Minority govt possible — Key

National Party leader John Key says it would be his "least preferred option" but he would run a minority government to avoid another election.

Watch the interview here

RAW DATA: TV3/The Nation transcript:Lisa Owen interviews National Party leader John Key

Lisa Owen: We've got the top five polling party leaders today, but first, Prime Minister John Key. I spoke to him first thing this morning and began by asking him, post-election, who would he prefer to form a coalition with — Winston Peters or Colin Craig?

John Key: The best-case scenario is we can get there on our own. Doesn't mean we won't go and talk to people and form agreements with them afterwards. But that's the easiest scenario for me. Look, in the end—

Of course, but you're a realist, and it is MMP.

Yep, and so what I would say is this. Look, you know, we believe very strongly that we've delivered as a good government over the last six years economically and across a variety of different fronts. We want to continue doing that, and we believe that's delivering for New Zealanders and their families. And if New Zealanders want to see a National government return because it can deliver for families and grow the economy and all the other different things, our main argument is give your party vote to National.

But could you work with both of them? Could you do a deal with both of them?

At the same time, do you mean? Look, anything's possible in the MMP, of course, because, you know, parties always have to find a way through. Otherwise we've got to have another election. So you saw that in 2005, where Helen Clark, you know, put together a deal. I think it was the '05 election with United and with Winston Peters.

Well, given that you're saying anything is possible, let's look at some of the interesting choices you may be faced with after the election. You've talked about Winston Peters and what you call a big shopping list. Those are your words. That's his list of bottom lines — asset buy-backs, sending migrants to the regions for five years, handbrake on foreign buyers, no race-based parties, public KiwiSaver. That's not even a definitive list. So could you meet those requirements?

Probably not the whole lot in that list, but you know, again—

So which ones could you meet, then?

Well, it would depend, but isn't this the way it works? In my view—

Actually, come on, give us an answer. Which ones could you work with, if not the whole list?

Well, obviously, the point I was gonna make is you're the biggest party and you're the biggest party by a considerable margin, there's a sort of view, I think, taken across political parties, that gives you the most leverage. So that's the point. We—

But you'll still have to do a deal, don't you? Can you give me a clear answer? Which ones could you kind of see some wiggle room?

Well, the truth is I don't know which of his long shopping list he would come back and say— you know, even if he was prepared to work with National, which is not a given. I mean, he might be prepared to, and he might not. I don't know the definitive answer to that. But on the basis that he comes back, of course you'll have to find your way through some of those things. So when you talk about migrants going to the regions, we already have that as a policy. You get more points at the moment if you are prepared to go to the regions. So of course there'll be ways of sort of tweaking policies all the way. So, in the end, I don't know is the bottom line. But what I do know is that if you wanna have strong, open, confident New Zealand, then in the end, that's only gonna get driven off National's policies.

OK, well, so if you... If that scenario eventuates, where you, say, you can't come to an arrangement with him — and the last couple of 3News research polls have you just short of a majority and let's say you are at odds with Winston Peters — would you go to the Governor General with a minority?

Well, it'd be my least-preferred option, obviously, because we're about strong and stable government, and we've provided strong and stable government, and yeah, when we say that, I think people sort of say, 'OK, well, yeah, of course. Yeah, a strong and stable government.' But, you know, in New Zealand's history, we haven't always seen that.

Yes, I know you're saying that it's your least-favoured option, but I'm asking, would you still give it a crack if that's what you faced?

Well, I would rather than go back and have another election because I don't think New Zealanders would thank us for having another election. And if you look at Stephen Harper in Canada, he proved quite successfully he could run a minority government, because in the end, all a minority government means is everything case by case. You have to find agreement with your partners. If there's a confidence-and-supply motion, basically a confidence motion in the government, the small parties have to decide whether they want to vote against you and form another election. But if they do, history tells you small parties get decimated as a result of that. But—

Isn't that, then—? Aren't you issuing, then, a challenge to the likes of Winston Peters? Isn't that a challenge? You're saying, 'I'm the biggest fish. If I have to— It's not my preferred option, but if I have to, I can without you.' That's a challenge, isn't it?

It's not so much a challenge. Firstly, the real point here is that history shows you that with all of these parties that we could work with, they have in the end formed governments. They may not get every win they want. They may not get everything they want. But, in the end, my view of the political parties we could work with is that they've shown that they can be responsible, and they will form a government.

But surely you must be planning for every contingency, and you've talked about this before on the campaign trail. That you would be... You said, 'I'd be more than happy running a minority government with confidence and supply.' So you're prepared to do it?

Yeah, look, in the end, rather than say... What I don't want to do is look down the barrel of a camera, you know, three weeks after the election and say to New Zealanders, 'We can't form a government or no one can form a government. So we're having another election'.

So how confident are you that if you get into a Mexican stand-off with Winston Peters, how confident are you can stare him down? Because that is basically a bluff. 'I'm gonna go to the Governor General. I'm gonna go with a minority, and I dare you to put the public back to the polls.'

Well, we'll have to wait and see, but other countries have run minority governments. What history shows you, though, is that in all probability, whether it's the Conservatives, whether it's New Zealand First, whether it's ACT, United or the Maori Party, in the end, those political parties have a vested interest in not returning New Zealand back to another election.

OK, then. When was the last time you spoke to Winston Peters? Have you got his number in your phone?

Yeah, I've got his number in my phone. I spoke to him... If you're talking about more than just, 'Hello, Winston,' then, yeah, I've spoken to him a couple of times when we've been away together overseas on missions that I've led.

So you're keeping—? In recent days, have you kept the lines of communication open?

Well, there's no direct lines of communication at the moment at all. But he wouldn't expect that. We wouldn't expect that, and that's also true of ACT, who we have a very close relationship with.

In terms of Colin— Let's cut to the chase regarding Colin Craig. He is hovering around 4.6%. Is a vote for the Conservatives a wasted vote?

It could be. I mean, that's the risk, isn't it? I mean, in the end, if they get under 5%, then, yes, it could be a wasted vote, although it's worth remembering if we poll, you know, a big number —late 40s — then we get at least half of that vote.

So you're hedging your bets here? It could be a waste of vote, you're saying?

Because if he gets above 5%, it's not.

No, exactly. So what are you telling centre-right voters in this last week, and please don't give me the 'party-vote National' line. What are you telling them? What is your clear message to them about Colin Craig in this week, with him hovering about 4.6%?

Yeah, so, sadly, I am gonna disappoint you. So grip the seat. But the answer is don't second-guess the polls. Go out there and give your vote to National.

One of the big issues this election has been child poverty, and you have said— just last year, you said, 'We are proud of the Government's record tackling child poverty.' Do you stand by that?

Absolutely, I do. So child poverty's a very long-term issue in NZ. I mean, we can throw around all sorts of numbers we like, but if you look back on the last nine years of the Labour government, and then in the time that I've been prime minister, there's been a great of, you know, young New Zealanders that have been living below the line, and that number varies a bit but not— hasn't very dramatically.

So you stand by—? You stand by that record, then? The Government's record at tackling child poverty? You're proud of it, yes?

Yes, because—

OK, but I just want to— No, I want to delve into this because, just last week, you told the Sydney Morning Herald, and I'm quoting you here, 'Our opponents say more children are living in child poverty than when we came into office, and that is probably right,' you say. So more kids in poverty. Are you proud of that too?

No, but I think you have to— Well, the point I was gonna make is a few things—

So you're not proud of that? You're not proud of that record?

No, I'm proud of what we've done in terms of addressing child poverty, and the reason—

But you accept that the numbers have gone up under my watch, and you're not proud of that?

Not necessarily. It's very close.

Well, you said it, Mr Key. You said it. You're quoted in the Sydney Morning Herald as saying that it's gone up under your watch.

Well, if you go and have a look at the numbers, right, they are very close to when the point we came in, and they're less than when Labour was in office in 2001 and 2004. But the point I was making there, and it's the right point, is in the worst of the recession, go and look at any of the right-wing commentary, it was to cut Working for Families. It was cut accommodation supplements. It wasn't to support people in need. And the Government — my government — took a really strong view. We're gonna support those families, and we wouldn't abandon them. So, firstly, I am proud of that—

But that's the point, isn't it?

No, no. Let me finish cos this is a fair point—

No, no. Isn't that the point, Mr Key? You raised the global financial crisis. Your government vowed more money than any other government to stop this problem growing. Yet you admit that more children are living in poverty than when you took office?

But that number's dramatically declining. So if you go and have a look at, say, children that are living—

But how can you possibly be proud of that?

Oh, just let— Let me— Hello? Hey. Hey. Lisa, don't be silly. Let me finish. Let me finish. Well, let me finish the answer, and I'll give you a complete answer. So we have stood behind those children. The second thing is, yes, the global financial crisis is obviously toughest on low-income people. That's absolutely true. But what has been happening if we've been generating jobs through all the economic policies that we have. 83,000 in the last 12 months. 150,000 coming in the next two years. The third thing that's happened is if you look at what we've been doing around young people going on the DPB equivalent is at a 40% low than it was in 2009. The number of people actually on the DPB overall is at 1988 low. 30,000 less children are living in welfare-based homes today than they were two years ago. So the point is the number is roughly—

We're running out of time.

But my point is it's a very serious issue, cos people throw around silly numbers or some sort of statement like you've made and don't accept this is a very long—

Back to the statement you made to the Sydney Morning Herald, Mr Key.

No, the statement I made is I'm proud of what I'm achieving because we've got a very long—

We've only got a little bit of time left, so I just want to ask you one more time. Glenn Greenwald, the investigative journalist, is going to be on this show shortly. What do you think he's got on New Zealand, and should you be worried?

Don't know, but Kim Dotcom might not like surveillance agencies or intelligence agencies. Fair enough. He's got his own reasons, and he can look himself in the mirror and ask himself why. But for other New Zealanders, there is a risk in New Zealand. It's much smaller than other countries, but there is a risk. And as prime minister, I have to take the responsibility to do everything I can to protect New Zealanders.

All right, thank you very much for joining us this morning. John Key, leader of the National Party, thank you.