Friday, December 16, 2005

Sideswipe

Barbecue food cooked courtesy of the Holy Spirit for worshippers in Osprey, Florida.


By Ana Samways

Paul Clark, Professor of Chinese at Auckland Uni, takes issue with the National Bank's pocket diary for 2006. "It has a useful two-page listing of international dialling codes. Such important places as Sao Tome & Principe and Faroe Island are listed. Taiwan is there too, including the area code for Taipei, as is Hong Kong. Missing again for 2006 is China. Good to see the bank keeping up with the most dynamic economy in the world and a place that looms hugely (and positively) in all our futures."

* * *

A reader writes: "To the nasty Xmas grinches who spoiled our family night out shopping at Botany Downs shopping centre, thanks a lot for clamping our car when we were parked in a disabled carpark with a mobility card because members of the public complained that we walked away from the car. Once again people's ignorance of chronically ill people shone through. When will it filter through that you don't need to be in a wheelchair to be disabled?"

* * *

An exchange on the Aotearoa Ethnic Network mailing list about the racist posters in Wellington: "My anti-fascist Nazi-tracker friends inform me that the 'organisation' White Crusaders of the Racial Holy War behind the Wellington posters consists of two rather sad, lonely and incompetent boys. Don't fret." Then another respondent recalled that the last National Front demo comprised two men, two flags and a Thermos. "Remember everyone ... capture the Thermos and you take away their power. The descendants of Albion are nothing without a nice cup of warm tea."

* * *

On December 17, 1944, the Japanese Army sent a 23-year-old soldier named Hiroo Onoda to the Philippines to join the Sugi Brigade. He was stationed on the small island of Lubang, about 120km southwest of Manila, and his orders were to lead the Lubang garrison in guerrilla warfare. As Onoda was departing to begin his mission, his division commander told him, "You are absolutely forbidden to die by your own hand. It may take three years, it may take five, but whatever happens, we'll come back for you. Until then, so long as you have one soldier, you are to continue to lead him. You may have to live on coconuts. If that's the case, live on coconuts! Under no circumstances are you to give up your life voluntarily." It turns out that Onoda was exceptionally good at following orders, and it would be 29 years before he finally laid down his arms and surrendered. (Read the full story on Damn Interesting)

Editorial: Sydney riot has plenty to teach us

When a city as close to us as Sydney suffers the kind of social trauma that was seen this week, the question needs to be asked, could it happen here? The rioting appears to be racial, but it involved two groups who, from this distance, are hard to distinguish. One side are young, second-generation immigrants from the Middle East, particularly Lebanon, who were dressed, and sounded, like the Australians they are. On the other side were young Australians full of liquor and resentment of the "Lebs", as they called them.

The tension seems to have been as much territorial as racial. The Anglo-Celtic Australians who went on the rampage at Cronulla on Sunday have regarded the beach as theirs and have not welcomed the visits of the "Lebs" and others from Sydney's poorer western suburbs. The city's social geography is the first comparison that might cause Aucklanders to pause. Here, too, beachside suburbs are generally better off than others. But there has been no sign yet that the residents assume the sort of proprietary rights that have become evident in Sydney.

Some blame the possessive attitude on the surf culture that is probably stronger there than here. Surfers like a wave to themselves and the local users of Sydney's surfing spots are inclined to try to limit the numbers they will allow in the water. But where there is tension for any reason between people who see themselves as different, grievances will be found.

The blame in Sydney was not one-sided. Lebanese gangs are accused of causing trouble around the beaches, abusing women who are not dressed to Islamic standards, vandalising property, trashing shops and allegedly committing an assault on volunteer lifeguards the Sunday before the riot. At least two people were stabbed in retaliatory gang attacks on Sunday night and police have been blocking roads to stop convoys of youths of Middle Eastern descent coming to Cronulla and other places to exact revenge. Both sides use cellphones to summon support and a crowd can assemble quickly.

The trouble has come as a shock to Australians who pride themselves on a multicultural society, as we do. The mob waved the national flag, sang Waltzing Matilda when a victim was found and beaten, and chanted the Aussie cheer in a newly chilling way. Whatever the minority group had done to provoke such an eruption of bile, it paled beside the ugly power of a crowd that knows it is the national majority.

Having glimpsed this side of itself, Australia must ensure there is no repeat. The images of Sunday will stay in the national consciousness for a lifetime and compel constant effort to deal with ethnic tensions long before they reach boiling temperature. This country, similar to its larger neighbour in many ways, should draw the same lesson. Most countries these days contain diverse immigrant communities, and for obvious reasons those from the Middle East or other Islamic places need to be treated with particular care at present.

The Sydney experience indicates that immigrant problems do not cease for the first generation born in the adopted country. Their position might be more difficult than their parents'. They do not know their parents' homeland nor do they feel fully accepted in the only country they know. If alienation drives them to form aggressive gangs and adopt extreme religious identities, police and social services need to be ready. Moderating cultural influences need to be brought to bear and law enforcement needs to make two messages clear: Minorities must practice the human rights and religious freedoms of their adopted society, and members of the majority must never take the law into their own hands. Australia is secure enough and mature enough to learn from this convulsion.

Te Radar: Why Santa claws the good folk of Buenos Aires

I am sure the plaintive cries of "Choose me!" are still echoing around the halls of Argentina's Tax Department after its tax inspectors were informed that some of them would be deployed to the streets, masquerading as Santas, to encourage tax avoiders to pay up.

These faux Santas were tasked with stopping people on the street and offering them incentives to pay their tax.

I am not sure whether those who conceived this idea did so to collect more revenue or simply to demean tax inspectors. Either way, such are the vagaries of the Christmas spirit.

It was a case of avoiding spirits at Christmas that clearly led police in one UK district to moot the idea of a drink-driving campaign, the central feature of which involved a familiar, red-clothed, bearded figure, run over and killed by a drunk driver.

It was eventually decided that this idea might be a little too severe for the festive season, and may indeed have had an adverse effect. As one psychologist commented: "People have very black humour these days and I think they might find it funny and not take it seriously." Ho, ho, ho.

Coincidentally, Santas in Western Australia have been banned from uttering that jovial laugh for fear of frightening children.

They have also been banned from handing out candy, patting kids on the head, and should they have their photographs taken with children, they must have both their hands in full sight at all times.

Needless to say I suspect they are also banned from kissing mummies underneath the mistletoe at all.

Still, it could be worse.

In Germany recently, Santa was savagely beaten after two men reportedly snapped when asked to tell him what they wanted for Christmas. I understand their anger.

I recall being told to be good, threatened with the idea that some chap called Santa was constantly watching me. The dread that this invoked was palpable. For years I was unnerved by the thought of an elderly man constantly scrutinising me as I performed all of the bad actions of which I remain so fond.

Of course, not everyone believes in Santa.

The Iranian President, who I suspect won't be celebrating Christmas let alone leaving a stocking out for Santa, doesn't even believe in the Holocaust. He is such a grinch that he could get a job as a Hamilton Taxi Company official, where he could concentrate not on annihilating Israel, but banning drivers from wearing Santa hats.

At least some people still have a sense of humour in the festive season.

Outside one Oklahoma store, police crime scene tape surrounds a Santa sleigh, some dead reindeer, and a prostrated Santa lying face down with an arrow in his back.

Mike Denison, the store manager, said, "We don't have Santa out there with blood on him or a body bag over him. We're trying to make it clean enough that no one thinks we're anti-Christmas." Indeed.

Jim Hopkins: Freeze on fiscal festivities as Economy tightens its belt

Christmas is coming
And the geese are getting fat
But Dr Bollard's got a plan
To put an end to that!!

And not a moment too soon, thought the Economy, fighting back waves of nausea.

It had not been a good night for the Economy. In fact, it had been diabolical. A series of stabbing pains and violent aches had seen their hapless victim up and down more often than the Crisis Lift at the TVNZ boardroom.

What made that particularly galling - apart from the pain itself - is that there'd been no hint of the misery to come at the start of the evening.

Everything had seemed perfectly spiffing at the premiere. Well, better than spiffing, actually.

Superannuationisticexpendalidocious; that's how it had seemed as the Economy strode proudly down the red carpet, shoulder-to-shoulder with the rest of the stars.

The crowd was cheering, the band was playing, fawning journalists thrust microphones under the Economy's nose.

"Isn't this great," they gushed. "Do you like New Zealand?"

"I should do," quipped the Economy, "I've lived here all my life!"

"Oh, we thought you were important," said the journalists and dashed off looking for someone who was.

"No matter," said the Economy, somewhat crestfallen, but assuaging his disappointment by generously signing an eager fan's cheque. "At least this will do my GDP the world of good."

But it hadn't, alas.

The first sign of trouble came in the rented limo on the way home. It was just a minor niggle, a sudden twinge in the fiscal rectitude but it did make the Economy wince.

Sadly, as we know, that was but a harbinger of what was to come in the hellish hours that followed. Eventually, brow furrowed with pain, the Economy could bear it no longer.

"This is awful," groaned the victim, "especially so close to Christmas. If I don't get help I won't be able to enjoy any of those treats in the basket of currencies under the tree. I must see a Doctor!"

So the Economy did, secretly terrified that these sudden afflictions were the first symptoms of Third (World) Flu.

"You're lucky we don't know what's wrong with you," sniffed the receptionist at the PHO. "If we did, we could bump you off the Super Urgent Waiting List and put you on the Nearly Urgent Waiting List for people who're waiting to go on the Super Urgent Waiting List.

"But that'll come soon enough. Once Doctor has a diagnosis, we can immediately start reassigning you."

"That's nice," gasped the Economy, feebly flicking through the waiting room copy of Property Investor. "What seems to be the trouble?" said the Doctor cheerfully when the Economy finally entered the surgery.

"Well Doctor Cullen," mumbled the Economy, desperately hoping that was indeed the name of this medical saviour, "for some time now I've been trying to make my ends meet, but without success.

"And now there are other symptoms. Rising inflation. And my bracket's started to creep as well."

"Go behind the screen and remove all your credit cards," said Doctor Cullen.

The Economy did so and reappeared, a much more shrivelled entity.

"Ahha!" said Doctor Cullen. "The problem is obvious. You've either got Profligacia or Bollardosis. I prescribe a tightening of the belt and the elimination of all debt!!"

"Would tax cuts help?" sobbed the anguished Economy.

"Of course not," snapped Doctor Cullen. " If I gave you tax cuts you'd have more money and what would you do with it, you reckless Economy? You'd spend it, that's what you'd do! And that would be seriously inflationary!

"I simply can't allow it," he continued. "I cannot allow anything that might encourage reckless or unnecessary spending!"

"Excuse me," retorted the Economy, briefly experiencing a surge of indignation, "didn't you just pass a bill giving every tertiary student in the country an interest-free loan? And might that not encourage reckless or unnecessary spending?"

"Of course not!" hooted the Doctor. "People might waste money but students won't. Besides, even if they do, they've already voted for us, so it doesn't matter."

"I see," said the Economy, suddenly feeling sick again. "I presume you'd say the same about Working for Families? Even though it means people like Cabinet ministers earning $100,000 and paying wealth tax can now apply for a benefit?"

"Most assuredly," grinned Doctor Cullen. "Think of the jobs that will create. And the taxes those administrators will pay. I certainly do.

"But, enough, you wanton spendthrift. We're here to cure you, not me. Merely because the Economy has to tighten its belt doesn't mean the Government has to."

"But you're using my money," wailed the Economy.

"Don't be absurd," retorted the Doctor. "You just look after it for a while, that's all. Till we get to spend it. And much more wisely than you ever would, I might add!

"You should try to export more," added the Doctor brusquely as he wrote a prescription for higher interest rates and dismissed his ailing patient.

"What a lousy Christmas present," sobbed the Economy as it waited for a bus. Through the mists of pain came the awful feeling that this prescription wouldn't help and that a permanent cure was still a long way off.

Brian Rudman: Cullen's jungle-law antics browbeat leaky-home victims

Someone should remind Acting Prime Minister Michael Cullen that if we'd wanted to live according to the law of the jungle, we'd have voted Act into power.

Yet I doubt even Act would have been as sadistic as the present Labour-led coalition in its hounding of 153 leaky home victims of the Sacramento complex at Botany Downs.

Not satisfied with having their claim of damages against the Government thrown out of the Court of Appeal, Dr Cullen is going for the kill and seeking up to $80,000 in court costs.

Not to do so, he says, would upset the Crown's insurers and set a precedent.

Well, so what? Isn't that what we elect governments to do when the moment is appropriate?

Of course there's a more obvious motive. To warn home-owners that if they dare persist in further appeals they risk the Crown trying to squeeze further costs out of them.

In this depressing saga this must be one of the more sickening moments.

Dr Cullen worries about setting precedents, but if he were to check he'd discover this Government has - well had - a proud history of trying to level the battlefield in David versus Goliath legal struggles.

There's the Environmental Legal Assistance Fund, introduced at the behest of the Greens, that has, since 2001, given grants of over $3 million to help groups participate in the Resource Management Act process.

Among beneficiaries have been protesting Waiuku farmers who got $33,750 to help fight state-owned Genesis Energy's plans for a local windfarm, and the noise victims of the Western Springs speedway.

If ever a group needed help, it's the people left sitting in their leaky homes when the music stopped. There's upwards of 5000 affected properties in Auckland and another 10,000 around the country.

For the past three years, owners have been appealing for help, while the culpable, to a greater or lesser extent, have sought refuge through the arcane escape hatches the law so often provides for those who can afford it.

And that includes Government agencies like the now defunct Building Industry Authority and the Standards Association of New Zealand, which together helped introduce the environment in which the epidemic of leaky homes was able to prosper.

In March the Government's so-called Weathertight Homes Resolution Service ruled that serial leaky building developers like Tim Manning could escape having to pay to fix the mess he built for two reasons. First, he'd been smart enough to liquidate the company he'd created for each development. Second, he had not "worked at the coalface" of the Ponsonby Gardens complex under investigation.

The adjudicator said: "He may have encouraged his people to cut costs, time and corners, but he never instructed his people to build in contravention of the building code."

Now the Court of Appeal has come up with the same sort of reasoning to protect the BIA. It ruled the Government's advisory body did not have sufficient proximity to the problem to have a legal duty of care.

This is the body which, among other innovations, approved the use of untreated framing timber.

In a situation where home owners and their lawyers are struggling through the legal quagmire seeking a way forward, the Sacramento case was a test case that failed.

One option now is to test this judgment in the Supreme Court. Dr Cullen's decision to seek damages acts as a dampener on that.

Leaky Homes Action group leader John Gray says that while the Government sidesteps liability, people are sitting in "leaking, rotten, poisonous homes". He wants the Government to declare a national disaster and provide compensation or assistance "to enable safe and sanitary repairs".

Sacramento lawyer Paul Grimshaw is more conciliatory with his appeal for interest-free loans so owners can ensure the problem "doesn't worsen".

Who could disagree with that? The Government's priority should be to ensure the homes are restored to a liveable state. If that means short-term interest free loans while liability is settled, then why not?

The Government should desist from persecuting home-owners and start owning up to its part in the disaster.

Peter Griffin: Free-access sites were the big story of the year

For me, 2005 will go down as the year that the internet became really useful. The test, in my book, is whether I can use a web service without having to punch in my credit card number.

This year, "free" came into vogue. All sorts of compelling web services emerged that are free to use.

Sure, the people running them will monitor our activity, try to sell us things and attempt to lure us into their "premium" sections, but they don't charge us for walking through the front door.

The rise of the free-access model has changed the internet for the better.

Just look at the hive of activity in the Google camp this year. We saw the launch of Google Earth, the free satellite mapping service. Google Talk introduced free internet telephony and messaging to Google users.

The controversial, but extremely useful and free Google Print got under way and we saw the debut of Google Desktop, which efficiently searches your computer and the internet for related files. It's free, too.

I almost forgot about Google.com itself, which has added picture searches and a retailer search in Froogle. All free.

Amazon came up with A9.com, a free and useful search engine that returns results from the web as well as the books Amazon sells.

The kingpin in the free internet calling market, Skype, was scooped up by eBay and while it offers subscriptions for making calls to regular landlines, the PC-to-PC calling service remains absolutely free.

The past year saw the emergence of Podcasting, where recorded audio is packaged into mp3 files for downloading and playing back on your music player or computer. Much of this content is free to download, though you'll want a broadband internet connection to avoid long delays.

The vast range of online radio stations remain, by and large, free to listen to. From the BBC World Service to Californian heavy metal station Knac.com, the audio feeds are free and accessible via the internet anywhere in the world.

The free almanac on everything, Wikipedia, was going gangbusters till this week, when the discovery of a major factual stuff-up in an article about former US President John F. Kennedy's assassination threw the site's credibility into doubt.

Wikipedia is a fantastic resource. I've learned about topics I'd never have explored through its clever system of directing you to related topics and then on to other related topics in a neverending cycle of enlightenment.

Most of the information on Wikipedia seems accurate, but its managers are going to have to monitor the service closely if it is to remain an often-consulted information source.

The free section of Britannica's online encyclopaedia became a lot more useful and I've bypassed my Oxford dictionary for Dictionary.com when it comes to straightforward word checks. The service is totally free and hasn't let me down yet.

The web has done great things this year for pooling information about popular culture.

At Metacritic.com, the US reviews of games, movies, books and albums are aggregated to give you an overview of what the top critics thought of the latest releases.

King Kong, for instance, has so far accumulated a Metacritic rating of 83 out of 100 based on published reviews so far. That signals "universal acclaim". I spend hours scanning the reviews at Metacritic.com

The hugely popular imdb.com has become the ultimate website for movie trivia, reviews and information. As a wannabe screenwriter, I subscribe to its premium section (imdbpro.com) to gain access to all the Hollywood trade statistics, but imdb's free service should be the first stop for movie buffs.

There are even free services to streamline your efforts in navigating the free services out there. I start my day at Bloglines.com, which aggregates my favourite news and weblog feeds. Through one web-browser pane, which I've customised to my own tastes, I can instantly see the updated RSS (really simple syndication) feeds of my favourite websites.

It costs nothing to join and saves you jumping between websites. There's no way back from Bloglines for me.

I took advantage of another planet Google service and became a blogger myself using its successful Blogger.com service. Within 10 minutes my blog was up and running. Posting messages is hassle-free and I pay no hosting charges or subscription fees. Thousands of people now have their own soapbox in cyberspace and it costs them nothing.

Those who want more control of their web logs and design flexibility opted for the sophisticated and totally free blogging software Wordpress. It uses the open source (and free) MySQL database software to give huge scope in developing web logs with depth. You don't have to hand over a penny for web services that a few years ago a web developer would have charged you thousands of dollars to put together.

Other free aggregation services, such as the highbrow news and arts website Arts and Letters Daily thrived without changing the recipe much.

Trade Me continued to attract much of the web traffic our small country generates with its popular online auction service, which is free to all except sellers, who pay a commission to Trade Me.

Wises.co.nz does a great job of displaying free maps of the entire country, down to specific roads. I've consulted it countless times before leaving the house in a rush to get somewhere.

But it hasn't all been a free ride. Many websites I used to frequent now want me to pay a subscription fee. The biggest mover to switch to the paid model locally this year, regrettably, was the Herald Online.

The Herald website now requires paid subscriptions for "premium" content, which includes this column and the work of many Herald contributors. The move ends six years of free, unlimited access to the Herald's digital vault of content and I, for one, am sad.

Being totally free, the website attracted a huge international audience that filled my inbox with interesting comments. But someone living in Houston or Hong Kong isn't likely to shell out for a Herald Online subscription unless they're a Kiwi expat.

Who knows what next year will bring? Maybe all the web services we've come to rely on will go premium. But I doubt it.

The online advertising model has gained enough traction to become viable. A lot of that is thanks to Google, which came up with an ingenious yet simple way of displaying adverts based on our web use. The adverts are there, they're targeting every time I use a Google service, but they're relatively subtle, unintrusive.

The services mentioned above are the tip of the iceberg. I hope the trend continues in 2006 towards web services that are functional, easy to use and most of all, free.

Graham Reid: Come in from the rain

Roma is the first restaurant you see in Venice when you get off at Santa Lucia station and turn the corner on to Fond dei Scalzi. For that reason it is a tourist trap and the food, while good, is certainly not the best you'll find in the floating city.

But it is certainly pricey, and I doubt many Venetians eat there.

But after tramping around the Biennale in the rain, with thunder booming overhead and water lapping the streets - plus the fact that it was fewer than 100m from our hotel - it had the advantage of convenience on a miserable night.

I arrived before our small party to do some paperwork and, with a Chianti in hand, sat under the awning outdoors and had time to enjoy the passing parade of those making for this refuge from the rain which served something warming.

The couple next to me ordered pizzas. "Kinda ordinary, but okay I guess," she said when I asked.

"I know what you mean. Pizza is pizza - and back home we have guys who bring them to the door, right?"

She laughed. She was from Orange County ("so I don't get to see much rain, this is a real treat") and he was from London. They were flying out later so this was just a quick snack before heading to the airport.

The rain got worse. He went to check on getting a boat to the airport. I chatted with the waiter who spent half a year in California at another restaurant. He guessed I was Australian from the accent. Not bad - but then again he had heard a lot of accents come through Roma.

A middle-aged couple splashed across the piazza and checked out the menu. He was wearing a wind-cheater with the badge of the Canadian Air Force on it. He spoke to the waiter in Italian. They decided to go elsewhere and splashed off into the gently falling dark.

The Londoner came back. There was no boat to the airport now. "No reason, just 'no boat', the guy said."

They grabbed their bags and made for the bus station as the few remaining hawkers packed away their stalls selling cheap souvenirs. The only person doing business was the woman selling umbrellas. Thunder shook the walls.

Six American teenagers arrived, two of them texting. They crashed in and ordered pizza and sat around laughing about the school trip they were on. They were here because they were studying The Merchant of Venice.

"I still haven't read it," said one girl and they all laughed. It seemed few of them had.

A couple of their friends arrived. They joked with the waiter about traffic in LA.

The wind rose and the rain slewed sideways across the piazza. An old Scottish couple arrived and looked at the menu and left. He'd wanted bacon and eggs and she'd wanted a cup of tea. They didn't see them on the menu.

The rain was now lashing the city, which hardly needed any more water.

A young Japanese couple ran through the rain then hesitantly entered the restaurant when the waiter assured them there was a menu in English.

An Indian family came out from the restaurant and sprinted across the piazza and into a side street.

A group of young Italians at the end table finished their coffees and left.

And for a few minutes I was the only one there under the sagging awning. The piazza was dark and deserted. A church bell rang, and the rain stopped briefly.

At that moment every discomfort of the day disappeared.

Across the piazza I could see my family arriving, ready to join me for dinner at the over-priced but interesting Roma.

Jenny Ruth: ING puts work into earnings

The mum and dad type of investors in the original Waltus property syndicates who stayed on for the ride through their various permutations have ended up in a far more comfortable place than I would have predicted back in the late 1990s.

Back then, a downturn in the commercial property market showed just how flawed and inappropriate to its risk-averse investors the syndication structure was. And how particularly unsuited they were to their risk-averse and unsophisticated investors.

Typically, the unlisted syndicates owned only a few buildings, often just one. When the downturn hit, capital values started dropping dramatically and many syndicated buildings proved to be "over-rented" - tenants were paying rents above market levels, inevitably leading to tumbling values as the leases neared expiry, not to mention falling rentals and vacancies when leases came up for renewal.

The outcome was inevitable: instead of the steady, reliable income streams the mums and dads thought they had bought, payouts were slashed or cut altogether and redemptions suspended.

Waltus, then controlled by the Hodge family, was the first to come up with a solution: tip all its syndicates into a single publicly traded company, Urbus, which is now in the process of being taken over by ING Property Trust Holdings.

While that at least provided investors with liquidity, the trouble with its solution was that the fortunes of its syndicates varied dramatically. While the value of some buildings collapsed to less than half their original value, others, notably the Albany Power Centre, improved in value. Naturally, the investors in the better-performing syndicates didn't want exposure to the poorer properties.

A number of investors had wanted to stay with their original investment, but after most of the syndicates gained 75 per cent votes in favour and despite a messy court battle, the merger was forced through.

Then in mid-2004, the Hodge family sold their rights to manage Urbus to a joint venture between ING and the Symphony Group, which managed the listed ING Property Trust, formerly Paramount Property Trust.

A little over a year later, the ING trust completed its scrip takeover of Urbus.

It bought into Paramount's management company in August 2003 and, later that year, folded 71 properties valued at $282.7 million into Paramount from two superannuation funds ING managed. The trust paid for the properties with $100.7 million in cash and 182 new units in the trust.

ING Property Trust Management managing director Andrew Evans, who has worked for ING for some eight years, said his company had been thinking of establishing a listed property trust, in keeping with ING's practice globally, for some time.

While it could have achieved that through a float of the properties already under its management, Evans said the trustees of the MFL and SIL superannuation funds didn't want to go that route. But they were keen to offload their direct property holdings and free up cash to invest elsewhere.

"They wanted the ability to grow and leverage up the returns of the direct property assets. They didn't have any debt, and clearly most listed companies have debt to enhance returns at a sensible level," he says.

An ability to grow the property portfolio and liquidity were also major issues for the funds, which selling the properties into the trust solved.

ING assumed practical management, administration, financial reporting and corporate governance responsibilities relating to the trust.

Evans says that doesn't mean Symphony is just a passive shareholder in the management company but is involved at the strategic level and in sourcing appropriate properties for the trust to buy.

When the trust first listed, it was granted the first right of refusal over Symphony's future developments and the right to some of the development profits if it buys any properties, but has no requirement to accept any such properties. That right continues and ING is also working on developing similar relationships with other developers.

Since it became involved, ING has been active in managing the portfolio now totalling 96 properties valued at $809.7 million at September 30.

The annual report shows that ING sold 34 properties for $92.6 million between December 2003 and March 31 this year, all but one at greater than book value, testimony to the buoyant property market. Those properties sold were the smaller, lesser quality buildings in the portfolio with little growth prospects. It had also bought three buildings for a total of $64.4 million in the same period.

Evans says the bottom line requirement for any acquisition is that it enhance earnings per unit.

After gaining control of Urbus, ING identified another 15 properties that it didn't want the trust to keep. By the time it reported the trust's first-half results last month, four of these had been sold for $24.1 million, an average 17.8 per cent above book value. The other 11 properties have a $42.8 million book value.

ING has also been active on the redevelopment front and in ensuring a high level of leasing. At September 30, its buildings were 99 per cent leased with a weighted average lease term of 4.9 years.

Another reason for the former Waltus investors to feel comfortable in ING's hands is the way it dealt with the Urbus management contract.

While the terms of that contract were more generous than that of the ING trusts, clearly it would have been unnecessarily complex administratively to continue operating the combined trust under two separate management contracts.

ING offered the trust a deal to cancel the Urbus contract for a one-off payment of $13 million. Independent expert Grant Samuel valued that contract at $15.5 million.

The share price performance since the Urbus takeover should also be cause for satisfaction.

The Urbus shareholders received 0.98 ING units for every Urbus unit they held. At the current $1.18 unit price, their units are worth $1.156, 18 per cent more.

The original Paramount investors ought to be relaxed too: their annualised return to September 30 has been 15.5 per cent.


Who, what, where

* ING Property Trust headquarters: Auckland.
* Profile: The trust owns a diverse portfolio of 96 commercial, industrial and retail properties, 73 per cent located in Auckland and the rest elsewhere in the North Island.
* Market capitalisation: $619.6 million.
* Latest results: The trust reported a 29 per cent rise to $14.3 million in first-half net profit.
* Management: ING Property Trust Management, headed by Andrew Evans.
* Major shareholder: The ING-managed MFL superannuation fund is the largest single shareholder with 32.3 per cent.

James McConvill and Mirko Bagaric: Global risk of feeling flat

As usual when there is a WTO meeting, public debate centres on the political and economic aspects of freeing global markets and encouraging international trade.

But one issue that has not received much attention is whether there is a positive correlation between international trade and levels of personal happiness.

An acceleration of globalisation may lead to job creation (particularly in developing countries), richer economies and product innovation but we must remember that our ultimate desire as human beings is to be happy, and that the economy is simply a part of society, albeit an important one.

Thus, before we sign off on rapid connectedness of the world's markets via the WTO, we should at least consider the potential implications in terms of the level of happiness.

If aggregate happiness will potentially shift down rather than up as a result of further globalisation and more international trade, we should reassess our commitment, even if it comes at the expense of some financial gain.

One of the main contemporary advocates of globalisation, Thomas Friedman, has argued in The World is Flat: A Brief History of the 21st Century, that because of globalisation, the world has become smaller over the past few centuries, particularly this century. According to Friedman, the world has become increasingly "flat".

This "flattening" process raises an interesting issue. Research shows that individuals are likely to be happier, and be capable of increasing their overall happiness, when they feel part of the community.

Being part of a close community, and participating in the various activities that build "social capital" (a sense of society and social interaction) is one of the main generators of happiness for individuals.

Therefore, if globalisation makes the world "smaller", would this not contribute to net happiness, or is it the case that the opportunity cost of greater connectedness of markets, and a general "opening up" of the world by trade, is a loss of the sense of local community?

In Bowling Alone: The Collapse and Revival of American Community, Harvard sociology professor Robert Putnam points to a decline in social capital in the United States over the past 30 years, and discusses the implications of this trend.

As Putnam argues: "A society of many virtuous but isolated individuals is not necessarily rich in social capital."

He explores the effect of mobility and sprawl on social capital, and hence happiness, which is important given that mobility and sprawl are two key effects of globalisation.

Feeling that one is involved in a smaller and more intimate daily routine is more likely to mean one will get involved in community affairs.

While flattening may make the world smaller in one sense, levelling the playing field also opens up the world for many people, leading to increased activity and providing for a picture of the world as a more dynamic and encompassing creature.

This can provide much in the way of economic capital but at the expense of building, or even maintaining, social capital.

Sacrificing social capital to build economic capital may achieve certain material gains at the expense of health and happiness.

Canadian philosopher John Ralston Saul has also highlighted the weakness of assessing globalisation and international trade according to conventional political and economic terms.

While Saul does not engage with the recent literature on human happiness and social capital, he does point to the importance of community, and warns against sacrificing social bonds to achieve economic gains.

In The Collapse of Globalism and the Reinvention of the World, Saul argues that, despite all the rhetoric about the virtues of globalisation and pursuing international trade, a strong sense of community may be what we need.

According to Saul, rather than accepting international trade as something to be seen purely in a positive light, public policy should instead be focused on the nation state and the benefits that derive from nationalism.

In other words, more is going on in the world than just economics, and progress isn't intricately connected with looking at the world through an economic prism.

As more research is conducted into human happiness and social capital, it will be interesting to see whether the empirical studies back up Friedman's strong advocacy in favour of globalisation, or whether a decline in happiness levels as suggested above bears true.

It is a shame that this aspect of the international trade debate will not be directly raised at the WTO's Hong Kong meeting.

* James McConvill is a senior lecturer at La Trobe Law School in Melbourne; Professor Mirko Bagaric is Head of School at Deakin Law School, Melbourne. Their new book, International Commercial Law: Themes, Principles and Policy, will be published by Oxford University Press next year.