Even though New Zealand occupies what he terms “a good spot”, former National Party leader Don Brash remains unsure what form the country will take after the global financial crisis.
In an interview conducted with debate, the former Reserve Bank Governor warned that despite entering its recession with low unemployment, small government debt and a strong banking system, the New Zealand economy was still vulnerable to bouts of misfortune.
“While I said that the government debt position was very low when this crisis began, a rapid increase in government spending caused by the last government and the sharp downturn in tax revenue caused by the downturn means [national] debt is going to get bigger very quickly,” Brash said.
“House prices have dropped by 8–10 percent over the last 12 months but they roughly doubled between 2002–07, so even with a 10 percent fall they’re a long way above what they were in 2002. Because house prices had been going up so strongly, we’ve all felt we don’t need to save as we’re getting wealthier because our house prices are going up, so we’ve been spending more than our income for quite a considerable period, and borrowing from overseas to fill the gap.”
Speaking candidly about his time in politics, Brash looked fondly back upon the time he spent shepherding the National Party, almost earning victory in the 2005 general election. While the dogged slurs and taunts of parliamentary life cast a pall over much of his tenure, Brash feels fortunate to have been afforded the opportunity to bring about change.
“I didn’t enjoy the petty name-calling. Political opponents often make mountains out of molehills and I was on the receiving end of that from time to time,” he said.
“Having said that, politics is where you can most directly change policies and laws. I went into it because I was convinced that some changes needed to be made. In my four-and-a-half years in parliament, with more than three years as leader of the opposition, I didn’t get to change a single law, so in that sense, I’m disappointed. On the other hand, most people would never get a chance to [do what I did], so I was very lucky.”
While resuscitating the National Party ranks top of his achievements in politics, Brash’s feels he also left his prints on matters of a cultural nature too.
“I think my second proudest achievement was reminding New Zealanders that thanks to the Treaty of Waitangi, we are one people. We are all citizens of New Zealand, irrespective of racial background and I think that it needed to be said,” Brash said.
“There was a growing perception that, in fact, the Treaty of Waitangi created some kind of legal partnership between two equal partners, and I don’t believe that’s true. “
Unsurprisingly, Brash felt the reign of former adversary Helen Clark had been “disappointing.”
“I think Helen Clark is, in many respects, a tragic figure,” he said.
“When she became Prime Minister, she said she wanted to return New Zealand to the top half of the developed world within 10 years. Despite having some of the best international economic environment in a generation, she oversaw a gradual move backwards in New Zealand’s relative position. So in the big scheme of things, I think she will be judged by historians as a failure.”
And of his successor, Prime Minister John Key, Brash had nothing but adulation to impart.
“I think he’s an excellent man and there was no question in my mind that he was the right person to succeed me. I stepped down of my own free will and I had discussed with John my view that when I did step down, he would be my successor, and feel very comfortable with that decision still.”
The former Reserve Bank Governor can be found occupying a spot as an Adjunct Professor of Banking at the Auckland University of Technology’s Business School.