A revolving door

Jonathan Coleman is the latest in what is probably a reasonably long line in National MPs transferring to the private sector.


I understand the issue that he was voted in for a three-year term, but I also understand that his party did not make it into government. And for some MPs, barking (or laughing) at the opposition does not make for a satisfactory career.

Newsroom has an interesting article on whether or not this is a good thing.


In announcing his resignation from Parliament, former Minister of Health, Jonathan Coleman, was brazenly unapologetic about shifting straight from his health portfolio into working for the private health group, Acurity. He explained he had received a lucrative approach from a private provider in the industry sector he has been overseeing as a Cabinet Minister, and more recently as an opposition spokesperson.

The shameless switch barely warranted a mention in the reports about his retirement, and there was little questioning from the media about the ethics of such a shift or whether Coleman faced any conflicts of interests in going almost straight from Health Minister to running a private health company.

End of quote:

Shameless? Why is that? And why does he have to apologise? Has he done something wrong? You are not trying to tell me that he is the first MP to resign after his government ended up in opposition.


Perhaps we have become used to the idea of politicians moving into business after retiring from politics. Over the last year, four major figures from the last government have left politics with the stated intention to shift into high-powered business roles. John Key stepped down as PM, and in April last year left Parliament, and is now a director for Air New Zealand and ANZ bank, both here in New Zealand and in Australia. Bill English is currently searching for business opportunities, after leaving earlier in the month, and Steven Joyce leaves this week, also keen to go back into business.

End of quote

Yep. So what?


We never used to have this phenomenon of senior politicians going into business – at least not on the scale we are seeing today. Partly this is because of the whole way political careers are changing. Traditionally, politicians came into power after having careers in other industries. Political activity was more of a post-employment role, rather than a stepping stone to a more highly-paid business job. In fact, many former PMs died in office, or went into retirement.

Now politicians enter Parliament and make it to the top jobs at a younger age. So, whereas in the past, former PMs tended to be much older and would retire from public life entirely once departing politics, our younger, former PMs and ministers expect to move on to other endeavours. We’ve seen Mike Moore and Helen Clark on the political world stage, Jim Bolger heading various government entities, Jenny Shipley take up directorships, and now Key and English also move into the commercial world.

End of quote

How far are we going back here? because, as the paragraph above demonstrates, this is not a new phenomenon. Jim Bolger was gone 20 years ago, and Jenny Shipley not far behind. Are we back to the dark ages here?


Everywhere this trend has emerged, questions normally follow about conflicts of interest. Possibilities for this to occur abound. First, ex-politicians might make use of their influence and contacts to help their businesses. For example, will Jonathan Coleman, in his new job, ever simply call up his former officials in the Ministry of Health on behalf of his new employer?

End of quote

Well, wouldn’t that be classed as …. er…. corruption?


Former Reserve Bank economist Michael Reddell has written a must-read blog post about Retired politicians in demand. He examines the trend for recent National ministers to take up board directorships, and says when there is a trend for regulators to become the regulated, there is a danger politicians might start to anticipate future employment when doing the regulating.

Here’s his main point: “Whatever the sector, a Cabinet minister who legislates/regulates in ways which are welcomed by the regulated industry are much more likely to find the post-politics doors open than one who regulates in a way the industry finds costly or inconvenient.

End of quote

In other words, former National MPs often have business experience and are sought after in the private sector. I don’t think the construction industry will be chasing after Phil Twyford when he leaves Parliament: do you?


Reddell adds: “Public service shouldn’t be stepping stone to wealth, via regulated industries, either. If the stepping stone is there, the risks to good government are real. It would concern me if Bill English quickly shows up on a bank board, or even the board of a commercial entity much affected by specific government regulation/legislation.”

End of quote

But Bill English lost the election. So just how much traction do you think he is going to get with Grant Robertson?

I could understand the concern if Jonathan Coleman had resigned while in government. But he didn’t. Instead of achieving absolutely nothing for his constituents in opposition, he decided to move on. Sensible move.

“Public service shouldn’t be a stepping stone to wealth.’ Sounds like envy to me.


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Accountant. Boring. Loves tax. Needs to get out more. Loves the environment, but hates the Greens. Has been called a dinosaur. Wears it with pride.

To read my previous articles click on my name in blue.