National Party Leader John Key says he welcomes an objective discussion about the future of Auckland's local authority governance.

"I welcome the proposal for a Royal Commission.  It's along the lines I proposed in my recent speech to the Local Government Association.  It's critical that we get buy-in from a wide range of Auckland decision-makers."

Mr Key says National looks forward to consultation on the terms of reference.

"It has taken Labour eight long years to recognise it needs help and doesn't have the answers.

"I'm delighted that the Government has finally outlined an approach that will allow a considered pathway forward.

"This can't be a partisan exercise for Labour.  We need a lasting solution that will stand the test of time."

Finance Minister Michael Cullen must give a personal assurance that there will no further unauthorised releases from his office of highly sensitive documents, says National Party Leader John Key.

He says the blunder, in which two top-secret figures relating to the Reserve Bank's currency intervention in the kiwi dollar were released to the Sunday Star-Times among Official Information Act documents, "would have been devastating in the wrong hands".

"This is a monumental blunder by Michael Cullen's office.

"This information would have put at risk millions of dollars of taxpayer money by revealing how much the Reserve Bank can risk when it intervenes in the currency market.

"Money traders would have known what the Reserve Bank's spending limit was.

"It's a bit like telling your enemy the size of your arsenal and would have rendered future Reserve Bank interventions useless.

"Michael Cullen must first explain exactly how this happened. It is not enough for his office to simply brush it off as 'an administrative error'.

"Then he must explain exactly what he is doing to make sure that when highly sensitive information is asked for there is a control check on what leaves his office.

"It's hard to believe he signed off on this.

"Perhaps he's having trouble handling the pressure of the widespread criticism aimed at him for presiding over the highest interest rates in the developed world."

Dr Bollard does it again

Yesterday, the Reserve Bank raised interest rates for the fourth time in a row. They are now among the highest in the developed world, and homeowners and exporters are really starting to feel the pain.

Interest rates are so high thanks largely to eight years of Labour's economic mismanagement. When inflation was low, Labour failed to provide the right incentives for working Kiwis and our economy. As the economy grew, Labour ramped up spending. This put pressure on everything from house prices to the cost of hiring a plumber.

Last November, Dr Cullen warned his Cabinet colleagues that a Budget spend-up would put more pressure on inflation and interest rates. But in May, he signed off on spending that was 30% higher than the limit he had set. Labour has dug itself a hole it can't get out of. It has nobody to blame but itself.

Lots of people have asked me what National will do about high interest rates. There is no quick fix, and loosening the inflation target is not the answer. It may give some people short-term relief, but it will cause long-term pain.

National will get New Zealand's long-term economic policies right. We will concentrate on increasing the speed the economy can grow without causing inflation. We will rein in rampant growth in government spending and ensure it is better focused. We will provide the right environment for businesses to invest, and give Kiwis better incentives to get ahead.

Watch my video on the interest rate hike and give your feedback here.

Breakfast on Wednesdays

This week I had my second regular appearance on TV One's Breakfast show. I'll be live every Wednesday at 7.20am.

Putting trades and industry back into our schools

On Monday, I visited Northland College in Kaikohe with John Carter MP. Due to a shortage of trades teachers and limited government funding, the college has developed an innovative trades training programme with the help of the community and local Maori. This provides hands-on training to secondary school students in hospitality, cooking, farming and carpentry.

Under the guidance of an experienced builder, year 12 and 13 boys are putting the finishing touches on a new house they have already sold. The money from the sale will go back into the trust and help train next year's carpentry class.

We also saw how teaching could work in the future. We watched students in an agriculture class receive a lesson via live streaming video from a tutor at Telford Rural Polytech in Balclutha. This is an excellent way for students to access expertise that's not available in their area.

I spoke about Northland College last month in my speech on Putting Trades and Industry back into our schools. The college is exactly the kind of innovative school-led programme that a National Government will encourage. It shows what can be achieved when business and the community get involved in their local school and help teenagers gain the skills they need to succeed.

Distorting our democracy

At the last election, Labour broke the election spending rules. It illegally spent over $800,000 of taxpayer money on its campaign. Now it wants to change the rules around election spending for its own advantage.

Last week, Labour introduced its Electoral Finance Bill. If it's passed, it will regulate free speech from January 1 in each election year. It will make it difficult for New Zealanders and New Zealand organisations to publicise their opposition to any political party's policies, and severely limit how much money they can spend criticising it.

At the same time, Labour will have almost unlimited government funds to promote its policies. Already, Labour is spending $15 million of taxpayer money promoting Working for Families, $7.4 million promoting Kiwisaver (it spent $1.2 million in June alone), and $5.1 million promoting ACC.

Labour's bill is anti-democratic, unfair, and doesn't provide the transparency that voters need.

To hear my thoughts on the bill, the Benson-Pope scandal, and the exchange rate, watch my video journal and comment here.

Benson-Pope and public sector neutrality

It's sad that Helen Clark was reduced to poring over media transcripts to determine whether David Benson-Pope was telling the truth about the removal of Madeleine Setchell, who was sacked from the Ministry of the Environment because her partner is my chief press secretary. It's also sad that Clark took so long to act.

It was clear to National that Benson-Pope's behaviour was inappropriate. It was also clear that he was misleading the Prime Minister, the media, and the country when he claimed he was not involved.

Helen Clark should have acted earlier. Unfortunately, Labour's botched handling of this incident has undermined the neutrality of the public sector, and that's a serious concern for all New Zealanders.

John Key MP
Leader of the National Party

"It is a sad day for democracy when the Prime Minister is reduced to poring over media transcripts to determine if one of her Ministers is telling the truth," says National Party Leader John Key.

"David Benson-Pope had no choice but to resign over his evasive answers on his involvement in the sacking of Madeleine Setchell from the Environment Ministry.

"It is regrettable that it took so long for this issue to reach this point."

Mr Key says according to media reports today, Helen Clark has known about Mr Benson-Pope's crucial ‘free and frank' comments since Wednesday.

"So the question needs to be canvassed as to whether the Prime Minister would have acted at all if questions had not been posed by the media and the Opposition."