Essentially, by limiting staff training to literacy and maths, John Key is saying that only these subjects matter. I kind of agree with him in that, if there is a limited budget, these subjects are the best ones to fund.
However it seems to me that the reason the schools are churning out poor literacy results can be attributed to things other than poor teaching: the philosophy of literacy tutoring in Teachers Colleges, the actual curriculum, size of classes … right through to too much television and not enough exercise.
Science is just as important as these two subjects in today’s world, and schooling without delight (music and art) would be a pretty joyless experience. Happy people learn better.