Archive for April, 2009
Monday, April 27th, 2009
It has been a mixed week, the NZ TWI being much the same now as last Sunday. Hence the jury is still out on whether, after the quick rebound of March, the NZD and AUD are now trending higher or whether they remain within a broad, sideways trend (with the next move likely downwards).
The latter still appears more likely. Especially in light of the IMF sobering reports – more US loan write-downs to come, a speedy global growth pick-up is unlikely, risks remain of problems feeding back to reduce output further – and a US report tracking previous US share market rallies and showing an approximate 50/50 record of revisiting previous lows even when the overall trend is upward. In other words, sentiment will probably wax and wane about prospects for global growth and asset prices; in turn, suggesting choppy currency markets.
It is quite possible that this week is not any more enlightening (see Calendar). The local RBNZ review will provide a rate cut and a warning that rates will remain low for a long time but the RBNZ will probably be guarded until the fiscal stance is clearer. The Fed meeting is likely to have an even more general wait-and-see tone. Confirmation of a turning point in confidence is likely to show in NZ, Australian and US surveys but this story is now well known so reaction may be muted.
The real action may come the following week when the results of the US banks’ stress tests are released and when we get to see how far the ECB is prepared to ease monetary policy using a wider set of instruments.
Saturday, April 25th, 2009
Don’t get me wrong. I’m a fifth generation New Zealander who could have left but didn’t. Globalisation’s great, but so is home.
But I really like Australia.
And because I worked for an Australian newspaper here for a few years, I know what it’s like to be treated as an Aussie by Kiwis, and it is unedifying stuff. Talk about sheep jokes – the Kiwi inferiority complex runs awfully deep, fuelled in the case of Australia by the fact that the Aussies just don’t care what we think.
Boy, that’s infuriating. So too is a particular kind of Australian executive sent to New Zealand to “fix the local operation” and who assumes NZ is little Aussie, except that Kiwis know nothing.
But Australians, to over-simplify, are also an optimistic, confident, forward-looking crowd. They have mineral wealth, irritatingly good weather, enviably good universities and science, a population that supports far more economic opportunity than our does and – most galling of all for the Aussie-bashing Kiwi – Australia is also proving a lifeline amid IMF and OECD predictions that the world economy will shrink in 2009, for the first time in 60 years.
About the best a Kiwi looking for wins against Australia can hope for is a triumph at the footy and the last laugh when climate change makes Australia too dry to inhabit while soaking us in more rainwater than we can handle.
Not only does Australia remain our biggest two-way trading partner by a country mile, but it remains our buffer against the rest of the world, our safety valve if the labour market goes septic, and is largely responsible through ownership of most our banks for ensuring that this is one of only three or four OECD countries that can still say their banks are sound. In other words, we remain a trustworthy corner of the globe while all around is black.
Whether you call it dependence or good fortune, these signs of Australia’s importance to our ability to weather the global economic storm mount up continuously.
Just this past week, for example, Auckland International Airport issued predictably grim figures on the numbers of passengers arriving in New Zealand from offshore.
Big dives in numbers from the US, Europe and Asia. The flow from Australia? Solid as a rock.
In part that’s because trans-Tasman airfares remain almost stupidly competitive. We don’t yet have Ryanair-style 1 British pound flights to Australian destinations. But international airlines like Emirates and, most recently Lan Chile, would rather fling a few bodies cheaply over the Tasman than pay to park their planes on the tarmac at Sydney or Melbourne at the end of a globe-crossing run. That’s terrible from a carbon emissions point of view, but the route remains deeply discounted.
Cheap travel is underpinning an ongoing strength in the two-way flow of people, goods, services and ideas between NZ and our nearest neighbour. Sydney to Auckland may be the same distance as London to Moscow, but they’re the closest friends we’ve got, and look how things are panning out for them.
As former Labour leader Mike Moore used to put it: “The Aussies are our closest friends, even if we don’t like them.”
With New Zealand troughing its way through a second year of recession, Australia’s Reserve Bank Governor Glenn Stevens was musing aloud this week in a speech to the Australian Institute of Company Directors about the possibility that Australia is finally in a recession too.
“The Australian economy has been contracting, though on the best information we have, not at the pace seen in a number of countries, where quarterly declines of real GDP of 3, 4, and even 5% have been observed in the last quarter of 2008 and are likely to have occurred in the first quarter of 2008.”
Hardly the kind of panicky talk emanating from other parts of the world.
While Australia’s terms of trade have fallen back from their extraordinary bull run – a 60% rise in five years – they look to be settling at levels still 40% higher over the same period, a long way from a catastrophic reversal.
“Perhaps that will not persist,” Stevens concedes. No one can be sure that another crisis won’t knock the fragile confidence that has emerged in international markets in only the past six weeks or so. “Alternatively, perhaps what commodities markets are telling us is that some factors beneficial to Australia – foremost the continued likely emergence of China – remain in place.
“It is probably not entirely coincidental that the clearest signs of a turning point in economy activity appear to be accumulating in China,” Stevens suggests.
Because Australia doesn’t have to use taxpayers’ money to recapitalise its banks, the country is also less burdened by the tricky business of deciding when to return banking systems to the real world in countries where government bailouts, “bad bank” asset carve-outs and nationalisations have been the forced reaction to recent turmoil.
The RBA board considered reports at its meeting on April 7 which showed retail spending only just beginning to fall in February after a strong run over the New Year; much stronger household confidence than business confidence; and a sharp bounceback from the very cautious readings coming out of the Australian business community earlier this year.
Stevens also reckons the combination of a floating exchange rate, a much more flexible labour market and better macro-economic policy settings are helping the Australian economy adapt quickly compared with jarring downturns in the 1950′s and 1970′s.
He also sees the same opportunity for Australia to emerge stronger than before this recession as New Zealand’s Finance Minister Bill English was talking up in his pre-Budget throat-clearer this week in Auckland.
And for a drily rational banker, Stevens is placing a lot of store on attitude.
“The first thing to maintain is some faith in ourselves and the prospects for our country over time.
“Unfortunately, there is no lever marked ‘confidence’ that policy-makers can take hold of. Our task is very much one of seeking to behave, across the board, in ways that will foster, rather than erode, confidence.”
Among Australia’s fundamental strengths are political stability – “something becoming a bit less common” – public finances that are in “very sound shape”, financial and regulatory system that remain strong and tested and, finally, Australia is deeply engaged with Asia.
That same day, the RBA board decided to cut its benchmark interest rate by another 0.25 percentage point, confounding market expectations of a bigger cut, based on a more pessimistic view.
This coming Thursday, the Reserve Bank of New Zealand faces a similar test. It is widely expected to deliver another 50 basis points cut when it meets on April 30.
It will be interesting to see, in the spirit of ANZAC Day, whether the confidence in prospects across the Ditch influences a more optimistic view here. For borrowers wanting to lock in interest rates at the bottom of the cycle, a 50 basis point cut might be good news, but 25 points is probably not. Unless the world deteriorates sharply again, we must now be very close to the limits of monetary policy easing.
Things are not the same here as in Aussie, but they might just be similar enough to mean that RBNZ Governor Alan Bollard will also go with a 25 basis point cut, and keep just a little more of his dwindling powder-keg dry.
Thursday, April 23rd, 2009
A friend of mine describes Lotto as a “tax on people who can’t do maths”.
My friend is right in the sense that the odds of winning anything worthwhile via Lotto are horribly stacked against the players. Check out the exact odds in this official brochure published by the New Zealand Lotteries Commission with the hilarious title of ‘Have Fun and Play Responsibly’.
In another sense, though, I reckon most players have an intuitive grasp of the mathematical possibilities presented by their own income – ie they will never achieve the life of moneyed luxury portrayed in the Lotto ads by their own efforts.
As author Peter Howland puts it in this interesting essay exploring the Lotto phenomenon: “Many of us now believe that the gap between our present circumstances and future prosperity will not necessarily be achieved by sober, hard grind but rather will be made in a single lucky leap.”
In this context, what’s 10 bucks a week? (It’s $520 per year, which compounded over time could grow to… you know the story.)
Lotto cynics are also facing a tough marketing battle. It’s winners that make the news, not the millions of losers. The latest lucky face of Lotto fits the mould perfectly. As interviewed on TV3 the shaggy, affable, unemployed Peter Green is visible evidence that anybody’s luck can turn.
Green is remarkably unambitious for his money, with reports that he would be happy enough to live on $307 per week interest from his $500,000 and never work again – which is exactly what real retirement is like for many people (minus the $500,000 capital).
Until the long-term savings industry can compete with stories like Green’s, regular Lotto players are unlikely to divert their weekly punt to more sensible, money-making alternatives.
Even the global financial crisis hasn’t dampened the risk-taking, pioneer spirit. According the the New Zealand Lotteries Commission latest half-yearly report, sales in the last six months of 2008 were up almost 19% (or just over $70.3 million) compared to the same period in 2007.
Across all its various gambling ventures, the Commission raked in $442.3 million in the six months to December 31, 2008, with the suckers (sorry, “customers”) egged on during the build up to its biggest jackpot of all time, eventually won in October.
As the report boasts: “The excitement of the largest-ever $30 million Powerball jackpot grabbed the attention of the whole country. In the final stages of the jackpot run, demand for tickets led to long queues at retail stores and resulted in NZ Lotteries’ best-ever sales week.”
How’s the NZ Lotteries Commission going to top that in 2009? Imagine the pressure in the boardroom.
A thorough reading of the Commission’s report should convince numerate Lotto players to give up. But if you still want to participate in the thrill generated by watching numbered balls picked out of a barrel, this is a solution suggested on a website link picked out by me randomly.
“Here is a better way to play the lottery, write down 5 numbers between 1 and 49, then pick a Powerball number between 1 and 42 (you can reuse any of the previous 5 or pick another number). Don’t buy a ticket, then when the drawing is held, and your numbers don’t match, you can congratulate yourself for saving a dollar.”
I don’t see it catching on.
Wednesday, April 22nd, 2009
After a period of conflicting pressures, the stars appear more aligned at present; namely pointing to downward for the NZ dollar.
1) There is the RBNZ policy review next week. The market is pricing midway between a 0.25% and 0.50% rate cut. This pricing between now and the 30th is likely to err more towards a 0.5% rate cut – one drag on the NZD near-term, especially for the NZD/AUD.
2) There is likely to be focus in the lead-up to the 28-May Budget on difficulties faced by NZ. These were highlighted last week in the OECD NZ Economic Survey:
“… among the most indebted in the OECD”
“… monetary policy should be the primary tool used to provide further stimulus. Indeed, the much improved inflation outlook allows scope for further easing”
“Although the quality of New Zealand’s regulatory regime is generally high,
it has fallen relative to other OECD countries”
The conflicting threats of credit rating downgrade should the government spend too much, and further monetary easing should the government restrain spending too much are likely weigh on the NZD.
3) The RBA and Australian government have a similar interplay ahead, with a budget 12-May and RBA reviews 7-Apr and 2-Jun. The net effect will be focus on an Australian recession and another RBA easing; a drag on the AUD (and hence on the NZD/USD).
4) The ECB is also likely to cut interest rates again 7-May, including presenting a quantitative easing policy. This is likely to weigh on the EUR (and hence on the AUD/USD and NZD/USD).
5) More significant than all the above, the global ‘green shoots’ optimism will have been sorely dented by sharp share price falls last night. Further forecasts and news to come of recession and the 4-May US banks’ stress test results will likely provide a further check to recent optimism.
This is not to say that the global recovery story and an upward trending NZD need not be a key theme of 2009. They most likely will be but now does not appear to be the right time. Importers may wish to guard against a sharp NZD fall in the next month. Exporters would do well to look for buying opportunities – a NZD/USD around 53-54c appears a reasonable starting point.
Sunday, April 19th, 2009
Rather than quietly letting this milestone slip by, ShareChat has celebrated her birthday in style, with a great new makeover. Like a fine wine, she is definitely getting better with age!
Not only does ShareChat turn 10 this year, but the site now sports a fresh new look and some exciting new content to celebrate. Follow along with me as I take you on a quick tour of what is new.
The site is now more distinctly separated into different sections depending on what you are most interested in; Share market News, NZX Market Activity or Sharemarket Education.
The home page is basically a quick summary of the latest news stories, top 15 index prices, announcements followed by blogs and forum posts. Great if you only want a quick glance at the index (see right hand column) and news headlines.
For those of you, who like to follow the news, click on the News tab and from there you can read our news stories from the last few days. To delve deeper, you can view older stories through the Archive.
This section also contains Daily News Links. This is the popular content contained in our AM Update newsletter. Sent early each morning, this email outlines the most important business stories, not only from ShareChat, but from several major local and international news websites. It’s a great resource to see what other markets have been doing overnight.
Expanding on the news section, you might also like to check out the Daily ShareChat and Blogs tabs. Daily ShareChat is a NEW section we’ve recently introduced. Journalist, Jenny Ruth investigates companies listed on the NZX and the broker sentiment surrounding them.
Moving on, the blogs are a great way to read views and opinions by our experienced team of contributors. Keep an eye on this space as we will be introducing guest bloggers to you on a regular basis and even a novice like me, will be sharing my investing experiences.
It’s hard keeping track of all this great content without missing any, so I invite you to either sign up to our newsletters or be sure to subscribe to our RSS feeds.
Building on the news content, we also have the Markets pages where you can get a quick overview of share prices and announcements from both NZX and ASX. This where our Market Weekly Diary lives as well as some excellent content from Finance TV and Boardroom Radio.
Another crucial part of the website is our Investor Education centres. Starting at the Investing tab you can learn more about investing in the share market. Once you have mastered that, we have also expanded on this further to specialised centres for the more experienced. The Forex, CFD and Options centre’s are great for those wanting to learn more.
Closely entwined with education is our no-risk Stock Guru game. Here’s where you can learn to invest in the share market with our simple buy and hold investing challenge. It’s FREE to play and we have some great prizes up for grabs. So don’t wait, register today and we’ll be in touch when there is a game due to begin.
If you’re looking to expand your investing knowledge, have a browse around our Bookstore. In conjunction with Good Returns we can offer you a specialised range of books on share market and property investing. Quite often there are special discounts and offers for newsletter members.
This leads me nicely on to tempt you with our vast array of FREE email newsletters on offer. There is something here for everyone, so be sure to tick one or two so we can keep you updated and in touch.
Finally, if there are any comments or suggestions for the website please feel free to drop me a quick email. The site is forever evolving and I’d like to hear your views.
Take your time looking around, get familiar with the site and hopefully we see you again really soon either here or be sure to look us up on Twitter or Facebook.
If you’re curious who’s behind ShareChat, then be sure to read the About Us page and you’ll get to meet some of the contributors.
ShareChat’s Website Manager
Friday, April 17th, 2009
Of all the big numbers floating around these days, the one that worries Finance Minister Bill English most is government debt.
Actually, that’s not quite true. Government debt is the most worrying of all the available worrying numbers that English can actually do anything about.
And it’s clear from two recent statements – responding to regular IMF and OECD reviews of the New Zealand economy – that this will be a key theme for his first Budget on May 28.
This week’s report from the OECD makes all too familiar reading. Much as various wishful thinkers would love New Zealand to pay its way in the world without earning it, the OECD points out that the options are narrowing sharply again, especially if its unusually pessimistic view of a 3% economic contraction this year proves true.
As well as getting the books in order, some things need to happen to get the wealth we have to work better for us. Both the Bolger and Clark governments largely dodged this unpleasantness, preferring to reap and then spend on taxpayers’ behalf the benefits of a sustained upturn in world wealth that made us think we were pretty clever for a while there.
Global debt crisis notwithstanding, the local outlook is constrained for all the reasons the OECD and IMF would habitually cite – the balance of payments deficit with the rest of the world remains dangerously high at a time when any creditor is looking askance at lending to inveterate spend-thrifts such as ourselves. After all, New Zealand has never in its post-colonial history earned its own way in the world for any length of time. This country’s wealth has always been based on our ability to convince foreign savers that we will pay them back eventually. We’ve clearly got a trusting face: possibly one of our greatest national assets.
As tax revenues plummet and unemployment rises, New Zealand heads into several years of large Budget deficits. These will push net government debt to GDP from below 20% in recent times to more than 50% – way above levels that Roger Douglas and Ruth Richardson struggled to reduce in their roles as Minister of Finance.
That struggle and the world upturn delivered their successors: Winston Peters, Bill Birch, and Michael Cullen, an increasingly comfortable fiscal environment which last year forced Scrooge McCullen to dole out the biggest personal tax cuts since at least the 1987 tax reductions that offset the imposition of GST.
Now it is English’s turn and he’s been handed a lemon that till last August was a ripely sweetened mandarin. He supports the tax cuts, but things have turned bad so fast that he mightn’t be able to keep them going through to the 2011 election, as Cullen promised in last year’s Budget, delivered three months before the world went phut.
The international creditors that we’ve relied on for so long will insist, especially in current world economic circumstances, on seeing a plan for net Crown debt to fall swiftly once the world economy – presumably accompanied by New Zealand – starts recovering.
Without such a plan, we’ll get a credit rating downgrade, we will face higher interest rates and perhaps a weaker currency, both of which will make our public and much larger private international debts that much harder to service.
“The private sector’s reliance on the external funding and government financial sector guarantees have increased the importance of a strong public sector balance sheet,” English said this week.
“Falling revenue has created a period of projected government deficits and rising Crown debt to levels that are unacceptable to the Government.”
On April 3, English said: “As we prepare for our first Budget on May 28, the new government is performing a delicate balancing act. Our first priority is to ensure that we help New Zealanders get through the worst effects of the recession by preserving entitlements, providing more than $1 billion of tax cuts from April 1 and bringing forward productive infrastructure investment.
“Our other priority is to set out a credible plan for economic recovery over the medium term. That means investing to increase New Zealand’s productivity and growth, while at the same time getting the government’s finances in order.”
As the Budget approaches, start looking for signs that the public health system is targeted for both financial order and productivity gains.
For the so many extra billions pumped into the public health system in the last decade, you’d think there’d be more results to applaud.
The bottomless pit and high cost of new healthcare demands, driven by a rising tide of voting dodderers and the constantly improving treatability of just about everything, leave the health system still underperforming while soaking up huge national resources.
English was a reforming Health Minister in the Bolger Cabinet and won much admiration from such unlikely, normally Labour strongholds as nurses and other professional carers.
“If Labour did this, it would be called radical communitarianism,” English said to me at that time. “But because it’s National doing it, it’s called ‘reform’.”
There have been whispers around the health system for weeks now, including the appointment of an advisory board-style body, similar to those being used in resource management and energy policy reviews.
These involve a panel of sector thinkers, advisors and participants in a process that runs parallel to the normal flows of public service advice, albeit that public servants “hold the pen” on any advice to Ministers.
Health Minister Tony Ryall and English go back a long way, and Ryall is a long student of the health sector too.
That, presumably, is why English ended this week’s statement on the OECD report with these carefully chosen words: The OECD also sets out some options for meeting future challenges in the health system, including the smarter purchasing and delivery of health care services.
“We note the challenges the OECD has described in the health sector. We’re already implementing some of the ideas and we will consider others,” English said.
Watch this space.
Friday, April 17th, 2009
“Investors have a right to be angry,” Jane Diplock, head of the Securities Commission, says in her opinion piece published in the New Zealand Herald this week.
And it’s a right that many of them are asserting too. After two years of scandal and slump investor activism is on the up.
For example, a few investors stuck in ING’s infamous CDO funds mobilised themselves earlier this year into a lobby group, which publishes a colourful monthly newsletter that channels discontent as well as sharing some pretty useful information.
I don’t think the Frozen Funds group has established a website yet but it’s already established decent grass-roots support from the disgruntled.
“It is not only that more people are becoming involved, their involvement is also increasing,” the latest ‘Frozen Funds File’ notes. Occasionally the newsletter gets the odd fact wrong but mostly it sticks to its one-issue agenda. Good luck to them.
Another group dubbed “Victims of Vestar” formed last year to vent their frustration at the financial planning group owned by Australian firm MFS that took down the savings of many clients with its collapse early in 2008.
Since then Vestar has been sold a couple of times, with its rump now resting comfortably in the arms of the Axa group.
The ‘Victims of Vestar’, though, want to disrupt the new comfy arrangement.
“The remnants of the company may have been flicked on to a new suitor, but the people who allegedly succumbed to conflicts of interest that destroyed many investors’ life savings remain. And sue them we will,” a comment on the website says.
Because it’s dealing with slightly more complex issues than the Frozen Funds crowd, the ‘Victims’ publication is more erratic, but the anger comes through clear enough.
However, the Exposing Unacceptable Financial Activities (EUFA) lobby group ratchets up the anger a few more notches to rage. In its first annual report EUFA is practically dyspeptic.
Unfortunately, the EUFA report comes across as a messy diatribe, which is a pity because there are some legitimate points buried in there amongst the awful prose. I know EUFA has collected some detailed information about investor experiences over the last couple of years and it’d be nice to see it. Jane Diplock might even be interested.
Wednesday, April 15th, 2009
I recently re-read an old favourite of mine that has been revised and updated. If you haven’t had the chance to read it yet, I can highly recommend it.
The book is titled, Active Investing, How to manage your Portfolio like a professional in less than one hour a week by author and investor, Alan Hull.
In today’s wired world there are an over abundance of products for the average investor; ranging from stock selection services through to software programs promising to pick the next hot stock. It’s no wonder that the average investor is often paralysed, like a possum in the headlights, by the sheer overload of information.
This book is Alan Hull’s response to this confusion. In it, he demystifies some of the beliefs of investing and empowers you to make your own investing decisions, without risking the family home or your hard earned savings. Hull encourages you to be an ‘active investor’.
Hull will show you how to implement a straight forward, common sense investment technique that takes less than an hour a week.
Hull’s definition of an active investor is someone who manages their assets and trades shares. Whereas Investors manage their assets and Traders trade shares.
The book briefly touches on the fundamental topics such as market capitalisation, price/earning ratios, price/asset and dividend yields.
Hull seeks out blue-chip companies with good fundamentals, and recommends books such as Top Stocks to assist you in your decision process.
Technical analysis also plays a part in the active investors decision making. “We simply want to profit from having the balance of probability working in our favour. I am not trying to be clever, not seeking perfection – just profits,” says Hull.
Chartists may be familiar with the ActVest range indication. This is a series of three lines based around a moving average trendline, with an upper and lower tolerance line which ultimately form a channel around the price movement.
The decisions (and emotions) around buying and selling then become clear cut. For example, as the price moves above the upper line it is an indication to sell and take profits.
Hull also touches on your risk management strategies and the importance of using stop losses. Measures such as these will ensure your account lives to trade another day.
A useful chapter includes some ‘real life’ examples, albeit slightly outdated – the market was somewhat different back in 2007. However this section is useful to see how you would put the strategy into place over four weeks and indeed how it could take just a few hours each week to manage your portfolio.
Hull has dedicated a new chapter to short selling using CFD’s – which gives you an overview of how to implement the range indicator system but in reverse to take advantage of market declines.
This is a great book for both new investors and experienced investors alike. It simplifies the investing process and breaks it down to a manageable system that anyone could implement if they are serious about taking their financial future into their own hands.
You can find out more about this book by visiting the Good Returns
Wednesday, April 15th, 2009
After recently incurring the wrath of a legal practitioner I think it’s safer to begin this blog with a disclaimer:”Readers are advised to seek specific advice from an appropriately qualified professional before undertaking any action in reliance on the contents of this discussion document.”
Although this sounds like a brand-awareness campaign for lawyers, this responsibility-outsourcing device is actually to be found on page three of a Ministry of Economic Development (MED) document laying out proposed changes to investment disclosure rules.
Don’t try reading the entire MED discussion document in one sitting because, like most bureaucratic publications, it could turn your brain to mush. The MED is aware of this danger, ending its disclaimer with: “The Crown does not accept any responsibility, whether in contract, tort, equity, or otherwise, for any action taken, or reliance placed on, any part, or all, of the information in this document, or for any error or omission from this document.”
That’s quite a get-out clause for what is only a discussion document – most likely a government best practice standard inserted on legal advice in the interests of full disclosure.
See what I mean about mush?
But if you can push through the jargon barrier the MED paper contains some sensible revisions of how to disclose relevant information in investment documents. The MED says one of its main aims is to make “disclosure in prospectuses more meaningful”.
For instance, the MED suggests replacing the word ‘interest’ with ‘returns’ (meaning earnings but not capital) in prospectuses to make it easier for investors “to compare the returns advertised by different issuers for different products”.
Regulation 20 is also getting a slight makeover with the insertion of the words ‘or imply’ after the word ‘state’ in the following sentence: “No registered prospectus or advertisement shall state that investment in the securities to which it relates is safe or free from risk”.
(The final version of Reg 20 should have another tiny difference – the MED is proposing the replacement of the word ‘shall’ with ‘must’ in keeping with “modern drafting language”.)
With 56 “issues” and 16 questions to consider anybody interested in responding to the MED disclosure proposals should get cracking. Deadline for submissions is May 8.
Send any questions to Ashley Tomlinson at the MED Competition, Trade and Investment Branch – don’t ask me.
Tuesday, April 14th, 2009
I first encountered Helen Clark in 1981. She was my political studies tutor at Auckland University.
She gave me a D for a very poorly written polemic, based on no research, in which I argued that the anti-Springbok Tour movement would drive voters into the National Party’s arms as a reaction against the violence and disorder they were seeing.
I gave no references and possibly sounded as if I supported the tour, when in fact I was solid as against it, man. The shame of watching my friends storming the field before the Hamilton test on the TV in a bar in Ponsonby is with me today.
Next time I saw her would have been around 1984, when I moved to Wellington to work on The Dominion. She was chairing the foreign and affairs select committee, shepherding the anti-nuclear law for David Lange.
David Lange: now there’s a name I didn’t hear in her valedictory speech in Parliament last Thursday, although there was one comment which might have applied as much to David Lange as it could yet to John Key.
“In my experience,” said long-haul player Clark, “success is seldom instant in politics, and where it does come quickly, it can equally quickly fizzle out.”
Clark survived a patch where her preferred PM rating was barely 2%. I remember Lange, by then a bored backbencher, gleefully gossiping to me that a delegation had gone to ask Clark to step down.
It was one of my best scoops. Lange told me Koro Wetere was so nervous he cut grooves with his fingernails into the table they sat around.
Leading that delegation was Michael Cullen, who also quietly bowed out this week. Cullen was the fiscally responsible rock to Clark’s socially reforming instinct. Labour left the books in good shape, but they spent it all for us, mainly on health and education, which continue apparently to under-perform, and show just how thankless a politician’s efforts can be.
The tax cuts, delivered like a ticking time bomb by Cullen into the sudden fiscal nightmare that Bill English finds today, were a very long time coming.
In a supreme irony, Cullen leaves just as his sworn enemy in the 1987-90 Cabinet, Roger Douglas, nestles back into parliamentary life in his dotage for Act.
Douglas was another not mentioned in Clark’s swansong.
Speaking of the Labour Party renaissance in Auckland in the 1960′s, she picked out Jim Anderton and Jonathan Hunt for special mention, although the Douglas brothers, Roger and Malcolm, were arguably part of that too. Rogernomics was dissected only as a political disaster for Labour.
Clark entered Parliament in 1981 to find Muldoon in charge and generally elderly male MP’s playing billiards on beautiful tables within strides of the Debating Chamber, high stakes card schools in MPs’ offices, and a great deal of focus on doings in the Bellamy’s bar.
These reminiscences, and their juxtaposition with today’s polyglot New Zealand Parliament painted Clark’s most intriguing verbal image for a speech otherwise delivered in the same flat-vowelled, lifeless and slightly stumbling way that Clark has always had.
She was a power politician, but never an orator. Face to face, she was warm and often funny. Her embarrassment when I told her about that D was memorable. “Oh, you poor thing,” she blurted spontaneously.
Her speech seemed so often to be on the verge of applause, and might have got it from a stronger speaker. In the end, the ovations were three: for her parents, where she spoke movingly; for her refusal to take New Zealand into the war in Iraq; and the perseverance over many years of her husband, Peter Davis. The couple suffered some of the nastiest stuff that New Zealand’s small-minded can come up with.
In being a strong, childless woman Prime Minister often surrounded by able women, Clark straddled a divide that New Zealand has yet to cross successfully. For a certain type of New Zealander, her combination of authority and feminist conviction came across as bossy, scary, and above all threatening, for many women as well as men.
Who talks now about “the nanny state”? That tiresome slur died with the Clark Labour government, or “Lyebah” government, as Clark would say it.
The only time her voice seemed to quaver was when she talked about finding out who your real friends are “when the phone stops ringing and the texts go very quiet” after losing the election last year.
What did she gloss? The 1996 negotiations with Winston Peters, for one thing, where after weeks of suspense, Peters finally went with Jim Bolger’s National Party.
If she’d kowtowed more to Peters, Clark might have governed from 1996. When she finally corraled Peters as Foreign Affairs Minister in her last government, she showed her class. Neutered on his signature trade and immigration issues by his international duties, Peters the show pony was finally out to pasture.
On governing during the long run of economic growth, Clark worked in her government’s “economic transformation” buzz phrase, but she seemed almost to lack conviction. The last nine years were boiled down into a long list of policy actions rather than a period of strength not exploited for greater gain.
Some, like giving midwives the right practice independently and the anti-smoking campaign, were controversial and close to Clark’s own heart. But there was no sum articulated that was greater than the parts.
Clark led very competently, but the closest she came to doing the vision thing was her sponsorship of the arts, culture and heritage,which has fostered the flowering of a more mature nationhood in recent years, and which hasn’t come a moment too soon.
It’s in this maturing, more complex society that Labour now seeks rebirth and a new constituency. But be watchful. With Aunty Helen and Uncle Michael out of the way now, Cousin Goff had better start watching his back.
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