean to cut wages
No we don’t. The policy, and the history, suggests that’s precisely what he’d do. It would be nice if he explained his comments honestly and told us exactly how he would lift wages.
“I suspect you know that Key doesn’t mean to cut wages”
is that like, wages will drop under Key’s National but he won’t mean it – like when Key says he’d “love to see lower wages” in NZ but doesn’t mean it, or like when wages and conditions have historically been attacked by National but they didn’t mean it either?
Pablo, yes I am a muppet.
Good point, Fonterra. Is it a success from the dairy farmers point of view?
You are right that without workers the capital owners would be… unable to leverage their capital. There is also another vital piece a plan (business plan, direction, leader.. whatever).
You have to admit that a capital owner willing to take risks with a good plan is in scarcer supply then a basic worker however. After all our government would not function without us taxpayers to support it yet Helen Clark earns alot more than I do. Does she provide more value to the country that deserves a salary that far outstrips mine or should we engage in some wealth re-distribution?
Answer me that
Haha, Tane, no-one actually cares. Next, please.
I think people would care immensely if their wages were cut
Or don’t you want to debate policy ?
“You have to admit that a capital owner willing to take risks with a good plan is in scarcer supply then a basic worker however.”
So what? His plan is shit without someone to do the work and with no-one to sell the goods to.
“After all our government would not function without us taxpayers to support it”
I don’t really understand your point. The concept of income tax is about as old as capitalism, from memory. Maybe slightly younger? http://en.wikipedia.org/wiki/Income_tax#History
(Pitt’s income tax was introduced to help fight Napoleon, a permanent income tax wasn’t implemented until 1841)
“Does she provide more value to the country that deserves a salary that far outstrips mine”
That’s an easy one – yes (and I don’t even know you
)
Tane said: “Now they’re complaining about a wage gap with Australia that they created and trying to get political traction from it.”
So you are seriously suggesting that, although their policy is to reduce wages, they are attacking the government for the wage gap with Australia?
Wouldn’t that be a little silly?
Maybe they arent’t the evil geniuses you guys think they are.
“Maybe they arent’t the evil geniuses”
well… you’re half right there Billy
this suggests someone has the tape
http://jtc.blogs.com/just_left/2008/02/truth-matters.html#comment-103524922
although their policy is to reduce wages
That’s not their official policy – the official line is that they want to lift wages. That’s why Key’s statement that he actually wants to see them drop is so interesting. It completely undermines their rhetoric on wages, tax cuts and the ‘exodus’ to Australia.
The one thing that comes across from JKs comments is that its fairly obvious that he (and National?) has absolutely no clue as to how the free market works. Although productivity is important it is far more important that costs be returned with a reasonable profit. As costs increase then income will need to increase as well. If it doesn’t then the market will not supply the required labour to keep that business going. This isn’t really a problem as the market no longer wants that business.
If you’re talking supplying financial capital and or physical assets rather than any actual work in the company I’d say that they’re entitled to their money back plus the agreed upon interest and no more (if the business doesn’t work and then they’re entitled to the risk part of it :p ). They are not entitled to any form of control/ownership as they’re not actually working for the company.
If you’re talking about the actual administrative work of the business then they’re entitled to the market rate of a CEO (or other administrative position) for a business of that size in that industry.
If both then they’re entitled to the money back plus interest and the going market rate for the administrative position.
Sprout, word around the traps is the tape was erased months ago (as you’d expect), but the transcript was checked against it at least a dozen times for accuracy given the prominence of the quote in the article.
It’s common practice for journalists to treat a transcript as as good as a tape.
i agree a checked transcript is sufficient.
but that link seems to suggest to me that Allan Kelly at VerbatimIT still has a copy.
Pablo:
>”Does she [Helen Clark] provide more value to the country that deserves a salary that far outstrips mine’
>That’s an easy one – yes (and I don’t even know you
)
Well my hypothetical answer to you (presuming that you believe that companies should share more of their profits with the workers) is:
“We are sorry but the management of Capitalists-R-Us provide a far greater value to the company than the general workers and are thus deserving of their eye watering salaries”
Glenn:
This is exactly the same level of ‘mistake’ as the Owen Glenn saga. In that case in phase 1, we had a casual conversation written up as a labour/government policy. In phase 2, we had a lack of knowledge of technical donation (interest) written up as lying to the media.
However one of them the MSM has chosen to blow into a ‘scandal’ and the other has been ignored. I wonder what that says about the MSM…
Now to me, Key’s ‘mistake’ sounds far more likely to be a party policy as it was exactly the type of policy implemented in the 90′s. In the absence of the Nat’s actually putting out a policy on wages, I’ll believe what Key says is policy.
Draco
John Key has no idea how a free market works …….. please as your esteemed Deputy Leader (Gollum) stated quite rightly he is a rich prick therefore quite clearly has a better understanding than the members of the current government a large number of whom have never had paid employment outside the public sector
DJP
Forgive my jocular riposte to your question. I don’t know who you are or what you do. You could be Johyn Minto for all I care and the answer will be the same.
Anyway, we’ll have to agree to disagree, because I believe there should be a more equal share of the profits between owners of capital and owners of labour.
At the moment, with a labour shortage, the owners of capital have to pay more in wages to get quality staff, therefore they have to put up with lower salaries thmselves. It is basic supply and demand. In times of worker over-supply – apparently a goal of Key’s in order to bring down wages – workers have to work harder to justify a higher wage. It’s called capitalism.
We could argue about redistributing the wealth, but we won’t agree, so why bother?
Pablo,
>Anyway, we’ll have to agree to disagree, because I believe there should be a more equal share of the profits between owners of capital and owners of labour.
That is a fair enough ideal.
My point still stands however.. from the point of view of wealth re-distribution why should the prime minister of this country get.. well it must be something like $400,000 a year?
If we justify it using an argument like “Well the job justifies the salary” then is that not the thin end of the wedge for justifying any corporate salary or dividend or whatever.
djp, yes, $400k or so is a lot of money – and I’m not top of the list in the Helen fan club by any means – but it’s still much less than the amounts earned by several useless bastards I’ve worked for in my time.
What astounds me about this issue is not that it’s a non-story – Key is undoubtedly on the side of business, and the transcript doesn’t show anything I’d be surprised to hear him say. (It is a little, well, *honest* though, and I don’t think he is, really, being more of a populist bent – but that could reflect his audience at the time). The surprise is the reaction from the blog-right, which largely seems to be composed of “oh noes, he couldn’t have said that, must have been misquoted, etc”. Which shows how much the strategy must be to emulate Labour in order to get the win (and consequentially how much will later be reneged upon or be seen to be “misunderstood”).
This next election is absolutely a game of picking the lesser of two evils. In my mind the greater evil is lying so as to appear less evil!
DJP
I’m still struggling to see your point, or am I falling for a red herring?
“If we justify it using an argument like “Well the job justifies the salary’ then is that not the thin end of the wedge for justifying any corporate salary or dividend or whatever.”
Not at all. The PM is not David Beckham, whose job is to generate income for his employer. Her job is to lead the government. You are comparing apples with oranges.