Monday, March 06, 2006


Ross Bauckham reckons that, with all the talk of internet speeds in the countryside, this farmer near Taupo has solved the problem with his own version of rural Hotmail

By Ana Samways

A reader from Grey Lynn writes: "I went into Sounds Music store two weeks ago for the soundtrack to Brokeback Mountain but no, wasn't in yet, no indication from the disinterested and pimply youth behind the counter as to when it might be available. I then rang Sounds a week later - 'No, we don't have it in yet' - this despite the fact the movie had already opened. Another week later, I rang again and yes, it was finally available. A few days later, I went to buy the disc but no, they've sold out. Record stores need to realise they are not public spaces for pimply and unhelpful youth to listen at ear-splitting volume to the most foul and revolting imported hip-hop music the world has ever had the misfortune to be exposed to but are in fact a business, with customers, who they need to CATER TO!"

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Easily inspired: Rugby's Waisake Sotutu buys bling on wheels ... "The Las Vegas wedding of All Black and former Blues and Auckland team-mate Carlos Spencer inspired Sotutu to bring the first ever Hummer limousine to Australasia," reads the story in Spasifik magazine. "I had hoped to go to Carlos' wedding myself," says Fiji international Sotutu, "but rugby commitments with the Yamaha team in Japan prevented me ... Charles Reichelmann, Filo Tiatia and Adrian Cashmore went and said how they were driven around in a bright yellow stretch Hummer Limo. I knew then I had to have one".

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There's nothing like a good comeback. A one-liner that stops a room or an action that puts you firmly on the moral high ground. Here are a couple of great comebacks posted on a UK blog:

* I was seven, running around the garden, with a pointed stick, as you do when you're a kid. Suddenly my mum starts shouting from the kitchen: "If you keep running around with that stick, you'll poke your eye out, and what are you going to do then?" ... "I'll become a pirate mum!", I replied and continued running around with stick in hand.

* I was on an empty bus, going a couple of stops. I'm sat in a seat designated for the disabled or elderly, with a heavy bag of groceries. Two perfectly sprightly old pensioners get on and sit in the seat behind me and start slagging me off for sitting there banging on about me having no respect and bemoaning the youth of today. So, when I get to my stop, I purposefully turned round and scowled at them, proceeded to get off the bus dragging my leg behind me in the manner of an amputee. That shut them up ... And I kept it up all the way down the road, for authenticity.

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Russian cosmonauts aim to set a record for golf's longest drive by hitting a ball with a gold-plated club from the International Space Station. The BBC reported the ball could stay in Earth's orbit for four years and travel millions of kilometres before burning up in the atmosphere.

The attempt is planned for a spacewalk this year. But Nasa must give its blessing first.

Some experts fear catastrophic damage to the station if the ball comes back and hits it. The way around this would be to hit it well out of the station's orbit.

Bill Alior, of America's Centre for Orbital and Re-entry Debris Studies, said: "The trick will be hitting the ball wearing a spacesuit."

Editorial: Rethink on failed jail policy vital

Corrections Minister Damien O'Connor caused quite a stir last month when he declared his intention to cut jail numbers by a third. Some doubted the public would tolerate such a step. Yet the Herald's week-long series on "Our Idle Jails" has surely confirmed the need for a substantial rethink of how we punish criminals, and how we stop reoffending.

The reports illustrated graphically how present policies have proved counterproductive. Since 2002, the number of men and women behind bars has increased by 33 per cent. Tough laws abolishing suspended sentences, which were enacted that year, have propelled our imprisonment rate to the second highest in the developed world. As fast as the Government has been building prisons, the courts have been filling them.

But the main outcome of this influx has been the falling by the wayside of work and rehabilitation programmes devoted to education, training, and drug and alcohol addiction. Life in the country's 19 overcrowded prisons has become, in the apt phrasing of an Ombudsman's report, one of "enforced idleness".

It is, thus, hardly surprising 86 per cent of released prisoners reoffend within five years. Or that there is universal acceptance of the need for more rehabilitation programmes. Imprisonment keeps criminals out of the public domain but without rehabilitation it merely delays reoffending. Prison becomes as much a catalyst for crime as a deterrent.

But rehabilitation programmes will struggle for effectiveness as long as our prisons remain overcrowded. There can be little hope of success when inmates are being shunted around the country in search of available cell space. Mr O'Connor's solution is to adopt community-based alternatives for low-level offending - the likes of drink-driving and theft - albeit not soft options.

His initiative has garnered wide support, but not from the National Party. It is clinging to a philosophy espoused by Don Brash in 2004. That policy, centred on the denial of parole to most inmates, has much in common with American-style "lock 'em up and throw away the key" approaches.

Since 2002, however, we have gone a fair way down that track. It has not worked. Imprisonment has not proved a panacea for violent crime; over the past four years, there has been only a 1 per cent drop in such offences. New Zealand has confirmed that sentencing policies and crime rates operate largely independent of each other. Even the Sensible Sentencing Trust now concedes the shortcomings of present policy. Its founder, Garth McVicar, like Mr O'Connor, found much to admire in Finland's approach during a conference there last month. Both men were doubtless also chastened by the way New Zealand was held up as a model of what not to do.

The Finnish model is based on separating hard-core recidivists, who remain imprisoned, from those who pose no threat to society and would benefit more from properly enforced community work. Offenders must give up their preferred employment for what would formerly have been their period of imprisonment. It may be that some of the work, such as the fruit-picking now being done by prisoners in Hawkes Bay, is not particularly rehabilitative. But even that is better than staring at the ceiling of a cell. And it entails far less cost to the taxpayer.

More fundamentally, a 2001 Corrections Department report emphasised the importance of early intervention, so that the goal of at-risk youth switched from offending to achieving. In the climate of that time, it gained little traction. Now, however, both it and the Finnish model warrant close scrutiny. Persevering with a failed policy makes no sense.

Brian Rudman: Auckland treasure isn't a cash cow to be milked

Brian Rudman: Auckland treasure isn't a cash cow to be milked


Six months ago Ports of Auckland was appealing for public response to its redevelopment plans for the land it owns known as the Tank Farm. Now it's Auckland City's turn, seeking public input on the planning template it wants to impose over the 35ha prime waterfront site.

It comes as no surprise that the two plans are passingly similar. That's because they are the outcome of much prior consultation and horse-trading between these two powerful organisations, and with the port company's owner, the Auckland Regional Council.

Normally I'd be full of praise for such close co-operation between two parts of Auckland's fractured local government. But not in this case. Not when this joint "vision" has been hog-tied by the desire of the owners to make a profit to pay for new transport and infrastructure projects across the region. Nowhere is this more obvious than in the port company's plans, apparently dominated by apartments.

Elsewhere in the world, an urban renewal project such as this, particularly a harbour front one, would at best, be expected to break even. More likely, large dollops of public funds would be poured into it, in recognition of the opportunity it provides to create a national and international drawcard.

This is why I support Sir Ron Carter and the Committee for Auckland, who last year called for the redevelopment site to be put under the control of a single-purpose development authority.

This would be a body with the sole task of creating a world-class new waterfront. It wouldn't have, in the back of its mind, the restraint of knowing it had to create a cash cow as well. Of course there are many other reasons why a single-purpose authority is the one to follow. These are canvassed in an analysis of 27 waterfront redevelopments, conducted by Mercer Delta Consulting for the Toronto Waterfront Revitalization Corporation, dated September 2004. Mercer's compared projects from around the world, singling out for in- depth study Sydney, London Docklands, Liverpool, Vancouver, New York Governors Island and Chicago. The full report can be found on Committee for Auckland's web site

The report warns that no governance model will succeed if there is lack of political will and commitment, lack of government and agency co-operation, if funding is inadequate or unpredictable and if the public and other key stakeholders are not proactively engaged.

What it does not address is the concept of making a profit out of the exercise. One assumes it's because none of the 27 world-class cities involved in their survey contemplated that turning a buck was a goal.

Indeed the consultants assume - and recommend - that a Toronto waterfront development authority will get initial seed funding from local, provincial and national government "and that all proceeds from development be used to pay down outstanding infrastructure debt with the objective of minimising the contributions required from governments".

In other words, to realise the vision and create a special place on their run-down waterfront, Toronto, like the 27 other cities, is going to have to fork out, at least until the project starts paying something back.

Auckland's vision, as currently espoused by our civic leaders, is to buck the world trend and turn a profit from our waterfront gentrification. Are we really wiser than the rest of the world? Do we want to risk our waterfront finding out?

Of course the consultation process Auckland City wants us to join in on doesn't address the issue of governance of the redevelopment project. It's acting as the planning authority and wants your views on how much open spaces versus 16- storey apartment blocks should be shoe-horned on to the site.

But as Mayor Dick Hubbard said in launching the plan and calling for comment: "We have only one chance to get this right." If you want the Tank Farm to become that "very special" place the mayor wants to help "define" Auckland City, I suggest you raise the governance issue in your submission.

We only have one chance. Let's not blow it.

Dick Hubbard: Be inventive with waterfront design

Aucklanders have a love affair with the sea. It is deeply ingrained in our psyche. It is our much-loved treasure.

Linking the sea with our city is our waterfront, undoubtedly one of our greatest assets. And now we have a once-in-a-lifetime opportunity to unlock the potential this spectacular area holds.

Around the world, cities are looking to their waterfronts. In London, Sydney, Cape Town, Barcelona and Vancouver these developments have breathed new life into their cities.

Now it is our turn. The area we are looking at first is an area Aucklanders affectionately know as Tank Farm. I know there has been a move to reclaim its official name - the Western Reclamation or Wynyard Wharf - but I like its nickname.

That its real use as a tank farm will end in the next 10-15 years is irrelevant. The world's major cities have many examples of areas called "fisherman's wharf" where fishing no longer occurs. And in London no ships dock at the Docklands.

In the past year, you have heard me talk a lot about heritage. But heritage protection is not just about buildings. It is also about historic areas of activity, and the Tank Farm is an indelible example of our heritage. We should forget about a competition for a new name for this area.

So what is my vision for the Tank Farm?

I want a place where Aucklanders can get up close and touch the water, where they can walk from the sea to the city freely, where they can enjoy the sea breeze while having a lunchtime sandwich.

I also want a place where visitors can say "Wow! This is breathtaking!"

I want a walkable waterfront. That means the new development must have restricted vehicle access while allowing for some commercial traffic to service the fishing and marine industry activities.

Accessibility is paramount. This could be assisted by a tram-type public transport system that travels frequently along the east-west axis from the Ferry Building to the western end of the wharf.

We need a spectacular bridge from Te Wero Island to Jellicoe St that links the Viaduct Basin to the Tank Farm. It would be an ideal opportunity for an architectural competition to ensure we get a bridge that is distinctly Auckland.

The bridge will bring pedestrians into the heart of a bustling marine area by the water's edge - a perfect venue for our city's waterfront events.

I am also in favour of Wynyard Wharf becoming another wharf for overseas cruise ships.

Cruise ships add excitement, activity and a sense of occasion to an area. At the same time, we would need to keep wharfside support buildings to a minimum so we do not block the area to the public.

The tip of the wharf is the jewel in our crown and must be designed with great care to encourage and entice people to this special place.

The Tank Farm cannot simply be the most desirable piece of real estate in town - that would be a sell-out to the greater interest of Aucklanders. Even worse, the open space at the end of the wharf area must not end up as an exclusive area for wharf residents.

I want to see a big, open public space, parks and esplanade reserves, and a large sound shell or theatre at the end of the wharf that could be used for open-air concerts. We'll need retail facilities, too.

Last week I visited the new Victoria and Albert waterfront area in Cape Town, South Africa. With clever architecture and good urban design, this area buzzes day and night and is a major attraction for locals and visitors.

We are a maritime city, so the concept of canals in this area is a great one.

I am not proposing a replica of Venice, but some strategically located canals would create interest and become a vital link between our city and the sea.

The harsh reality is that funds may limit us.

But I look around the city and marvel at the foresight of some of our great Aucklanders - Sir John Logan Campbell and his gift of Cornwall Park, and Mayor Gunson with the building of the Auckland War Memorial Museum.

Think of the Auckland War Memorial Museum and ask yourself - what would have happened if Gunson and his Auckland City Council in 1922 had settled for something less?

On the redevelopment of the Tank Farm we must set our sights high. We must not settle for anything mediocre.

We must ask ourselves whether we are better to have ratepayers' money invested in Auckland Airport shares, as it is at present, or in our waterfront.

In my opinion, I believe we should exchange this piece of family silver for a piece of gold.

A chance such as this will not come our way again. Now is not the time for the faint-hearted or the short-sighted.

In true Auckland style, we need to be bold, brave and imaginative. Let this be the gift of our generation to the Auckland of the future.* Dick Hubbard is the Mayor of Auckland City.

Mark Todd: KiwiSaver a super tool

There was a time, not so long ago, when a great many employers were prepared to help their employees save for retirement. Staff super schemes were a major part of the employment landscape.

In part, this reflected the nature of working patterns. Employers took an almost paternalistic approach and employees often rewarded them with lifelong loyalty.

These super schemes were highly valued. Small sums set aside over 30 or 40 years grew into wonderful retirement nest eggs. This was a source of satisfaction for employer and employee.

Almost everyone accepts that saving through a deduction from salary has significant benefits. It is relatively painless because there is no opportunity to spend the money.

But the number of employers with staff superannuation schemes has dropped over recent years. Many have been wound up or the schemes are now closed to new employees.

There are a number of reasons why employers have been reluctant to provide superannuation:

* Changing work patterns mean that employees are less likely to remain with a single employer until retirement;

* The cost and time associated with operating an employer superannuation scheme; and

* The legal liability associated with these schemes.

Now we have KiwiSaver, the Government-designed plan to reverse the decline and reinvigorate our individual and collective savings while we work and earn. The KiwiSaver legislation released last week is aimed at getting us back on the road to the good old days by providing a simple vehicle through which employers can assist employees to save.

KiwiSaver aims to tackle employer reluctance in a number of ways:

* KiwiSaver arrangements will travel with an employee from one employer to another, accommodating today's work patterns.

* It is designed to impose only a minimal administrative burden and cost on employers. KiwiSaver schemes will generally be operated by third-party financial institutions and the Inland Revenue will provide a clearing house for contributions. There is no compulsory employer contribution required.

* Employers will be able to be part of basic KiwiSaver arrangements without Securities Act liability or liability under laws relating to financial advisers.

Employers will also be able to choose their level of involvement, depending on their particular philosophies and business requirements. Possible options are:

* The minimalistic approach - just complying with the basic requirements of the KiwiSaver legislation. This would require an employer to provide the Inland Revenue with new employee details, pass an information package to new employees and deduct KiwiSaver contributions for employees who do not opt out.

* A medium level of involvement - activities over and above the minimum required by the legislation. For example, employers might promote the benefits of retirement savings in general to their employees or facilitate arrangements under which those employees are able to obtain advice on financial planning. There is also scope for an employer to select a KiwiSaver scheme that will apply to its employees if the employees do not have their own preference.

* The more traditional model of superannuation - the employer making additional contributions for the benefit of employees, a potential recruitment and retention tool.

The draft legislation also contains provisions designed to limit disruption to existing employer schemes. If relevant criteria are met, employers will be able to convert their existing schemes to KiwiSaver schemes or obtain an exemption from the requirement to enrol employees in KiwiSaver.

These provisions are critical to ensuring KiwiSaver is not counterproductive through being the final nail in the coffin for existing schemes.

It is early days for KiwiSaver and a vast array of legal and business issues need to be addressed before its anticipated April 1, 2007 implementation date.

However, my view is that KiwiSaver should be welcomed as an additional tool for employers to assist staff and enhance relationships.

* Mark Todd is a partner with law firm Bell Gully. He is a corporate and commercial lawyer who has been involved in superannuation law for over a decade and has a practice advising on superannuation and investment products.

Claire Harvey: Charles may save monarchy from becoming irrelevant

It is so deliciously easy to mock Prince Charles but this time we should let him speak.

It has emerged, apparently to the startlement of many, that the Prince of Wales has a conscience, and admires the Dalai Lama and Nelson Mandela.

He writes to British Cabinet ministers to complain about laws which he feels are unwise or unjust, and publicly defends those causes (such as hoodie-clad teenagers and albatrosses) he feels are misunderstood or endangered. He sees himself as a loyal dissident, with a duty to use the security of hereditary rank as a licence to speak freely.

These revelations, which have emerged rather accidentally in the swirl of a court case between the Prince and a British newspaper, have been widely reported as either embarrassing for the Palace, further evidence of the aristocracy's hilariously deluded pretensions, or just another personal failing deserving of mockery, like wanting to be a tampon or talking to flowers.

But if we must have a monarchy, I would rather have an outspoken, interested, vital King than more of the same old Royal pointlessness.

If he has the courage to embrace the opportunities of his destiny, Prince Charles could become the monarch to win over the republicans, and to persuade us that royalty could provide something more valuable than Woman's Day cover stories and the occasional fancy funeral.

The knockers would presumably prefer Charles to follow the example of his family and limit his opinions to a few gruff murmurings into the sherry-glass, or perhaps to provide an ongoing sideshow by indulging in wastrel ostentation like the Tongan royal family, but what a waste that would be.

Here we have a royal who wants to do more than soak up public funding, so why mock him? Why not encourage him to become a spokesman for what he thinks is the silent majority, even if he might be a bit nerdy or pompous.

Hopefully, Charles will lose his foolish legal action against Associated Newspapers Limited, publisher of the Mail on Sunday, and realise this might be the chance for him to assert a new place for the monarchy.

In a doomed attempt to protect his privacy, Charles is trying to stop the paper printing seven travel journals he wrote on official overseas visits, which were apparently leaked by a former personal assistant, Sarah Goodall.

The only journal to be published so far, written by Charles in 1997 on the plane trip home from Hong Kong's handover to China, has only whetted the public appetite for more, with assessments like "appalling old waxworks" (Chinese dignitaries).

If the Prince believes he has a right and a duty to get involved in policy affairs, as his unappealing former private secretary Mark Bolland claims in a witness statement presented to the court by Associated Newspapers' lawyers, he should embrace the publication of his journals.

Indeed, Bolland has already implied there might be a commercial motive in Charles' attempt to protect his copyright. He claims that far from being ashamed of his views, the Prince circulated the journals and his private letters widely and was involved in discussions with his staff about publishing the journals in a book entitled Travels with the Prince.

Bolland claims the Prince also insisted all staff read his regular missives to Government ministers, in which he criticised various bills, including, according to another leaked document, writing "rubbish!" in the margin of one letter from the Lord Chancellor.

Bolland says he continually tried to keep the Prince quiet, and was infuriated at HRH's refusal to be restricted to opening fetes and hosting garden parties, a lifestyle which Bolland felt was far more regally appropriate.

But the former secretary's disapproval reveals more about his own delusions than any silliness of Charles'. When working for the Prince, Bolland would often gossip disparagingly about "Princeypoos", as he called him, with cultivated weariness.

Bolland's statement relates sneeringly how Charles was "delighted" when the media recognised the deliberate snub he delivered Chinese leader Jiang Zemin by refusing to attend a banquet at Beijing's embassy in London. It was Charles' way of expressing solidarity with the people of Tibet, and although avoiding dinner might seem like a slender sacrifice compared with the suffering of Tibetans murdered and exiled by China, it is the sort of gesture which should be encouraged.

The Bollands of this world like the royal family as it is, decorative and useless. If royals like Charles could only overcome the PR flaks' snobbish traditionalism, maybe the monarchy stands a chance of becoming more than an expensive irrelevance.

Rather than making fun of Charles, we should encourage him to act on his conscience more publicly and more often, to transform the palace from boring reliquary to something bigger and more important. He might even win over republicans like me.

Richard Cain: Speech as vital as writing

Traditionally, Western education authorities focus on the written word as their primary means of communication. New Zealand is no exception.

Secondary schools and the tertiary sector rely heavily on pen and ink to measure intellect and rank pupils through assignments, entry tests and external examinations.

Grammar and simple syntax become extremely important, often overshadowing content or original ideas. Failure to understand or use the correct form is penalised. Pupils not brought up in an atmosphere of the written world, either for cultural or economic reasons are disadvantaged. Subsequently, many talented, intuitive thinkers are often overlooked or ignored by the system.

Today, the educational milieu still places tremendous emphasis on the written word and compliance. Computers and word processors allow language to be written faster and perhaps more legibly, particularly by boys. Email allows immediate transmission. Traditionalists would argue that many original rules and traditions have been forgotten.

However, institutions still demand excellence in the written medium and little thought is given to promoting alternative communication modes.

The written approach has many advantages in an educational setting. It allows precision and detail to emerge. More people can be assessed. Privacy can be ensured. Reading and marking of scripts can take place at an appropriate time and place for the marker, removing emotion from the equation and allowing reflection. Material presented, rather than any other criteria such as personal appearance, is assessed. Criticism and/or a numerical mark ensure that direct dialogue can be minimised.

The largely clinical, collective, one-dimensional approach is the essence of Western educational thought and, in turn, has been instrumental in shaping the nature and structure of Western society. The underlying agenda appears to have been to create a bureaucratic elite to operate society, based largely on writing.

Written material will still play a prominent role in successful societies. However, the world is changing fundamentally. Globalisation and telecommunication technology are altering the fabric of the world. Culturally, different forces are emerging. New, more contemporary skills and techniques will be needed by future generations of New Zealanders to take part in this metamorphosis.

New Zealand is within the Polynesian triangle, with its substantial oral tradition in speech and music. Status and success in those societies has been, and still is, largely based on skill as an orator or musician. The ability to communicate ideas effectively verbally in the public domain is paramount.

Listening, an under-used skill in the Western world, becomes a necessity. Each word has an instant and public presence. Simultaneously, body language, emotional state and appearance are important. Speakers are under constant scrutiny. Often, they must face their critics.

Public speaking and performance in the Polynesian world is encouraged at all levels of society. Other non-Western societies adopt similar practices.

Telecommunications technology is moving rapidly. Visual developments are at the forefront in many societies.

Televisions, DVDs and mobile phones which record and transmit images are now an integral part of the environment. Younger students are becoming familiar with local and international visual projections as a matter of course. They bring instant reality, with little need for imagination or subtlety. Oral communication is assuming greater importance, though the quality is debatable.

Society is influenced by what it sees and hears. Written language is, inadvertently or deliberately, being altered. Slang, and shortened words with little punctuation are commonplace in the written vernacular.

The challenge for New Zealand educators is to create cross-cultural, inclusive communications systems relevant and beneficial in the global world. They must also be capable of incorporating many learning styles and mobilise students' abilities. Above all else, talent must be able to surface.

* Richard Cain is an observer of educational assessment systems and outcomes.

Adam Feeley: Energy crunch demands action

Oil affects everyone. Most people are harshly reminded of this on every visit to their local petrol station.

Its influence is ubiquitous and ingrained. Our car culture means the modern appetite for oil is insatiable. But it is not simply fuel for our daily transport needs. Its use in plastics, cosmetics and other petrochemicals means we require oil in one of its derivative forms at every turn of our daily life.

The worldwide scale of oil production is staggering. Saudi Arabia alone produces 9 to 10 million barrels of oil a day. Super-giant fields individually produce more than 500,000 barrels a day and BP has estimated the world's proven reserves at 1.19 trillion barrels.

But, while integral to modern life, the idea of endless oil is fantasy. At the present rate of consumption, this could be exhausted within 40 years - with non-OPEC nations running out far sooner. Super-giant fields are rare. Finding new fields of any scale is increasingly difficult and expensive. An offshore drilling rig can cost up to $500,000 a day. From initial exploration to production, oil development can cost many hundreds of millions of dollars. Add on an exploration success rate which can be as low as 1 in 12, and the risks and costs are not for the faint-hearted.

Closer to home, the issues are no less daunting. Our scale means New Zealand is a "price-taker" not a "price-maker". Our geographical isolation means we are at the end of the supply chain. The implications for an economy dependent on transporting imports and exports are obvious.

In addition, almost all of our liquid fuels are imported (a far cry from the days when Maui provided 60 per cent of our oil needs). We also face growing uncertainty about the long-term supply of domestic gas. While there is debate about when energy demand will outstrip supply, there is no doubt that without new energy sources, the day will arrive sooner rather than later.

New, sustainable sources of energy (for example, wind power, bio-fuels and geothermal) will ultimately play a greater part in the energy supply equation. However, in the short term, if new sources of domestic gas are not found, we face the prospect of a significant investment in imported gas (in the form of liquefied natural gas), which will ultimately lead to rising energy costs.

The outlook for domestic oil and gas is not all bad news. With a landmass (including the offshore basins) of over 2.75 million square kilometres to explore, and only 800 wells drilled, the scope for future exploration in New Zealand is immense. But, while the potential is vast, it cannot be realised without a large and well-conceived exploration programme.

With record oil and gas prices, one might ask why that is not already occurring. The reality, however, is that much of the frontier acreage likely to yield significant new finds requires substantial technical and financial capabilities. Attracting new companies to New Zealand is an essential element of New Zealand's exploration future.

A number of recent Government initiatives have been directed towards hastening the arrival of new companies and expanding the interests of incumbents. Changes to the fiscal regime have made New Zealand one of the most attractive countries in the world to establish new exploration operations. More significantly, in a world first, a fund has been established to acquire new seismic data from frontier basins. Such data is the critical first stage to assessing the areas most likely to contain hydrocarbons. Without it, an exploration company would have to expend potentially millions of dollars and months of effort to assessing New Zealand against other, better known petroleum systems.

With new data having been acquired and new regions being opened up for competitive licensing rounds, the question is where to next? Today, an international group from the exploration and production industry, the finance sector and Government meet at the 2006 biennial New Zealand Petroleum Conference. With over 50 speakers and 500 delegates with backgrounds as diverse as geology, law, physics and commerce, there is little doubt that the priorities for action will be many and varied.

However, two issues are beyond dispute. The time for finding new sources of energy is fast running out. And, if the vast potential of New Zealand's offshore petroleum basins is to be part of the solution, the time is right for concerted action from all parts of the exploration world.

* Adam Feeley, group head of Crown Minerals, hosts the Petroleum Conference at SkyCity this week. The event brings together oil analysts and companies to debate New Zealand's future potential as a petroleum producer.

Alasdair Thompson: Bottlenecks threat to power supply

According to the data coming from Mco, the monitor of our hydro storage lake levels, New Zealand is at risk again from a dry winter. The threat of brownouts looms as large as it did in 2001.

Since 2002 substantial new electricity generation capacity has been brought on line, notably the Whirinaki gas-fired plant, and from wind power. The water level of Lake Taupo is also under no pressure.

Regardless of what happens this winter, in two to three years' time we are likely again to run the risk of brownouts, not from a lack of generation but as a result of bottlenecks in the electricity transmission network.

Power transmission is as important as new electricity generation capacity for securing reliability of power supply and ensuring that the electricity market functions efficiently.

Without reliable transmission, electricity can't get where it is required, or when, at a price that reflects its realistic cost of production and distribution.

When the transmission network fails to carry all the power demanded of it by users in a region, and despite the availability of adequate generation capacity down country, local scarcity will drive up power prices due to the congestion on our "State Highway" for power transmission.

Users in a region like Auckland or Wellington, who are remote from most generation capacity, are likely to find themselves paying much more for their power than if the transmission network was not congested.

At present the price of electricity does not reflect the costs of its generation or transmission or market forces, but the demand factors operating on the transmission network system.

At times when congestion occurs on the transmission network the owners of new generation capacity are well placed to game the system in local regions by charging for their power based on the constraints of the transmission system, which is a monopoly, not on what the market would otherwise determine.

In addition to easing electricity congestion constraints, a high-quality transmission network allows power consumers a choice of who they buy their power from.

As the network is subject at present to constraints and bottlenecks, and approaching a condition where it is unable to carry the capacity demanded of it, business and residential consumers don't have the choice of who they buy electricity from, whether from renewable resources such as wind or solar, or from efficient gas-fired co-generation.

Reliable transmission with the scale to carry power without constraint is required to guarantee reliable power supply at competitive prices.

Until the transmission worry is resolved, new investment in job-creating industry is being deferred.

The Electricity Commission is charged with recommending the best solutions to these issues though it is by no means clear the Commission understands this well enough.

For example a particular measure supported by the Electricity Commission is the Time of Use (TOU) metering of power for smaller businesses and residences. Business fully supports widespread TOU metering but it is impacted negatively by the transmission network's constraints.

At present transmission costs are priced at nodes on the network; this is outmoded. For TOU metering to be effective, transmission pricing needs to reflect demand, but when demand is rising and falling, price signals do not come down the lines past the network's nodes.

So transmission systems need to be designed with the flexibility to eliminate power supply constraints occurring at the present system's nodal bottlenecks.

The proposals being considered by the commission include Transpower's upgrade of the high-voltage line into Auckland and alternatives to it, such as new local generation.

While new generation is welcome, it would represent only a temporary reprieve on the need for upgraded transmission lines, equivalent at the most perhaps to three years' regional load growth. Without significant transmission capacity, investment in new generation, renewable or otherwise, is stifled.

The Electricity Commission is not politically independent, unlike the Commerce Commission. It reports to the Minister of Energy (not even to Parliament) and with the potential for politically motivated decisions.

Business is concerned the commission is not in touch with what security of supply means from the consumer's perspective, and that it doesn't fully appreciate the need for supplier choice to restrain prices through market competition.

* Alasdair Thompson is chief executive of the Employers & Manufacturers Association (Northern)

Christopher Niesche: Being all over the place is normal for Richina Pacific

Richina Pacific is all over the place, both literally and figuratively.

It's based in Singapore, registered in Bermuda and listed on the New Zealand Exchange. Its main assets are a construction company in New Zealand, an aquarium in Beijing and a leatherworks in Shanghai.

Unfortunately, the lack of cohesion shows.

Last week it reported a record US$10.3 million ($15.5 million) full-year profit, but said it wasn't really a profit.

"The company's profits were non-cash gains and do not reflect positive results from the company's operating businesses," Richina Pacific said in statement accompanying its financials.

This confused brokers. Does it mean that it's making profits in China - where its major focus is - but can't get them out of the country?

Does it mean that the profits were from revaluations of assets? Who knows?

The company certainly didn't say.

The profit was "based on the outstanding contributions made by the Richina Financial division".

On its website, the company says Richina Financial provides "a wide range of financial and commercial services to its many subsidiaries and affiliates, as well as strategic and financial partners". Does this mean the company made a profit lending money to itself?

The picture only becomes more confusing with a closer look at the division's results. Richina Financial made a tax-paid profit of US$17.5 million from revenue of just US$3.5 million. The figures certainly seem to bear out Richina's contention that its profits were "non-cash gains".

What dragged the company down in 2005 - and prompted it to cancel its dividend - was the poor performance of its New Zealand construction arm Mainzeal, which made "significant and unexpected" losses on the building of Auckland's Arena indoor events centre and an apartment development in the Auckland CBD.

Once again, Richina failed to divulge how much Mainzeal had lost, but didn't dispute a figure of a $15 million loss on the Arena job alone.

The fact that Mainzeal failed to make a profit during one of the country's largest construction booms should be a major concern to investors. True, labour and materials costs have been high, but the huge demand for construction should have more than offset that.

This isn't the first time the company has failed to live up to its promise.

Richina Pacific started life as construction company Mainzeal. After acquiring a New Zealand leather business (since sold) in 1996 it changed its name to Richina Pacific and started investing in China.

Chief executive Richard Yan, a Chinese-born New Zealand-educated businessman, was convinced China was about to boom.

Yan was right about the China boom, but Richina hasn't been able to benefit from his foresight.

Both its Blue Zoo Beijing aquarium and its Shanghai leather business (which also has ambitions in property development) have performed poorly in the past.

As for how they performed in 2005, that's a mystery because neither rates a mention in the profit announcement.

New Zealand investors largely shun Richina now.

The company has suffered from the same problem that many other New Zealand companies that move offshore do: being ignored in both their old and new homes.

This may not concern the company overly as the billionaire American families Yan brought into the company in 1996 remain on the share register.

Certainly Richina Pacific can't have been a happy investment for them. The stock peaked at $2.33 in 1997 (after adjusting for a share consolidation), but since 1998 has averaged just 50 cents. It closed at 42 cents on Friday.

If Richina is to improve its financial performance, it would do well to decide what sort of company it is: a New Zealand construction company, a Beijing amusements company or Shanghai property developer.

And if Richina wants investors in New Zealand to take notice of it - and it's by no means apparent that it does - then it needs to tell them what it's doing and why.

Dr David Skilling: Aggressive planning the key to economic success

Economic policy in New Zealand needs to increasingly focus on identifying desired economic outcomes - like having world-class investment in R&D and ensuring that New Zealand firms are participating fully in the globalisation process - and then deliberately configuring policy to achieve these outcomes ... In a world in which agglomeration pressures are strong, and in which labour, capital and companies are increasingly mobile across borders, we need to be very thoughtful about what it takes to generate a growth-friendly environment in New Zealand. Boilerplate solutions are unlikely to be appropriate to encourage growth in a small, remote economy like ours. New Zealand's economic performance has been strong over the past 15 years relative to previous decades. This has halted the relative income decline. But a substantial challenge lies ahead. New Zealand is well placed in terms of the quality of its policy foundations, and has an educated population, a valuable resource endowment, and so on. But these advantages do not automatically convert into strong future economic performance.

The task now is to build on these foundations and deliberately focus on positioning New Zealand for international success over the coming decades.

A new generation of policy will be required to make this happen, which will be far more deliberate and strategic, focused on achieving progress in key areas like strengthening the productive base, investing in knowledge, and taking the economy global. Policy should be deliberately configured towards achieving these goals.

This task needs to be approached with real seriousness of purpose and aggression given the size of the income gaps between New Zealand and other developed countries, and the increasing international intensity of competition for talent, companies, and capital.

Achieving much higher rates of productivity growth is a demanding task, but it can be done. There are many economic success stories that provide confidence that much improved economic performance is possible for New Zealand. But this goal is very unlikely to be achieved on New Zealand's current course and speed ... In most of the key areas, we are lagging behind our competitors and these countries are not standing still but are ramping up their commitments in areas like education and knowledge. New Zealand will need to engage in some sustained sprinting to begin to make headway.

So when I consider the economic prospects of the New Zealand economy over the next 20 years, I am a conditional optimist. I am optimistic that we can build a much better and more prosperous New Zealand, and that we have what it takes. But this optimism is conditional because it will not happen on current course and speed. It will require a commitment to deliberate, sustained, aggressive effort.

This will require leadership and the creative and disciplined execution of deliberate policies to generate strength in the economy.

Much improved economic performance will not occur spontaneously. Claims are often made about the significant benefits New Zealand will enjoy from a successful WTO round, by growing demand from the Chinese market, and from the collapse of distance brought about by technology.

While luck and positive external developments are part of most economic success stories, these benefits are unlikely to fall into our lap. Serendipity is not a substitute for a growth strategy.

* An abridged version of a lecture by New Zealand Institute chief executive Dr David Skilling to the University of Auckland Distinguished Alumni seminar on Saturday. The full lecture is available at the link below.

Neville Glaser: Speculation: a mug's game?

To some, the share market by its very nature is an exercise in speculation. But this is not true.

At one end of the scale are the followers of fundamentals and value investing, for whom Government bond-type yields are about as risky as they like to get.

At the other end of the scale are pure speculators, who invest where earnings are virtually non-existent and the speculative premium (measured in the price/earnings ratio) massive.

Most speculators are involved in momentum investing, where they buy a share because it is going up, and that drives it still higher. Momentum investing works until it no longer works. Momentum was one of the major fads of the past decade, fuelled by the hot performance of technology and dot-com shares.

The prices of these shares seemed to rise for no good reason, despite lack of earnings, or sometimes even the prospect of earnings. No historical valuation models could justify the prices achieved by many of these stocks. Very often, the booming momentum investment is in the throes of developing a high-tech product that few understand but which we are assured will change the world.

A feature of the dot-com boom was that analysts began to believe the traditional earnings/book value/cash flow method of valuing companies no longer applied. Internet companies could be valued on "eyeballs", because if you had the traffic, the profit would follow.

That was a disaster and simply reaffirmed that every time investors seek to move beyond traditional valuation techniques, they get burned.

As momentum investors see a rising trend, they all join in, driving prices even higher. It may seem like a winning strategy. But the risk of this strategy is that, while momentum investors can all pile in together, they cannot all escape (sell) at the same time unless markets are both highly liquid (large blocks can be sold quickly and at the same price) and continuous (prices do not gap sharply downward with no opportunity to sell).

Unfortunately, the typical momentum share is usually neither liquid nor stable, and because the share price is typically very low (10c to, say, 80c) the leverage that worked so well to make money also helps the gains disappear.

One of the most extraordinary momentum shares of recent years is Plus SMS.

The company joined the stock exchange in August 2000, raising $600,000. In May 2001 it acquired Retail Services Ltd, for $1.15 million. This didn't work out too well and, in March 2005, the company reported it had acquired all of the shares in Plus SMS, for a price of $12 million, satisfied by the issue of 240 million RetailX shares at 5c a share, and the name was changed to Plus SMS. Further shares were issued at 10c each.

Plus SMS describes its activities as "involved with routing SMS and MMS messages over existing telecommunications infrastructure, using the settlement processes that are in place for payment". There is no proven revenue from this company, no profit and certainly no cash flow.

To create Plus SMS, shares were issued at between 5c and 10c. But "investors" have subsequently decided that they know its true value, chasing the share price to 75c. Because there are so many shares in issue, the cheap sounding 75c actually values the company at over $200 million.

For that money, you could acquire the entire Provenco Group, (Eftpos provider with sales of $115 million) plus the whole of Renaissance Corporation ( Apple Computer distributor, with sales of $155 million) and have change over for a $40 million portfolio of coastal property.

The speculative premium on Plus SMS is virtually the entire $200 million value placed on the company. From what I can see, that value was established on the back of some press releases about securing the numbers used in text messages.

The speculator might argue that it is before a product or innovation is properly established that you should climb into the shares, reaping all the rewards of a fantastic growth rate thereafter.

The problem with this thinking is that you are taking on the role of venture capitalist, and the success rate among start-ups is very low. For start-ups based on innovation, the historic success rate is even lower.

I believe that the time to invest in a new business is when it has moved beyond venture capital, has established a clear market niche with competitive power in that niche, and with revenues and cash flow to prove it.

It is then becoming a growth stock.

Those who think it is too late to buy into a company that is already a recognised leader should consider the case of Microsoft. Sure you could have bought into Microsoft for $1 in 1987. But nobody could be sure it would emerge as the winner in a sector that was evolving in many directions, with several players emerging.

By the time Microsoft released Windows 95 in the middle of the 1990s, however, it became clear the software giant was unassailable. But had you waited for Windows 95, you could have bought Microsoft shares for around $6. Today they trade at $26, and that's after a sharp correction.

Those who were prepared to carry the start-up risk between $1 and $6 are welcome to their profit. But if they had 10 technology start-ups in their portfolio, they would have lost money on most of them.

If your personality veers towards speculation, at least do it in a disciplined way. This involves looking for signals beyond mere price momentum.

A combination of the following signals present your best bet at speculation gains: price momentum (the share is going up); plus profit momentum (the company has just reported a rise in its fortunes); plus insider buying (directors and staff are suddenly buying into their own company).

Mark Peart: Anderton's schmoozing of Europeans misplaced

I couldn't quite credit it. There he was, Jim Anderton, our new Minister of Agriculture, in England, schmoozing with British farmers and waxing lyrical about how progressive (no pun intended) the Europeans are when it comes to agricultural policy reform.

Certainly, British Prime Minister Tony Blair has been a vocal champion of late of the need to kickstart the limply meandering World Trade Organisation talks on agriculture.

The same couldn't be said of the wider European community, of which Britain is a member.

The WTO ministerial conference in Hong Kong in December was for the most part farcical because of the EU's stubborn and persistent refusal to bring a proposal to meaningfully cut domestic farm subsidies.

The word meaningful is important, because what the Europeans consider meaningful and the remainder of the WTO membership (including New Zealand) consider meaningful are two diametrically distinct concepts.

Europe says it won't budge until countries like Brazil and India cave in on non-agricultural market access (or industrial products).

The countries in the vanguard of the push for more liberalised agricultural trade include the United States, Australia, Canada and New Zealand.

In a speech just before Hong Kong late last year, Prime Minister Helen Clark noted that both the Apec and Commonwealth leaders' summits issued strong statements on the need to break the impasse on agriculture - and that the focus was firmly on the EU position.

Subsequent events at Hong Kong and since haven't altered that.

As Helen Clark put it, Apec and Commonwealth leaders, representing a sizeable proportion of the world's economy and a cross section of developed and developing economies, believe the EU has to improve its offer on agricultural market access to unlock the Doha round.

The EU signed up at Hong Kong to the elimination of export subsidies by 2013, but moved not one muscle on the market access issue.

EU Trade Commissioner Peter Mandelson resents the pivotal role New Zealand and others play in the WTO in the pursuit of a successful and unfettered Doha round, which thanks to Mandelson and his cohorts has been wounded, but not mortally.

He made that plain at Hong Kong by insisting that dairy giant Fonterra is a state-subsidised single-desk seller, even though there are laws on the statute books clipping its monopolistic wings.

So here is our Jim, on British soil, praising the "substantial commitment" the EU has made towards the elimination of export subsidies and the reform of its Common Agriculture Policy.


"New Zealand is working with the EU to ensure that the other major subsidiser - the US - also undertakes the meaningful reforms that are necessary to free up international markets," Anderton said.

Jim and I must be on different planets.

Surely, if one accurately digests the utterances made by trade ministers Jim Sutton and Phil Goff, and a plethora of trade experts, it's the other way round.

The overwhelming consensus is that it's the EU, which will determine whether substantive numbers can be dropped into the framework that's supposed to be concluded by the end of next month to pave the way for subsidy and tariff elimination.

Anderton says the EU is "well on the way" to less trade distorting support for farming and is "well placed" to contribute to an ambitious outcome in the negotiations. The jet lag must have really scrambled his brain.

I'm perturbed now that I opined in this space late last year that Anderton was a shrewd choice for the agriculture portfolio.

Sucking up to the arch-protectionist Europeans in a negotiation potentially worth billions to New Zealand farmers, when those same Europeans have the potential to deny them that windfall, isn't my idea of shrewd.

So excuse me while I scrape the egg off my face, gag on my humble pie, and console myself that at least Helen Clark didn't make Anderton the Minister of Trade.

* Mark Peart is a Dunedin-based freelance writer.

Nicola Vallance: DoC just as accountable as others under the RMA

Department of Conservation media adviser Nicola Vallance responds to Frank Brenmuhl's Rural Delivery last week

Frank Brenmuhl's comments on the role of the Department of Conservation in the Resource Management Act (RMA) require some clarification. He contends that the activities carried out by DoC on public conservation land are exempt from RMA processes, when in fact DoC is subject to scrutiny and controls as for any proposed development under the RMA.

If the department's activities are not specifically permitted, then DoC must apply for a resource consent, the same as for any developer. The kinds of DoC activities that are subject to RMA process include piping water in and out of huts, discharging contaminants, such as 1080 poison, or building bridges on tracks.

Any exemptions DoC has from the RMA are laid out in the publicly notified Conservation Management Strategies, which in practice are stricter than the RMA with regard to restrictions on what DoC is allowed to do on public conservation land.

DoC makes submissions on publicly notified resource consent applications, as an affected party, in exactly the same way others get involved, such as adjoining landowners and neighbours, other Government departments (such as the Energy Efficiency and Conservation Authority), statutory bodies (such as Fish and Game NZ), or other relevant organisations such as Federated Farmers.

If a proposed activity is likely to affect natural public resources, e.g. a neighbouring national park, or a protected native species found on that land, then DoC has a statutory responsibility to make sure it advocates the protection of these public resources on behalf of all New Zealanders.