Saturday, February 11, 2006

John Armstrong: Brash makes the right call

It is like the proverbial elephant asleep in the living room. No one can ignore its presence. But everyone is wary of disturbing it.

Tempting though it might have been for Opposition parties to exploit the resentment towards Muslims, which has no doubt hardened following the furore over the publication of cartoons mocking the Prophet Muhammad, there was just too much risk of it backfiring.

That was especially so for National. There is clearly disappointment in that party that Don Brash, having just used his landmark Orewa speech to question the wisdom of New Zealand accepting large numbers of migrants from Muslim countries, should so meekly fall into line behind the Government only days later.

By taking a stronger stand on freedom of expression, Brash would have won applause not only from conservatives within his own party, but also from those in Labour's ranks fed up with the Government appeasing Muslims.

Brash has, however, done the right thing. This was not the time to be sending in the "political correctness" eradicator.

It would have been different had the firestorm over the cartoons been confined to a theoretical argument about rights of free speech versus the responsibility to respect others' religious beliefs.

But this was a conflagration which quickly spread beyond the theoretical to the nub of New Zealand's national interest - the conduct of foreign policy, the preservation of hard-won export markets and, with the threat of trade bans, company profits, people's livelihood and, potentially, even jobs.

The major Opposition party could not ignore those considerations and still expect to be treated seriously as a Government-in-waiting - the image National wants to project.

National has to prove it is cognisant of the responsibilities of Government. The political imperative for Labour in this case was to show it is not totally consumed by the responsibilities of office. As Murray McCully, National's foreign affairs spokesman, put it, this week was all about drawing "fine lines".

While angry that some media had dragged New Zealand into someone else's argument, Labour had to strike a careful balance between slamming those media and at the same time upholding their ultimate right to publish the cartoons.

That made the diplomacy more difficult, but Labour could not ignore a domestic audience ready to castigate any Government being too apologetic to intolerant Muslim states.

The Prime Minister keenly watched the direction the public mood might be shifting. Her initial remarks last Sunday criticising the judgment of offending media were strong. Speaking after Tuesday's Cabinet meeting - by which time it was clear the country was safely split on the issue - she was more scathing.

However, the Government was also conscious that too much noise risked drawing even more attention to New Zealand.

For that reason, the diplomacy was kept low-level. For example, the head of the Ministry of Foreign Affairs' Middle East division - rather than Trade Minister Phil Goff - was tasked with soothing the Iranian ambassador.

However, while the Beehive was pulling out the stops on a government-to-government level to avert damage to the country's $1.1 billion export trade to the Middle East, ministers would have found it harder to deal with a media-driven consumer boycott in the region resulting from New Zealand being lumped alongside those Scandinavian countries taking the heat for publishing the cartoons.

That has not happened. But the fury in Islamic countries was also reason for National to take a deep breath before saying something inflammatory.

The last thing National needed was to put itself in a position where Labour could blame it for any consumer backlash against New Zealand products or a company like Fonterra losing lucrative export contracts - especially when Brash has placed so much store in painting Labour as the economic incompetent.

Neither has it escaped National's attention that the two newspapers which published the cartoons have ended up apologising to the local Muslim community, thereby undermining their own stand on press freedom.

But there is still a feeling within National that Brash did Labour too big a favour.

This appears to have prompted McCully to intervene in his foreign affairs role to reach a more balanced position which puts some distance between National and Labour while not contradicting his leader.

He talked of there being a fine line between showing respect for other cultures and pandering to them. He left it pretty much at that. But without saying so, he was implying the Government had crossed that line, especially in relation to Iran, given that country's call for the destruction of Israel, its nuclear programme and dodgy human rights record.

McCully was clearly concerned that Brash likewise risked being seen to be pandering to Muslims and thus undermining his own call for a debate on Muslim immigration.

It has been quickly forgotten that less than two weeks ago, Brash was flagging immigration policy as one of his priorities, citing the numbers of Muslim migrants as the reason.

He put it more delicately than that, of course. But his reference to some immigrants potentially undermining New Zealand's "liberal, tolerant and secular" society meant there was no mistaking whom he was singling out.

Less than 45,000 in number, the Muslim community is too small to be a force under MMP. But it is large enough for politicians to weave scare campaigns around - as Winston Peters demonstrated last year.

As Foreign Minister, Peters is now constrained as to how far he can take his anti-immigration rhetoric. He will be seen as attacking immigrants - and, by implication, the countries they come from.

Even though Brash's wife is an immigrant, National now intends to fill the gap vacated by Peters or, if he refuses to budge, force him to match National in ways which cause Labour to shudder with embarrassment.

However, the events of the last week have made things far more complicated for National. At a minimum, there will have to be a lapse of time before Brash mounts a serious attack on immigration policy.

And he may have to couch things even more carefully. This week has demonstrated one thing: the local Muslim community may be small, but the West is now on notice in the wider Muslim world as to how such communities are treated.

To ignite a debate about Muslim immigration may be more a case of pouring petrol on an already raging fire. It is an invitation to self-immolation.

Audrey Young: A look into a political crystal ball

The cut and thrust of parliamentary debate resumes next Tuesday when MPs return to the House. Political editor Audrey Young polishes up her crystal ball to make some predictions about where their fortunes will lie in three years


Labour's line-up in Parliament will be vastly different to the one we will see next Tuesday.

There is a remote possibility that Helen Clark could be gone, having had greatness thrust upon her in the way of an international post. Despite impressions, she has never ruled it out. Even recently, when asked about her availability for the post of United Nations Secretary-General, she said it was her "intention" to lead Labour into a fourth term. "Intentions" are a valuable commodity for politicians who don't want to mislead.

The United States does not favour Clark, however, and it is deemed to be Asia's turn next. But if there were a deadlock and someone like Tony Blair, for example, convinced the United States that Clark was the best compromise candidate, it might be possible.

The good money, however, is on her staying on to fight a fourth term, letting the rejuvenation take place in the lower ranks, then stepping down after the next election.

Michael Cullen - without peer in Parliament in terms of sharpness in the debating chamber - is Deputy Prime Minister, deputy Labour leader, Leader of the House and Finance Minister.
He won't have any of his present jobs come the end of this parliamentary term. He will be in the Speaker's chair, realising the last of his parliamentary ambitions.

Speaker Margaret Wilson, who has earned the respect of the House as a firm, fair and flexible Speaker, is a list MP and will have moved on to some stimulating job suited to her talents, back in the law world, perhaps even to the bench.

After a well-managed but intense internal tussle between Phil Goff and Trevor Mallard, Goff will become deputy leader and Mallard will become finance minister. An alternative is Mallard becoming deputy leader and Goff getting finance, but that is less likely.

The election for deputy will be a proxy contest for Labour's next leader in the expectation that Clark will step down next term. Mallard would be more acceptable to the caucus but it will discover that Goff would be more acceptable to the voter.

The caucus will also have realised by then that despite being Labour's "thinker," Education Minister Steve Maharey does not have what it takes to be leader. He will be on his way out to a new job to accommodate his talents, perhaps a professorship somewhere.

Shane Jones will be Maori Affairs Minister and encumbent Parekura Horomia will have signalled his intention to stand down next election because of health problems.

Jones has greater ambitions than solely the Maori Affairs portfolio but he will need an apprenticeship to keep his ambitions in check.

Marian Hobbs will have signalled her intention to retire to make way in Wellington Central for younger blood, Clark adviser Grant Robertson.

Dianne Yates and Russell Fairbrother will have moved on, being members of that unpopular Labour club, the over-60s who have lost their electorate seats.


Labour's domination of the House for the past nine years will be challenged this term by National as its main players use the House more as a platform for their own advancement in the inevitable changes ahead.

Leader Don Brash will try but fail to make any impact in the House. Bill English, John Key, Simon Power and Judith Collins will return to the House this year on political Viagra.

Brash's stated "intention" to lead National into the next election will change. He will step down in year two or three when he realises that, first, the media won't let the leadership issue go away and, second, that that will make him a liability to National's next campaign.

John Key will become leader. English will refuse to be part of a peaceful compromise to become Key's deputy but finance spokesman instead. He will also be leader-in-waiting if Key fails the grand task when he is cut loose from his finance specialty.

Gerry Brownlee will resign as deputy. Collins will become Key's deputy.

Power may contest the deputy's job but Collins' gender and gutsiness will prevail. Brownlee will keep his role as shadow leader of the House.

Lockwood Smith will be challenged if he doesn't retire. List MP Clem Simich will retire.

List MP Richard Worth may tempted back to the law now that Chris Finlayson has been earmarked for Attorney-General.

New Zealand First

In terms of House performance, leader Winston Peters is the only MP that comes close to Cullen's class, although he is some distance away, literally.

Peters' difficulty this term will be scheduling time to get to the House, being Foreign Minister. His MPs won't miss him terribly because they will get the platforms.

By the time Peters makes public the emails he says will end Don Brash's leadership, Brash's leadership will have already ended.

If he had had the goods, he would have disclosed the emails in the last week of the election campaign rather than creating a storm about Bob Clarkson's testicles.

Peters will announce his intention to stand as a list-only candidate for the 2008 election rather than taking on Tauranga again.

He will stand willing and able to serve his country as foreign minister under any Government next term, but his party won't make the 5 per cent threshold.

Deputy leader Peter Brown will announce his retirement from politics allowing fresh blood and next on the list Susan Baragwanath into Parliament.

After a very close contest between Brian Donnelly and Ron Mark, Donnelly will get the deputy leadership and Mark will get the Tauranga nomination - but National will win it again.

The rest

United Future leader Peter Dunne will continue his dream run in politics and stand willing and able to serve his country as revenue minister again in the next Government - or as foreign affairs minister, with Peters' demise.

Act leader Rodney Hide will become more sophisticated and more selective with his scandals. His goal will be to retain Epsom - and he will, but that means suppressing the hooligan in him.

His second goal will be to expand Act's representation.

His third goal will to befriend the Maori Party as much as he can in order to improve the prospects of it as a coalition partner for the centre-right - and his own prospects of being part of a government.

Maori Party co-leader Tariana Turia will decide not to contest the 2008 election. Pita Sharples will lead the party into the next election with Hone Harawira as co-leader.

Greens co-leader Jeanette Fitzsimons will be joined as co-leader by activist Russel Norman.

Audrey Young: A minister on foreign territory

Winston Peters was given a reality check yesterday on the last day of his visit to Fiji as Foreign Minister.

Forty minutes away from the grandeur of the Sheraton Fiji Resort Denaru where he was wined and dined by his Fijian counterpart the night before, he was taken to inspect a small squatter settlement just outside Lautoka.

It could not have been further removed from the glamour and romance associated with Foreign Affairs.

A one-roomed pink tin shack the size of a small New Zealand lounge houses 10 people. A hut on piles just beyond had housed two families, one in the house and one underneath.

Underneath this one was a mangy dog and a chicken.

A subdued Mr Peters had a polite glance inside the house where five wee kids carried on playing, oblivious to the foreign inspection.

The mother welcomed everyone with a "bula". She had just used a garden hose to fill up their outside water tank, an open-top 40-gallon drum.

Nearby is a rubbish dump where they scavenge for what they can get.

Rubbish was strewn all around but it is not theirs. Lautoka caught the edge of Cyclone Jim last week and the garbage had been washed downstream from a much larger settlement of 500 people who pile up their rubbish next to the river.

It's a huge problem in Fiji, with an estimated 82,000 people living in 182 such settlements.

Lautoka is virtually ringed by them and many of them are merging, Mr Peters was told.

The problem promises to worsen with the expected downturn of the sugar cane industry.

At present, New Zealand has given just over $2 million for two pilot projects to get the squatters into more habitable housing.

New Zealand has told Fiji that within five years, 70 per cent of its funding will be directed to such poverty alleviation.

Such visits may become regular features of Mr Peters' duties as Foreign Minister. Under the arrangement struck between Mr Peters and Prime Minister Helen Clark, the Foreign Minister has regained oversight of New Zealand aid. Marian Hobbs, who held it for the past three years is, on the back bench.

Five minutes away Mr Peters' four-wheel-drive vehicle was taken over a rough-as-guts road, Naikabula, to a pilot model village, Koripita, to inspect a village which she had agreed to part fund in conjunction with Rotary.

It literally means "village of Peter," a reference to evangelistic aid worker Peter Drysdale, a private citizen, whose mission in life is to rehouse everyone in western Fiji's squatter settlements.

So far 82 small, neat, safe homes have been built in the village housing 300. A further 100 are planned.

The women of the village turned out in force with garlands, cakes and Indian delicacies.

It was only 11 am but in the very hot village kindergarten-cum-community centre - estimated 30C - Mr Peters received a 25-minute PowerPoint presentation on the project. Then followed two presentations from non-government organisations about their involvement in the community, making chutney and cards to sell and suchlike.

In another life, Mr Peters may have called these people hand-wringing do-gooders.

Yesterday he sat and listened, fanning himself throughout, and throwing back the orange cordial when it finally came.

The New Zealand High Commission NZAID manager, Kirk Yates, thanked the village on behalf of Mr Peters, who offered no view on Mr Drysdale's fundraising suggestion that guests at the Sheraton might be brought over to the village as tourists.

* The funding injection of $2.2 million announced by Mr Peters this week means New Zealand is set to become Fiji's third largest donor on $8.7 million annually, based on 2004 figures. The EU gives $20.7 million; Australia $13.8 million, Japan $6.9 million and China $5.1 million.

Editorial: High time Blake was honoured

Put it down to balmy days enjoying the waters of the Hauraki Gulf at the height of summer. In such idyllic circumstances, some people's thoughts have turned to Auckland's favourite sailing son, Sir Peter Blake. More particularly, if letters to the editor are an indication, they have focused, with some bewilderment and not a little annoyance, on the fact that more than four years after his murder on the Amazon, this city has yet to acknowledge his deeds with a suitable memorial.

This sad state of affairs merits a logical response. Unfortunately, there is none. Plans for a Blake memorial might be said to be in limbo, except that this period of irresolution has lasted several years. Those responsible for the project have, in fact, done, and are doing, little to suggest they view it as a priority.

The last firm sighting of a plan was as far back as 2003. That involved the encasing of Black Magic, the America's Cup-winning yacht gifted to Te Papa by Sir Peter, in a glass building on Princes Wharf, adjacent to the Maritime Museum. The national museum was to raise $5.5 million towards the cost of the memorial, while the Auckland City Council committed $2 million and the Government $2.5 million.

Lady Pippa Blake backed the project, but Aucklanders were somewhat unenthused by the design. Te Papa, for its part, was chastened by the cost, and the difficulty of raising sponsorship money. It announced a review aimed at trimming expenditure. To all intents and purposes, nothing more has been heard from it.

Te Papa's retreat need not have killed off a suitable memorial, however. Later in 2003, Auckland City bought the Team New Zealand base at the Viaduct Harbour. The building, the epicentre of this country's America's Cup adventure, seemed the perfect place for a memorial to Sir Peter. A museum named after him and commemorating both his feats and his country's involvement in the event could be anchored there. It was also the ideal spot to showcase Black Magic. The boat needs to be housed indoors because of its fragility; its display at the base would entail little of the upkeep and cost involved with a glass case.

Yet nothing has eventuated there, either. The city council of the time talked vaguely about turning Team New Zealand's headquarters and others on syndicate row into a marine events centre, which would host the likes of on-water concerts and boat shows. It has not happened. But nor has the present council seized the opportunity to turn the base into a memorial.

One objection to this idea was the distance between the base and the Maritime Museum, which was intended to reap the benefit of the ship-in-a-bottle memorial. But the distance is, in fact, little more than a stone's throw, hardly an unmanageable gulf, particularly if both sites were to play a complementary role.

If progress is finally to be made, the city council must take the reins by creating a partnership with Te Papa and the Maritime Museum that would see the two locations involved in the project. A full range of static displays and interactive exhibits of the sort favoured by Te Papa could be accommodated - and all in a scenario that makes financial sense.

Matters have drifted long enough. Such were the magnitude of Sir Peter's exploits in both the yachting and environmental spheres that he is not about to fade from the popular consciousness. The ongoing public interest in a memorial confirms as much. That memorial should be in place now. The longer the delay the more the memory of a great New Zealander is ill-served.

John Roughan: Hurt results from intent

When I was a raw young reporter I was sent one morning to cover a court martial at the Devonport naval base. "We don't know what it's about," the chief reporter had said. "Go and check it out."

Not long after the proceedings got under way, the subject started to unfold. An officer standing there in his starched white uniform was said to have sexually molested several young ratings when they were on a ship together.

My newly acquired news sense started to beat with excitement. Within the hour I was on the phone to the office dictating breathless copy to a typist, visions in my mind of front page headlines in the afternoon editions.

I had barely finished the fourth paragraph before the chief reporter came on the phone.

"Come on back," he said. "What they do among themselves is their own business."

On the drive back to the city I thought about this. The reason he had given was not, I knew, the real reason they didn't want the story. Like all news editors they ran lots of stuff that was strictly somebody's own business.

They didn't want this because they could sense it was going to be too grubby to put in front of their readers, and they were right. It was an early lesson in the limits of journalism.

That newspaper, incidentally, was the Auckland Star. All media observe boundaries of taste that broadly reflect what they judge to be their audience's sensibilities. When they get it wrong you have a right to be offended because they are not just expressing their own low standards of taste and judgment, they are acting on their assessment of yours.

The boundaries are difficult to define and they change over time. That court martial could be reported in lurid daily detail now, probably with a feature of several pages to wrap it up at the end.

Subjects such as child abuse and paedophilia, which were almost never covered 30 years ago, have become part of the daily news diet.

It is said to be better that these things are "out in the open" and we presume readers agree, though quietly I still have my doubts.

There is not much consistency in these trends. Suicide, for example, is seldom reported in much detail because the authorities insist it is not better to deal with it out in the open, that it is positively dangerous to discuss cases in public in case they are copied. I have my doubts about that, too.

And there is no consistency in the changing treatment of those two sensitive issues of the human personality: race and religion. Race is treated with much more care now than it was 30 years ago. But religion is an increasingly rare experience for people in this country and many in the media don't know what it is.

They know only the religion that makes news in fundamentalist forms or in moral absolutes that are hard to reconcile with human nature. They have no idea of the way religion settles into your heart and stays there, a part of your identity, long after you have decided you don't believe it.

Last Sunday I was lured on to John Tamihere's Radio Live programme to talk about the Herald's decision not to run the now infamous Danish cartoons. It was a decision made by editor Tim Murphy who had summoned several of us to discuss it.

It was quite a brief discussion. All of us were of the same instinct: the cartoons had been published by newspapers in Europe that felt a need to show Muslims the free Western media was prepared to offend them.

That did not strike us as anything we needed to prove or to be sufficient reason to give anybody offence.

But Tamihere threw me two curve balls called the taniwha and the Virgin in a Condom. They've been haunting me ever since.

I wrote some scornful comment on the trouble that a Tainui hapu's taniwha caused Transit New Zealand when it was building the Waikato expressway, comment that was bound to hurt Maori whether or not they "believe" in taniwha.

I know it would have hurt them because a few years earlier I had felt the offence of Virgin in a Condom. The injury I was done by Te Papa's exhibit surprised me at the time because, like John Tamihere, I have come a long way from a Catholic childhood.

What hurt then, and what hurt Muslims this week, was not so much the defiled image as the intention to offend. That is the difference between the Virgin in a Condom and, say, Life of Brian, which had me helpless with laughter and not at all offended. The movie was also good, which helps, too.

It was no surprise that the cartoons, when they appeared in the Dominion Post, were abysmal by any standards of the art.

Clever work almost never gives offence because it clearly has a better intention.

Tamihere's question reminded me that while I was writing fiercely against the Virgin in a Condom I don't recall feeling even slightly offended by images of it in the Herald.

The reason, I think, lies again in the intention. Te Papa put the thing on display to be "challenging". Newspapers used it to illustrate the story.

That is what Bill Ralston says he was doing when his TVNZ news programmes carried the Danish cartoons, but I don't think Muslims could be expected to accept that. The medium sometimes is the message. Nobody would use them but for their ability to bait Muslims.

As for press freedom in this instance, the last word deserves to lie with a Muslim, a woman, Yasmin Alibhai-Brown, who writes for the Independent in Britain.

She said of those who reprinted the cartoons, "They have taken something precious and turned it into a licence for the intelligentsia to behave like yobs."

Paul Thomas: Cartoon fallout lands in familiar territory

As is often the case when the world is plunged into a crisis that no one saw coming, it's tempting to assume that we're witnessing an event of historical significance, perhaps even a turning point in the affairs of men.

But we have been here before.

In 1969 the satirist Auberon Waugh wrote a column in the Times in which he recycled an old army joke about the sort of trousers worn by men in parts of the Middle and Near East.

The paper was bombarded with furious letters from the embassies of Islamic countries, there were demonstrations in London and the British Council Library in Rawalpindi was burned to the ground. (Interestingly, when he recounted this incident in his autobiography, Waugh chose not to repeat the joke).

Then there was the fatwa - sentence of death - complete with multimillion-dollar bounty imposed on writer Salman Rushdie whose novel The Satanic Verses was deemed disrespectful of Islam. Rushdie was forced to hide for more than a decade.

The fatwa wasn't imposed by some shadowy terrorist outfit, but by Iran's spiritual leader and de facto head of state, Ayatollah Khomeini. It was subsequently and repeatedly confirmed by the Iranian parliament and government officials.

Perhaps historians will identify the West's passivity when confronted with this chilling assault on freedom of expression as a turning point. Having finally discredited and rolled back state censorship of the arts, the West could only manage a muted protest when a foreign government sought to impose the ultimate censorship on one of its leading writers.

And as is often the case with moral debates, the Danish cartoons unleashed an extravaganza of paradox, hypocrisy and unconscious irony. Gusts of hot air were expelled on the related themes of freedom of the press and media responsibility. Some of the most strenuous huffing and puffing took place in parts of the world where the media is neither free nor responsible.
Lectures on this subject from newspapers which routinely reprint that anti-Semitic forgery The Protocols of the Elders of Zion or peddle inflammatory misinformation such as the claim that the September 11 attacks were the work of Mossad, the Israeli intelligence agency, are of curiosity value only.

Cue the inevitable claim - this time from a high priest in the Iranian theocracy - that the caricaturing of Mohammed was a Zionist plot.

After the Dominion-Post published the cartoons, it featured a piece by a Muslim law student who asked whether the newspaper, in the name of free speech, would run an article by professional Holocaust denier David Irving repeating the assertions that have landed him in an Austrian jail.

A good question given that Irving was denied entry to New Zealand, thus sparing editors that very dilemma.

The following day an Iranian newspaper announced it would sponsor an international festival of cartoons about the Holocaust with a view to challenging the Western media to publish them. It'll be interesting to see if this provocative notion has legs.

Given the looming confrontation over Iran's nuclear programme and the fact that the new Iranian President has already indulged in Holocaust denial and expressed his desire to wipe Israel off the map, it's already in danger of being overtaken by events.

Next a Muslim cleric in London was jailed for preaching that the killing of non-Muslims was a religious duty. His lawyer admitted some of his client's statements were a bit over the top, but the British Attorney-General took a sterner view: free speech was important, he said, but encouraging murder and inciting hatred on the basis of race was intolerable.

One of the guilty pleasures of this ongoing drama is watching the intellectual contortions of the post-Christian, anything-goes society as it attempts to accommodate religious fundamentalism.

The law student also asked if the Dominion-Post would run a cartoon of the late Pope sodomising a boy in St Peter's Square. Probably not but I'd be amazed if the Dom, like most papers in the Western world, hasn't at some point run savage comment, perhaps in cartoon form, on the Catholic Church's paedophilia scandals. I'd be equally amazed if many a blameless priest hasn't felt tarred by that brush.

Our media routinely portrays fundamentalist Christians as simple-minded or sinister or both - witness the Exclusive Brethren's involvement in last year's election.

Their core beliefs - for example, creationism and the sanctity of the unborn child - are derided as primitivism, even as we accord the utmost respect to ethnic myths and legends.

Perhaps the lesson in all of this is that because the sceptical, humanist, liberal West no longer believes in anything much beyond its standard of living, it has great difficulty in knowing how to respond to those who take their beliefs very seriously.

As a result we vacillate between disrespect and appeasement.

Islamic extremists hate our freedom, our secularism, our indulgence of individualism and diversity, our robust and sometimes wounding give-and-take, all of which they see as licence and decadence.

They'll maintain the pressure with the aim of eroding our commitment to those values and our willingness to defend them. Faced with that pressure we as a society must have the confidence and clarity to know which battles are worth fighting.

Fran O'Sullivan: Ruling comes after the party horse has bolted

Are the New Zealand authorities so pussy-whipped that they have to wait until four months after the election to throw the book at Labour for what looks like a clear raid on the Government purse to help finance its campaign?

On the surface Labour had been caught cold, well ahead of the September 17 election, by using Parliamentary Services as the channel for the production of a raft of pamphlets issued by Prime Minister Helen Clark's leader's office - including Labour's pledge card - rather than the party's own coffers.

Sure this obvious election collateral did not carry Clark's exhortation to get out and vote for Labour. It hardly needed to.

After Labour's successful use of the Clark pledge card at the two previous elections, that particular device had already acquired iconic status. It would not have taken a brain of Einstein magnitude to make the obvious leap of logic that finally led the Electoral Commission this week to decide that the expenditure was politically rather than government oriented.

It has found Labour has exceeded its allowable election expenditure limit by $418,000, just shy of the $446,815 Parliamentary Services forked out for what is now deemed to be a Labour-related spend.

Commission chief executive Helena Catt has shown some courage in referring the issue to the police. It is, after all, the first time any party has been referred to the plods for election overspending since the lamentable introduction of proportional voting.

But it is too late to have any impact on the only tally that really counts.

Just like David Henry, the Chief Electoral Officer before Catt, who referred the same material to the police in October after deeming the election advertising did not carry the required Labour Party authorisation, Catt is acting after the horse has bolted.

The only person who is even remotely in the frame at this stage is Labour Party secretary Mike Smith. Smith has already being fingered in some news reports as the poor sucker who could face up to a year in the boob, fines of up to $4000 or both, if he is found to have committed a corrupt practice. (A lesser $3000 fine is in the offing if an illegal practice is found.)

But, frankly, this is chicken-feed compared to the impact Henry in particular could have had if he had taken strong action before the election.

Across the Tasman, Victorian Premier Steve Bracks is facing claims that his Government is abusing advertising rules to position Victorian Labor for upcoming state elections.

State auditor-general Wayne Cameron, who was previously at the NZ Auditor-General's Office, has agreed to conduct an audit into the Government's advertising spend and, importantly, release the result well before the November 25 election.

Thus Victorian voters will know, well in advance of judgment day, their auditor's verdict on whether the Bracks Government is, basically, using their money to promote votes.

Inevitably, NZ Labour will argue that woolly election advertising rules, on this side of the Tasman, created confusion in its ranks over what was acceptable election spend and what was not.

It has some justification. There has been no concerted attempt to clarify the rules since the Auditor-General's report in June last year noted a big growth in publicly funded parliamentary party advertising.

The report makes it clear that there are a number of anomalies which concern the auditors.

But in my view, Labour will be on weak grounds indeed if it uses that report to justify any resultant defence if and when the matter gets to court.

The reality is that by pointing up the explosion of parliamentary spending, the Auditor-General has served notice over where the boundary of acceptable practice lay.

Unfortunately for National its failure to include $100,000 GST within its broadcast spend at the election means it is also facing police investigations this time for breaching the Broadcasting Act .

So it is not in a position to spray too much vitriol over its opponents.

The big losers are once again the New Zealand voters.

If an election candidate exceeds his/her campaign allowance limits, he can be automatically thrown out.

A new election will be called to fill the seat at which the fallen candidate is banned from standing.

This neat solution does not work at national level.

Even if a political party's election transgressions were proved to be so blatant - for instance, involving clear vote-rigging or voter fraud - the resultant court cases would take so long to wind their way through the legal system that they would probably still be going on well after the next election was due.

Labour's alleged transgressions are not of that ilk.

They are probably symptomatic of an environment which sets an absurdly low limit on the amounts political parties can spend at any election.

Unfortunately for voters no one really polices the worst electoral frauds.

Such as the fictitious costs political parties attached to their policies when they sought to buy our votes with our own money at the last election.

If the authorities' attention was turned in that direction, it would not be the party apparatchiks facing the jump but the politicians who benefited from the overspending in the first place.

Brian Gaynor: Shareholders too quick to accept offers

The clear message from recent takeover offers is that shareholders are far too quick to accept opportunistic bids. The recent offers also demonstrate that the share price of a target company will often rise, rather than fall, after a bidder fails to reach 90 per cent and an offer lapses.

There was little doubt that Graeme Hart would want to mop up Carter Holt Harvey's minority shareholders as quickly as possible after Toll Holdings failed to act decisively in its bid for Tranz Rail.

Hart's $2.50-a-share offer closed on January 27 and seven days later he announced a new bid at $2.70 a share. (If he reaches 90 per cent within seven business days all remaining shareholders will receive $2.75.)

Under the Takeover Code, there is no requirement for Hart to pay the $2.70 or $2.75 to shareholders who accepted his earlier $2.50-a-share offer.

The 5c-a-share incentive to accept within seven business days has immediately run into trouble with the Takeovers Panel. The panel is holding a meeting on Monday to determine whether this complies with the code.

The concern is that the 5c incentive effectively shortens the $2.75-a-share offer period from the 30 days required under the code to just seven business days (the 30-day requirement is an important aspect of the code and is one of the main reasons why bidders are not allowed to use stands in the market to gain control of target companies).

There is also a concern that the seven days will have expired before shareholders have received the new independent appraisal report.

Under Rule 57 of the code, shareholders can object to the compulsory acquisition price if Hart reaches 90 per cent but fails to acquire 50 per cent of the outstanding shares. As he starts with 85.7 per cent, he has to reach 92.85 per cent before minorities lose this important right, which was successfully used by Shotover Jet shareholders.

In late 2002, Ngai Tahu made an offer for the Queenstown jetboat company at 70c a share and raised its holding from 82.2 per cent to 88.3 per cent. A year later, it made another bid at $1.03 a share and Grant Samuel valued the company at between 97c and $1.10 a share.

Ngai Tahu reached 90 per cent but failed to acquire 50 per cent of the outstanding shares. Some holdout shareholders objected to the $1.03 compulsory acquisition price and the panel appointed an independent valuer to determine it under Rule 57.

The new independent appraiser concluded that $1.18 was a fair price and all shareholders who had not accepted the Ngai Tahu offer received this 15c-a-share premium.

This objection facility is not without risk, as the independent appraiser could determine that the final compulsory acquisition is lower than the offer price.

Hart's attempt to gain full control of CHH is not over yet and the outcome of Monday's panel meeting and the independent appraisal report will have an important bearing on the outcome.

We could see a few more twists and turns as several astute investors - including the ACC with 0.9 per cent and Peter Masfen and James Kirkpatrick with 0.2 per cent each - remain on CHH's share registry.

AMP's offer for Capital Properties is entering a fascinating stage.

The original $1.42 a share offer was raised to $1.48 and all accepting shareholders receive this higher price because it was increased under an existing offer.

Despite a flood of media comment by AMP's Stephen Costley - one of which drew a public ticking off from the NZX - the offeror's last shareholders' notice indicated it was stuck on 88.2 per cent.

The offer must close on February 26 and it would be surprising if AMP reached 90 per cent, because remaining minority shareholders are now in the driver's seat with no incentive to accept.

As it is highly unlikely that AMP will want to stop at 89 per cent, it has two important options:

* It can make a new offer for Capital Properties at a higher price.

* Wait for 12 months and use the creep provisions of the code to reach 90 per cent (a controlling shareholder can buy an extra 5 per cent in any 12-month period without making a formal offer).

If AMP makes another takeover offer and reaches 90 per cent, then hold-out shareholders can object to the compulsory acquisition price if the bidder doesn't acquire 50 per cent of the outstanding shares. As the mid-point of last year's independent valuation was $1.60, it is reasonable to assume that a new valuation would be in excess of the present offer price.

If AMP reaches 90 per cent under the creep provisions then an independent appraiser also determines the compulsory acquisition price.

Why would Capital Properties' shareholders want to accept AMP's $1.48-a-share offer when there are numerous ways they could receive a higher price, including through a sharemarket share?

Carmel Fisher stymied Macquarie's attempt to gain full control of Metlifecare when she didn't accept in respect of the 11.6 per cent shareholding held by Fisher Funds.

The Metlifecare bid has lapsed and the company's share price is $3.90, the same as the offer price. The New Zealand Superannuation Fund has recently said it has a 5.1 per cent holding and this will make it extremely difficult for Macquarie to acquire full control of Metlifecare without making a new offer at the upper end of the $3.63-$4.15 independent valuation.

Delegat's attempt to gain majority control of Oyster Bay Marlborough Vineyards has had a huge number of twists and turns.

In short, Peter Yealands made an initial offer for Oyster Bay at $3.10 a share, partially because he believed that the company's land holdings were undervalued. Yealands' offer started a bidding war with Delegat's, which finally bid $4 a share.

Ferrier Hodgson's independent report did not value the land at market, Yealands objected, the panel intervened, Delegat's offer was declared null and void and the latter launched a new offer to obtain 50.1 per cent at $6 a share, Delegat's offer closed this week with 88.3 per cent acceptances and shares will have to be returned on a pro rata basis as the offeror is only after 50.1 per cent.

Yealands' determination shows that a more positive outcome can be obtained from rejecting low offers and challenging independent reports.

This has also proved to be the case in the recent bids for Baycorp Advantage, BIL International and Mike Pero Mortgages.

Allco made an offer for Baycorp Advantage at A$3.52 a share and the target company's share price is now A$3.63 after a 50Ac capital repayment.

A bid for BIL International at S$1.25 a share ($1.06) was only partially successful and the share price is now S$1.52. The latest offer for Mike Pero Mortgages is $1.05 a share compared with 82c for last year's bid.

The willingness of most shareholders to accept low offers, as demonstrated in the Capital Properties and CHH bids, indicates a lack of understanding and appreciation of the code.

In the pre-code era, the bidder held all the cards and shareholders had little option but to accept low offers. The balance of power has now switched from the offeror to the offeree, but most investors, and their advisers, are taking a long, long time to recognise this.

* Disclosure of interest; Brian Gaynor is a CHH shareholder and an investment strategist and analyst at Milford Asset Management.

Paul McIntyre: Who Wants to be a Millionaire host hits the top of the management pile

"Even by my standards it's been a complete circus."

So said Eddie "Everywhere" McGuire, the risky new chief executive of Network Nine, Australia's top-rating TV broadcaster, controlled by the Packer family.

Ever since Nine's former boss and close Packer family friend David Gyngell got the huff and resigned suddenly from Nine in May last year, speculation has been relentless over who would run the $900 million TV network.

It came to a head this week as the broadcaster gushed leaks that its very own on-air supremo was about to land the top job. On Thursday afternoon it was official.

McGuire is an intriguing and risky choice. Intriguing because he comes from a Scottish immigrant family who left the coal mines in the 1950s for a better life in Melbourne.

The family settled in the working class suburb of Broadmeadow from where McGuire weaved his way up to the top of the TV business.

But the risk with McGuire's appointment - which did get the late Kerry Packer's blessing - is intriguing because he's taking the top job at Nine at perhaps the most vulnerable phase the network has been in for 30 years.

McGuire, 41, has no background in the management of a big business and it has some analysts concerned because last year saw the one-time TV basket case of Channel Seven bounce back with a vengeance in the ratings.

Nine has been stunned - it's still No 1, but its outright ratings and revenue dominance has gone. On Monday night, for example, just 8000 viewers separated Nine and Seven.

McGuire on Thursday night fronted his own network's current affairs show, A Current Affair, and acknowledged the competitive threats but, typically, talked his way out of it.

"A lot's been said about whether or not I've got the management skills," he said. "I've been hired because of what I bring, not what I don't bring.

"There's been a lot of stuff in the media about how Seven's going against Nine. Let's not forget instead of absolutely belting them last year, we just belted them.

"This year they've got a fantastic slate of shows so let's not kid ourselves we are in a fight up against a real foe. And probably for the first time in years Channel 9 has been challenged, but not only by Channel Seven but the world of new media.

"We have to think smarter, be quick on our feet and be relevant."

All of that, plus.

McGuire starts on Monday and his on air role is now over. He is hugely ambitious and driven to win.

McGuire, until now, anchored the top rating Who Wants to be a Millionaire. But that came after he'd put his name on the map anchoring The Footy Show for 13 years - Aussie Rules' first theatrical TV production that turned players into celebrities. He also took over the presidency of the legendary but almost broke working class Aussie Rules team, Collingwood, turning around its fortunes with a massive injection of sponsorship dollars and a couple of spots in the AFL Grand Final in recent years. Through his own company, Maguire Media, he also has ventures in gaming, publishing and the internet, and earns about $3.5 million a year.

His biggest job now is swinging Nine's momentum around and repairing a fractured internal culture, resulting from interim boss Sam Chisholm offloading more than 90 people and slashing costs, acts which dented the usual sense of invincibility. Many believe that has frozen the flow of ideas from the station.

Indeed, the extent of the dislike for Chisholm - who took on the job as a favour for Kerry Packer after David Gyngell's departure - is so intense at the top that senior producers and programmers at Nine hammered out an agreement last year at the ritzy Bondi Beach restaurant, Icebergs, that they would stick together to ensure they would outlast Chisholm.

Chisholm will remain a non-executive director of Nine's parent PBL, but McGuire has to now ensure he can get morale cracking.

"I want Nine to be the epicentre of creativity," he said on Thursday. That was for the staff. He's also got to ensure big fat profits for his bosses at PBL and its shareholders. Otherwise Eddie will be out of the big black chair and back on the screen. Pronto.

Richard Inder: Liberty in the driver's seat

Liberty Financial's acquisition of a 10 per cent stake in Mike Pero Mortgages should be viewed as a break for freedom by the Australian lender in New Zealand.

Liberty's lightning raid on the Mike Pero share register a little over a week ago has frustrated the ambitions of rival New Zealand Finance, which has a controlling 55 per cent stake and is bidding another $1.05 a share for the remainder.

Typically, investors would regard Liberty's move as a precursor to an auction. Liberty would block NZF from reaching 90 per cent, the threshold where NZF could compulsorily acquire the outstanding shares. The two would then enter backroom talks over what price was acceptable, before NZF launched another bid.

This will not happen.

For one, Liberty's managing director, Sherman Ma, told the Business Herald: "That is certainly not the case. We have not ever taken short-term positions in things, it has always been for the long term. We think we can bring some benefits to the organisation. We are by no means looking at an exit."

Such utterances are rightly viewed with scepticism in contested takeovers, but this time there are strong grounds for taking Ma's assertion at face value.

Liberty was facing a serious threat to its ambition to expand in New Zealand if it did not block NZF.

Liberty provides finance to the non-conforming borrowers, the builders and plumbers who have not kept their accounts up to date, former waywards who declared themselves bankrupt when they were students - people who fall outside banks' normal lending criteria.

These people, which according to Liberty represent as much as 10 per cent of the mortgage market, are most in need of advice on the universe of lenders outside the traditional sources.

The people who provide this advice are mortgage brokers, of which Mike Pero is the largest with an estimated 30 per cent share of the New Zealand market.

(Those on a good income with a decent credit history and a reasonable standard of education can negotiate with the main banks just as easily as a mortgage broker. The rates and terms they get with major trading banks are likely to be more competitive than rates offered by institutions such as Liberty, which demand a premium to banks to offset the additional credit risk.)

By taking a controlling stake, Liberty has bought an insurance policy that the Mike Pero directors act on an arms-length basis with it as well as the other lenders who provide finance to Mike Pero's customers. It will not make a rival bid because it has no chance of getting more than 50 per cent without NZF's agreement.

NZF is also a big lender to Mike Pero's customers.

Its mortgage book, between March 2004 and March 2005, grew 56 per cent from $39.5 million to $61.5 million. Meanwhile, it has a complementary business in New Zealand Mortgage Finance, expected to write around $1 billion of loans in the year to June.

Even if NZF had succeeded in getting full control of Mike Pero, it probably would have continued to use Liberty as a funding source. Liberty is big, and can offer better rates than smaller competitors.

However, full control would have allowed NZF to offer Mike Pero customers more favourable terms on its loans. It could sacrifice margins on its loans to build the customer registers of both operations.

Now , such sweetheart deals are off. Mike Pero directors must now ensure that any deals with either NZF or Liberty do not breach the NZX listing rules on related party transactions.

These require Mike Pero to seek shareholder approval if a deal involves assets of more than 5 per cent of Mike Pero's market value, or services worth more than 0.5 per cent of the market value. In such situations the related party - Liberty or NZF - would be prevented from voting.

In short, Mike Pero must continue to behave as an independent entity even though two of its suppliers sit on its share register.

The stake is a blow to NZF's ambitions. The acquisition of Mike Pero may have helped it shift its growth up a gear. Now it must forgo these benefits as well as any savings obtained by de-listing Mike Pero from the exchange, worth as much as $750,000 a year.

To put it mildly, NZF will now have to rethink its plans for Mike Pero, but the alternatives are unclear. The related party rules would also seem to prevent NZF and Liberty reaching accommodation that would be enough for Liberty to give up its stake.

Some investors believe this may be the end for NZF.

Since Liberty's interest in Mike Pero was disclosed, NZF's shares have soared, suggesting to some that it may believe Liberty may eventually have designs on it as well.

However, for Mike Pero, Liberty's position may have a silver lining. It will miss out on the gains that come with size.

But customers can be sure that the broker will deal with Liberty and NZF on purely commercial terms. This must help borrowers get the best interest rate and terms.