Sunday 29th August, 2010

The panel discussions have been transcribed below. The full length video interviews and panel discussions from this morning’s Q+A can also be seen on tvnz.co.nz at, http://tvnz.co.nz/q-and-a-news

Q+A is repeated on TVNZ 7 at 9.10pm on Sunday nights and 10.10am and 2.10pm on Mondays

PANEL DISCUSSIONS Led By PAUL HOLMES

In response to BILL ENGLISH interview

PAUL Jennifer Curtin is our political specialist this morning, also Steve Maharey and Alisdair Thompson. Three percent growth says the Finance Minister, that’s what we've got 3% growth. Where is it Mr Thompson.

ALISDAIR THOMPSON – CEO Employers & Manufacturers Association Well I think people were expecting to see growth this year, and to them it hasn’t happened. I mean retail sales are very low, the domestic economy is not going well at all. Some exporters are doing quite well, those going to Australia for example, exchange rate there is quite good and Australia has been quite good up until now. But to most business people and the average Kiwi it sure as hell doesn’t feel like 3% growth.

PAUL Jennifer what did you make of that performance, the Finance Minister’s performance as a Finance Minister? Did you see ideas, did you see optimism, did you see inspiration there?

JENNIFER CURTIN – Political Analyst It didn’t feel like a particularly positive message for voters I don’t think, and I think they're getting mixed messages. Cos they're still looking at all the sales in the retail sector and get a sense that they have to spend, but on the other hand they're being told to save long term, they're being told to retire their debt short term. Interest rates are looking like they're going up, GST’s coming along. Like there's just too many messages.

PAUL And also at the moment yes he hopes that people have got the message not to keep investing in property, buying houses and so forth. What else are we sposed to do with any money we might want to invest? If we put it into the sharemarket everyone goes broke.

ALISDAIR Well they don’t all go broke.

PAUL No they don’t make any money…

ALISDAIR I mean I think worse, all the people who put their money into finance companies and thought they were diversifying by choosing ten different finance companies, all of which went broke. So I mean yeah housing has been a good safe investment and paying off your mortgage is the very best thing you can do, and when we get to super later on, that’s an issue that we've gotta think about.

STEVE MAHAREY – Vice Chancellor Massey University Yes, he's in the worst position isn’t he at the moment, he looked a bit like that this morning. Either it was early morning or he looked a bit sad, which I don’t doubt he would be, because the government's in that horrible position of thinking it is over and things are picking up and it's not, and secondly they were told there's be step changes, catch up with Australia, all sorts of things, and it felt like a plan. Now it doesn’t feel like a plan. So they're saying to themselves so what do I do out of all of these messages. That’s the worst place to be for a government.

PAUL Do we blame the government for that, or it is just have they been buggered by the world? I mean the world has not picked up as it should have been. Ben Bemanke is still talking about recovery jitters.

STEVE I'd cut them some slack and say that every government is trying to second guess and wonder where the next wave is coming from. America clearly is not doing as well as people thought it would. But it does come back to the fact that they have to win elections here, and people want to know two things, when is this going to be over, and what do I do about it personally, so don’t tell me 15 different conflicting things to do, what's the way through this that I can rely on as a person, getting a job or paying a mortgage or running a business, what do I do?

PAUL He spoke about a couple of alternatives as the way through. He talked about the sugar shot recovery. Here he is;

Bill English: ‘I mean we have the choice here between a sugar shot recovery that you can't sustain, that is people rushing back to the shops and the housing market, or New Zealanders doing what I think they're doing already, which is being careful about their spending, working on getting their debt down.’

Which of course takes nobody nowhere.

ALISDAIR Yeah well we have had a recession, and you know our personal debt has risen dramatically over the past 20 years, and specially the last ten years. So as individuals we do have to pull our heads in, and the problem with that is if you pull your head in, and stop saving or start reducing your mortgage faster you're not going to spend and the domestic economy really has a big problem recovering, and I think to some extent too many of us rely too much upon what is the government going to do, instead of perhaps you know business leaders and all of us, taking some responsibility ourselves to dig ourselves out of this.

STEVE What I like about what he is doing at the moment, he is trying to sincerely explain this. That’s a good strategy, but on the other side there needs to be somebody, maybe him on another occasion, but somebody saying okay you’ve got the explanation, here's the way forward. They're not doing that.

ALISDAIR Yes that would be good coming from Key for example.

PAUL As Lou Grade once said all business is show business, there's gotta be perhaps a serious intent to try and explain, but there's gotta be show business as well and a sense of hope. For example he talks about foreign investment, he says the Australians what have 45 billion dollars worth of ownership in New Zealand. Already is the government wrong? We know we need foreign investment, we've been crying out for it for years. We get two billionaires apparently, Julian Roberts and then the other bloke. Are they wrong the government, not to take leadership on explaining to the people of New Zealand why we've gotta have foreign investment?

STEVE Oh yeah this has become one of those little issues now if you touch this it goes bang on you. Very quickly they're gonna have to get a position. I think it needs to be one which is sensible, we have to have foreign investment. But what people are worried about is what he was explaining they do not want to see someone come in here, run a farm and make all the profit in another country They don’t want to see that.

PAUL Or make all the profit themselves here?

STEVE Well I think it's the issue of people just feeling like they won’t be New Zealanders, there's a real nationalism building up in New Zealand which I kinda like as long as it doesn’t become jingoistic.

PAUL Yes but – I don’t own that farm down the road now, I'm a Kiwi. It's a kiwi farm but somebody else owns it, Chinese person comes in, Chinese person owns it apparently I own it less. Isn’t that the problem? Anyway what do you think Jennifer. As an Australian looking at our attitude to foreign ownership in New Zealand, are we hoki?

JENNIFER No I don’t think so. I think what voters do is they see foreign investment in business as one thing, and foreign ownership of land, particularly farms that have that kind of emotive family farm thing going on, as something different, and especially farms as assets. We know that New Zealanders have very kind of on again off again feelings about privatisation and the sale of you know like New Zealand assets, and they would see land as an asset in a way that they might not see businesses as assets, and so foreign investment in business is fine, but maybe foreign investment in farms and everything that goes with them is not fine.

PAUL Emotion is a terrible thing.

In response to ADRIAN ORR interview

PAUL Well some interesting things there. First of all he's of the view the government should not have suspended contributions to the super fund. He says if you'd borrowed ten billion here to give to the super fund, over 20 years the super fund will make more than the interest you're paying having borrowed ten billion over here, and what's more you still have ten billion.

STEVE The virtue of hindsight of course is serving him at all because I guess the government at the time was saying well we don’t know where this is going, but in hindsight he was right, he's managed to maintain a fund which is making more money on the money that’s been borrowed. So we should have invested it.

PAUL He puts it very nicely too, he says you know the average person, many of us, I mean we're paying a mortgage of course but we also instead of repaying all the debt with every spare cent we've got we do put a little aside over here, and he's saying that should be the same for the country.

ALISDAIR I think the main point is if we've got a liability in the future to pay people who are going to be retiring at a great rate in the future, a lot of money. So we've got the liability anyway, whether we borrow the money or we don’t borrow the money the liability is there in the future, and you know to be frank with you there's no – I mean if you're borrowing to save you're not saving, it's a neutral situation. You’ve got an asset, which you’ve invested in, and you’ve got a liability, and as you said Steve, if you can make more money out of it and leverage and get more money out of it, sobeit.

PAUL Jennifer we look across at Australia of course, you have electricians over there retiring you know to the Gold Coast with a million dollars from personalised superannuation fund they’ve been paying into for years. We look at your superannuation scheme, what do you make of our lack of superannuation schemes here?

JENNIFER Well look our universal pension system works really well – in New Zealand yeah, so here our old age poverty rates are actually lower than those in Australia. But we also have to think that they’ve had this compulsory superannuation scheme in Australia since the mid 1980s, and households there recognise, voters recognise that their diverse portfolios are taken care of by their super fund, so they can just focus on buying their house and reducing their mortgages, saving a little bit, and something else is going on that’s looking after that diversification element. And I think the thing that they’ve done with Kiwi Saver is a good stepping stone into growing an idea that we need to think long term about these super funds.

PAUL Steve you're a university man now, and you're looking of course at some very brilliant, particularly at Massey, brilliant agricultural innovators and so forth. Is that one area of the domestic economy where Adrian Orr’s really got to be starting to look, the entrepreneurs, the people who've got the inventions, the people who've got the patents and so forth, who need the capital over a long period? Is that where the super fund could start to be looking?

STEVE We'd certainly like to see it because right now the government's releasing some quite significant money alongside industry to invest in research and development. That is now going to have to turn into people putting those ideas into practise, and when you turn around and say so where does that money come from, quite hard. So one thing I would love to see, next month it will be into October we'll get a taxcut, and if that money doesn’t go into something then of course what are we going to do with all that money that’s going out. The things I'd love to see over the next little while is people starting to look at ways people could begin to easily put into say an angel network or something like this, where they can get a bit of a stake in these kinds of investments.

PAUL Interesting just quickly, the politics of this, we've even had the New Zealand Herald saying, well the time for compulsory super is here. If Labour were to go Alisdair, go big on a couple of things, on compulsory super and on re-getting that super fund going, are those things going to resonate for them.

ALISDAIR It's good we've got the working group and I don’t think we should jump in and say compulsion is the answer to all of our problems. I think it's a valid thing to look at – compulsion would be good for some, and not good for others. We've got a lot of people in New Zealand who are very poor in terms of their income, they need every cent they earn just to live. People standing here not so, but most of the people in New Zealand have very – and at a certain time of their lives …

PAUL Yeah but we've also got an appalling record on self driven saving though.

ALISDAIR You know our incomes per capita, because of what we produce and sell internationally and inside New Zealand are the lowest in the developed world. So our ability to save isn’t as great as Australia’s for example where incomes are 30% higher.

PAUL Okay let's look ahead at what might be coming in the week ahead.

STEVE Quiet week, recess, Bill English is offshore and no doubt circuses will carry on around Heather. I'll plumb for in that quiet time a speech by Michael Cullen about republicanism. That’ll come back on to the agenda again and we'll all say we're going to wait for the Queen to go and then we'll turn it into a republic, I think will be the week.

JENNIFER Oh I'm really interested to see what happens at the Australian federal level and who forms government with who, and also I think the Save our Farms lobby with the Crafer Farm decision is going to be really interesting, if not the next week over the next month.

ALISDAIR Labour had Chris Carter, ACT had Rodney and Heather, I'm not sure which one to blame, the Maori Party or National’s turn next week to implode on something, and if I was to pick one I would say probably the Maori Party.

PAUL Oh well we shall see.

ENDS

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