Friday, December 09, 2005


Portaloo hell.

By Ana Samways

Reader J. H. Pirie from Waitakere is getting mixed messages about how to get rid of his garden rubbish. He writes: "Six weeks ago one of my neighbours dobbed me in to the Waitakere City Council for burning some garden waste. An official duly turned up and told my wife to pour a bucket of water over the ashes, which were now cold. The official informed my wife that my small backyard burnoff was against some council bylaw. But what confuses me is, in the Western Leader this month a MAF ad appears with a list of of vegetation control rules for the silly season, to reduce the risk of spreading the painted apple moth. The first rule says "bury, compost or burn your green waste on your property or take it to an approved disposal site."

* * *

The train operator Connex has provided many excuses for delays, including mechanical failures and hiccups with track-switching devices, but on Tuesday a late afternoon train from Swanson to Britomart came to a gentle, unscheduled stop while staff moved a mother cat and her newborn kittens from the track and laid them safely in the grass before resuming the journey.

* * *

Cheese crime: An 18-year-old Memphis woman mistook a block of white cheese for a cocaine stash. She tried to hire a hit man to kill four men who had the cheese and steal it. But the hit man was an undercover cop. The young woman, who is an aspiring model, told the hit man she needed money to pay a modelling agency. The officer taped the conversation and police say they have her saying any children old enough to testify must be killed as well.

* * *

More cheese crime: From the Columbia newspaper the State regarding fugitive Rodney Dane Higginbotham, wanted for criminal domestic violence. Police said Higginbotham argued with his wife because she had not cooked dinner. When she began cooking, he started making spaghetti while eating crackers and squeeze cheese. They argued, and he squeezed cheese on the kitchen floor. She squeezed the cheese on his truck, and he squeezed the cheese in her hair before fleeing in his truck. (Source: News of the Weird)

Editorial: America's heart of darkness

Before leaving for European capitals this week, the United States Secretary of State, Condoleezza Rice, gave an interview to USA Today that was considered important enough for American embassies to draw to the attention of newspapers abroad. It dealt with her Government's assumption of the right to seize people in foreign countries and secretly detain them without trial in third countries that sanction torture.

The secretary made no apologies for the kidnappings on foreign soil, which the US calls "rendition". In the war on terror, she said, America was up against enemies that did not respect national borders and nor could the US in its pursuit of them. But she also said these renditions were "never in violation of other countries' sovereignty", which can only mean they occur with the connivance of the country in which they are carried out and countries through which the prisoner is transported.

This leaves an interesting question for governments such as ours to answer. Do we, would we, have we allowed US agents to snatch people in New Zealand and spirit them away to be held indefinitely in a place unknown? If so, we have a right to know that the civil liberties we suppose to be the right of everyone within New Zealand's jurisdiction have been seriously compromised. Dr Rice's European tour may not have been much eased by her candour in this respect.

She also strenuously denied that the US turned a blind eye to torture of its secret detainees. "The President has been very clear," she said, "that [detention] is not going to include torture. He's been very clear that it's going to be within the limits of our laws ... " It is hard to know whether this will satisfy critics in Europe, especially after reading yesterday of the experience of a German citizen seized because he had the same name as one of the dead September 11 hijackers. Why would detention centres be set up outside the US unless it was to take advantage of the custodial practices of those countries?

Rendition and foreign detention are carried out by the CIA, which is allowed to operate by different rules from the State Department or even the military. US law, for example, forbids its diplomatic or military representatives to buy influence abroad. But the CIA can do it with impunity and does, hardly bothering to deny that it sometimes hands out money to gain access to places and the support of people the US needs.

Not long ago Vice-President Dick Cheney said there should be an exception for the CIA from certain international norms in the war on terror. Pointedly, Dr Rice declined to endorse that statement when it was put to her. But the suspicion remains that the State Department and the CIA operate by different codes.

This suspicion is fed, as usual, by secrecy. The US has made no secret of its detention of al Qaeda suspects at its Guantanamo base in Cuba. The reason it tries to keep secret its other detention facilities around the world is presumably to protect friendly governments that permitted the facilities to be set up. But that consideration hardly outweighs the interest of the US and its allies against terrorism in upholding the principles for which they stand.

The world ought to know the identities of those being held on suspicion of terrorism or the intention to do harm. Their detention should be known and their condition independently monitored. Abu Ghraib was a warning that Dr Rice acknowledges. She cites the exposure of abuse there as an example of the checks and balances that protect prisoners of an open society. But it was really an example - a mild one at that - of what can happen in prisons outside the normal oversight of a decent society. It is well past time to let some public light into these shadowy places.

Te Radar: Tennis balls are too good for'em

Collectively there are fewer more vindictively malevolent groups than classrooms of children, whose shallow knowledge of life is combined with an unblunted viciousness.

As harried teachers daily face the apathetic, malicious, conniving and pseudo-innocent faces of youth, it is small wonder that some of our educators snap, and decide to use novel methods of discipline.

But, if one of the many teachers I maddened with my insolence had ever inserted a tennis ball into my mouth I would certainly recall it, no doubt because I would have thoroughly deserved it. The punishment may even have benefited me.

However, I would expect the perpetrator to at least remember and acknowledge his or her correctional innovation, if only for the sake of my own vanity.

The real shame of the current Tennis Ball Saga is that no one has instigated a debate about such methods being introduced to our criminal justice system. What better way to reform the criminally inclined than through ritual public humiliation.

It would serve to reduce our staggeringly high incarceration rate, while simultaneously providing tourists with quirky scenic attractions, as they crowded round our public squares to witness our criminals being disgraced.

As for our burgeoning youth crime statistics, nothing deters wayward youth like the prospect of public ridicule. A few hours with their foreheads taped to a wall they have defaced seems fitting.

Likewise, having to loiter outside premises they have robbed with signs stapled to themselves detailing what they have stolen is appropriate.

For the violent, being forced to stand barefooted in buckets of animal manure seems an apt metaphor for the trouble they are in.

Anyone who has tried to control unruly children will know that they can take an inordinately short period of time to move from innocence to insurrection.

As one chum recently commented: "Even if you are not in the mood to be antagonistic, there are 30 others in the class, so someone will pick up the baton."

At my high school, one teacher whose wife had apparently passed away was reportedly taunted with the low chant of "Mog killed his wife, Mog killed his wife". It would come as no surprise to hear that he had cracked and committed a classroom atrocity.

I had little idea of the horrors that can be inflicted by verminous youth until I had the recent misfortune to address a particularly boisterous mob of intermediate school students.

Grappling to seize their attention through methods other than systematically impaling their hands to desks with pens, I asked if they knew of any famous New Zealand historical criminal gangs.

"But not," I said, "the Black Power, the Mongrel Mob, or any similarly modern morons."

One lad squealed, "What about the Road Knights?"

I responded, "No, they are morons, too."

"My dad is a Road Knight," he replied.

If the children's laughter had a certain mocking ring to it before this revelation, it's derisive edge seemed substantially heightened after it.

"Class dismissed," I said.

Jim Hopkins: Don't despair, Kong will save us from gloom and doom

Don't worry, folks. Keep calm. Relax. There's no need to panic. Don't rush out to cash up your Christmas Club or put your life savings into pork futures or lunar real estate.

Don't suddenly liquefy your assets and start buying shares in one of those weird Uzbekistan companies that spews out unsolicited emails offering unspecified pharmaceutical miracles that will triple the length of unmentionable parts of the human anatomy.

'Cos they don't work.


You must be resolute. You must be a brave little soldier. You shouldn't do anything rash, like pulling the kids out of Dilworth. Or Dio.

"Never say Dio" should be your watchword. That's what the experts say. "When the going gets tough, the tough get counselling," is their view. And it should be yours, too.

Even if that is easier said than done in the present financial situation. Which it certainly is. It's hard being the fiscal equivalent of an ice-cool, 007 Junk Bond when old Ebenezer Bollard seems determined to turn happiness into humbug and the normally ebullient Harold starts splashing terrifying headlines across its front page.

Sell NZ dollars, warns US bank - that was Wednesday's grim message. Or allegedly grim. Until you did some digging and discovered that "global investment banking giant" Goldman Sucks had just got the pricker, that's all.

They were miffed because they hadn't been invited to the King Kong premiere. So they took it out on the currency.

Well, good luck to them. We didn't go nuclear-free just so we'd have a panic attack every time some New York Nobody starts yelling "Sell!!!!" Mr Goldman and Mr Sucks need to understand that they're in a minority of one.

They might want to sell but the rest of the world is desperate to buy. Dollars. Dramas. You name it, they'll buy it. Provided it's Kiwi made.

To prove the point, you need look no further than the premiere to which these Wally Street wonders were not invited. King Kong is going to be huge.

It's going to be huger than huge! Huger than Krakatoa. Bigger than the Bird Flu. It's going to be mega-maxi-massive!!!!!!! So much so that several thrilling sequels are in production. Ever hopeful that some positive information might encourage those Goldman Sucks to get with the programme and change their tune, here's an outline of what moviegoers will soon enjoy:

Ping Pong: This heartwarming tale focuses on a spiritual leader's tireless efforts to reform the world with sports equipment. Saddened by the equivocation, duplicity, media manipulation and bullying around him, Pope David Benson embarks on a one-man crusade to banish evil and put his balls in the nut, whoever that nut might be!

Highlights include scenes where Pope David tells the police one thing and parliament another and also a moving moment where he passionately declares, "I am one of the 19 people who either do not recall the alleged events or do not believe they happened and, more to the point, I am one of the 4,000,000 people who do not know which of those categories I am in."

Watch also for an exquisitely poignant sequence in which the endangered Pope tenderly carries his loyal Press Secretary to the top of the Empire State Building - then throws him to the wolves! "It's political decency with a capital 'duh'," says film reviewer Helen Highwater.

Ning Nong: A gritty fiscal thriller featuring hot hunk John Keys locked in a life-and-death struggle with the fearsome monster, GiSTzilla.

"I had no idea we had to include it in our spending," confesses a chastened J.K. when confronted by the Electoral Commission. "But, hey, inclusive, exclusive, what's the difference?" Actually, about $100,000 dollars, John boy!

Hong Kong: Set in the mystic Orient, this zany romcom is a classic chalk-and-cheese tale. Accused of "treason" after writing disparagingly about a prominent politician, gorgeous reporter Mandy Muckrake steps up her attacks only to find, as she accompanies her nemesis to exciting destinations like Kowloon and Edinburgh, that the Minister of Foreign Affairs really is as handsome, gifted, honest, brilliant, consistent, invaluable and sexy as he claims.

But do the baubles of office include a wedding ring? Find out for yourself when the movie screens next year.

Ring Rongo: Apparently, a lot of people have but he won't answer the phone.

Kingi Kongi: At last! The great ape story with an indigenous twist. In this Kong remake, the visiting scientists never land on Skull Island because of a foreshore dispute and Kongi gets to keep the Empire State Building as part of a Treaty Claim settlement.

Gone Wrong: Action fans will love this thriller starring Bruce Willis as beefy banker Alan Bollard, whose purpose in life is to smash the sinister Uridashi and crush domestic spending.

Unfortunately, no one takes any notice and keeps on sticking DVDs, LCDs, SUVs and CBDs on the plastic until, finally, just when it looks like the whole country's going to fall into the Dreadful State Building, Dr Bollard trumps his enemies by raising interest rates higher than the dollar and we all live happily ever after. Whoopee!!

Brian Rudman: Rail bureaucrats try to go forwards in reverse

I'm a sucker when it comes to preserving our heritage, but I do have to draw the line at the rail bureaucrats' way of speeding up western-bound trains though the Newmarket station bottleneck.

Next they'll be suggesting we dress someone up in a 19th-century tailcoat and have him lead the trains up the track waving a red flag.

Surely a 21st-century rapid-rail system shouldn't involve the driver having to leap out of his/her seat at the first stop and bustle down the platform to a duplicate driving cab at the other end to continue the journey.

There's a certain quaintness about travelling in a train that leaves the city pointing in one direction, then, at the first stop, has to reverse briefly down the way you've come before branching off to complete the trip.

But we're not trying to create a tourist fun railway here, and I'm told the novelty of arriving at your destination facing in the opposite direction to the one you started wears off, especially when it adds four minutes to the journey.

The whizzkid planners at the Auckland Regional Transport Authority reckon that with a bit of fine tuning, they can get the stopover delay down to one minute, which is, they say, about the time it will take for passengers to get on and off, so where's the problem?

Well for one, will time and motion officers be hired to ensure the driver doesn't dawdle? And who, in these days of global terrorism, will be guarding the controls in this one-minute interregnum?

The good news is that the ARTA board has yet to decide which upgrade option for Newmarket station they prefer. But Auckland Regional Council chairman Mike Lee's public dismay that trains could still be reversing west out of Newmarket following an up-to-$75 million upgrade is timely. Particularly when alternatives have either been rejected or talked down.

The officials' clear preference is for a station in the same vicinity as the existing one, behind the Broadway shops near the corner of Remuera Rd. This is past the western line turn-off north of Khyber Pass Rd, which is why western-bound trains have to reverse out of Newmarket to continue.

There are two obvious alternatives. The first is to build an additional station on the western line at Kingdon St or Davis Cres just off Khyber Pass. The officials rejected this option, admitting it met basic operational needs, but that land purchase was likely and there would be increased transfer time between stations.

Certainly an integrated station where trains from the south and west meet is the ideal. But does a slight degree of separation automatically rule it out?

Another alternative is to shift the Newmarket station north to the triangle created at the point near the Newmarket Warehouse where the southern line and the one from Britomart each arc west.

The officials fret that building a station inside this triangle would involve "significant" land purchases causing a likely two-year delay and threatening the 2008 completion deadline.

But what's the point of meeting a deadline if the solution turns out to be a bad one? As Mr Lee says, it is important to get the upgrade of this key rail junction right.

The relocation to The Warehouse site might disadvantage some present users, but there are only 1012 exiting passengers in the morning peak anyway. The focus should be on future users, and maybe they'll say a station near Khyber Pass, next to two cinema complexes and the swimming baths, is not a bad option.

While land purchases might be necessary, surely costs could be offset by selling surplus land near the existing station.

There's one other factor to be considered and that's how much western line traffic will go through Newmarket once/if the mythical tunnel west from Britomart station to Mt Eden is completed.

But some no doubt will, and over the years it will increase rapidly. That's why it is so important to get it right now. Mr Lee pointed out that bad decision-making just a few years back saddled Britomart station with a choking two-rail track entrance. He could have thrown in the four-lane harbour bridge his predecessors thought would also fulfil future needs.

Don't let's add Newmarket station to the list.

Peter Griffin: Why I still haven't found what I'm looking for

I had all the bases covered. I wasn't going to have to queue all night to buy tickets to see my favourite band, U2. I had three mobile phones, third-generation mobile phones, at my disposal to blitz the Ticketmaster 0800 line. I had a wireless high-speed internet connection on my laptop to beat my slower rivals to the booking website.

As I swaggered into a Post Shop in central Wellington at 8.30am on Monday, I had the words of my favourite U2 song, Zoo Station, in my head: "I'm ready for the shuffle, ready for the deal, ready to let go of the steering wheel".

But I also had insurance - the country's high-speed communications networks at my disposal. I had "the Edge", so to speak. Sure, I was in the queue, but only to offer moral support to my fellow fans.

The first sign of trouble came when I fired up my laptop and loaded the Ticketmaster website.

Attempts to log in were greeted with the message: "Our system is currently busy due to a large event on sale. We apologise for the inconvenience."

At 9am on the dot the silent selling frenzy began. I juggled my three phones, to the sniggers of others in the queue. I began dialling - engaged and disconnected tones beeped at me. I balanced my laptop on my knee. Still busy.

Behind the counter, bemused Post Shop staff shrugged and waited for the overloaded booking system to untangle itself. It never did.

At 9.16am, someone up ahead in the queue got through on the phone. She was on a low-end, low-speed Nokia! All my high-speed gear meant nothing.

A few passersby who'd never heard of U2 stood staring in the window.

"Has the dollar gone through the floor? Is Kiwibank going under?" they must have thought. People around me complained that Ticketmaster's system had crashed. It hadn't crashed, it was just being selective and Wellington wasn't in favour.

At 9.25 the game was up - sold out. I put away my fancy phones, shut down my laptop and trudged home. All I could do was take comfort in the fact that thousands of others had also been let down by the technology.

There was the heartbreaking story of "lifelong U2 fan" Tina Raymond, who queued all night outside a Post Shop in New Plymouth to make sure she was the first to the ticket counter. Like me, she watched in agony as staff tried unsuccessfully to access Ticketmaster's website.

So distraught was poor Tina at having missed out that the sympathetic Post Shop workers put some tickets aside for her when they became available later in the day. But her phone battery had gone flat from constantly calling the Ticketmaster 0800 line. Unable to contact her, Post Shop eventually flogged the tickets to someone else.

In reality, there were no computer crashes. As with Ticketek in Australia, Ticketmaster throttled its system so it wouldn't collapse under the weight of numbers. It was first come, first served and all the high-tech gadgetry at my disposal wasn't going to help me.

But the ticket touts on TradeMe offered to - at a hugely inflated price. By Monday afternoon the tickets that sold for $99 to $199 were attracting bids several times those figures.

The bidding has since been furious, but the U2 ticket auctions on TradeMe are the most divisive series of auctions I've ever seen on the site. For every member savaging the scalpers, there's another commending them on their support of free market economics.

"It is not illegal to sell these tickets, so I don't know what they are moaning about. I bet if they scored extra ones, they would sell them on here for higher prices too!" said one member.

"I hope you bunch of vultures choke on your profits. Swine," wrote another.

There was even intelligent debate around politics and macroeconomic theory: "Scalping is not illegal, you know why? Cos we're not communists! It's a free economy."

Even with the announcement of a second show, the bids keep creeping up. Maybe it's the fact that Bono and the boys chose St Patrick's Day for their first show here in over a decade that has people feverish for tickets to that show.

The exact same thing is happening on auction site

Whatever it is, we're going to have to get used to this type of online enterprise. Auction houses such as TradeMe aren't going to stop the reselling of tickets, and rightly so. The U2 ticket "scalping", for want of a better word, represents the online marketplace at its most efficient. This is what TradeMe is all about.

At least the website goes to the trouble of conducting "moral surveys" to gauge public opinion on such matters. In October, one such survey found that 85 per cent of members agreed that concert ticketholders should be allowed to auction them off.

It might be a different story if the U2 gig was a charity event. In July the organiser of the Live8 concert in London, Sir Bob Geldof, was urging hackers to attack eBay. He was angry that eBay was allowing tickets to the star-studded charity gig that had been given away in a lottery to be resold for huge sums online, with money going not to charity but to the scalpers. You could understand his outrage.

But even with more commercially minded ventures, do people deserve to make huge profits on tickets just because they were lucky enough to log on to the website first, get through to the phone operator or be at the front of the queue? The answer is yes, because by and large that's the system we value. And while the system increasingly runs on computers, the best technology isn't going to help you beat it.

Graham Reid: Gun totin' dude upstages parrot

In the fuzzy Polaroid I am standing next to a short, goofy-looking guy with a curly blond Afro. He's holding a multicoloured cocktail. And I have a parrot on my head.

It was at a travel industry function in Miami Beach, and representatives of many countries, every American state and dozens of major cities, and many small tourist operators, were there to sell their destinations by day - and party by night.

Del, the goofy-looking guy, came from a dude ranch in central California and although he promoted it enthusiastically he was really there to party.

Every night, squadrons of buses would pull up outside the hotels we were staying in - more than 500 delegates and I, who happened to be in town - and then truck us off to a beach or pool party hosted by some rum or vodka company.

Tables bowed at the middle under the weight of the silver buckets full of seafood, and waiters made sure no one was sober after half an hour of arrival.

Inevitably, people did silly things. On the first night a guy from New York, who had three children, dived off the top of a fountain into a few centimetres of water and killed himself. That delegation went home immediately.

But mostly people just partied and paid for it, or ended up in the wrong bed. Or were photographed with a parrot on their head.

Del and I had hit it off and on the night of the parrot incident we both felt we'd had enough of loud drunken blondes from Texas. So we hopped a cab back to his hotel to have a quiet night and see what was in his minibar.

We sat and chatted and swapped stories, and at some point we started talking about guns.

Del had one - he pulled it from a briefcase - and told me he'd once shot someone. Not shot him dead, but he'd brought him down.

It seemed that a few years before Del - who looked utterly harmless in a Harpo Marx kind of way - was the proud owner of an expensive car. He was also in possession of a gun and a cocaine habit.

One night in LA, when wired-up, he heard someone in his yard and, fearing his car was being tampered with, grabbed his gun and ran outside.

Sure enough some kid was going at his car door with a screwdriver.

The kid took off. Del gave chase, caught up, and crash-tackled him. The kid stabbed at him with the screwdriver - which explained the scars on his arm and shoulder - then got up to run off.

Del fired three shots, one of which hit the kid in the leg and brought him down.

The kid - maybe 16 or 17 - wasn't hurt too badly so Del said he yelled some more and told him to go home and never come near his place. He didn't.

Nor did the police - which was just as well because Del had white powder all over the coffee table - and he was still in his underwear.

He left LA shortly afterwards and cleaned himself up at the dude ranch owned by a friend of the family.

He recounted this in a flat and unadorned manner - although at the end he gave a little James Brown funky dance and whooped "livin' in America" - and afterwards I couldn't think of anything to say.

We shook hands and said goodnight. The following day I waved at him from across the convention hall, but we didn't catch up again.

Somewhere I've got that photo of our brief encounter and have shown it to a few friends who always ask - as if having a parrot on my head is not worthy of comment - "Who is the goofy-looking guy?"

So I tell them.

Jon Stokes: Wetere tenacity a mixed blessing

The final battle begins with Te Wananga o Aotearoa's Rongo Wetere showing a marked reluctance to leave his creation.

That his name can be linked so closely to the tertiary education giant is testament to how intertwined he has become with the often embattled institution.

The reason is simple. Wetere is the wananga.

It is through his dogged determination that the institute exists. And it is this same singlemindedness that has seen the wananga and Wetere so often go head-to-head with Government officials in the battle to ensure the wananga's continued growth.

It was Wetere who, in the mid-1980s, came up with the idea to create a training organisation to offer an alternative for the stream of young, mainly Maori children who were falling through educational cracks at Te Awamutu College.

Wetere, who was on the school board, thought more could be done to provide an alternative for the increasing number of children being expelled.

At the time he was already a wealthy man, having made a fortune in the insurance business. But he saw the opportunity to make a difference.

His enthusiasm was not shared by all in the community. Wetere remarked earlier this year how he had been surprised at the opposition shown by many.

Fundraising for the golf course or school swimming pool was one thing, but a marae for the college and a training centre for Maori dropouts was another.

Wetere, true to form, continued anyway, demonstrating the immovable drive that has earned him an impressive array of knockers.

What started as a small operation, run with donations and fundraising, offering trade training and te reo lessons, soon grew.

In 1998 it successfully took the Government to the Waitangi Tribunal seeking equal treatment with other tertiary providers. The tribunal supported the claim, the Government accepted its findings, and the wananga's future was assured.

In 2000, Mahi Ora, a course designed by Wetere's daughter, Susan Cullen, was offered. It actually appealed to the educational drop-outs at whom it was pitched. The dress-for-less of the tertiary sector was born.

As the wananga grew, so did the murmurings about the quality of courses and standard of management. This week, a damning report from the Auditor-General showed that some of the concerns were valid.

The report fuelled calls for Wetere to resign. Dr Michael Cullen, the Minister for Tertiary Education, said Wetere should listen to those closest to him, and stand aside.

And of course he must. Examples of conflicts of interest and shoddy decisions appear to have been rife.

However, Wetere should and will be remembered as the wananga's founder - that legacy is deserved, and assured.

A battle for control will come only at the expense of Wetere's mana and further increase the spiralling legal bills that his defiance has created.

The wananga succeeded only because he had a vision and refused to accept barriers. But that same inflexibility can be disastrous when employed for the wrong reasons.

Maoridom is not alone in finding that the qualities to bring new enterprises into being are not always the same as those needed to sustain them.

Tainui has had its share of visionary leaders whose reputations have been shredded in futile attempts to cling to power.

Wetere's relative, and former nemesis, Sir Bob Mahuta, shared the same traits.

It was Sir Bob who ensured his tribe was hammered into some type of unity long enough to achieve its $170 million Treaty settlement. It was an impressive feat requiring buckets of mana, heavy connections, and a powerful can-do personality.

Yet Sir Bob, who died in 2001, is not universally remembered for the settlement, arguably his greatest achievement.

For many, including some within his Waikato tribe, there are bitter memories of the division and financial scandal that tarnished his final months at the helm.

Sir Bob was a good leader, but not gifted with the management skills required when millions of dollars are poured into an organisation.

Senior management positions were dished out based on whakapapa and blind loyalty. The consequences were devastating. The year Sir Bob died, Tainui wrote off about $42 million.

This year, after consistent growth, a $20 million profit was posted. The brutal internecine fighting of that time has also faded.

For Maori, especially those of Wetere's generation, the comforts of mana and legacy are what softens the burden when embarking on the final leg of life's journey.

Fighting and losing unwinnable battles serves only to deplete what are not bottomless reserves of either respect or money.

* Jon Stokes is the Herald's Maori issues reporter.

Jenny Ruth: Blue Chip buys up key partners

Buying the businesses that are crucial or important to its success should make Blue Chip Financial Solutions a far more transparent and easily understood company.

Its minority shareholders also have a level of comfort about the price they will pay for these businesses that subscribers to floats such as Vertex and Feltex would envy: The price will depend on the three businesses' earnings in the three years ending December 2008. The maximum price is also capped.

The three businesses are three mortgage-broking companies which effectively operate as a single business under the Tasman brand, Tasman Insurance Brokers and Ingot Holdings' property procurement operations but not its property development activities.

At present, 80 per cent of Tasman's mortgage-broking business is obtained through its relationship with Blue Chip. The insurance business provides insurance on the properties Blue Chip manages.

But it is Ingot which is the linchpin of Blue Chip's operations: It provides the residential properties which Blue Chip then sells to "mum and dad" investors who finance the purchase using the equity in their own homes.

Blue Chip then assumes the tenancy risk by guaranteeing the investors an income, takes care of all the maintenance and then shares in any capital gain at the end of the investment term.

Until this proposed transaction, Ingot, being a private company, looked like a "black box". Without any insight into its performance and prospects, judging the worth of the Blue Chip business was extremely difficult.

If the profit forecasts for the three businesses are met or exceeded, Blue Chip founder Mark Bryers, who also owns the three businesses being bought, will be $26.64 million richer.

But if the businesses' performance falls short of the forecasts, Blue Chip will be paying less. Indeed, independent expert PricewaterhouseCoopers thinks that if the mortgage-broking operations record average net losses over the earn-out period, Bryers will end up paying Blue Chip, which will still continue to own that business.

Given the forecasts, particularly for the mortgage-broking operations, I'd say that's just as well. PricewaterhouseCoopers is relatively polite about those forecasts: "Given historical and current activity levels, we believe that the mortgage business' ability to achieve growth rates set out above is questionable.

"However, as the proposed acquisition price will ultimately be set based on actual (rather than projected) performance, we have not investigated the forecasts further."

The mortgage-broking operations' actual net profit in the year ended March was $54,000 and in the eight months ended August it was $81,000. The latter was below the $125,000 result budgeted.

In just four months ending this month, that $81,000 profit is expected to rise to $223,000.

That may not be as fanciful as it looks. Blue Chip chief executive Jonathan Woodhams says that more than 70 per cent of his company's business this year will be settled in the second half. Those settlements will flow through into the mortgage-broking business.

PricewaterhouseCoopers also note that management attributed the shortfall against budget to delayed settlements.

In 2006, the mortgage-broking business' net profit is forecast to rise 80 per cent to $401,000. It will then jump nearly five times to $1.9 million in the year ending December 2007, the forecasts show. For the final year of the earn-out, the forecast shows only 60.4 per cent growth to $3.1 million.

Woodhams and Blue Chip chairman Jock Irvine said those results could be achieved if the potential synergies with Blue Chip could be realised, but that they and the other independent directors were not prepared to rely on those forecasts.

"It wouldn't have been a credible transaction. We could conceivably have been paying for something that didn't materialise," Irvine says.

Getting to the present proposal took up to nine months, he said.

"It's been a long and hard negotiation. We've ultimately achieved a position which we think is fair to shareholders at large and gives the directors the comfort of knowing we're not paying for something that may not perform."

Blue Chip will pay $540,000 up front and a maximum of $3.34 million for the mortgage-broking operations.

PricewaterhouseCoopers estimates that if profits remain at the level estimated for the current year during the following three years, "the investment actually provides a net return of around $212,000 in the earn-out period and also leaves the asset in Blue Chip's ownership at the end of the period".

If the forecasts are met, "the investment would prove to be highly attractive and largely, if not entirely, self-funding", the accounting firm says.

Blue Chip is to pay $804,000 up front for the insurance broking business and a maximum of $3.29 million under similar earn-out provisions.

Interestingly, accountancy firm PricewaterhouseCoopers says the insurance operations were acquired from May 2002 for a total of $3.8 million. That works out at 18.8 times the $202,000 net profit that business earned in the year ended March this year.

Its earnings are forecast to rise to $985,000 in the year ending December 2007. The accounting firm notes that the 2007 forecast includes a possible new business stream which is "as yet unproven and may or may not eventuate". But it also concludes that otherwise, the management forecasts appear "to be broadly reasonable".

Ingot's net profit is forecast to rise from the $107,000 recorded in the year ended March this year to $3.9 million in the year ending December 2008. While Blue Chip will pay a maximum of $20 million for the business, it only has to pay $100,000 up front.

PricewaterhouseCoopers says that the minimum price "compares favourably with historical profitability" and that otherwise the price is entirely performance related.

It views the maximum price as high, but notes that if it is paid "Blue Chip would have enjoyed extremely strong growth".

Woodhams said the independent directors definitely didn't want Blue Chip to buy Ingot's property development operations.

"We would've liked it because it's more profitable, but the market doesn't like that," he says.

As well as protecting the minority shareholders' interests, the purchases will resolve the related party issues that have bedevilled Blue Chip since its backdoor listing through the shell of Newcall Communications in mid-2004, clearly one of Irvine's aims.

The related party issues "were causing confusion in the minds of analysts and journalists like yourself. That was very understandable," he says.

The company has also resolved another of its headaches: The stock exchange had given it until the end of this year to dilute the interests of Bryers and his associates from 92 per cent to below 75 per cent.

Bryers' interests are now down to about 61 per cent, thanks to hisselling shares in exchange for real estate and to placements Blue Chip made in October to Australian investors Macquarie Bank and CVC. The PricewaterhouseCoopers report shows Macquarie owns 3.5 percent and CVC 4 per cent.

One of Blue Chip's aims in listing was to gain greater credibility and to give its clients and the professionals they deal with greater comfort that it is a reputable company abiding by the stringent corporate governance rules which apply to a listed company. Having such investors on its register certainly boosts its credibility.

Transactions due to settle, including the three Bryers' businesses, will reduce his interests to about 53 per cent.

Blue Chip is also seeking shareholder approval to sell up to A$30 million of new shares to the public in Australia early next year to support its expansion in that country. That will further dilute Bryers' shareholding.

Who, what, where

Blue Chip Financial Solutions.

Headquarters: Auckland.

Profile: Blue Chip provides the residential properties which are then sold to "mum and dad" investors who finance the purchase using the equity they have in their own homes. Blue Chip assumes the tenancy risk by guaranteeing the investors an income stream, takes care of all the maintenance and then shares in any capital gain at the end of the investment term. Ingot provides Blue Chip with those residential properties while the Tasman mortgage broking business arranges mortgages for Blue Chip clients and other parties and the insurance broking business arranges insurance cover.

Market capitalisation: $52.5 million.

Latest results: Reported a $2.4 million net profit for the six months ended June on revenue of $23.4 million. It was not listed in the previous comparable period but the company says pre-tax profit of $4.4 million was up 20 per cent on the previous first half.

Management: Chief executive Jonathan Woodhams, executive director and company founder Mark Bryers, chief executive of Australian operations Andrew Murray, corporate affairs and strategy head Brian Rankin and chief financial officer Gregor Duncan.

Nicki McDonald: A hand-up beats a handout

Improving educational achievement among low socio-economic groups was ranked first among the five priorities to improve New Zealand socially, economically and competitively, when the Ministry of Social Development briefed its incoming minister after the election.

It makes sense to focus on the under-achievers. Low educational achievement has direct links to a range of problems, including crime, limited or low earning potential, and dependency on benefits.

But we also cannot afford to ignore those who are succeeding in our low-decile schools but face financial barriers to higher education. The cost of doing so is potentially just as high.

As Treasury identified in its own briefing to the incoming Government, tertiary participation rates of those aged 18 to 24 have not been growing, yet an educated workforce is fundamental to economic growth.

The OECD estimates that the estimated long-term effect on GDP of adding just one year to a person's education is from 3 to 6 per cent per capita.

Given that New Zealand has struggled since the 1990s to achieve productivity gains of more than 1 per cent, supporting achievers about to leave low-decile schools would seem a sound investment.

They deserve it. Students in low-decile schools often come from low-income families and the statistical odds are stacked against them.

Last year, 21 per cent of students from decile one to decile three schools left with few or no qualifications, compared with 6 per cent from decile eight to 10 schools.

Ethnicity doesn't help the odds. Last year, 25 per cent of Maori and 16 per cent of Pasifika left school with few or no qualifications, compared with 10 per cent of New Zealand European students.

Those that beat the odds are doing well. Yet when it comes to the further education that will enable them to reach their full potential, it is often lack of money that stands in the way.

The First Foundation was formed in 1998 to help address these financial barriers, and allocated three scholarships to students from low-decile Auckland schools.

This year, 21 were allocated throughout the country to students from a diversity of ethnic backgrounds. They will join the 44 already on our books, working their way through their degrees.

Among the 21 students awarded scholarships this year, several have lost one or both parents, and others have been juggling work and school to help support themselves or their families. Despite that, they have all shown the tenacity and maturity to achieve not only academically but also in sports, culture and community service.

Neither are these students a handful of exceptional cases. For every one who earned a scholarship, two more high achievers had to be turned away.

More than 40 companies - including the main sponsor, Telecom - have joined the First Foundation to give financially disadvantaged students a hand-up, but not a handout.

These companies are providing part-time work, beginning in the student's last year of secondary school and continuing for three years of tertiary study.

Students commit to saving $1200 a year from their wages towards their tertiary fees.

In addition to paying part-time wages, their partnering company contributes $17,000 in financial support over the four years of the programme.

A volunteer mentor helps the student to meet agreed goals. The foundation monitors performance and provides development opportunities.

This monitoring and support is important, because although all our students have demonstrated the ability to beat the odds, they face real challenges when they move into tertiary education and leave the comfort zone of a supportive school.

Admission to university is no guarantee of graduation and the odds remain stacked against some of our students.

The University of Auckland's Equal Opportunity Office says that, in general, students from low-decile schools tend to find the work a struggle. Pass rates for Maori are improving but are still 6 per cent below the overall pass rates. For Pasifika students the pass rate is 20 per cent below.

A First Foundation scholarship helps shorten the odds for students of all ethnicities.

Of the 99 students who have received scholarships since our inception, only 14 have dropped out.

In a few weeks school will end, and if the trend runs true to form, more than 20 per cent of those leaving will do so with no qualifications and not much hope of a future.

Our scholarship students will be knuckling down to their jobs, their savings commitment, and their study goals. It makes good sense to help those who are working hard to help themselves.

* Nicki McDonald is general manager of The First Foundation.