Fran O'Sullivan: Malcolm Turnbull's close shave holds lessons for John Key

By Fran OSullivan

Not much of a swing needed to tip PM out.
John Key will discuss an opportunity with Malcom Turnbull for New Zealand and Australia to make a joint response to Britain leaving the European Union. Photo / Getty Images
John Key will discuss an opportunity with Malcom Turnbull for New Zealand and Australia to make a joint response to Britain leaving the European Union. Photo / Getty Images

Malcolm Turnbull's narrow win in Australia ought to put fellow political brahmin John Key on notice.

The election outcome proved the growing unreliability of political polling in the era of the smartphone.

It took a relatively small swing to Australian Labor to bring the Coalition to the point where Turnbull was even taking advice from Key on how to run a minority Government. It would not take much of a swing in New Zealand to tip Key out.

Arguably the Brexit vote created sufficient turmoil for Turnbull to be able to persuade the Australian electorate not to change horses (yet again) and ensure some level of stability after the concerning period of revolving prime ministerships.

He had spent 10 anxious days waiting for the Australian Electoral Commission to finalise its vote count and reveal whether he would be able to quickly form a Government or have to do some of that minor party ingratiating and deal-making that Key is so adept at to get to a parliamentary majority in the lower house.

He's just scraped back into The Lodge. He is now an elected Prime Minister who must quickly bed in his mandate or he will be toast.

Enter Key, stage right. Our Prime Minister will next week add Turnbull to his dance card after his farewell visit to David Cameron, who bows out as Conservative Prime Minister this week after the Brexit defeat.

Turnbull is Key's closest political mate. While Key cosies up to Barack Obama - who has also deputed Vice-President Joe Biden to visit NZ next week to talk through pressing regional issues - the Australian Prime Minister is a different fish.

They have mutual respect as successful former investment bankers. But Key has had more success hugging the political centre.

New Zealand Prime Minister john Key and American President Barack Obama. Photo / Supplied
New Zealand Prime Minister john Key and American President Barack Obama. Photo / Supplied

Key will next week discuss an opportunity with Turnbull for New Zealand and Australia to make a joint response to Britain leaving the European Union. He can also relay to Turnbull the outcome of the talks Trade Minister Todd McClay had in Shanghai last weekend at the G20 trade ministers' meeting. Australia had no ministerial representation at the G20.

McClay did speak with senior figures from the EU and Britain at the Shanghai meeting.

He makes the point that New Zealand already sells about $8.6 billion worth of goods and services to the EU. And he contends there is a lot of common ground in many areas that we want to trade.

The problem is agriculture, which will prove a tough negotiating point.

Australia was leaderless and unable to send Cabinet representation to Britain and the European Union to take soundings and position the nation with the divergent interests. Key has done both.

He has also met with senior figures in Britain such as the governor of the Bank of England and Lloyds Banking group chair Lord Norman Blackwell.

Finding those areas of common interest between New Zealand and Australia will be more difficult.

It is possible Turnbull and Key could proffer some version of the Australia-New Zealand agreement that was signed jointly with the Asean group of 10 Southeast Asian nations.

A so-called "CER" deal is not a go. The Closer Economic Relations agreement is not a customs union. There is no common border nor are there common tariffs between Australia and New Zealand.

The fundamental task is to ensure that the principles underlying any new deal are sound.

It ought to be easier for both nations to score a deal with Britain. But the fact is the UK will also be focused on ensuring it gets the best deal it can from the EU.

New Zealand's Prime Minster John Key meets Britain's Prime Minister David Cameron. Photo / Claire Trevett
New Zealand's Prime Minster John Key meets Britain's Prime Minister David Cameron. Photo / Claire Trevett

A more pressing regional issue is the South China Sea.

New Zealand's official position is it does not engage in "taking sides". Australia tends to line up with the United States, which wants China to retreat.

The Hague Tribunal has come out in favour of the Philippines.

But President Xi Jinping has also come out strongly, saying China's "territorial sovereignty and marine rights" will not be affected by the ruling. This ruling declares large areas of the sea to be neutral international waters or the exclusive economic zones of other countries.

China is New Zealand's biggest trading partner (it is also Australia's).

This is a difficult matter for Key because New Zealand's position would be guided by The Hague judgment. Saying nothing is no longer a tenable option.

Where the Turnbull-Key discussion could assist the Australian Prime Minister is on selling policies.

The Key Government has successfully focused on getting back into Budget surplus and protecting NZ's credit rating.

A succession of Australian Prime Ministers have not managed that feat.

Turnbull must find his mojo and proceed with broad tax reform - not simply the company tax cuts and relief for middle-income earners. His Government has to write a new story for the times.

He rarked up the electorate with the superannuation changes.

But that will not solve the fundamental imbalances in Australia's two-tier economy.

And nor will all Key's advice solve the growing imbalances in the NZ economy.

- NZ Herald

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