John Key: The man who would be PM

By Carroll du Chateau, Paula Oliver, Eugene Bingham

John Key at the National Party Election Campaign Opening in October, 2008. Photo / David Rowland
John Key at the National Party Election Campaign Opening in October, 2008. Photo / David Rowland

For someone whose career had been a series of champagne glass-chinking highs, John Key's first day in Parliament was a shock. Flushed with his victory in Helensville, he was almost jumping out of his skin at the chance to get started on the next part of his life plan. The first day of his journey to be Prime Minister.

And he walked into a blood bath.

The country had been brutal in its judgment of National in 2002, its support on polling day collapsing to 20.9 per cent, the 66-year-old party's worst-ever election result.

Amid the carnage, Key had been the bright spot. Auckland's Westies had reacted well to the new face with its big smile and a man willing to roll up his sleeves and hammer together his own hoardings. As it had earlier in his life, Key's self-confidence and willingness had paid off, and he won the Helensville seat by 1705 votes.

On the Tuesday morning following the election, Key flew to Wellington for his first caucus meeting.

"I went in feeling euphoric and left feeling depressed," he recalls.

The departing MPs, some retiring, many defeated, stepped up to receive their farewell gift (a silver tray), said their farewells, and left. The survivors and the few newcomers - Key, Don Brash, Judith Collins, Brian Connell and Sandra Goudie - huddled together.

It was a sober introduction to Parliamentary life for this retired merchant banker. Last week, in part one of this project, we told his background story, the steps he took to reach Parliament. This week we examine Key's rise to the top of the party and explore what he stands for.

Key achieved his goal of getting elected, even as voters mauled his party. His longer term ambition to be Prime Minister is now within reach. But which John Key will emerge? The centrist figure who has embraced so many existing policies that his critics label "Labour-lite"; or the career banker and money-man, who linked fast economic growth with fewer holidays for workers (two weeks' annual leave, in fact), said he could not see any reason to own Air New Zealand, and accused some DPB mothers of "breeding for business".

In a little more than three months, New Zealanders will know if Key occupies the Beehive. The bigger question is will they know what to expect from him? In this, the second part of our far-reaching examination of the 46-year-old, we push past the window dressing to reveal what he believes in and how he operates.

We have read hundreds of Key's speeches, trawled through the Parliamentary records of his questions to ministers, and pored over interview transcripts dating back to the start of his political career. As well, we have interviewed dozens of MPs, including those from other parties in an attempt to glean as full a picture as possible. Those interviews are among about 100 we have now undertaken as part of this project.

For the first time, we reveal Key's role in the Bill English versus Brash leadership battle, and we uncover his plans to bring in another wealthy former investment banker to help him.

We go back to his tougher right-wing speeches six years ago and ask: how do they square that with the centrist man and messages we see and hear today?

STAR QUALITY

If Key's first day as an MP was a glimpse of some political apocalypse, the following weeks were not much better. National's paltry numbers were regularly ridiculed by its political opponents. The daily journey to the debating chamber became a ritual humiliation. And it was a sharp dose of reality for the man who had given up a career in the world of international finance.

The question of why Key would want to put himself through this crossed some minds early on: "I remember going to a meeting one night on the North Shore and I had to fly back to Wellington early the next morning, and he [Key] said, 'Come and stay at my place'," recalls then-deputy leader, Roger Sowry. "I needed a shirt for the morning, and he just grabbed the iron and started ironing. I remember saying to him, 'This is what you gave up Merrill Lynch for - so you could stand in the kitchen at midnight ironing my shirt'?"

As internal subplots swirled around them, National's five new entrant MPs formed a regular breakfast group nicknamed "Hi-Five". They regularly met at a cafe next to Parliament, the Ministry of Food, to share impressions of their tumultuous introduction into politics - their meetings these days are much smaller, attended only by Key, Collins and Goudie.

Key, meanwhile, refused to retreat into a shell. He opted to give speeches on legislation in the House when he could and though many of the bills he spoke about were obscure, his colleagues remember a clear desire to learn the dynamics and theatre of the chamber. He jousted early on with seasoned campaigners like Annette King long after question time had ended, when the chamber was light on numbers and even lighter on public profile. And although he made some comments that will eventually come back to haunt him, at the time little notice was taken. Later in this story we examine what those comments might suggest about Key.

Behind the scenes Key began carefully building a network of contacts, part of a well-planned but quietly-executed strategy to get to the top. Members of the media were among those he wanted to establish relationships with; bank economists, experts in fields like tax and others who he might have to deal with in future portfolios were also on speed dial.

As always with any fresh intake of politicians, some had to be tagged as future stars, and in 2002 it was obvious that Brash and Key were the ordained ones. Key had bigger ambitions - and although colleagues suggest he might have disguised them early with a sunny personality, the smiles didn't fool everyone. As one current senior National MP puts it: "It was pretty obvious from the start that John wasn't here to eat his lunch".

Key also raised eyebrows among some of Parliament's more experienced campaigners in other parties when they heard him openly talk of reading leadership books shortly after he became an MP.

Despite hoovering up information from a range of sources - he would relentlessly ask questions of MPs in Wellington and while on overseas trips - Key maintained a careful distance. Factions were rife and he steered through them. Ask him who he formed relationships with early on, and he is guarded. He got on quite well with Labour's David Parker, he says, and the pair would sometimes meet for dinner.

Inside his own caucus, Key's affable nature meant he was liked by many but his complete absence of self-doubt and a willingness to back himself ruffled some feathers. The way he came to Parliament - by ousting long-time National MP Brian Neeson in Helensville - just wasn't the traditional National way and that, too, meant some were wary of him. Key says there was "a range" of people he got to know but he is unwilling to go any further. It appears he didn't get especially close to anybody. He didn't work on the caucus to win support.

"You know, it's a competitive environment," he says. Indeed it was.

It would not be long before continued poor polling saw the knives come out for National's leadership combination of Bill English and Roger Sowry. Brash, a member of Key's Hi-Five breakfast group, would take up the reins in an unorthodox and polarising coup that forced Key to make a difficult decision.

BRASH V ENGLISH

Brash's open challenge to English for National's leadership in October 2003 was successful but not everyone within the caucus at the time was convinced the former Reserve Bank Governor and political novice was up to the task.

In the days before the caucus vote, English's camp made frantic efforts to muster the numbers to hold on. In the final hours they thought they had it.

One of the MPs English's team approached was Key who was told that he would be finance spokesman if English was leader. It was a big carrot, and when the meeting ended English felt Key's vote was going to be heading his way.

It has since been suggested in several publications that Key broke his word and after promising English his vote, gave it to Brash instead. Certainly this is what English's camp suspected happened as it tried to work out how something that should have been in the bag turned into a narrow victory for Brash. The final vote was said to be 14 to 12.

Key now tells for the first time his version of what he did.

"There was only one party I ever said I would support, and I supported them," he says.

So that was Brash, as everyone thinks?

"No."

"But it's a long and involved story, there's lots of reasons why."

So did you vote for English?

"Yes."

Just who betrayed Bill English will probably remain secret, but the point here is, Key is adamant it wasn't him - nor did he play one side against the other to get the best deal for himself. As it turned out he became deputy finance spokesman under Brash and did much of the legwork in the portfolio as his leader juggled dual roles for a time.

Key says he just wasn't sure a change to Brash would work.

"In hindsight it did and the party rejuvenated and did really well," he says.

Key has since told English that he voted for him. But he hasn't told Brash. And it is probable Brash's supporters thought - though not with certainty because Key never gave an undertaking - that Key's vote had helped propel their man into the leadership.

Of course the caucus vote was confidential. Nobody will ever know for sure which way Key voted, aside from Key himself, and with English now beside him as his deputy, Key's fresh statement is undoubtedly convenient.

Key simply says: "I know what I did".

English says he "takes him at his word. The point I would make is, I don't think it matters."

For Key, just over a year into his career at Parliament, the coup - regardless of outcome - had an opportunity to move forward to another stage of his overriding plan.

GROWING RESPONSIBILITY

After a short apprenticeship as deputy finance spokesman under Brash, Key was thrust into the limelight as fully-fledged finance spokesman in August 2004.

Once again he was on a fast track to the top. This was a man in a hurry.

It was Key's performance in the 2005 election campaign that confirmed in many minds within National that he was a future leader.

Where the shrunken caucus of 2002 had given Key an opportunity to take on more responsibility than normally expected of a new MP, the role of finance spokesman presented a much bigger - and far riskier - chance to shine.

The stakes were high. He was pitted against the veteran Michael Cullen and there was a lot to gain from performing well but a lot to lose too.

Cullen's ability to outsmart and tear opponents apart remains legendary, and among the senior members of National's caucus there was some concern about throwing Key to the wolves.

Brash and his closest advisers debated how much responsibility to give Key and there was some trepidation Cullen might make mincemeat of him. They spoke of a need to "protect" Key. They need not have worried - perhaps they forgot that risk, and high stakes were not new to Key. He had spent years in pressure situations and thrived on them.

Key took the high-profile tax cut package he helped design and challenged Cullen in the 2005 election campaign in a way previous National spokesmen hadn't.

He refused to be intimidated and was credited with matching Cullen in the campaign debates. Key's success may have been partly a consequence of Labour choosing to target Brash, and turning its big guns in his direction in a fierce bid to discredit the former Reserve Bank Governor.

Whatever the reason, once again Key had backed himself and taken on something that should have been beyond him.

Of course, National did not win the 2005 election. Brash came close to leading the party to power but he couldn't quite get over the line as voters appeared uncertain whether he had what it took to be Prime Minister.

Once again, in defeat Key was National's bright spot. He had borne up to public exposure and shortly after the election Key began to appear in the preferred Prime Minister ratings of opinion polls. "We knew it was a pivotal development," says one of National's senior MPs of the time who did not want to be named. "Caucus doesn't choose leaders, the public does. And the public was choosing him."

Key's star rose further post-election, as Brash became dogged by allegations of an extra-marital affair, and involvement with the Exclusive Brethren. Ongoing speculation about leaked emails undermined him.

By now Key was doing little to dampen down talk that he was the leader-in-waiting. Rumours circulated that some Key supporters - Lockwood Smith, Craig Foss and John Carter - were checking caucus numbers for a tilt at the leadership. Key denied any knowledge of such a move.

But he was annoying some senior party figures who thought he should pull his head in. Some of them - English supporters - were still smarting at what they believed was Key's betrayal of English when he cast his vote in the Brash coup.

Brash says he and Key had some "very open conversations" about the future and it was fairly clear to him who his successor would be - Key. "I really didn't feel threatened by that, I thought it was a very positive thing," Brash says. There was at least an understanding between the pair that a managed, bloodless handover would be best for the party when it eventually came time for Brash to go.

Key says there was no formalised agreement but Brash said to him after the 2005 election that he didn't think he'd stay through the year and Key was the one to take over.

"I effectively just carried on doing my job," Key says.

But it became evident to him shortly after that Brash had decided to stay longer. The gameplan in Brash's mind was that he would lead the party into Government in 2008 and become Prime Minister, with Key as his Minister of Finance.

When the time was right Key would take over as leader - possibly as Prime Minister. But with the suggestion of sleaze and talk of a looming bombshell book of emails increasingly undermining Brash, in the end he went sooner.

When he resigned National was ahead in the polls and there was only one real contender to replace him.

Key had positioned himself perfectly. He had put in the groundwork and built a momentum that was by now irresistible. There were some internal doubters who tried to put the brakes on his rise even in Brash's final days. English was known to privately bag Key and express doubts about him.

But on November 27, 2006, Key's time had come.

THE RUTHLESS STREAK

Good political leaders require an element of ruthlessness and until Key took the helm of National there was little evidence of this lurking beneath his amiable outward nature in the political sphere. Some of his oldest friends even now wonder whether that the streak is there.

Chris Wasley, a friend from squash and university days, hopes his friend has what it takes.

"I think if it gets to the point of him being Prime Minister I think he will be very successful from the point of view of his determination, his focus and his research," says Wasley.

"Politics itself is slightly different [to business] and the question with John would be does he have that sometimes ruthless streak required in politics. I don't know him well enough more recently to know. But from the point of view of appeal to a wide range of people he is perfect."

Mate Milich, a party stalwart who came to know Key in the Helensville seat, does not doubt Key's intelligence and ability. "But the political world is different to the commercial world he was in," says Milich. "I told him once before he became leader, 'Don't be in a hurry'. He learns fast, but he is Mr Nice Guy. This vindictiveness that has taken place over the last month or so has attacked him. He is learning he has got to be tough or get out."

To many of Key's caucus cohorts, he was for a long time their smiling and friendly colleague. Three swift acts by Key shortly after Brash resigned would change those views.

First, Key did a deal with chief rival English in which someone else had to lose. In this case it was Gerry Brownlee, the man who had been deputy under Brash and who clearly wanted to hold on to that job. Key cut the deal over a weekend, operating out of his Parnell home, on the phone for hours and occasionally opening his big metal gate to welcome senior party figures in for talks. English was one of them.

By Sunday night Key had managed all the egos to a point where Brownlee was convinced to step aside with English coming into a position of considerable power as deputy leader and finance spokesman. Brownlee retained an important strategic role under Key, who in doing the deal with English for an uncontested vote united the bickering factions of the party.

"The main hurdle from my point of view was that if he couldn't make a decision about the leadership, then he was going to run into a lot of trouble," English recalls. "Because there was so much bound-up in getting that combination right."

To other members of the caucus the deal was a clear message that Key meant business.

Then came the difficult task of dealing with Brash, who was making noises that he would stay on as an MP if Key gave him an attractive portfolio. For Key, a clean break was better. Having Brash sitting on his front bench was going to detract from the fresh start Key wanted, where he quickly moved to embrace New Zealand's anti-nuclear policy and soften Brash's Maori and welfare policies.

But Brash was handing over the leadership in the way that prevented a bloody battle and he could have been forgiven for thinking Key owed him something in return.

Brash waited for a job offer from Key that never came. Just a week after stepping down as leader Brash quit politics altogether. Key had ignored Brash's repeated statements that he would be willing to stay and in the end the pair met to talk and it was unceremoniously over.

In the eyes of those in the caucus who had been Brash supporters till the end, it was a harsh exit.

The third thing Key did was a no-brainer but it still required an element of toughness. The party's problem child, Rakaia MP Brian Connell, began talking of returning to caucus after Key took over. Connell had been out in the cold after clashing with Brash about an alleged affair and he told media that he was ready to come back. While the decision rested finally with caucus, Key demonstrated no appetite for bringing Connell back. To this day Connell remains a suspended outsider.

A small number of caucus members felt Key might have handled Connell differently. One current senior MP said he thought that view was partly founded on the fact that Connell entered Parliament alongside Key in the 2002 intake. "There is loyalty in those groups," he says. "But John made an example of him."

Connell did not reply to messages left for him requesting an interview for this project.

With those three moves Key suddenly cloaked himself with a a tougher aura. The other side of the nice, funny guy who always smiled and had been their equal was exposed.

Front-bencher Maurice Williamson shies away from the term ruthless when asked about Key. "I won't use that word," he says. "But strong. I actually count John as a friend, I get on well with him, we've got a good relationship," Williamson continues. "But I know that he would not let that stand in the way of dealing to you if you screwed up in the job you were to do - he is that strongly focused on outcomes."

It appears that Key adapts his personal style to whoever he is dealing with: several caucus members spoken to for this project say they have never seen him swear or raise his voice. Yet in informal dealings with others Key will casually swear. Some of his caucus have never seen him drink at work, yet he has been known to share a drink or two in Wellington with others - one night not too long ago Key, at a loose end, hit the capital's pubs with two senior political journalists where he knocked back beer and wine for a few hours.

Nobody owns up to saying they've ever seen him lose his temper, and it seems the person he is toughest on is himself. He aims to set high standards and is willing to back people with good records if they make a mistake. But make the same mistake twice and Key is intolerant.

Errant MPs who have stepped out of line since he became leader have been contacted by Key personally rather than by someone acting on his behalf. After a brief conversation the person is left in no doubt about Key's view and they move on.

Discipline within National's caucus under Key is better than it has been for years. It helps that National is riding high in the polls and that someone thinking of stepping out of line has to weigh whether it might actually cost them a Cabinet post. But the Key/English team has tightened the caucus.

SAVING THE WORLD

Discipline is one thing - but purpose is another. What's it all for? What drives Key? As he edges closer to the election and the prospect of victory, these are questions being asked more frequently.

There is a pattern throughout Key's life of setting aims and racing toward them. As a child he spouted two outlandish goals: to make a million dollars and to be Prime Minister - he knocked the first target over easily, now he looms tantalisingly close to the second.

Why does a wealthy man who appears to have it all want to get into the Beehive and take hold of the purse strings? Is it just a fantasy? Key relishing the challenge of getting there, only to get bored and frustrated when he discovers that making significant changes in government is something akin to turning around the Queen Mary?

Key clearly didn't come into politics for the money.

Though the $233,000 salary he receives as Leader of the Opposition is something most Kiwis will never receive, it is a drop in the ocean compared with the millions he received as a trader. He gives away much of his six-figure Parliamentary salary.

Key doesn't trumpet his giving and few within National know he has written cheques to help people get health treatment, or to give a youth from one of his electorate's local high schools a hand with fundraising.

Highland dancing enthusiasts are among the recipients of Key's money after he became a regular donor to help a local association.

Key is reluctant to talk about his philanthropy and offers only scant detail about most of the recipients. "It's not a perfect science," he says. "Some are specific projects which someone might approach me for, some are if people write to me in my electorate ... ," he trails off, and worries out loud that his office might be inundated with letters.

"It's a really broad range. Some are much larger sums of money for individual charities."

Despite having an eye-popping personal bank balance, Key claimed many of the taxpayer-funded allowances he was entitled to when he first arrived in Parliament as an MP. The move was snidely questioned by some of his political opponents and he has now stopped. Key says he claims some work-related expenses but doesn't take other things like a Wellington accommodation allowance for MPs with a mortgage.

It is clear that donating money is part of Key's urge to save the world, or at least some of those less fortunate around him. His poor upbringing may have motivated him to give back.

And it is not just about money - he also uses the position he now holds to give a hand to others who need it.

On a recent trip to a North Island school Key was approached by a girl after he had made a speech. She told him her life was not easy and her step-father had been put in prison for sexual molestation. Her mother didn't accept it was true and the girl said she wanted to do well but didn't know how to rise above the situation she was in. Key asked if she used email and she said she did, so he told her to email him. "And we've got to do something for that girl," he says in an urgent tone, leaning forward in his chair.

Then he checks himself and notes "you can't do it on a one-by-one basis".

Yet that is exactly what he tries to do. "If she emails me, I'll do something about it because I know she needs help and I can - I'm in a position where I can."

On another occasion Key came across a girl who he describes as being in an "at-risk group", who wanted to be an air hostess. Again, Key told her to email him and said he would try to do something for her. She didn't make contact.

"But if she had, I would have rung up [Air NZ chief executive] Rob Fyfe to see if I could have done something."

"That girl is either going to go down a path of being highly successful, in my view, or it's going to go horribly wrong. She's right at the crossroads - you can tell by looking."

John Key, saving the world one-by-one.

So where does this urge arise? It's not a religious fervour, more likely a set of values derived from his mother, Ruth.

When he was growing up, she was the sole adult in the home. Though she was an Austrian Jew, who escaped the Holocaust, she did not practise her faith while her children were at home, returning to the synagogue only once they had left.

Ruth took her son to synagogue just once or twice, although she did send him to St Aidan's Sunday school in Christchurch, from the age of around 8 to about 13.

But the Christian links are tenuous. Neither Key nor his sisters were married in the church. He doesn't attend church now, except with his children when they are required to attend chapel at their private schools.

Key says he doesn't count himself a member of any religion, though he does attend events in the Jewish community. It would be a stretch to call himself Jewish, he says, "although you would understand from your research that Mum being Jewish makes me Jewish".

He doesn't believe in life after death and takes a practical view when talking about it - "I've got no evidence of it".

So, what does he believe in?

"You get out of life what you put into it. I think you need a bit of luck but you also make a bit of luck. I think that if you're a pretty decent person you'll get back what you put in."

Key then arrives at a more sensitive part of his make-up and he looks as if he feels uncomfortable for a moment. "I have quite a strong sense of wanting to sort of, wanting to help others," he volunteers awkwardly. "I'm not claiming I'm a saint, but I have a genuine, genuine belief in trying to help others."

Because Key has been so successful in life he believes others, too, can climb the ladder if given the opportunity. He appears to accept, however, that not everyone strives for his level of success. Some are happy with their lot in life and don't want to be a sporting champion, a revered artist, or a multimillionaire businessman.

"That's not for me to judge that. But it is for me to ensure that everyone gets an opportunity," he says.

One of Key's own MPs thinks there is another, perhaps less ingratiating, element also propelling him toward the 9th floor of the Beehive. Speaking on condition of anonymity the MP says Key seems to harbour a deep instinct to be the most important guy in the room. Generally now that he is leader, he is exactly that. But if an outsider comes in who might challenge that status, Key is said to almost physically transform to take up the challenge.

This anecdote conflicts with the way Key outwardly treats visiting leaders he has met such as former Australian Prime Minister John Howard. Key once labelled Howard "a legend" and there was almost a paternal element to the political relationship.

Howard praised Key when contacted for this project. "I've met John Key on several occasions and was impressed," Howard says, choosing to highlight three particular areas he obviously saw as strengths: an understanding of economic challenges and a strong commitment to national security and economic development.

POLITICAL SOUL

Politically, Key is pragmatic and not wedded to any obvious ideology. That pragmatism has seen him adopt several Labour policies that his party has previously railed against - including the Cullen Superannuation Fund, interest-free student loans, early childhood education funding and most of KiwiSaver.

Former National Prime Minister Jenny Shipley believes Key's instincts are one of his strongest assets.

"If you were to ask the old-fashioned political advisers whether they would encourage John to have done two or three of the things he has done, they'd have said no and yet he's done them and in every instance they've come off extremely well," she says.

Asked for an example, she cites his going into Auckland's McGehan Close early last year after delivering a speech in which he highlighted the street's social problems. Old-school advisers would have told him not to.

"That's political courage and foresight, but it also shows authenticity and genuineness. I think great leaders do need to have that instinct. The ones who are arguing [he is] inexperienced frankly are yesterday's politicians. I do think the qualities you see delivered worldwide from leaders making an impact are those people who are bringing much more to the table than that they've just belonged to a political party for 25 years."

Shipley admits she does not agree with everything Key has done, though she won't get drawn into any argument about where the Key-led party sits on the left/right paradigm. "He's not going to get caught in the old language or old procedures. I've not met a person in either political party [where] I agree with everything they do, but let me be clear that I agree with more that this young man is seeking to do for New Zealand than I disagree with by many percentage points.

"He's not a philosophical devotee by any means and neither does he need to be. This is not an economy that is starting where it was in the 80s and 90s with the great rows of would we be opened or closed? John has now got to lift the spirit and capability and I genuinely believe he understands that and has the capacity to do it."

Key is open to more private sector involvement in the way some government services are delivered but his views are restrained by the political reality that opponents seize on hints of movement in that direction as an opportunity to wield the "privatisation" word the wider public so dislikes.

Earlier in Key's career he was happy to voice an opinion that it did not make much sense for the Government to own three-quarters of the electricity generation industry. In 2003, shortly after stepping up to the role of deputy finance spokesman under Brash, he said he could see "no compelling reason to own Air New Zealand".

Now, as leader, he has adopted a stance that National would not sell anything in its first-term in government.

There are many other examples of Key pulling back.

In late 2003 he criticised Labour's handling of the country's relationship with the United States and said New Zealand was "MIA" - missing in action - in Iraq.

He told the Rodney Times, that "blood is thicker than water" and with respect to Iraq New Zealand should stick with the family which has supported it in the past.

Fast forward to today, and Key articulates a foreign policy that is independent and more in touch with local public opinion. "We're not just going to follow them blindly into some conflict just because they're there," he says of New Zealand's traditional allies.

After the better part of six years outside New Zealand, working in the highly charged financial centres of London and New York, it is possible Key was out of step with the national psyche when he returned. He was personally affected by the September 11 terrorist attacks which killed his boss and two other Merrill Lynch employees he had recruited and the world he had been part of was far removed from New Zealand, where Helen Clark's decision not to join the Coalition of the Willing has been a popular one.

Key recently said his early comments about Iraq articulated National's position at the time. He has run into trouble when trying to explain that position - to support the Coalition of the Willing's right to invade Iraq, while apparently not supporting sending New Zealand troops to help. It is a confusing mix that fails the test of Key's own leadership mantra: explaining is losing.

In a more harder-right sounding moment Key in mid-2002 also revealed to the Sunday Star-Times a tough personal view on welfare. Asked about the topic as National struggled internally with its policy line, Key said there had been "enormous growth in the number of people on the DPB, and where people have been, for want of a better term, breeding for a business".

The comment is cringe-inducing for those close to him. One of the features of Key's leadership of National has been his chiselling down the hard edges of the party's policy framework, including behind the scenes on its yet-to-be released welfare position.

Another example of the looser talk he would steer clear of now came in late 2003 when Key was arguing against Labour's push for a minimum of four weeks' annual leave for workers. He urged other members in the House to go and have a look at the United States, "which has a minimum of two weeks' holiday a year, and the economic prosperity in the US is so much greater than New Zealand's".

It's a fair bet that Key's policy package going into this year's election will not include reducing annual leave to two weeks' minimum. Such talk would well and truly scare the worker voters he's hoping to secure.

Key has been a difficult target for Labour to pin down because he is acutely sensitive to public opinion and backs his instincts. His softening of his own and National's tone has brought the party back toward the centre of the political spectrum, while his refusal to release major policies until nearer the election mean Labour simply has little to aim at.

Labour labels Key "slippery'' and jumps on any difference in anything he says. Such as when, the day after taking over as leader of National, he told Radio New Zealand he firmly believed in climate change and always had. Labour rewound to mid-2005 when Key told the House the Kyoto Protocol was a hoax, and that he was somewhat suspicious of climate change.

Key tries to ignore the attacks although they seem to irk him. "They try to claim really two things: indecisive and slippery, that's their latest word," he says.

"Firstly they're factually incorrect: I've lived an entire career where the mantra is your word is your bond. The fact that I'm in tune with public opinion doesn't mean I'm slippery."

The difference between the 2003 Key and the 2008 Key, however, raises the question of which John Key is the real Key. Which Key would be Prime Minister?

Key admits to being more cautious about the phrases he now uses and suggests Helen Clark probably phrases things differently now compared to when she first became Prime Minister nearly nine years ago. In a somewhat unusual simile, he likens it to being a magician with a magic wand.

"You know, you don't quite realise how powerful it is until you get to pick the wand up and you realise very small movements have quite strong and far reaching reverberations," Key explains.
"My underlying philosophies remain the same."

So his beliefs remain the same, the difference is in the language?

"Yeah, I think that's largely correct."

This is a startling admission which suggests that the real John Key is actually the John Key who originally entered Parliament, not the version we see today. You can't fault him for his honesty, but politically it is a statement opponents keen to bring him down will likely try to use to their advantage.

MAKING THE FINAL CALL

As Key tries to steer National toward government, his team has been under pressure to perform.
One insider says Key has a pet saying of "whatever it takes" - it is his indication to a caucus member that he just wants something to be done, find a way to do it. But it's a phrase which has a double-edge.

In many ways it has been his modus operandi since as a small boy he dreamed of being Prime Minister. Caucus members who have been sent away by Key to find a policy solution to a problem know that returning without one is a no-no.

Even if the ideas they come up with are not palatable to Key, it is better to put a potential policy in front of him than nothing at all. Maurice Williamson is one of the few senior National MPs to have so far seen a major policy release in his portfolio, with a $1.5 billion pledge to build a faster broadband internet network across the country.

The costly policy took a long time to draw up and Williamson was sent overseas to wherever he needed to go for research. Outside consultants - who Key won't name - were also brought in.
Key crammed on the subject himself and after a policy outline was taken to caucus, English and Key examined it critically. Once the policy passed those tests it was taken to National's shadow cabinet for approval and Key controlled its final release.

"John kept a very strong hand on what was happening, and questioned it all the time," Williamson says.

The decision-making style Key displayed during his currency trading career has largely been transferred to his political leadership.

He still consults a range of people and then makes a final call himself, but in the case of formulating major finance-oriented policies such as KiwiSaver and a tax cut plan, Key has limited the inside knowledge of those decisions to just himself and English.

That tight grouping has led to some problems as the election nears and backbench MPs are regularly pressed to explain National's position on KiwiSaver when they don't know what it is.

Key bats off questions about any lack of inclusiveness by saying he is inclusive at a certain point in the policy-making cycle. For policy areas where there is a "high premium" on confidentiality, he deliberately keeps the information tight.

He admits it is because of a fear of leaks. "The simple reason we don't engage the wider caucus in that debate is not because we're trying to keep them in the dark per se, but we just can't afford to have an organisation that leaks," he explains. "If lots and lots of people know, information leaks not deliberately but inadvertently."
?

It's a comment which can be interpreted two ways: either Key is untrusting and paranoid; or it's simply a reflection of the party's sensitivity given the ongoing leaks which led to Nicky Hagar's expose book, The Hollow Men. Key's instinctive leadership style was evident in his handling of the high profile anti-smacking law in May of last year where he signed his party up to a compromise with Labour which let Helen Clark off the hook.

The surprise move was not greeted warmly by some of his caucus who didn't want to go back to the electorate and explain what National had done. Key had got ahead of his caucus and he now freely concedes this while defending what he did.

"I thought we did the right thing though probably if we'd taken it to a caucus vote initially it would have been deemed to be the wrong thing," he reflects.

The wash-up of the smacking deal, however, has been more positive for Key and National than expected. When the issue flared again this year as a petition arrived at Parliament it was apparent that in public minds, Clark is allied with the controversial smacking law far more than Key. The risky play had once again come off.

ADVISERS

No matter how instinctive, though, political leaders do not operate alone. Behind Key is an array of staff, advisers, a political mentor, network of contacts and outside consultants who inform him as he chases the prize of the Beehive.

Even before Key officially became National's candidate for Helensville in 2002, he identified a man in the political world who could help him reach his goal. To this day that man remains a mentor for the National leader.

Jim McLay, now executive chairman of major investment bank Macquarie New Zealand and a member of the New Zealand Council for Infrastructure Development, is a former National leader and deputy Prime Minister. He remembers the day Key wandered up to him outside the gate of King's School where the men both had young sons. The boys were a year apart, McLay's a year older than Key's.

Key introduced himself, told McLay he was thinking of seeking the nomination for Helensville and they chatted about it. Key's name was not new to McLay, who recognised it from the financial world many years earlier.

"I suppose we talked for about five minutes and from that agreed to stay in touch - and that was what we did," McLay recalls. Key made regular contact as he moved through the process of selection and eventually the general election, tapping into McLay's considerable political knowledge as he went. Their relationship became publicly obvious at National's 2007 annual conference when Key and party president Judy Kirk invited McLay to speak. In the introduction Key referred to him as a mentor.

McLay plays down his role when questioned but thinks Key is an impressive candidate for Prime Minister. "He does have a real vision of what he wants to do, he has a real feel for the picture of New Zealand that he wants," McLay said. "He's increasingly able to convey that."

Key says McLay is the person he can ring up and ask what happened in the past. It is not just that Key missed six years of New Zealand history when he lived overseas. He also lacks the kind of knowledge that veterans like Winston Peters and chief adversary Helen Clark intrinsically have after so many years in Parliament. Key admits he watched in awe during his early days in Parliament as Peters and Richard Prebble spoke about things that went on decades before.

"I lack institutional knowledge," Key says candidly. "Jim McLay is the sort of person I'll ring up and say `tell me what happened' and `what do you think?' He'll say `well, back in 1981 when we looked at it, this is what happened'."

Key has relationships with all National's living former leaders but it appears McLay is the one he speaks to most regularly - aside from current deputy-leader Bill English.

English is a vital cog in Key's leadership and the grunt behind the leader's aspirations. The political inner circle Key goes to when an important decision needs to be made includes English, Gerry Brownlee, and long-time National strategist Murray McCully - who has been welcomed by Key despite some experienced political commentators questioning how wise it is to cosy up to the veteran.

As the election nears, National's campaign boss Stephen Joyce is also very much in there. Joyce was campaign manager for Brash in 2005 and left after the loss, but was back in the media a year later when The Hollow Men book dragged him into the Exclusive Brethren scandal. Joyce had met church members and was later an important figure as questions swirled about how much Brash had known about the Brethren's plans. Key himself at some point met church members and was reported in The Hollow Men to have been sent an email by the planners of the Exclusive Brethren leaflet campaign outlining their intentions. Key maintains he didn't open that email so never saw the plans.

As sensitive as Key may be to jibes about his connection - or not - to the Brethren, he has allowed Joyce to return to National to plot this year's campaign.

Wayne Eagleson, Key's chief of staff, is another member of the group closest to the National leader. Eagleson worked in Parliament during the days of Jim Bolger and holds the fort in Wellington for Key, managing budgets and having a big hand in how the leader operates.

Beyond Eagleson is a mixture of experienced personnel and talented up-and-comers promoted on merit by the National leader.

Outside National it is harder to nail Key down on who he talks to for advice. During two lengthy interviews he was guarded when questioned, referring mainly to his senior MPs, his wife Bronagh and McLay.

What is certain is that Key established a strong network of contacts in the media and financial worlds early in his political career and regularly rings senior reporters or commentators to discuss issues. Bank economists and fund managers know Key well, although that is not entirely unusual for a politician - nor is an Opposition leader phoning the media. Clark's relationship with the media was once much closer and she was known to cultivate influential commentators.

"Key's approach is a little different though," says one high profile bank economist. "He's probably more direct - instead of having 15 people in a room he thinks he may as well ring one up individually."

The contact with bank economists feeds into Key's knowledge and expectations for the economy but he does not discuss policy ideas with them. They are more useful for Key to get the lay of the land, as is the case with the CEOs of most of New Zealand's top companies who the National leader knows. Rob Fyfe, chief executive at Air New Zealand, was at Burnside High at the same time as Key but he declined to talk when approached for an interview. Another business leader who declined to be interviewed is stock exchange head Mark Weldon, even though the two are understood to have a warm relationship, particularly as former finance sector alumni.

Key's network extends to seeking technical advice from some of the country's top accountants and tax experts, while he has also despatched his MPs to build the party's - and ultimately his own - relationships with major players in sectors National is not traditionally associated with. MP Paula Bennett is one such emissary who was handed the task of meeting and understanding the voluntary and not-for-profit sector when Key first took over as leader. Then there are Key's outside consultants.

The infamous Crosby/Textor Australian political strategists do work for Key as they have for his predecessors. But this is a touchy subject. Key refuses to confirm the name of any of his consultants, ostensibly because National thinks the contractors might suffer at the hands of Labour if they are named. It is difficult, however, to see how Crosby/Textor - who Labour has demonised already as dark not-to-be-trusted operators - could possibly suffer any further.

Crosby/Textor have been employed to manage Key's public image and political strategy, according to author Nicky Hager.

The Australians are controversial figures and Hager accused them of tactics which play on fear and prejudice to win over soft voters. Among their more recent work has been election of conservative candidate Boris Johnson to the London mayoralty where a feature of his campaign was the disciplined and tight messages that came through.

Key has had media training too, "in recent times" after being asked in an interview whether he was receiving any.

"I took it by the fact that I was asked the question that I should probably go and get some," Key says.
"I haven't had a lot, I've had a little bit."

Again, Key refuses to say who has done the work for him, but it has been reported to be Janet Wilson, through a business she directs with partner Bill Ralston. Wilson has refused to say if she's helped Key with media training.

The use of political consultants like these is not unusual in New Zealand. But secrecy around their identities has created a question of transparency for National where there otherwise wouldn't be one. In refusing to budge on his `we won't confirm or deny' stance Key has allowed the left to make capital. In interviews, he appeared belligerent and uncomfortable. Repeatedly answering questions about Crosby/Textor's influence with a twee line that he intended running a positive and upbeat campaign created an impression that he was doing nothing more than spouting a line from his Australian advisors. Surely, it would have been more pragmatic and cleaner to confirm Crosby/Textor as one of a range of consultants Key uses as have his predecessors. If they are actually only involved in polling for National - as some insiders have suggested off the record - Key appears to be giving himself more trouble than he needs to as conspiracy theories run wild.

Key says he is comfortable with the position.

"People are going to judge us the way they see us, and I personally think we're pretty straightforward,'' he says. ``I think that we're appropriately transparent and I'm comfortable with it."

Key's media training could tighten up his performance in front of the country which has been punctuated by relatively minor mistakes. For instance, he has uttered the wrong word, such as in August last year when he suggested he would lead a Labour government rather than a National one. On at least one occasion he seemed to be not totally on top of a subject: at the party's disastrous health discussion document press conference he was surprised by questions about caps on doctors' fees.

But Key is learning fast. He now exits stand-up press conferences when he is ready rather than waiting for all the questions to dry up. Helen Clark and several of her executive do this regularly.

Key is enforcing the message to his team that National must speak with one voice and so far apart from some slip-ups over the unknown KiwiSaver policy, discipline in this area has been solid.

Being out on the road meeting hundreds if not thousands of members of the public in a week also informs Key. And when he just wants to talk things over on a personal level, Key turns to wife Bronagh. The couple is close and Key knows he will get an honest appraisal from home. "I kind of treat her as the woman in the street," he says. "In so much that she's not a policy junkie for the National Party and she's not an activist... but she's a good sounding board for what I'd say is the average person's thinking."

AND IF HE MAKES IT TO THE BEEHIVE?

Throughout this project, we've learned about the making of John Key, his motivations and how he operates. But the question remains: if he was to become Prime Minister, what would we get?

With National yet to release its major policies it is difficult to fairly judge. But should this driven, ambitious man replace Helen Clark in the Beehive there are some signs of what he would do.

Key is branded as an optimist. Rather than follow the pattern of recent National leaders before him who have torn into sitting governments and come across largely negative, Key has tried to carry a positive tone where possible.

As the economy hits the skids Key has continued to talk about the opportunities that exist from New Zealand's positioning on the edge of the fast growing Asian region - although he does still criticise Labour for its handling of the economy.

One of the things National is acutely aware of is that if it goes too negative on the economy, voters will gain an expectation that Key will be able to do something about the painful cost of living rises. In reality there is little he, or Helen Clark can do about food and petrol costs for starters.

Key has used the term "ambitious for New Zealand" and it is a hint of the tone his Prime Ministership would have. Remarkably he counts two former leaders from the other side of the political spectrum - British Prime Minister Tony Blair and US President Bill Clinton - as people he admires, citing their positivity and aspiration.

Key's ambition is to have a faster-growing economy that in turn improves the services New Zealanders value. He wants to lift incomes and to create the opportunity for people to do better. It seems - but hasn't been confirmed yet - that he will be willing to raise debt to at least improve the country's infrastructure. He may be willing to take more risks than other politicians.

All that sounds good but is difficult to do. These are long-term goals and the question remains whether Key is really a long-term player.

He has been glowing in his praise of the transformation of the Irish economy, which flourished under a series of reforms that featured the use of the tax system to aid business development. Key says the Irish prescription "might be" applicable to New Zealand but he would need to examine it more closely to see which parts could be adopted. "I think the basic concept of a low level of taxation to encourage investment is something that could work, and we could look at," he says.

Underneath Key's desire to lift New Zealand's economic performance is a belief that the country is "grossly underperforming".

He likens it to some of the companies he went to work in, quickly adding that running the Government is different to running a company for obvious reasons. "But if this is as good as it gets it's beyond me," he says.

Following on from his targeting of the so-called emerging underclass last year, Key is preparing to release policies that attacks the problem across a range of fronts including education. It is youths who are on the borderline of a lawful and rewarding life or a future of crime and little hope that Key is most driven to target.

Infrastructure development will be a major feature of National's programme and it is an area where Key's knowledge of financial markets will come to the fore. He wants to develop infrastructure bonds as an investment asset class beyond what Labour has so far done.

"Let's be honest, that's the one bit of the New Zealand capital markets which is blindingly obvious by its absence," Key says.

He has previously mused about potentially redirecting some of the New Zealand Superannuation Fund to help with infrastructure development and now suggests that is still possible but not in a way where the fund's managers would be told what to do.

"I think that if we open up infrastructure as an investment asset class... then they are likely to be investors in that category because it fits exactly what they want, which is long-term assets," Key says.

And true to form Key already has a man waiting in the wings to help implement his idea should he become Prime Minister. During the Weekend Herald's inquiries into Key it was discovered that another New Zealander who succeeded in the world of investment banking in London is heading back to these shores with an eye on a job with Key.

Troy Bowker, who declined to speak when contacted for this project, rose to the role of managing director of asset and structured finance for HSBC and has been a high profile member of the expat community in London. In March this year it was announced in a newsletter for the UK branch of the New Zealand Institute of Chartered Accountants that Bowker had "accepted a position in Wellington as economic adviser to John Key".

Bowker isn't in New Zealand yet because he has stopped off on his way here to do a fundraising climb of Mount Kilimanjaro, in Tanzania, next month. When questioned about Bowker, Key says there was no formal job agreement but he had talked with him and thought Bowker would probably work in the area of infrastructure if he was taken on by a future National government.

"He is interested in public policy and working for us, and we've said to him 'look, that's possible'," Key says.

The two men first met in the financial world but got to know each other better last year when HSBC shouted Key tickets to a Rugby World Cup semi-final match in France. Key declared the tickets in the MP's Register of Pecuniary Interests and says he paid for his own accommodation and travel because he didn't think it was appropriate otherwise.

Asked if it might appear presumptuous to have Bowker lined up for a job, Key says it would be if he had actually offered him a job.

"Last time he was down here I saw him and said 'look, you know, if we win the election come and have a chat to us and we'll see how it goes'."

Key was sensitive when questioned about the potential hiring of Bowker, perhaps wary that it might be perceived as 'jobs for the boys'.

As a still relatively inexperienced political leader Key is aided by an ability to sense where danger might lurk, although it is not infallible.

With just over six years in Parliament by the time the election rolls around Key would be most inexperienced New Zealand Prime Minister in living memory should he win power. Only David Lange, who had just over seven years as an MP before becoming Prime Minister comes close to Key's low level of experience in Parliament.

But Key has never bothered with training wheels. It wouldn't be the first job he has leapt into without apparently having the necessary experience or qualification. He's a man who certainly backs himself. With the Prime Ministership though, it would be the country and people's lives he would be risking, not just a career and foreign exchange dollars, a point he is acutely aware of.

Key's leadership is likely to be guided by public opinion but he is aware he will have to, at some point, make decisions in government that will not be popular. A test for him as Prime Minister will be how he executes these moves.

Another test will be how he handles the reality that while National's public image has softened compared with the Brash leadership, in some cases that change is more tonal than actual. For instance, Key might sound softer when it comes to Maori issues than his predecessor but the fact remains that National's policy is still to abolish the Maori seats in Parliament.

The skills he displayed in his previous life as a trader may well be tested to the limit should he have to negotiate with other political parties post-election to form a government.

THE BOOK

For this man in a hurry there is much to look forward to. He doesn't have a Plan B for this election - he only talks about winning - but when pushed about what he would do after politics he indicates a quieter life beckons.

Spending time with his family is where his post-politics future is. "It'll be based around Bronagh and the kids. By then I will have spent a long time charging round the world. For Bronagh especially, there's been a lot of time in her life when I haven't been there and I think there's got to be a time in her life when I spend some time at home."

Plus, he's planning a book. He jokes about it, even now, his sister Liz Cave reveals: "Sometimes you'll say to him, `What did you think of this?', and he'll say, `You'll have to read about it in the book'.'' His other sister, Sue Lazar, agrees: "With things like the Don Brash thing, he says, `I can't tell you about that until it comes out in the book'."

Not even Prime Minister, and Key is already thinking of the next chapter.

- NZ Herald

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