HARD NEWS 10/6/00 - The Lost Boy

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Subject: HARD NEWS 10/6/00 - The Lost Boy

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GOOD DAY MEDIAPHILES ... a concerned young man gathers the country's best and brightest behind him and places a full-page newspaper ad begging the country's leaders to turn the economic ship around. It is a cry in the darkness. Actually, it's a Business Roundtable jack-up. But, by golly is it ever interesting ...

It was all quite a blow coming the day after the New Zealand dollar had made a brief but historic dip below 40 US cents - a foray sparked, in the view of the Australian Financial Review, by Reserve Bank governor Don Brash's musing that one possible economic outcome of the low dollar and high oil prices was stagflation, a phenomenon last seen in the Muldoon years.

The Department of Statistics announced 24 hours later that retail sales for August were up 1% on July and nearly 6% on August last year, so stagflation actually seems about as likely as an outbreak of the plague.

But - thanks to the temple of tabloid TV that is Holmes - the organiser of Young New Zealanders, Richard Poole, is briefly a star and his thing has legs.

So how did it happen? This, as far as I've been able to gather, is it. Twenty seven year-old Auckland marketing manager Richard Poole, who hails from a solid National Party family, writes some letters to people in high places warning that if New Zealand's economic direction doesn't change, "our once wonderful country" will lose a generation of its best and brightest to foreign shores.

Among those people is Roger Kerr, executive director of the Business Roundtable, who meets with Poole. They meet and discuss a newspaper ad. Then a PR company - the Roundtable's PR company - contacts Poole and says it will arrange the booking.

Meanwhile Poole and/or persons unknown begin an email campaign. It's easy enough - the audience mostly works in corporate offices where they're always flicking stuff around to each other - jokes, bogus virus warnings and those irritating Christmas .exe files. Hundreds of names are collected behind Young New Zealanders ...

And so the full-page ad appeared on page five of Thursday's Herald, with the names attached to it, and an exclusive deal with the Holmes show brokered by the PR company. But government minister Pete Hodgson had had time to go ferreting and find an email from Poole in which Poole volunteers that Kerr came up with the idea of using his letter to the Prime Minister as a "catalyst" for a newspaper ad.

When asked, however, Poole denied any big business group was behind the plan, and that no one had financed the ad. Kerr then claimed not to be able to recall how much the Roundtable had paid towards the ad - gee, it's just like the Winebox hearings, isn't it? He finally remembered that it was $10,000. Poole now insists that all the people whose names were on the ad chipped in and that he has paid the Roundtable back. Given that at least some of those people appear to have had no idea of how their names were to be used, I find this a little hard to believe.

The government might have come out of this better but for yet another email. This one was from Jim Anderton's press secretary Tony Simpson, who received Poole's letter after it was referred on from the Prime Minister's office. Simpson didn't reply to the letter until he got wind of what was up - at which point heemailed Poole, abusing him, lecturing him and calling him a "half-wit"

Simpson made one of the classic email mistakes. He wrote in a red mist and hit "send" before it cleared. We've all done it. But you would have thought Deputy Prime Ministerial press secretaries would have been trained not to by now.

What does it all mean? You could look at the stunt as the ultimate expression of the Me Generation. The hundreds of bright young things who've signed their names up to this stunt aren't really asking what they can do for their country but what their country can do for them. And anyway, the net migration trends simply do not bear out the idea of an exodus.

But perhaps that's uncharitable. Like that other crowd of young people, who have flocked lately behind the anti-capitalist flag - with whom they share some striking similarities, including rapid mobilisation via email, and a fondness for protest over policy - these folk do signify something.

But exactly what are the ruinous government policies sending us down the plughole? Poole, who doesn't appear to be the brightest of bulbs, hasn't been able to help much. He has only been able to nominate the Employment Relations Act - which in a spooky bit of timing came into effect this week.

So talent is fleeing the country because our labour laws have been modestly realigned to be closer those of the rest of the developed world? I really don't think so. I really don't think the only way we can secure First World status is by reintroducing Third World labour laws.

Major investors in New Zealand - like Tony O'Reilly - don't appear to give a toss about the ERA, which, after all was a flagship policy on which the current government was elected. People voted for it. It's called democracy.

So is it, say, the renationalisation of workplace compensation that's sinking us? It's actually getting a bit difficult to whinge about the ACC changes now that the ACC has come back with employer premiums an average 28% lower than what private insurers were touting last year.

You could argue that ACC benefited from the short, sharp shock of a brief exposure to the market - or that National must have been running it really badly - but you'd have to be on drugs to believe that the current arrangement is causing economic ruin.

Don Brash made a speech to the American Chamber of Commerce this week that was a lot less startling than his "stagflation" crack - and which has, oddly enough, altogether escaped the headlines. In that speech, he said that the fall in the value of our dollar relative to the greenback has little or nothing to do with the nature of the government or even with its policies - except in so far as financial markets choose, rightly or wrongly, to get flustered thinking about them.

Brash pointed out that we have a floating currency, the logical consequence of which is that sometimes shit happens. It's not so long since our currency was as overvalued as it is now undervalued. It probably ought to be about 50 cents US and indications are that it will return to that level.

Contrary to what some people will tell you, in Dr Brash's opinion there is "no quick or easy way to reverse the recent decline in the New Zealand dollar". The dollar's fall is indeed triggering a major readjustment of the New Zealand economy by which we may finally, after 30 years of negative trade balances, learn to live within our means. Reality is biting and we really just need to keep our heads down and get on with it.

The economy is not poked. But it is complex. For every bad number there is a good number, especially in the export sector. Things are changing and nobody quite knows what's next.

In a perfect world, the government would simply explain this. But unvarnished truth is the first casualty of politics, and Michael Cullen - perhaps fearing that he might upset the delicate moods of the business community by some involuntary witticism - didn't front for the press this week.

Brash is right about the need for businesses and unions to resist the urge to whack up the price of goods, services and labour and create a "secondary wave" of inflation in response to the price-rises driven by the currency and the oil. Business ought to be obliged to do this by competitive pressure, but the same thing need not apply to labour. People are not widgets. They are open to reason.

I find myself returning again and again to the view that what we really need is a national consensus. The trouble is, we had that in the mid-80s - we all talked about pain and gain and belt-tightening when the Lange government swept in on Muldoon's mess - and a lot of people came out of it feeling cheated. Goodwill seems like a big ask in a world where Richard Prebble still gets airtime.

Nonetheless, the two biggest players in the union movement, the CTU and the Engineers, have signalled they're up for it - that is, that they'll forgo wage increases in return for the social contract being kept. So am I. Over to you, Helen ...

And in the meantime, a few challenges. One for Richard Poole. Prove you're not the Tania Harris of the noughties - or the Roundtable's rent boy. Drop the vague and vacuous newspaper ads and try harnessing all that brainpower. Put discussion forums on your Website, organise yourselves, work out exactly what it is you want and develop ways of achieving it. If all you care so much about New Zealand, put your bloody backs into it. Come back and start a small business. I did.

And another for Business Roundtable chairman Ralph Norris, who also happens to be the CEO of ASB bank. Ralph, your bank does some cool things - but it could do a lot better. I've been talking to a lot of small, new-economy businesses lately. None of them are particularly exercised over the ERA or ACC - although they really want those R&D tax breaks.

But their biggest problem is with their banks. Come on Ralph - if you're going to lecture us about the knowledge economy, walk the walk. Make it possible for your customers to run accounts in foreign currencies. Make it possible for them to run credit card merchant accounts in US dollars. Stop your anti-competitive policy of forcing your customers to use your secure payment product before you let them take payments over the Internet.

And to the Prime Minister: try and take a break from fighting fires and do the vision thing. Go hell-for-leather on the e-commerce summit next month. Listen to Paul Swain. Use all that research he's having done. Hang in there on the trade stuff.

Make Jim Anderton put someone who understands technology on his Industry New Zealand board. For that matter, make Jim Anderton understand technology. Find a way to get those R&D tax breaks happening. Well done on the telecommunications review - now don't fart about deciding on what to turn into policy. Make e-government mean something. If you can't cut company taxes, cut compliance costs.

And get back to what we all expected you to do. Okay, so Heart of the Nation got captured and pretty much wrecked by a grandstanding consultancy firm. But as I recall, you had an arts policy before the election, you've put aside the money, so do it. And please remember that creative policy isn't just opera - it's Web designers and writers and musicians and television.

A caller to Lawline - of all things - this week reckoned Hard News oughtn't be called Hard News because I'm going soft on the government. If that means I like this government a lot better than the last one, then I'm guilty, sir.

I know some people would rather have Jenny Shipley, Max Bradford, Murray McCully, Roger Sowry and Lockwood Smith running things, but I am not among them. If you want Maori-bashing, bile and spite, read NBR - although the latest Nielsen numbers suggest hardly anybody is doing that these days ...

I am not one of those people who thinks there's something terribly wrong with New Zealand - although after the absurd crisis of confidence over the Olympics I do occasionally despair. I'm not in thrall of the world. I lived in London for five years and that was an enormous influence on my life. But I wanted to see the beach again, I wanted to be part of the New Zealand story.

I don't want to live anywhere else now. I have great work and plenty of it. I love the wine, the food, the coffee and the dak. In more practical terms, I have access to some of the best and cheapest Internet service in the world - and 60 Pacific Pesos a month for 300 hours of unmetered 1.5 megabit access is CHEAP - in a country which ranks in the top five in the world by any measure of Internet use. As was evidenced by this week's entertainment.

I have a house with a backyard and trees. My kids go to a great primary school. I have a great relationship.

And if I want to go out in Auckland these days, lordy, I can go out. Look, Derrick Carter's in from Chicago at the St James tonight. How very bloody nice of him. Yes, I definitely feel a night out coming on - G'bye!

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