25 July. In this journal John covers a lot of ground, starting with the critical importance of a politically neutral civil service and efforts by leaders in the Labour Government to undermine that principle. John also talks about a new election spending reform bill that stands to muffle all voices but the Government's and shares his insights into the currency crisis.

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Public servants are unlikely to be reassured by Helen Clark's failure to offer a personal view today on the idea of a conflict-of-interest register for public servants, says National Party Leader John Key. "The Prime Minister has the responsibility to set the tone from the very top. "It's not good enough to hide behind the State Services Commission on this issue, as she did in Parliament today. "I would think that civil servants will be worried that the Environment Ministry's plan for a conflict of interest register will be replicated in other departments and ministries. "It is important that a climate of fear isn't created in the public service over who someone's sibling or partner might be. "I note that the Public Service Association is concerned about this issue – and with good reason. "Under a National government, public servants will continue to be treated professionally." Tweet

25 July. Wallace Chapman’s regular chat on KiwiFM with John Key, Wednesdays 8:40am. This morning John talks about the rising dollar and interest rates, debt-free student loans creating a culture of debt and Harry Potter.

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National Party Leader John Key says homeowners and exporters are now paying the price for the years that Labour has mismanaged economic growth.

"The high dollar and rising interest rates are not solely the products of a short term economic sea change. They are the result of eight years under Labour."

Mr Key says Labour failed to provide the right incentives for working New Zealanders when inflation was low and the surpluses were large.

"New Zealand productivity has suffered as a result, hundreds of Kiwis every week are jumping on planes bound for Australia, and those who have stayed are now paying the highest interest rates in the developed world."

Mr Key says Labour has made deliberate choices that it knew would impact on exchange and interest rates.

"Having warned his colleagues that a big Budget spend-up would put more pressure on inflation and the exchange rate, Michael Cullen went ahead and signed off on a Budget spend that was 30% larger than expected.

"It was a calculated decision.

"Labour has dug itself into a hole and there is now no easy solution to this economic problem of its own making. Interest rates are destined to stay higher for longer."

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National Party Leader John Key says he is alarmed by comments by Helen Clark that sacked communications manager Madeleine Setchell should never have been hired by the Environment Ministry.

"In her efforts to defend the indefensible, Helen Clark has been caught in an awful double standard. At the same time she has been trying to claim there was no undue political interference from David Benson-Pope's office, she has said that in her view the appointment should never have been made.

"This is a worrying new low standard. Helen Clark is effectively saying that people who have relatives, partners or friends connected to political parties other than Labour need not bother to apply for senior roles in the public service.

"This is proof positive that Labour sees the public service as an extension of its political operation.

"What's worse is that with those statements, Helen Clark has officially abandoned the long-standing convention of a neutral public service.

"Democracy can only suffer when appointments are made for political reasons rather than the person's ability to do a good job."

Mr Key says he is still waiting to hear how David Benson-Pope could tell the media he had no knowledge of the case, despite having a briefing.

"Was that before or after he told the media he knew nothing?

"Mr Benson-Pope also needs to tell the public precisely what he said to Hugh Logan, whether he had any discussions with his staffer, and exactly what was said during the phone conversation which triggered Madeleine Setchell's sacking.

"The reality is that there was no problem until that phone call was made.

"Meanwhile, Helen Clark needs to reflect on the many hundreds of communications people that the Government employs, and consider how many of them have friends or relatives with connections to National.

"Through her statements today, Helen Clark has declared war on public service neutrality."

Morning Report:

PRESENTER: one sees that there are things that may have gone wrong all along this process, but primarily it seems the mistake that's made is that her application was progressed at all.

CLARK: That's probably right Sean, and in the light of the advice that the State Services Commission later gave Mr Logan.

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