Key builds case for military action against IS

John Key used an interview on TV3's The Nations to build the case for military action against IS.

The PM said New Zealanders face three main risks: “Domestic beheadings” by returning fighters, aid workers and military personnel in the war zone and tourists caught up in “Bali bombing”-type attacks.

“Doing nothing is an option, but it would be very odd for New Zealand to be in a situation where the UK and the United States and Australia and Canada and France and Germany and Belgium and lots of other like-minded countries, the Netherlands, are all involved in some form in fighting a very serious terrorist group, and for New Zealand to do absolutely nothing,” Mr Key said.

The PM also used the interview to flag tht more support could be on the way for families on benefits:

"What I'm saying to you is there's clearly a need to give those families more support,” he said.

He ruled out benefit increases and extending in-work tax credit, but signaled rent relief and money spent directly on services for the children of beneficiaries

"There might be ways we could put more money directly into those youngsters and make sure it actually reaches those youngsters and isn't just part of an overall pot which delivers a certain level of support," the PM said.

The government must reduce housing as an overall percentage of expenditure for low income families, Mr Key said. “So that's one element that we need to address, and there are things we can do there, I think.”

He added it's a matter of when, not if, National will roll out a Warrant of Fitness scheme to all state houses, saying, "Over time we have to move in that areas. I think we all understand that”.

He would not commit to how much of the money raised from selling state houses will be spent on new social housing, but said, “The key test of the policy is to increase the overall level of housing."

Watch the interview here

RAW DATA: The Nation transcript: Lisa Owen interviews Prime Minister John Key

Lisa Owen: Well, refresh and renew was the refrain as John Key's third-term Cabinet was sworn in this week. The Prime Minister moved quickly to put new faces on his front bench and is keen to stress National won't be resting on its laurels. But with all the talk of child poverty, is he willing to heed the expert advice? And what's he really got planned for state houses and the SAS? The Prime Minister joins me now. Good morning.

John Key: Morning, Lisa.

Last time you were on this show, you said that you were proud of your government's record on child poverty, on poverty. But you've now identified this as a core area that needs work in this term. So, what changed?

Yeah, so, from memory, I think you were quoting me from an Australian article. And it was really about the fact that— the thing I was proud of was that we supported the most vulnerable in the most difficult of times. So I think as I said on the show last time, when all the cries were to cut Working For Families or pension entitlements, we didn't do that— and welfare support. We maintained all those. The challenge, I think, for New Zealand is that there is a group of young New Zealanders that are living in very poor conditions. There has been for a very long period of time. And the question is what can we do to address that now, we know work is by far the fastest way of lifting those families out of poverty and into a higher level of income. So the challenge is of growing an economy, and that's the main focus of the tension. But I think that there is a group we can identify where more will have to be done both in terms of assisting those families into work and support in the critical areas like housing for them.

So you've asked people within your office to look at measures, get some news. What areas are you wanting them specifically to burrow down into?

If you sit back and say— cos there are lots of measures of poverty, and we could spend heaps of time, I think, as a country trying to define what we really mean by that. There's anything from 260,000 kids on a housing sort of, you know— When you look at it after housing costs, before housing costs, right through to a smaller group. But I think the first thing is to say what's the group that we're particularly going to target? We'll go away and look at that. The second thing is to say what drives the poverty, insomuch as they are in poverty, what drives poverty for those families. And I think there are some really big issues. They are housing, the debt often that those households have. There's childcare costs, transport costs as they move into employment. So I think you can sit with all sorts of different programmes and ideas, and you can certainly make agencies work better together, but if you look at those core issues, they're the things that are likely to make a difference to them now.

Can we look at some of those specifics, Prime Minister, cos you raise childcare there. I just want to put a few things to you. So what about—? Would be prepared to provide free after care and holiday programmes for students in low-income areas, say?

I can't genuinely tell you today, because I don't know. I can tell you the process I'm going through, which is — I've gone to the Department of Prime Minister and Cabinet, and we've chaired one meeting already with Treasury and with officials from MSD and the likes and said let's go away and look at those core issues. Let's try and identify the group that we're talking about. Let's try and identify what it would actually take to do that. How much do we have in the way of resources? And maybe what resources could we move around to fund some of this stuff? So that's the sort of process we're going through.

Doing that, then, are you open to— because the Children's Commissioner has said that benefits are woefully inadequate, are you open to raising benefit levels?

The main argument as I see it has really been about whether we're prepared to pay that in-work tax credit to people on a benefit? So those who have children, on a benefit. And the answer to that has generally been no. We haven't wanted to support that, because we haven't wanted to narrow the gap between welfare and work. And I think it's worth remembering that Working For Families was essentially established in its new form under a National government. Labour themselves came up with that policy, and it was Labour that fought very strongly not to have that in-work tax credit paid to those people. So the question is, can we do other things for those families? Because if it's just a matter of a bit more money on the benefit, the one point I'd make there is that welfare broadly costs about $8 billion a year. So if it was just as simple as a bit more cash and that was at the heart of the problem, I would strongly suggest governments would have fixed it in the past. It's a much more complex issue when it comes to those families and those particular children we're talking about.

But when you sort of say talking about countering that in-work tax credit, what would you be prepared to do, then? A universal child payment or something along those lines?

There might be a range of things. If you look at young people, what we did with the 16-, 17-, 18-year-old, typically young mums, we've now extended that to 19-year-olds that were going previously on the equivalent of the DPB, we did lots of things. We put a wraparound support person, because there's tremendous frustration for some of these families when dealing with lots of agencies. We also gave them incentive payments as they undertook different activities. So what I'm saying to you is there's clearly a need to give those families more support. I can't, as I sit here today, tell you exactly how you can do that. I can say at a principled level, I want to maintain the incentives for families to move into work. But there might be ways we could put more money directly into those youngsters and make sure it actually reaches those youngsters and isn't just part of an overall pot which delivers a certain level of support.

So targeted spending you're talking about?

Potentially.

When you say that you need to keep benefits at a level that there's still an incentive to get a job and earn a salary or a wage, poverty expert Jonathan Boston has said, and I'm quoting him here, 'people wholly dependent on the benefit are 25% worse off relative to citizens in work than they were a generation ago.' His point being that the gap is there and it's too wide already, in his view.

Yeah, so, if you take a look at the macro level, what's been happening is benefits have been going up, and we put into law that they should be adjusted by the inflation rate, but fundamentally, you're right, the average wage is rising. But what's also absolutely true if you look at what's been happening over a generation, is that housing as a percentage of the costs for those families and actually for New Zealanders in general is rising. It used to be about a third of disposable income. Now it's about half for a lot of people. And that's just as true for a young couple that might go and buy their first home. So, in a way, if you think about the comments that Bill English made this week, you can debate the merits or whatever, but the real point he was making is that if we want to increase the level of disposable income for those families, we have to reduce the percentage of housing as an overall part of their expenditure. So that's one element that we need to address, and there are things we can do there, I think.

Given that housing is one of your top priorities— Let's have a talk about that too. You trialled a warrant of fitness across about 500 state houses. So, when are you going to roll that out across all your housing stock, because Nick Smith seemed to be indicating that would happen this year? Paula Benefit— Bennett said it was a great idea. So are you going to roll it out this year?

I can't give you the answer to that today because Nick hasn't come back to me to say he'll definitely do that or he won't, and, actually, the demarcation may change, or the responsibility may change, because Bill [English] is now responsible for Housing New Zealand.

But is it a serious option that you think is a good idea to roll out?

Yes, and if you think about what we've been doing in relation to those Housing New Zealand homes — we've been insulating every one of those that we practically can. There are some that we can't, and you raise absolutely the right point, which is under the previous government, their focus of attention was lifting the number of state houses. Under the last six years of our government, the focus has been improving the quality of that stock. And so we do want to continue to improve that quality, but I think also our big focus of attention would be to say, clearly there's a need for more housing, but who's the right provider of those houses? And if you come to warrant of fitnesses, one of the reasons we were a little concerned about rolling that out on a mandatory basis for all private sector rentals is because there's plenty of less well-off people who actually live in a privately rented home. We are concerned that will really drive rents up, so there's the counter-productive argument there.

But it is an incredibly basic warrant of fitness list. I mean, anyone watching this show wouldn't want to live anywhere that didn't meet those requirements. It's stuff like having two power points in a wall, having running water in your bathroom. Do we not have better expectations for renters in this country?

We should do. But, I mean, without being silly about these things, you could probably go to a few flats in Castle St in Dunedin that 14 students are occupying at the moment, way above what they really should have in there, and they wouldn't meet anywhere near the warrant of fitness conditions. So my only simple point to you is that, yes, I think there's a level of expectation. Yes, I think in a voluntary basis we should embed that, and over time we have to move in that area. I think we all understand that. I'm just simply saying if you put a lot of costs on them, a bit like the Treasury advice on capitals gains tax, when it comes to renting, the impost that ultimately falls to the renter.

Well, National is preparing to sell off up to five billion dollars' worth of state housing. Whereabouts in your policy did you spell that out to voters before the election? Because when you sold off assets before, the power companies, you may it very clear you sought a mandate to do that. I've looked at your policy—

Well, I've never seen a number for five billion, so I don't know where you—

Up to — up to five billion.

Well, I've never seen that number.

Bill English has said it could be up to a third of your stock. So that would be a value of around five billion.

Yeah. So let's wait and see before we all get a little bit excited about the thing. But the fundamental point, though, that we are making, is that we do want the social housing stock to grow. So the point there is — OK, how do you make that happen? So the first thing we did last year—

But, excuse me, Prime Minister, my question was — where in your policy did you outline specifically that you intended to sell off state housing stock in quite high levels? Where did you indicate that prior to the election?

Well, it was quite clear, I think, in our policy that we want to move to greater social housing. So in the end, my point is — I think you're taking a particular comment that he's made, and in the end I can't tell you if he's absolutely right or wrong because we haven't had those discussions yet, but what I can say is where Bill is wanting to move is he's wanting to increase the overall level of houses available. But what he's wanting to do is say that the social housing  sector would be a much bigger provider. Now, the question we haven't answered ourselves yet is — how do you do that? One way we've done it—

But how much of the sell-off of those houses will actually go back into creating more homes? How much of that money will you guarantee will be spent on that?

Well, it depends, I think, a lot on how you structure— and we haven't done that work, but as an example, you could, obviously, transfer some Housing New Zealand homes to social housing providers at a certain rate. Now, that could be at a discounted rate—

But can you guarantee that most of that money will be spent on creating more houses, if indeed you're selling some off?

Well, that will be the key test of the policy, is to increase the overall level of housing. We are less concerned about whether a social housing provider owns that home, like Presbyterian Support or Salvation Army or others, or whether Housing New Zealand owns it. In fact, we'd probably argue with you that while there's a place for Housing New Zealand, over successive governments, it's hardly been a ringing success. I think there's more that we can do there. Now, the challenge, as I said, is we gave income-related rents as a new policy to social housing providers. That provides the cash flow for them. So the challenge here now is — how do they build up that capital stock? What we do know is in places like Australia, they've been very successful in growing the overall level of stock available.

OK. I want to move on in the time we've got left on to global issues. You have said that we'd be surprised at the number of New Zealanders who would want to leave this country and fight in foreign wars. How many people are you talking about?

Well, a bigger number than I think the average New Zealander would think.

Yeah, but give us a ballpark.

I can't and won't today, but I might when I give the speech that I want to outline. That's a process I'm working through with my, kind of, security officials.

Experts have kind of said to us about a dozen, maybe. Is it more than that?

Um, I just don't want to give you a number today, but what I genuinely would say to New Zealanders is that the threat—

But don't New Zealanders—? If you are planning legislation, don't New Zealanders need to have an idea? So can you tell us?

My sense is — yes, actually, they do need to have an idea, and there will always be those that will challenge the voracity of those statements.

So more than a dozen?

Well, I'm not going to go into that number today, but what I'm saying to you is it's highly probable, if I'm allowed to, I will spell out, within a range, what those numbers look like. There are different categories in that group of foreign fighters. So they're people who are either in a country overseas fighting. There are people who are looking to leave. And there are people who are looking to be part of the overall engagement, so they might fund those activities. I think if you put all those numbers together, New Zealanders would be quite surprised.

So why would we involve ourselves? You're considering, at the moment, whether the SAS will be involved. Why would we involve ourselves in this war? Why would we make it our war?

So again we're sort of jumping a bit to conclusions there in terms of the SAS. What I would say—

If we get involved at all, why would we?

Why would we get involved? Yeah.

Why would we make it our war?

So there are three things happening at the moment in terms of threats, as I see it. So number one is a domestic threat, and they are foreign fighters either returning to New Zealand or people that might take actions — sort of, domestic beheading as we sort of potentially saw in Australia. Number two is those who are in-country — so they're young New Zealander— Well, they might not be young, necessarily. They're aid workers or they're even our military people that are in the Middle Eastern countries that are associated with us. Again, both those groups are quite small. But of the number of foreign fighters currently in Iraq and Syria, we think that total number is about 3000. And many of those come from Muslim-based countries in our region. So it's regional activity. If you take a step back to, say, the Bali bombings, that was a terrorist group, domestic in nature. If you look at what is possible, it is that you could see foreign fighters going back to those countries, and they are countries where New Zealanders are likely to holiday or to travel, and so they present a threat. So I guess all I'm sort of saying to New Zealanders is we need to consider what we might do. And of course doing nothing is an option, but it would be very odd for New Zealand to be in a situation where the UK and the United States and Australia and Canada and France and Germany and Belgium and lots of other like-minded countries, the Netherlands, are all involved in some form in fighting a very serious terrorist group, and for New Zealand to do absolutely nothing. The question is what we do, I think, rather than whether we do something.

OK. So very quickly, Prime Minister, if we do involve ourselves, whose side would we be on?

Well, we'd be on the side of standing up against ISIL because they are a terrorist group that in the last two years have grown in frightening proportions. They're extremely well-funded. They have control of about five, we think, Iraqi oil wells, so they have lots of cash. They've been using kidnappings as a form of financing— and ransoms, as a form of financing their activities.

So it's about who we're against, not who we're for?

Well, the one differentiation I'd make is — in the Iraq war that took place in the early 2000s, that was a view taken by the United States and the coalition of the willing against the then-Saddam Hussein regime. This is a situation where the Iraqi government is asking international support against this terrorist group. And one quite interesting thing about ISIL is that they've managed to make themselves the enemy of people who normally don't like each other very much. You've got Iran and Iraq, and Saudi Arabia and Jordan, you know, Turkey, Egypt. You've got lots of countries in the Middle East, — Israel — people that don't necessarily always…

Who are involving themselves.

…have warm relation with each other, all of a sudden all oppose. And all I can tell you the build-up in the activities of ISIL in the last two years is happening at a frightening proportion.

All right. Thank you very much for joining me this morning. That's Prime Minister John Key