Audrey Young is the New Zealand Herald’s political editor.

Audrey Young: McCully's value to Key set to increase after US elections

‘Whatever-works-fast’ McCully proves good fit for ‘whatever-works’ Key.
Illustration / Guy Body
Illustration / Guy Body

There are many reasons why Foreign Minister Murray McCully is not losing his job over the Auditor-General's report into the Saudi agrihub deal.

Quite apart from the report itself, McCully is too valuable to Prime Minister John Key.

That will never be more relevant than in the aftermath of next week's US presidential election, the most important since World War II.

Since gaining power in 2008, the Key-McCully partnership abroad has been as successful as the Key-English partnership at home.

Key and McCully forged the foundations of their relationship in Opposition.

Three days after Key became National Party leader in 2006, he announced a huge policy shift that he and McCully had planned together - that National would unequivocally support New Zealand's anti-nuclear status.

They had rightly identified it as a major vulnerability for National in terms of voter-trust.

It underpinned the undertaking that Helen Clark extracted from George W Bush in 2007 that the United States would no longer try to get New Zealand to change its anti-nuclear laws.

And building on those gains with the US is the area in which Key and McCully's partnership has been exemplified.

Both have built up strong professional and personal relationships in the current Administration.

While Key is looking at a Cabinet reshuffle to start the New Year, the chances of him putting in a new Foreign Minister just at the time the new President is setting up his or her Administration are close to zero.

Right through to the New Zealand election in 2017, it is more likely Key will want the guy who has been there for nine years rather than for five minutes.

The New Zealand Government would quietly celebrate a Clinton victory. It hasn't said so, but it is blindingly obvious that Clinton's world view is more aligned to New Zealand's than Trump's.

She would not only continue Obama's "pivot" to Asia in the military and economic sense as a counter to China's rise but could put greater emphasis on it.

The unpredictability of US allies in the Philippines and Thailand would necessarily add weight to its other security relationships, including with Australia and by association with New Zealand.

Clinton's familiarity with the New Zealand Government could only help.

A Trump victory is looking distinctly possible.

It is a safe bet that one of the last things a Trump Administration would be worrying about is its renewed relationship with New Zealand.

President Trump would create short-term turmoil in the markets.

But after that calmed, there would be a longer period of uncertainty about how protectionist his trade policy would be, about whether the Congress would sign up to his policies, about the role of the US as a global and regional leader, about its commitment to its post-war security alliances in the Asia Pacific, its attitude to nuclear weapons and about its attitude to China and Russia.

The only certainty with a Trump victory is uncertainty.

And that is exactly why Key would want his most experienced hands on the case, including McCully.

It is more likely Key will want the guy [Murray McCully] who has been there for nine years rather than for five minutes.

Fairly soon after the election, they are expected to be hosting another high-profile US visitor, US Secretary of State John Kerry, who worked closely with New Zealand to secure the world's largest marine reserve in the Antarctic's Ross Sea.

The most compelling reason for not sacking McCully is the report itself.

There is nothing in it that warranted a sacking. It uncovered nothing new in terms of a smoking gun.

If there were grounds enough to sack him this week, there were grounds enough to sack him in 2013, when Cabinet signed off the deal.

In summary: It was a surprising but lawful deal to settle a private commercial grievance which was impeding New Zealand's relations with the Saudi Arabia Government and which was underpinned by a Cabinet paper with big shortcomings.

Granted it was not the sort of deal that Helen Clark and Phil Goff would ever have entered into, it is fair to say.

They would have found other means to try to appease the Saudis - perhaps some education scholarships to study at Massey University.

The deal was a blend of the characteristics of both Key the dealmaker who follows the "whatever works" ethos, and McCully, the corner-cutter who follows the "whatever works fast" ethos.

The Cabinet approved the investment in the agrihub knowing it was an odd way of settling a grievance. That was obvious from the Cabinet paper.

There was no "guise" about it, contrary to what the report said.
But it was unusual enough for the Cabinet to cover its butt in 2013 and seek an early opinion of the Auditor-General.

She gave her view at the time and it hasn't changed, although the tone of her response back then suggests she did not want to be inveigled into a process over which she had oversight.

In a letter to Foreign Affairs, in 2013, released under the Official Information Act, she said it was lawful in terms of spending within the appropriation for Government money but that the business case for it had been woeful.

She didn't use that precise word. She said it had been "inadequate." Like this week's report, the Auditor General did not use strong language.

Auditor-generals have a powerful bully-pulpit. It was exercised modestly in this report.

The paperwork for the deal was thin. That is because it was a highly political deal. Padding it out with paperwork to suit the case would have been the "guise."

That said, even if the Auditor-General had decided to throw the book at McCully, and be horrified and appalled by the deal, he almost certainly would have survived.

The threshold for a McCully sacking is higher than for ordinary ministers because despite his failings, he is good at his job. And that helps Key.

- NZ Herald

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Audrey Young is the New Zealand Herald’s political editor.

Audrey Young is the New Zealand Herald’s political editor, a job she has held since 2003. She is responsible for the Herald’s Press Gallery team. She first joined the New Zealand Herald in 1988 as a sub-editor after the closure of its tabloid rival, the Auckland Sun. She switched to reporting in 1991 as social welfare and housing reporter. She joined the Herald’s Press Gallery office in 1994. She has previously worked as a journalism tutor at Manukau Technical Institute, as member of the Newspapers in Education unit at Wellington Newspapers and as a teacher in Wellington. She was a union nominee on the Press Council for six years.

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