Russell Brown's HARD NEWS

16th February 2001 - The Weather Turns Wicked

Copyright © 2001 Russell Brown

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and what an exciting week it's been and promises to be. The world's fastest fast bowlers have turned up just as the weather has turned wicked for fast bowling, the first secrets of the human genome have been revealed - and we have potentially the most serious industrial dispute in a while underway.

There aren't many MAF vets - about 140 - but without them and their inspections, the business of killing and processing livestock grinds to a halt, putting thousands off work for eight days and endangering late orders for the Easter market in Europe.

The vets would seem to have a case. This week's strike action is the business end of two and a half years of negotiating since their last contract expired in 1998. They haven't had a base salary increase for 10 years and if they don't get one this season - when farmers are rolling in money - it's hard to see when they would.

They want 14%, but would apparently settle for less if their conditions are preserved. MAF has made a last-minute offer that doesn't look close enough to that. This strike is not, as some people would have you believe, a result of the Employment Relations Act. It is over the renegotiation of a contract signed under the old Employment Contracts Act. The only difference under the new law is that the freezing works can't hire replacement staff, but foreign customers are hardly going to want meat certified by non-registered ring-ins, so that's probably moot.

The sizzle is added, of course, by the fact that the government is the employer. It would no doubt dearly love to just dismiss the whole affair by giving the vets the rise, but it can't be seen to cave in or to dictate ministry operations for political advantage. Tricky ...

If that weren't exciting enough, we've had the Montana business. The New Zealand Stock Exchange has been a sick puppy for many years now. It has languished while bourses around the Pacific Basin have boomed.

It has witnessed many actions that would have been illegal in other jurisdictions: clear cases of insider trading; Doug Myers and the Lion Nathan board lining up to get a price for their holdings from Kirin that was not available to the shareholders they were supposed to be representing. Compared to better regulated exchanges elsewhere in the world, it has not been a safe place to put your money.

Lion Nathan has this week been at the centre of probably the worst incident yet. Lion and the British company Allied Domecq both wanted to acquire our largest winemaker, Montana. Allied made an offer for Montana shares last Wednesday, giving it a head start on Lion, which under the exchange rules, had to give two days' notice of its own offer.

Allied would be able to buy Montana shares on the Friday in pursuit of its own takeover plans, Lion would have to wait until Monday. These notice periods are designed to ensure that everyone in the market has time to find out what's going on in a takeover situation - and thus has time to accept the offer. They're pretty much a bottom line for the civilised conduct of a market.

Lion could simply have made its offer - which was better that Allied's - known and waited until Monday. Nobody would have sold to Allied on Friday knowing there was a better price waiting on Monday. Instead, Lion went to the NZSE's Market Surveillance Panel and asked for a waiver to allow it to start buying earlier.

The panel - as it almost always has in the recent past - bent over. Lion got its waiver on the Thursday and immediately started stitching up off-market deals, paying a relatively small number of institutional investors a price for their Montana shares that most of Montana's 10,000 small shareholders would never get a look at.

What made it worse was that one of the three panel members, Paul Bevin, is the managing director of Tower Asset Management, which, only hours after the waiver was granted, sold Montana shares to Lion in one of those off-market deals.

Allied, used to dealing in more civilised regimes, never had a chance. Montana chairman Peter Mafsen, whose governance of his company has been a model for the New Zealand business community, lost more than $30 million on the value of his holding. And the New Zealand market's credibility went down the gurgler.

This almost certainly wouldn't have happened under the new takeover code, which is due to become law in July. Anguished and angry columnists and commentators demanded this week that the government make the new takeover code right away.

This would probably only have the effect of making us look even flakier. The code, whose passing was a Labour manifesto promise, has made fair progress. The real issue is the fact that it was held back for five years by key ministers in the National government, at the bidding of the powerful chums in the market.

It's not just the takeover code either. This is about a group of people who talked and talked about international investor confidence and a share-owning democracy and then took deliberate actions to undermine both.

There was not a lot of contrition on offer from National this week, of course. Indeed, the revitalised Shipley machine went on attack, as promised, when Parliament reconvened. While the Prime Minister went for a measured, statespersonlike speech focusing on something called "economic transformation", Shipley came out effing and blinding and throwing roundhouse punches.

She has plainly had some coaching in the holidays. The patronising tone has disappeared in favour of something more rustic and her speech was full of good breathing, strong emphasis and expansive gestures.

It was, everybody agreed, very good. But no amount of coaching can allow for the good old Shipley Brain Fart. "This speech is a huge disappointment!" she bellowed. Indeed! chortled the government benches, applauding wildly. She meant the Prime Minister's speech, of course, but the deed was done and her foot was shot.

We can expect to see lots of this kind of vigour from the new National lineup, especially with Gerry Brownlee - you'll recall him helping an elderly protestor with a spot of stair-surfing at last year's National campaign launch - vaulting up the ranks.

But all the vigour in the world is no substitute for the cold-eyed efficiency of an old pro. Richard Prebble opened his Parliamentary shootin' season by sharing with Parliament the very interesting information about Alliance minister Phillida Bunkle's living arrangements.

It appears that Bunkle's Wellington Central home - which she said was so small that she needed a ministerial residence - isn't that small after all. It was big enough to be the registered dwelling of four adult family members. Were they living there or not? If they were, why was Bunkle getting an out-of-town allowance on the basis that the family home was up the coast in Waikanae? If they weren't, why were they registered to vote in Wellington Central? What exactly was going on?

The Bunkle business is casting a shadow on the Alliance just as it's rolling out its main event. With the agreement of the Greens to approve the government's $70 million start-up investment this week, Jim Anderton's New Zealand Post-run People's Bank became a goer.

The Greens offered rather more than a green light. The price of their approval was the promise that the People's Bank, or whatever it will be called, will co-operate with communities and local independent financial institutions such as credit unions.

In getting this promise, the Greens have actually given the whole thing a point. Anderton's plan has principally been to do what the existing banks do, only different. The Greens have opened up the possibility of a banking hub that can actually *be* something different.

The big threat to the People's Bank isn't necessarily the existing banks, it's the planned Warehouse Bank. Hands up who wants to take on Stephen Tindall at retail? My dark side wonders if perhaps that's the exit strategy: if it all comes adrift, flick the business on to Tindall, who has already absorbedeSolutions' notably unprofitable online mortgage broker E-Loan. It has to have at least crossed somebody's mind.

As E-Loan has demonstrated, the Internet isn't going to be everybody's new shop counter any time soon. The High Street is on the comeback, and a multi-purpose retail service chain isn't a bad model. In the end, the bank's key advantage is the fact that it will be guided by NZ Post CEO Elmar Toime, the smartest man in the state sector. If anyone can make it fly, it's him.

The chairman of Post, Ross Armstrong, will also have his part to play, assuming he can stop Paul Holmes biting his bum. Armstrong in his role as TVNZ chair, confirmed to the New Zealand Herald that the highest salary band at the SOE had not escaped an edict to crank back the big salaries by about 20%.

The level of that high band is a matter of public record. And we all know who is in that band. There has been only one person getting three quarters of a million dollars a year at TVNZ and that is Paul Holmes. Hence, 'Holmes salary cut' was the Weekend Herald's front-page lead.

Holmes was so traumatised by his chairman's callousness at exposing his personal affairs that he spoke to both the Sunday newspapers - the Sunday Holmes and the Sunday Holmes Times - who subsequently featured his private tragedy on their front pages.

Holmes told the papers he had spoken to his lawyer and hinted that he would take action if an apology from his "friend" Armstrong was not forthcoming. But by Tuesday, it was Holmes doing the apologising, to Armstrong and his family. Jesus. Keep taking the tablets, Paul.

Speaking of which, the town will be in a right old state of excitement this weekend, because it is, of course, the big weekend of the Hero Festival. I'd like to thank the people concerned for rescuing and restoring Hero - it's a part of Auckland that we all share.

But to the disappointment of the masses, the parade organisers have already signalled that they want a seemly affair by bumping out an S&M float. Look, the last time they wimped out, its poured with rain. God likes it raunchy, alright?

And God loves all his - or her - children, no matter what certain Citizens and Ratepayers councillors might have you believe. Oh, by the way - Citizens & Ratepayers and Auckland Now are to merge, into a new party called - ta da! - Citizens & Ratepayers Now.

Don't buy it folks. Think of the dodginess of Britomart, think of the decaying sewage system, of rank idiocy over Hero. Think of what a shambles and - most of all - what a bore these pricks made of Auckland local government for decades. And promise me you'll never go back there. That's all


    ==  ==      Russell Brown
  [ @ / @  ]                      
     /        ________________________________________
    (_)         "The views expressed on this programme
    ____)       are bloody good ones." Fred Dagg, 197?

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