Risky shake-up as PM gets down to business

Prime Minister John Key’s cabinet reshuffle went further than anticipated, but it would be wrong to call it a major shake-up.

The defenestration of two under-performing ministers – Kate Wilkinson and Phil Heatley – was not unexpected but they are not enough in themselves to depict this as any sort of major reconstruction of the government.

The administration’s key ministers – Bill English, Steven Joyce, Tony Ryall, Murray McCully – all remain in their previous roles.

All reshuffles are risky: it is why timid prime ministers (Helen Clark being the most recent example) tend to avoid them until there is little option. Reshuffles aggrieve anyone who misses out, and, of course, also anyone who is fired.

Jim Bolger fired several ministers in 1996 to make room for coalition partners and it was telling that all those demoted were firmly behind the move to unseat him the following year.

The government seems reasonably assured of avoiding any collateral damage from a disgruntled Mr Heatley or Ms Wilkinson, although there will be a few backbenchers wondering why they did not get the nod.

Don't give up hope

Mr Key’s implicit message today to those backbenchers was not to give up hope.

The other risk, of course, is the new appointments will not be up to the job.

Two more specific risks stand out with the reshuffle.

One is overloading Steven Joyce. Responsibility for sorting out the shambles that is the Novopay education payroll system has been passed over to the Economic Development Minister from Commerce Minister Craig Foss. 

The prime minister cited Mr Joyce’s commercial skills as being needed to sort out the long-running problem.

“Novopay is now a commercial issue,” Mr Key says, and the company is now “on notice” that it will need to deliver on its promise to pay teachers the right amount on time.

Novopay is “not INCIS”, Mr Key says, citing the aborted police IT project which ended up costing the country hundreds of millions of dollars in the late 1990s.

In fact, Novopay is potentially worse than INCIS – perhaps not in direct costs, but in the diversion of ministerial time and energy into the problem.

Mr Joyce’s principal ministerial role is to work out ways to speed up economic growth: it is why he was given the unique combination of portfolios comprising economic development, science, skills and tertiary education.

The Novopay problem will divert him away from this. Sorting out the tangled mess of a problem will be a huge draw on time, focus and, probably, political capital. There is not a lot a payroll system will add to economic growth, even when it does get working properly. 

Novopay is potentially political more damaging than INCIS because the project, while a fiscal shambles, did not directly affect thousands of people.

Most New Zealanders know someone who has been adversely affected by the Novopay screw up. That brings the issue into the tearooms and shopping malls of the nation in a way INCIS never was.

That is the main risk in the reshuffle.

Second risk

The second risk is to do with the appointment of Auckland Central MP Nikki Kaye to a group of mostly minor portfolios such as food safety and civil defence and youth affairs.

She also has an associate education role and Mr Key signalled this is likely to be where most of her work will be focused.

Ms Kaye has turned the formerly solid Labour Auckland Central seat into a reasonably safe National one, but she will have to be wary of the Harry Duynhoven syndrome.

The former Labour MP turned marginal New Plymouth into a solid Labour seat when he was a backbencher, and held onto it even as other provincial Labour MPs were losing their seats.

Once appointed to a ministerial role he no longer had the time to be as assiduous in his electorate and support ebbed. There is a risk of Ms Kaye suffering the same problem.

The main reason Mr Key gives for sacking Mr Heatley and Ms Wilkinson but keeping beleaguered Education Minister Hekia Parata in her job is that while Ms Parata has made mistakes, she has only been minister for a year.

The other two were ministers for four years and Mr Key says in that time they made a valuable contribution – just not valuable enough.

They have done nothing wrong, the prime minister said several times at his press conference this afternoon.

Nick Smith reinstated

As signalled, former minister Nick Smith is reinstated to the cabinet and gathers the housing and conservation jobs.

Local government, previously held by David Carter (who will be elected to the Speakership when Parliament resumes on January 29) goes not go to Dr Smith - who previously held the job -  but to Chris Tremain.

However, Mr Key says Dr Smith’s housing role will still put in him the forefront of local government issues and the prime minister signalled these, linked with reforms to the Resource Management Act being developed by Environment Minister Amy Adams, are “top of the government’s current agenda”.

Other new faces are Simon Bridges, who moves from a group of associate portfolios outside the cabinet to take over Mr Heatley’s Energy and Resources portfolio, along with Ms Wilkinson’s former role as Minister of Labour.

The new minister outside cabinet is Dunedin list MP and former senior whip Michael Woodhouse, who gets the always-tricky immigration portfolio, along with veterans affairs and an associate transport role.