How Jim Bolger became the master of the 'smoke-filled room'

Analysis: Jim Bolger was the first Prime Minister I ever interviewed. It was 1992 or early '93 at Massey University. He was in the second half of his first term and I was a 21- or 22-year-old student journalist.

Bolger had already made most of the historic political choices that would define his leadership of the country - letting Finance Minister Ruth Richardson execute "the mother of all budgets", going back on his promise to cut the hated superannuation surtax, and passing the Employment Contracts Act.

He'd promised an end to the rapid, painful reform of Rogernomics and return to a more settled politics that suited his political temperament. He had campaigned in 1990 with the promise of a "Decent Society", a slogan that fitted him to a T but didn't exactly fire up his party.

Instead, his first two years in office were a tsunami of economic reform, a continuation down the neoliberal path laid by Roger Douglas and David Lange. After winning the 1990 election in a landslide, Bolger had become a deeply unpopular prime minister. So I did the maths and asked him a confronting question.

In essence, I said 'You're unpopular, but your party is still polling well and so's Winston Peters. If you want National to win the next election, why don't you hand over the leadership to Peters?"

I remember Bolger's reply almost word-for-word after all these years. He stared hard at me and said, "You are a very naive young man who clearly knows very little about politics".

Bolger wasn't afraid of expressing his opinion and even when he was facing the stormiest of political seas, he never lacked self-confidence.

Bolger was New Zealand's 35th prime minister. The 11th longest-serving, from 1990 to 1997.

A farmer prime minister, in the best New Zealand traditions, following in the footsteps of Coates, Massey, Forbes, and Holyoake. MP for the King Country (and King Country-Taranaki) for a quarter of a century, entering parliament at the dawn of the Robert Muldoon era, in 1975. He was a cabinet minister just two years later and after National's 1978 win became Minister of Labour and Minister of Immigration.

These were the days when big strikes were settled in the minister's office. Bolger became a master of the 'smoke-filled room' although his office negotiations were more famously concluded over a glass of whiskey.

When I produced The 9th Floor in 2017 we called his episode 'The Negotiator' for good reason. In part because of his real politik acumen but also because in his second term he would begin some of the most consequential negotiations in modern New Zealand history. More on that later.

On a precipice

When Bolger came to office, he knew the economy and the majority government-owned bank BNZ were in bad shape. He didn't, however, know both were on a precipice. As he told Guyon Espiner and me in his interview for The 9th Floor, our series of interviews with former prime ministers, it's hard for anyone to understand what it's like "being told the day you become Prime Minister, that the country's broke".

It was the epitome of Harold Macmillan's quote that the great challenge for a politician is "events dear boy, events". After a night of jubilation, he was called by Treasury officials on Sunday morning and summoned to a meeting.

They told him the BNZ would need a $380 million bailout, the government would need to borrow double that. Bolger's fiscal plans turned to ashes before his eyes.

Leadership, to Bolger, was about being able "to see a little further" than most and to "see a different world".

And being able to bring people along on the journey. But his first term was about the here and now. So he decided to follow the advice of his Finance Minister, cutting benefits, removing the universal family benefit altogether, keeping the super surtax. It was a reluctant choice but, in his mind, the right one. The only one.

A conservative by instinct, Bolger knew the public hates change and the best path is to get from the old stability to the new stability as quickly as possible. So he also introduced the Employment Contracts Act at speed, ending compulsory unionism and national award agreements.

Neoliberal politics slated

They were decisions he never resiled from, but he certainly had second thoughts. In The 9th Floor interview, Guyon and I could hardly believe our ears when he embarked on a deconstruction of neoliberal politics and its impact on the poor.

"Do I believe the gap between those who have and those who don't at the moment is too big? Yes. This is why we're getting many revolutions around the world. The world has sat silent as they have pursued neoliberal economic policies … and in fact they've failed. They have failed to produce economic growth and what growth there has been has gone to the top."

Guyon asked the question every New Zealander alive in 1990 was asking: "But you embarked on that model, did you not?"

History has come to view his hard economic choices more kindly, but it came at immense political cost for Bolger. With interest rates around 20 percent and unemployment around 10 percent, times were tough and voters turned on him.

The reason I asked him the question I did that day at Massey was because his preferred Prime Minister numbers fell as low as 8-9 percent. By the time we did The 9th Floor he could joke about it. "They were the lowest in polling history... No-one will beat me."

Perhaps Bolger's greatest good fortune at the time was that as unpopular as he was, Labour was even more so. It was a divided party struggling with its identity in the wake of the Lange-Douglas years.

Mike Moore launched a fierce campaign in 1993, but Bolger clung on after a hung parliament on election night, thanks to a few hundred votes in Waitaki. Bolger quickly signalled the tough medicine was done, sacking Richardson as Finance Minister and trying to steady the ship of state. He got the nickname 'the great helmsman'.

Bolger always took himself and his work seriously. When we made The 9th Floor he was less than impressed that Moore, Prime Minister for just 59 days, would get the same treatment as him. But he was also incredibly realistic when it came to politics. He knew it was the art of the possible. He knew to pick his battles.

Hatred of racism

The battle he chose that became perhaps his greatest legacy was his commitment to honouring the Treaty of Waitangi.

He dragged his party, cabinet, and voters to a new era of race relations that he was uniquely placed to introduce. As a farmer just out of Te Kuiti, he got to know a lot of Māori leaders in the King Country. As the son of Irish immigrants and a committed Republican who accepted the Order of New Zealand but never a knighthood, he empathised. He insisted New Zealand needed to "give up the colonial mentality".

He had a deep, personal hatred of racism. "I cannot abide racism. I cannot abide people judging others by the colour of their skin, their ethnicity or their culture… One of the great evils of world society is racism. The undermining of a stable world society is racism". He pointed to Brexit and the first Trump election. "Tragically, this has a long history."

Bolger, with his friend and ally Sir Doug Graham, began treaty negotiations with Tainui and then Ngāi Tahu.

They changed the relationship between the government and iwi and re-imagined race relations in New Zealand. It began with an act of political opportunism, when about 20 percent of the fishing quote came up for sale and the Bolger government decided to offer it to Māori.

As was Bolger's style, the settlements were often hammered out in his office with a mix of threats and compromise.

But his approach to Māori-Pakeha relations was a fierce act of principle for Bolger and he's now renowned for his foresight in Treaty relations. He described as "absurd" the idea that New Zealand's first citizens should be dispossessed of so much of their land and rights without any redress.

He thought Treaty settlements were a way of bringing honour back to New Zealand and that "if Māori do better, we all do better".

I remember at the time that one of the most telling comments he made during our interview was that the treaty settlements that have flowed since the mid-1990s might not be "full and final" as per the legislation. As long as Māori dominate the bottom quartile of social statistics, Māori leaders will keep asking the question and keep pointing to the where that poverty began. He said they would be quite right to do so.

Burying the hatchet with Peters

Despite never becoming truly popular or being embraced by voters. Bolger won a third term. He was the first MMP Prime Minister. He won the largest share of the popular vote in 1996 but New Zealand First held the balance of power.

Bolger had sacked Winston Peters, his heir apparent, in 1991 over his continued criticism of the government's economic policies.

They'd become bitter rivals. But Bolger, the negotiator, knew a deal could be done. Labour would need three parties to form a coalition, National and New Zealand First could do it alone. Peters demanded the deputy prime ministership and a new role of Treasurer, senior to the finance minister. Bolger conceded.

He told the story of a late night discussion with Peters where their colleagues drifted away through the evening until just the two men were left, putting ghosts behind them and agreeing a way forward.

Tensions grew within the coalition however, and in December 1997 Bolger was rolled by Jenny Shipley. He harboured some doubts about MMP but thought it had acted as a safety valve, saving us from some of the turmoil and division seen in recent years in Europe and the US.

Bolger was as complex a mix of contradiction as any Prime Minister, probably more than most. Despite wanting to break the power of the unions, he thought they had become too small.

He hated politicians promising to build more prisons and lock up more people as a solution to crime ("it's demonstrably a cross on New Zealand's record that we have so many people in prison").

And of course he led a strongly neo-liberal government and then railed against those policies later in life. He went on to be New Zealand's ambassador to the US and feared that as early as Trump's first election, the country was turning its back on democracy.

Given his fondness for the country, he might not mind being remembered as something of a Jimmy Carter figure.

While he led much longer, he will be remembered for his decent character and was more popular and respected after he left office than when he was in power. Once dismissed as "spud", he has slowly moved up historians' rankings of Prime Ministers as the years have gone by.

He was, undoubtedly, a proud New Zealander who loved and understood his country.

"One of the great ethos of being a New Zealander is fairness. And I've got a book in the bookshelf which is titled Fairness or Freedom. Americans talk always about freedom. Every sentence has freedom in it.

We talk much more about fairness. And fairness was what I wanted. That every member of society had a fair opportunity to succeed, make progress, to look after their families, provide for their children and so forth."

Bolger knew, even towards the end of his life, there was still much work to do to create the decent society he longed for. A decent society for all, even the newest New Zealanders.

"The biggest challenge in societies like ours is to welcome in others from different cultures and value systems, histories and religions and make them all feel New Zealanders," he said.

"You see, you could argue the challenge is to grow the economy by X percent a year or whatever, but it's almost mundane by comparison.

There are various ways you can do that. I think the sense of people feeling they are important in this society and [that] their lifestyle reflects that acknowledgement of that importance [is critical]. We have to listen more carefully to those who are left on the margins."

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