Thursday, December 08, 2005


Sideswipe gift recommendation #3: Kiss Celebriducks. Bath-time can now be shared with your four favourite glam-rock rubber ducks. (From

By Ana Samways

The Commonwealth Bank of Australia apologised on Monday for a "grooming handbook" that suggested staff wear flesh-coloured underwear and advised against shiny stockings because they make legs look fatter. The grooming guide also recommended that earrings should be no bigger than a small coin and that women should wear no more than two rings on each hand. "The guidelines are just that - guidelines," said bank executive Hugh Harley, backpeddling madly. "I apologise to any staff who may have been offended or who do not feel comfortable discussing such matters."

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Auckland City Council responds to the towing of the Christmas tree delivery truck by pointing out that the offending truck was parked on a bus stop. And "not even Santa and his sleigh should be doing that!" ... Whodoya have to be to get off a parking ticket in this town? John Banks?

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Did you hear the one about the guy who sat in line outside Real Groovy from 3am Sunday morning for two U2 tickets for himself and his girlfriend, only to end up having to flog them on TradeMe days later because said girlfriend dumped him for spending all their savings on the tickets. "U2 was our band and she's ruined it for good," he writes on the auction description.

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Online gossip-spreader Defamer ( reports that Elijah Wood, "the much-respected expert on wildly successful film franchises adapted from beloved fantasy literature", was overheard after the cast and crew screening of The Chronicles of Narnia saying: "The little girl carried the film. British teeth and all."

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At a symposium on the Cultural and Historical Aspects of Foods at Oregon State University, a presentation titled "What is the Flavour of Human Flesh?" reveals the most succulent body part is the palm. And according to a member of the Dani tribe in Irian Jaya who reminisced about the taste of human flesh in an article in the Baltimore Sun in May 1992, "Old ones are tough". As you'd expect.

John Armstrong: Welcome back, Winston Peters

For months it has seemed as if the real Winston Peters has been abducted by aliens and his double-breasted suits filled in his absence by a lookalike imposter.

How else to explain the surly, unsmiling figure who blamed everyone but himself for NZ First's abysmal election campaign, who accepted the "baubles" of office when he said he would not, who denied he is a member of the Government, and who has rounded it all off with an unconvincing impression of a foreign minister?

Not only was the clone behaving in ever more worrying ways, it appeared to be utterly devoid of the Peters magic.

However, on the evidence in Parliament this week, the Peters of old seems to have returned. He is back to his happy and irrepressible best in the arena he loves to dominate, poking fun at National MPs and seeking out Rodney Hide - a favourite foe - for special attention.

His verbal chipping at the Act leader yesterday saw him ejected from the chamber by the Speaker. But for once, Margaret Wilson's ruling, which followed numerous warnings about interjections, did not provoke the usual volley of protests from Mr Peters.

Such was his good humour that when Mr Hide called him a "Government poodle" - an insult all the more wounding for it being Mr Peters' preferred description of United Future's Peter Dunne in the last Parliament - the Peters smile, if anything, expanded.

His sunny disposition was no doubt bolstered by his possession of a clutch of leaked emails written by one of Don Brash's advisers, the contents of which appear to be hugely embarrassing to National.

But Mr Peters is also acutely conscious that his so-far stuttering performance as Foreign Minister is under intense scrutiny as National uses its first opportunities to grill him in Parliament since his return from the Apec and Commonwealth summits.

Murray McCully, National's foreign affairs spokesman, was not lacking material as he quizzed Mr Peters on the friction between him and Phil Goff, whom Mr Peters replaced and who has likened Mr Peters' relationship with Labour to that with his mother-in-law.

Getting grumpy about that would have played right into National's hands in helping it drive a wedge between him and Labour.

He instead made light of suggestions he had been at odds with Helen Clark and Mr Goff. And, for the first time in weeks, he looked comfortable about being a minister in a Labour-led Government, rather than trying to fight it.

While the joke-cracking and refusal to treat Mr McCully's questions with any seriousness was frustrating for National, it was also a much-needed morale-lifter for his NZ First colleagues.

When National's Gerry Brownlee raised one description of Mr Peters as nothing more than a "post-box" through which other Foreign Ministers communicated with those in the Government who really did the work, NZ First's Ron Mark shot back, "Better than being a tucker box" - a dig at Mr Brownlee's portly frame.

Most striking was Mr Peters' posing patsy questions to the Prime Minister and David Benson-Pope which cheekily contrasted the latter's difficulty in remembering events of 20 years ago with Dr Brash's inability to remember something that had happened just weeks ago.

The questions would have provided some respite for Labour had the Speaker not ruled them out of order. No matter. Mr Peters' gesture was more than Mr Benson-Pope's own colleagues have been willing to do to help him.

Editorial: Overheated dollar can't beat gravity

The view of Goldman Sachs, arguably the world's most influential investment bank, that the New Zealand dollar is likely to drop quickly in value next year would have been music to many ears. Among those most heartened by the scenario would have been the country's exporters and the Governor of the Reserve Bank, Alan Bollard. Not that Dr Bollard was ever about to be dissuaded from lifting the official cash rate today. He has laid his cards on the table several times in the past month or so, and will have seen no compelling reason to reshuffle them.

Inflation, with good reason, is the Reserve Bank's core concern. Its most pressing current worry is, therefore, the breaching of the 3 per cent inflation threshold. In October, when Dr Bollard last raised the official cash rate, he made it clear that consumer spending, particularly on housing, was the main obstacle to bringing inflation back within the bank's target range. Further rises in the rate could be ruled out only when this spending moderated, he said.

There has been little to suggest a sudden outbreak of moderation. The housing market remains relatively strong, and retail spending, based on credit-card billings, retains a head of steam. Added to these are the threat to inflation posed by a tight labour market and wage increases, as measured by a 5.5 per cent surge in the unadjusted labour cost index. In sum, there is little to suggest the domestic economy is slowing.

Goldman Sachs' advice to its clients to sell the New Zealand dollar is likely, in time, to reduce the capital available for mortgage lending. The funds of the archetypal Belgian dentist, which have underpinned the housing market bubble, will be transferred to a destination boasting similar interest rates but stronger economic fundamentals.

The investment bank forecasts, in fact, that with the New Zealand economy slowing very quickly and interest rates falling, the dollar could be worth just 63USc in 12 months. In the past few days it has traded around 72USc as the market factored in a rise in the official cash rate. Dr Bollard will, of course, be mindful of the medium-term scenario. In particular, he will be anxious not to cast a pall over business growth intentions. But this is not a situation in which he can afford to exercise patience.

Such is especially the case when eight previous rises in the official cash rate since the start of last year have failed to moderate consumer spending to any great degree. Bank lending practices have ensured that mortgage demand, itself the product of an annual 17 per cent increase in the national median house sale price, has been met. At some point, however, higher interest rates must dampen consumer spending and lead to a fall in the dollar.

Indeed, Dr Bollard's main point of conjecture in the lead-up to today's announcement was probably whether to lift the official cash rate 25 basis points, to 7.25 per cent, or to deliver the jolt of a 50 basis points rise. The finely balanced nature of the economy, and the likelihood that one serious setback could prompt a hard landing, probably ruled out the more dramatic action. But Dr Bollard has every justification to signal that another rise lies in store early next year if consumer demand does not slacken.

Goldman Sachs has cautioned that foreign-investor support for the New Zealand dollar "could rapidly disappear". Today, the Reserve Bank will again tackle the demand side of the equation. How people respond will determine how long gravity continues to be defied - and the degree of pain when everything comes back to earth.

Garth George: Ten simple steps that lead to good living for mankind

I don't know whether the silly season has come early this year, but there seems to have been a lot more than usual claptrap floating around the news in the past week or so.

It started with all the kerfuffle over the death sentence on the young Australian for trying to smuggle drugs through Singapore.

It seemed an open and shut case to me. Singapore law provides for a mandatory death sentence on anyone caught with sufficient drugs on their person to indicate trading therein.

Anybody who has kept even cursorily abreast of current affairs in recent years would be aware of that, for this case is only the latest of several which have seen foreigners executed in Singapore for carrying drugs.

I can understand that there are many people who disagree sincerely and passionately with capital punishment (I am not one of them, incidentally) but why they would try to interfere with the sovereign law of another country is beyond me.

Even more claptrap has been generated over the kidnapping in Iraq of Harmeet Singh Sooden, who has been described ad nauseam as a "peace-loving man". I don't see him that way; I see him as a side-taking man.

Those who genuinely seek peace, the blessed peacemakers whom the Bible says "shall be called the sons of God", never take sides. And certainly never protest.

Sooden does both, as evidenced in a front-page picture of him in this newspaper carrying a banner reading: "Israel apartheid is wrong".

But that aside, anyone who sets himself up as a self-styled peacemaker and sets out to negotiate in a war zone cannot be a bit surprised if it all turns to custard, particularly when he might find himself dealing not with rational human beings but with religious fanatics whose minds are firmly locked in the 12th century.

I just pray that Sooden, and his equally misguided colleagues, don't pay for their naivety with their lives.

Now for the ultimate claptrap to appear in this newspaper of late. Under the heading "Lessons in being a soul survivor" it appeared on this page on Tuesday from the pen of the Rev Glynn Cardy.

Cardy is the latest of a series of pretentiously unconventional, even oddball, parsons to inhabit the pulpit of St Matthew-in-the-City, that elegant pile of Anglican stone which gives Auckland's inner-city Hobson St a modicum of character.

I take issue with Mr Cardy on two counts: (1) that the word "sin" should be deleted from our lexicon as historical spam; and (2) that Jesus Christ came to Earth to be a politician.

Much else that Mr Cardy wrote is beyond my comprehension, which is how I generally find the dissertations of religionists who have evolved their own personal theology.

So impenetrable was some of it that an old friend of mine, once a big gun in the Anglican priesthood, was moved, most uncharacteristically, to describe it as "bullshit".

It beats me why some people - and churchmen in particular - go to such great lengths to complicate what is such a simple concept.

Sin is nothing more than rebellion against God, the creator and sustainer of the universe, who made us in his own image and likeness.

Since God wants only the best for his people - be they in church or out - he laid down a set of principles which he knew would lead to good living for all. Simple they are, too - there are only 10 of them.

But as the millenniums rolled by he came to the conclusion that mankind was incapable of obeying even 10 simple principles, and in the meantime his beloved humanity was losing touch with him and had come to see him as a strict disciplinarian rather than a loving father.

So he sent his son, Jesus Christ, whose birth we are again about to celebrate, to show us how much God loved us as our heavenly daddy and to make himself a sacrifice for the sins of us all.

There is, of course, great mystery here, but the simplicity of it is that God told us that if sin was getting us down, then all we had to do was ask him through Jesus and he would forgive us our sins and cleanse us from all unrighteousness.

Some of us recognise ourselves as sinners, many don't. Some of us try, often without too much success, not to be sinners; many don't. It's strictly a matter between an individual and God.

But if we're going to delete "sin" from our lexicon, then we will have to delete such words as "religion", "Christianity", "Judaism", even "church", for there will be no need for any of those - and Mr Cardy will be out of a job.

As for that statement that "the arrival of Jesus was a political act" and that to the Roman Empire "Jesus was a political threat", I must admit that I was gobsmacked.

Jesus showed no interest whatsoever in the Roman Empire, neither was he a threat to it, although some insecure lackeys of Caesar's might have seen him so. Had he been, then he must be seen as an abject failure, for the Roman Empire lasted for centuries after he had gone.

He was a threat only to the religious leaders of the day, King Herod among them, who had a huge vested interest in keeping God at a distance from the people.

So they killed him - and by doing so lost the spiritual battle (Jesus was involved in no other) for the souls of men. I praise him and thank him that as a result, 2000-odd years down the track, I am a soul survivor.

Gwynne Dyer: Rice opens can of worms in Europe and at home

Metternich comes close to being a statesman; he lies very well," Napoleon once said of the Austrian aristocrat who dominated European diplomacy for a generation. By that standard, US Secretary of State Condoleezza Rice does not come close at all.

Her four-country European tour was originally intended to rebuild US-European relations damaged by the Iraq war, and especially to welcome a new German Government whose leader, Chancellor Angela Merkel, wanted to kiss and make up with the Bush Administration.

But then came the furore about the alleged torture of terrorism suspects and the revelation that the Central Intelligence Agency used the airports of America's European allies for the "rendition" of those suspects to places where the torture could be done more conveniently.

Rice's failure to lie convincingly about the torture accusations - the US, she said, "does not tolerate, permit or condone torture under any circumstances" - was not all her fault, for she is continually undermined by other parts of the Administration.

Vice-President Dick Cheney publicly insists that the CIA be exempt from the ban on "cruel, inhuman and degrading" treatment of prisoners, and the CIA goes on using such techniques as "waterboarding" (strapping a prisoner to a board and immersing his head until he believes he is drowning) even while the State Department condemns other Governments that use the same technique.

Since almost all of this activity takes place beyond the borders of the United States, there is not much that its opponents can do about it through the American justice system.

Moreover, the CIA and the US military usually outsource the more extreme forms of torture to other Governments (the Abu Ghraib abuses were an aberration) to evade direct legal responsibility.

But that does involve flying detained suspects around the world in planes owned or chartered by the CIA, and the flight logs of these aircraft show that they have landed hundreds of times in European Union countries - which may legally implicate those countries as accomplices to torture.

Thousands of detainees may have been carried on these "ghost flights" over the past four years, and Lawrence Wilkerson, a former US Army colonel who served as chief of staff to former Secretary of State Colin Powell from 2002 until early this year, told the BBC last week that between 70 and 90 prisoners have died in "questionable circumstances".

As the revelations about secret CIA prisons in Europe, and CIA shuttle flights through EU countries grew - at least 210 stops in Britain, 50 in Ireland and 437 in Germany - EU political leaders were forced to demand explanations from the United States.

For two weeks Condoleezza Rice denied US wrongdoing but mostly said nothing, which was certainly the best strategy in the circumstances.

The European Governments could satisfy their own public opinion by loudly demanding answers, and the US saved everybody embarrassment by not giving any. But then Rice lost her patience and told the truth.

She defended the renditions as a necessary part of the US "war on terror." She made it absolutely clear that the US Government had the knowing co-operation of the relevant EU Governments, or at least of their intelligence services, in these shuttle flights. It must have felt very satisfying, but she will regret saying it before the end.

What she said was completely true, of course. You can't have all those flights going through the airports of sovereign states without the knowledge and permission of the host Governments, even if they choose not to inquire too closely into what the planes are carrying.

By highlighting their complicity in the renditions, Rice made it very likely that there will now be judicial or parliamentary inquiries in these countries to probe the extent to which their Governments knew - or chose not to know - what was going on.

The uproar will probably be greatest in Germany, where the former socialist Government led by Gerhard Schroeder had publicly broken with the Bush Administration over the invasion of Iraq.

It's not all that surprising that it tried to repair some of the damage by turning a blind eye to the ghost flights, but the manifest hypocrisy of its behaviour will create huge pressure in Berlin to uncover the truth, and it may yet break Angela Merkel's brand new "grand coalition" Government.

There will be public inquiries in other countries, too, and a constant flow of new information about the illegality and cruelty of the American gulag that will undermine the already failing authority of the Bush Administration.

By telling the truth and insisting that European Governments share the blame for the policy, Rice has opened a can of worms that her colleagues at home would have preferred kept shut.

Philippa Stevenson: Grim future reflected in a dying lake

I know I'm not alone in worrying, as I get older, about what sort of world I'm leaving for my descendants.

Barring cataclysm, I'll probably take that short step to my grave from a life of comfort.

I am unlikely to know a world without the convenience of my fossil fuel-guzzling car. I'll have a good roof over my head, heating at the touch of a switch and food in such abundance that obesity will remain more of a concern than starvation.

But I'm haunted by the thought of my grandchildren or their children living in some Mad Max-type world where every man, woman and child fights daily for a skerrick of dwindling shelter, energy and food.

Such nightmares might suggest the power of Hollywood but they also reflect the bombardment of environmental bad news that seems to veer from prospects of global warming to another ice age.

I don't know whether my offspring's offspring will fry or freeze but either way things don't look comfortable.

Neither am I comfortable with the idea that scientists have got a handle on what has happened or what will happen. Nor have I much faith in so-called public servants to make timely decisions should their advisers reach a consensus on what needs to be done.

I've reached this level of cynicism after years of being dewy-eyed about the ability of scientists to uncover the intricacies of what makes the place tick, and harbouring the belief that the powers-that-be - duly informed by the clever scientists - were there to do the right thing.

As far as I can make, out no one knows enough to make more than a rough guestimate of what affects what and what remedial action, if any, could make a difference.

That's not a reason to do nothing but it's surely a reason to be honest about what we know, what we don't and what we can, realistically, achieve.

It's a reason to take a much longer-term view. Longer than the average human life, which seems the most common but most inadequate span used for much thinking and planning.

If the planet has come to this pretty pass after 4600 million years then three-score-years-and-ten seems a bit on the short side for making far-reaching decisions.

This was brought home to me by a local example: Cambridge's much put-upon Lake Te Ko Utu, a 5.3ha body of water set in a 17.6ha park on the town's church corner on State Highway 1.

Before European settlement, Maori treasured it and used it as a source of eels, koura and fresh water. European settlers, too, valued the lake; swimming in it and erecting a bathing house and changing rooms. But in 1882 town commissioners made a fatal error. Instead of draining the town's run-off into the nearby Karapiro Stream or Waikato River, they piped it into the lake.

Over the next decade stocking the lake with golden carp and American catfish and planting thousands of shrubs compounded the bad decision.

A historian writing in the Cambridge Edition this week detailed, year by year from the 19th century to the 21st, the cruelties visited upon the lake, which in 1864 was described as a "reedy lake" that was home to large numbers of wild duck.

Not a decade has past since without some new plan for clearing, dredging, planting, flooding, draining, or filling in some area of the lake.

The latest is for the Waipa District Council to spend $600,000 on such measures as filtering stormwater feeding the lake, removing weeds, rebuilding walkways and building a retaining wall.

Given the vast changes over 123 years to the lake's natural, sustainable state I suggested to Cambridge Community Board chairman Rob Feisst that the council could only deliver stopgap measures on the way to oblivion.

He didn't agree but it seemed more about my choice of words. "Part of the council move is to stop further deterioration," he said. "They are trying to maintain it as long as they can."

And then what?

More than 60 Cambridge residents made submissions on the council's plan last month and Feisst said the community regarded the lake as "a gem, very special and a well-kept secret."

It's sad to say, but regardless of how much the present generation of Cambridge people is prepared to fork out I'll wager the lake won't be considered something special by my grandchildren's children.

More than likely it will be another former gem condemned by short-term thinking.

Michael Richardson: Water politics are heating up

China's pollution of the environment and its enormous demand for natural resources and energy to fuel its rapid economic growth are injecting a potentially disruptive element in Beijing's relations with neighbouring states - water politics.

Russia is on alert after a big chemical spill in its far-east territory, carried from China by one of several major rivers common to both countries.

The toxic slick is heading towards Khabarovsk, a border city of nearly 600,000 people, and is expected to reach there next week.

The accident has renewed questions about the costs of China's breakneck economic boom and the culture of official secrecy that allowed some Chinese officials to withhold information about the danger of the spill.

Several senior officials, including the head of China's environmental protection agency, have resigned as a result of the cover-up.

China is not just a rising economic and military force, it is Asia's dominant headwater power. This is an aspect of the growing Chinese influence on its neighbours, for both good and ill, that is seldom recognised.

Many of the big rivers that sustain people, agriculture and industry in the Russian far east, Central Asia, South Asia and Southeast Asia start in Chinese territory.

They include the Songhua, Heilong, Ili and Irtysh that flow into Russia or Kazakhstan.

They also include long stretches of the headwaters of the Brahmaputra River before it reaches India's Ganges River and Bangladesh. Many of Southeast Asia's largest rivers come from deep inside China, too. Among them are the Salween, Mekong and Red Rivers.

What China does to this vital supply of water - by building dams, diverting flows for its own use, or polluting upstream sections - affects its downstream neighbours, a point graphically illustrated by the 100km chemical slick heading for Khabarovsk.

Both the benzene and nitrobenzen in the water can cause blood disorders in people exposed to high doses. Benzene also causes cancer.

The Chinese Government formally apologised to Russia late last month after the two countries said they had agreed to set up a hotline so that Beijing could keep Moscow informed about the spill.

But Russian environmentalists say China should have consulted its neighbour more quickly and extensively after the spill. Beijing didn't officially notify Moscow until nine days after the accident.

Russia's chief state epidemiologist, Gennady Onishchenko, said more than a million people in the Russian far east could be affected by the residues of benzene in the water. Some fear the slick may poison fish and cause other long-term damage.

"Such a heavily-populated territory as China by definition cannot give us clean water," said Onishchenko, who is also Russia's consumer rights watchdog. "We need to switch big towns to more secure sources of water."

China, which faces growing pressure to provide more clean water and electric power to its 1.3 billion people, is intensifying use of its fresh water resources and harnessing previously untapped rivers.

Hydro dams on rivers in China provide about 100 million kilowatts of electricity, about 23 per cent of total capacity.

The Government plans to triple hydro power supply by 2020. The programme includes a series of huge dams on Chinese sections of the Mekong and Salween that downstream countries in Southeast Asia fear will affect the amount and quality of water they receive.

China's increasing withdrawals of water from the Ili are contributing to the drying-up of Kazakhstan's Lake Balkhash, the second largest body of water in Central Asia. And construction of a 300km canal to divert water from the Irtysh is causing concern in both Kazakstan and Russia because the river flows from China into both countries.

To head off protests, Beijing has held talks with its neighbours about its plans to make fuller use of the shared rivers.

It has also offered some of the countries compensating deals in energy supply, trade, aid, concessional loans and investment.

Some critics say binding transboundary agreements on river water allocation are needed.

But China is unlikely to sign such accords at a time when demand for water has never been greater and will increase even more in future.

* Michael Richardson, a former Asia editor of the International Herald Tribune, is a visiting senior research fellow at the Institute of Southeast Asian Studies in Singapore.

Brian Fallow: Kyoto road map proves far too hard to follow

The Government is having second thoughts about the climate-change policy it rolled out three years ago.

That was inevitable after it became clear that one of the underlying assumptions of that policy - that New Zealand would comfortably meet its Kyoto target and would be a net seller of carbon credits on the international market - is most unlikely to be true.

And it is debatable whether a carbon tax, the central plank of the policy, would pass the new Parliament. It would probably come down to whether the Maori Party supported it.

The conclusions of an officials' review of climate change policy remain under wraps while the Cabinet scratches its collective head.

But if the Treasury's advice to the incoming Government is anything to go by, radical change, not tweaking, is in the offing.

It says present measures will contribute little to meeting our Kyoto obligations (average annual net emissions between 2008 and 2012 no greater than in 1990) but at a relatively high cost.

While the prospect of a carbon tax tilts the playing field in favour of renewable electricity generation, at the level initially set (equivalent to 4c a litre on petrol) it would lead to almost no change in transport use. As a price signal, it is pretty feeble compared with the loud and clear one already being delivered by international oil prices.

Nor is it clear, the Treasury says, that negotiated greenhouse agreements with large industrial emitters will deliver material reductions in emissions.

It argues that the carbon tax would be distortionary because it exempts methane and nitrous oxide - the greenhouse gases arising from the farming sector - which account for about half of New Zealand's emissions.

Not that the farmers have been conspicuously grateful for this subsidy from other taxpayers, given their vehement opposition even to fronting up with the originally agreed contribution to some research on reducing those emissions, the so-called fart tax.

The Treasury recommends scrapping the proposed tax on the carbon content of fossil fuels and the associated negotiated greenhouse agreements, under which large emitters secure exemption from the tax in return for achieving world's best practice in emissions for comparable plants.

Instead, it favours devolving a large part of New Zealand's climate change obligations to firms and individuals and allowing markets to determine the most efficient way of meeting the country's emission reduction goals.

On the other side of the ledger, this would include devolving forest sink credits and the Kyoto obligations for deforestation.

The briefing document does not elaborate on how this emission trading system would work.

But it is likely to involve allocating a fixed number of carbon credits or tradeable rights to emit greenhouse gas to firms on some basis, perhaps grandfathering or a tender.

Those expecting to exceed their allocation would have to buy extra credits to cover the excess from those who had them to sell, such as the owners of "Kyoto" forests, established since 1990 on land not previously forested.

For the transport sector, the point of obligation would most likely be the oil companies.

They, it is safe to assume, would pass on the cost to consumers, giving them a price signal not just about how to use existing vehicles but more importantly about what to buy when it comes time to replace them.

For large industrial emitters, the system might not be different from the negotiated greenhouse agreement, one which, in effect, determines a baseline of emissions they are allowed before penalties apply.

But it is far from clear how emissions trading might be applied to the agriculture sector.

That large exemption seems to have led to one of the least satisfactory elements of the present policy, the decision for the Government to retain ownership of (or confiscate as the foresters see it) the credits created under the Kyoto Protocol for forest sinks.

The subsequent drying up of new forest plantings cannot solely be attributed to that decision - weak cyclical prices have also contributed - but it has not helped and is responsible for much of the Kyoto-related hole which has opened up in the fiscal accounts.

But while Kyoto forest owners might rejoice at a flipflop of that policy (which is on the table in negotiations the industry has been having with Jim Anderton), the flipside would be devolving to forest owners obligations under Kyoto when the change in land use goes the other way, from trees to grass, which is increasingly common.

Clearly, then, the design and implementation of a domestic emissions trading regime would not be easy, whatever the theoretical advantages of using the market and continually varying prices to allocate the resource instead of the crude and sticky instrument of a tax.

And such a system would have to interconnect in some way with international trading in carbon credits as New Zealand as a whole is now expected to fall short of its target.

One element of the policy which has not been on the table in the latest review is the possibility of pulling out of Kyoto and reneging on international obligations solemnly entered into.

But one of the major uncertainties overhanging all this is what sort of international regime there will be after Kyoto's first commitment period expires at the end of 2012.

Talks are under way in Montreal to draw up some kind of road map for arriving at a successor to Kyoto.

The geopolitics of climate change remain as challenging as ever, however.

The Bush Administration continues to set its face against any quantified target, yet that is fundamental to the Kyoto approach. So long as that view prevails in Washington, the world's largest emitter will remain outside the system, seriously weakening it.

And the question of what obligations it is reasonable to impose on developing countries remains a vexed one, even though their collective emissions are expected to overtake those of the developed countries within 20 years.

As the Treasury sees it, the Government faces a strategic choice.

One option is to relax the goal of moving the country on to a downward path for emission by 2012 and awaiting the outcome of negotiations on a post-2012 regime.

This amounts to waiting and seeing if Kyoto collapses under the weight of its free-rider problems and lets us off the hook.

The other path would be to accept that more stringent climate change targets are inevitable in the longer term and that sustainable policies are needed to move towards them at least cost.

That is the future-proofing option.

Frances Grant: Oprah puts the wind up

How thoughtful of TV3. Halfway through epic six-part thriller The Grid, the channel has come up with something more urgent than global terrorism for us to worry about.

True, The Grid wasn't flawless. It did require us to swallow Julianna Margulies as a woman who always could find a window for sizzling sex in her busy schedule co-ordinating the major intelligence agencies of the Western world.

And some of the lines were clunky enough to topple an edifice or two of consumer culture in their own right.

But it was a drama with a scope and purpose that we are rarely treated to in these times of reality-trivia-obsessed TV. And it had a sophistication jettisoned long ago by the ever more breathless and cliched terrorist drama 24.

Never mind all that. TV3 pulled the show to make way for terrorism of a much more urgent kind: that which we must learn to exercise over our bodies in a too affluent society with a pathological fear of ageing.

Who better to put the wind up us - literally, in last week's special on how to maintain a healthy colon - than that doyenne of influence, US talk show queen Oprah Winfrey?

What better way to digest dinner at 8.30pm than to watch Oprah and a doctor with a book to push struggling with the euphemisms required to talk about faeces and flatulence on prime-time TV.

Never let it be said that Oprah neglects to deliver public service TV. You have to hand it to her: not everyone moves with such ease - forgive the word choice in the context - from showing off her itsy-bitsy heels to wrangling with a diseased intestine for the cameras, fetchingly accessorised in purple surgical gloves.

And Oprah is certainly pushing the boundaries of candidacy for talk show guest: Sarah Jessica Parker, say, in the spotlight one week, America's most constipated the next.

The show offered some interesting information, if only Oprah didn't feel the need to process it into her excruciating baby talk. Or to endlessly repeat the last two words of what her guest said, as if that constitutes some kind of repartee.

A few harder questions might have added variety, such as asking the good doctor why humans, after hundreds of thousands of years of survival, suddenly desperately need diet supplements. Or why there's no meat, or indeed any protein other than fish, among the recommended foods.

Oprah knows her audience's limits. Too many details could constipate the brain and we're obviously here to get that bolus moving, people.

Speaking of brains, this week we say goodbye to a show which has been allowed to run its natural course to the end of the season. Despite the tender years of its target audience, Veronica Mars was one of the best on the box.

Its heroine was a little misnamed, however, being a superhero who, unusually, relied on her mental powers rather than physical prowess.

Young women do not always come from butt-kicking Mars, some are from a more cerebral and savvy planet. The teenage PI used logic, deduction and persuasion to defy the bullies and defend the helpless in her troubled town of Neptune.

Let's hope the show survives tomorrow's conclusion to its major storylines -who killed her best friend and who is her real dad - and keeps some powder dry for future seasons. Given its intelligence and inventiveness so far, all the vital signs are good.

Allan Hawke: Neighbours, friends and all too often rivals ...

This is the second part of an edited transcript of a paper prepared by Allan Hawke and used as the basis for his address to the New Zealand Institute of International Affairs in Wellington.

In a recent Lowy Institute poll of what Australians think about our friends and neighbours, 94 per cent thought positively about New Zealand, 4 per cent were negative and 2 per cent were unsure. I wonder what response New Zealanders would give to that question?

People from the West Island often make the mistake of thinking Kiwis are just like Aussies. They're not!

Kiwis often feel Australia takes them for granted, ignores them or patronises them. Even worse, we're sometimes indifferent.

Because the relative importance of the relationship is so much greater for New Zealand, Australians have a constant - if vague - sense, that we are continually being outsmarted through not paying sufficient attention to what you are up to.

The obverse of the coin involves Kiwis obsessing about Australia to the point of paranoia. And we have a bad tendency towards petty point-scoring and talking past each other - a bit like some marriages really!

Let me turn now to the three initiatives I mentioned earlier.

The CER ministers meeting

First, the expanded CER ministerial dialogue.

The second such meeting, at Queenstown, in December last year saw a detailed exchange on biosecurity issues of concern to both sides and resolved the Wine Equalisation Tax issue.

Ministers decided to develop an agenda for working more closely together on industry development issues in an endeavour to build globally competitive industry capacity.

A few months ago, we settled the arrangements allowing export of New Zealand's summer fruit (including apricots and plums) to Western Australia.

I'm pleased that the revised draft Import Risk Assessment was released last Thursday. The rather long gestation period in reaching this stage stemmed from court proceedings (that were finalised on November 18) and biosecurity, including Australia's rightful determination to follow rigorous and transparent science-based processes to ensure the risk assessment's integrity. We haven't reached the finishing post yet, but we're in the home straight.

I don't think I've ever been accused of subtlety - but let me give you an illustration of New Zealand's. Last Tuesday night, I was fortunate to be present at a dinner at Government House - the name cards were held in place by little apples.

A few niggling issues relating to "Rules of Origin", men's suits and meat pies remain on New Zealand's agenda.

Less well known than these cases are Australian concerns over access for seven tropical fruits (custard apple, papaya, longan, lychee, mango, mangosteen and rambutan), bananas, mushrooms and honey to the New Zealand market. We're also waiting on legislative changes to enable quarantine policy to operate without contravening the Hazardous Substances and New Organisms Act.

In typical Australian fashion, we have been very patient and not raised a public fuss about the lack of progress with these items.

More seriously, we will need to be very careful not to let these sorts of irritants become disproportionate in the broader bilateral context, as they have threatened to do on occasions - another example of where the value of personal relationships cannot be underestimated.

The Australia New Zealand Leadership Forum

All relationships need nurturing to preserve the romance.

Last year, Wellington hosted the Inaugural Australia New Zealand Leadership Forum, which brings together a group of around 80 political, business, academic, cultural, science, media, union and public service leaders.

In my view, the two sides came together with different expectations. The Australian side was keen to get some concrete outcomes, whereas the Kiwi side was more inclined to foreplay.

One official remarked: "I don't want to be told about our shortcomings by Australians." Another pondered why his colleagues were not inclined to take the Australian side at face value.

Business journalist Rod Oram commented: "It would be a serious mistake to believe that Australia is the answer to most of our problems By focusing too intently on Australia we would miss other, bigger opportunities."

Rod's assessment reflects the mirror image of Paul Keating's inclination to tell the Australian business community that every time Japan's GDP grew by 1 per cent, that equated to the whole of New Zealand's GDP. In other words, why bother with New Zealand when there are bigger fish to fry elsewhere.

At its initial meeting, the forum adopted "the free flow of people, trade and capital across the Tasman" as its vision.

The first forum also considered the question of a common currency. Currency union would remove exchange rate uncertainty and lower currency conversion costs for companies that do business between our two countries. It would increase transtasman trade and investment. So why isn't it a given?

As Michael Cullen has observed: "It's not a common currency that is on the table, it's whether we adopt the Australian dollar." Prime Minister Helen Clark regards it as a sovereignty issue. And it's certainly not on Prime Minister John Howard's agenda.

The second forum meeting in Melbourne on April 29-30 this year featured a range of written papers, presentations and working group sessions around the vision's three themes:

* The Single Economic Market initiative.

* A common border.

* Enhancing the skills base of both countries through joint standards and training efforts.

Australia and New Zealand have very similar standards of safety and security.

Our border agencies - customs, quarantine, immigration and aviation security - already work very closely together. But, there is scope for further measures and the differences between us can be resolved if the political and bureaucratic will is forthcoming.

We took an important step towards the common border objective last December during the six monthly meeting between our Foreign Ministers when we signed new advanced passenger processing arrangements.

I'm sure you'll be pleased to learn that on November 24 the primary line signs at Sydney, Brisbane and Melbourne International Airports were amended to read, Australian and New Zealand Passport Holders Only, affording New Zealanders going to Australia the same courtesy you extend to Australians when we come here.

I'd be surprised if many of you had heard of, or knew much about, these initiatives. They illustrate the perplexing tendency to play down the positives in the relationship, and to overstate and hype the differences and difficulties.

The Single Economic Market

Most people have forgotten just how controversial the CER proposal was in the early 1980s. The loud vocal majority opposition was convinced that New Zealand would suffer dramatically from such an approach. In fact, analysis of CER by New Zealand has shown that you have been a more significant beneficiary of the agreement than Australia has.

On January 30, 2004, Peter Costello and Dr Cullen set out an ambitious agenda to strengthen CER by pursuing a genuine Single Economic Market (SEM).

With that overriding aim at the forefront of their minds, the ministers decided to focus on five initiatives:

* Integration of the ANZ competition and consumer protection regimes (including implementation of the recommendations contained in the Productivity Commission's January 13, 2005, report).

* The transtasman mutual recognition arrangements governing offers of securities and managed investment schemes.

* The transtasman Accounting Standards Advisory Group, which has started to align the financial reporting requirements between Australia and New Zealand towards our ultimate goal of a common set of accounting standards and a joint accounting standard-setting arrangement.

* Whether an investment component should be added to the CER agreement

* A joint approach to transtasman banking supervision that delivers a seamless regulatory environment. Dr Cullen sees the SEM as the way to realising "a dream, where being a company in one country will be equivalent to being a company in the other country".

At a minimum, we need to adopt what represents best practice on either side of the Tasman. What we really need, however, is to set the standard in all that we do, just as we're doing with accounting standards where we are influencing what is to become the international standard.

I believe that history will look back on the SEM in the same way as CER is now viewed. The proviso is that a similar level of commitment will be required to realise the benefits and overcome the chaff being deployed to distract us from the target.

At the Gateway to Australia Trade Summit in Auckland on March 3, a senior Kiwi businessman argued in favour of broadening and deepening the transtasman relationship. But, here's the rub: He counselled a slow, sensible, cautious approach, saying that other things on the wider world front are more worth doing, so New Zealand shouldn't allocate too many resources to the Single Economic Market.

A significant proportion of elite business opinion over here shares that sentiment, seeing the SEM as a backdoor approach to an Australian takeover of New Zealand's sovereignty.

"If Australians are better than us at anything, it's screwing the scrum," sums up their attitude, and lies behind the orchestrated campaign against the SEM.

Having regard to the rhetoric of the naysayers, it's instructional to look at what has actually been going on.

Over the past decade, the growth in transtasman trade has averaged 9 per cent a year, which is greater than the growth in either country's trade with the rest of the world.

Australia's fifth largest market is New Zealand, which takes 7.4 per cent of our exports (2004), and contributes 3.7 per cent of our imports.

Australia is New Zealand's principal trading partner, taking 21 per cent of your total exports and sourcing 23 per cent of your imports.

At the end of March this year, Australia's investment in New Zealand was NZ$59.4 billion, having grown 24 per cent a year over the past three years, while New Zealand's investment in Australia was NZ$25.5 billion, up from NZ$15.9 billion three years ago.

A few observations

Our nations seem obsessed by sporting prowess as a mark of our identity and measure of global success. If our descendants are to enjoy a similar standard of living, we need to give due recognition to the deserving heroes and heroines in business, engineering, science, academia and other fields of endeavour.

We seem to live in the age of the ephemeral anti-hero - the celebrity poseurs flickering like moths in the spotlight for their fleeting moment of fame or infamy.

I suggest that both our countries need to celebrate the grace and spirit of those who put duty and service to the national interest ahead of public or private gain.

My greatest disappointment is that six years from initiation, we haven't realised our desire for an Anzac memorial. As Deputy Prime Minister of New Zealand, Don McKinnon made two valiant attempts to get regular face-to-face sessions at prime ministerial level - Paul Keating's response was to stare at the ceiling and say that he " ... could always pick up the phone".

John Howard was here for his annual meeting with his New Zealand counterpart earlier this year, the fifth such get-together on Kiwi soil since he became Prime Minister in March 1996 and his eighth visit here since that time.

Two things are unusual about that.

First, the only such annual meeting programmed in his diary is the one with New Zealand.

Second, it was Mr Howard who initiated such meetings.

John Howard's grandfather fought in World War I. His father and grandfather both fought in World War II. I suspect that it's these Anzac links which drive Mr Howard's attitude and approach to New Zealand.

History shows us that we shouldn't be sanguine that Mr Howard's successor will put as much effort and political capital into the relationship as he has.

Revisiting some of my earlier comments, I've concluded that when Australia departs from the stereotype and takes a real interest, then that's construed as a hostile takeover, annexation by stealth, or an attempt to turn New Zealand into a branch economy through hollowing out.

The opportunity to broaden, strengthen and deepen our already close economic integration is there for the taking. If there's a will, we've created a way, just as those responsible for the conception and launch of CER did.

CER set the standard for the rest of the world over 20 years ago - I believe that benchmark should drive today's transtasman agenda.

* Allan Hawke is the Australian High Commissioner to New Zealand.

Talkback: The creative economy and all that Jazz

By Vincent Heeringa

New Zealand is too slow to recognise the new reality: commercial creativity rules.

I spent many happy teenage hours in the fertile apple orchards of Hawkes Bay. So it was with a pang of nostalgia that I heard about orchardists ripping out their trees in response to catastrophically low world apple prices. Maybe New Zealand can't compete at making cars or computers. But apples from Hawkes Bay?

In fact, not everyone is ripping out their trees - and there's an important lesson in why not. When Turners & Growers bought ENZA it inherited a new variety of apple called Jazz. Like Braeburn, Gala and Pacific Rose before it, Jazz was developed by scientists at HortResearch to be crispy, long-lasting and deliciously sweet. But that's where the similarity ends. Braeburn and Gala sell for an uneconomic $15 a box. Jazz sells for a very attractive $30. Why?

Well, we're not comparing apples with apples. Along with Jazz came a plant variety right, much like a patent, that guarantees T&G exclusivity. A "controlled scarcity" policy has meant T&G has much greater control over the quality and volume of Jazz and, as a consequence, the price.

Jazz is an example of the most important change in New Zealand's economy since refrigeration. The difference between Jazz and the rest is not rainfall, rich soils and good horticulture, it's intellectual property. Kiwifruit or lamb, furniture or film, music or milk powder, the key to economic success is turning ideas into IP and IP into commerce.

New Zealand has been dangerously late to recognise this change. On all formal measures of IP creation, we rank poorly, whether it's the number of patents registered each year, R&D spend by private companies or the low level of income generated from copyright activities.

There's another performance indicator, harder to measure, but the most important of all. It's the number of "commercial creatives". First identified by US economist Richard Florida, the presence of commercial creatives in a city is one of the best indicators of future economic growth.

Commercial creatives fall into three groups: technologists, artists and entrepreneurs. They are the new wealth creators because they operate at the centre of IP creation.

Nurturing this group is, in the view of Florida and many economic development experts, the most important intervention a government could make.

Writing about the new dynamic, Dan Pink sums it up: "Lawyers. Accountants. Radiologists. That's what our parents encouraged us to become. But they were wrong. The era of 'left brain' dominance, and the Information Age that it engendered, are giving way to a new world in which right-brain qualities - inventiveness, empathy, meaning - predominate."

There is hope. Florida is a frequent visitor to New Zealand and a great fan. He points to the obvious success of Peter Jackson at attracting Hollywood talent and money to Wellington. But this isn't a job just for film-makers.

The creative economy needs to reach into agriculture, education, retailing, manufacturing or any sector. It will make the difference between New Zealand flourishing or being uprooted like a delicious but uneconomic Braeburn apple.

* Vincent Heeringa is a founder of new business magazine Idealog, launched this week.