Monday, March 27, 2006


Spotted in Valley Rd, Mt Eden, and photographed from a distance by Kim Mazur.

By Ana Samways

The satire of American Stephanie McMillan, one of the few girl cartoonists on the planet, has a bit more oomph when she suggests South Dakota Senator Bill Napoli, who was instrumental in getting abortion banned in the state, might want to help women out with other decisions. The strip goes on to give out his home phone number. (Source:

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New Zealand has nothing to fear from the CIA if the US spy agency's internet listing on New Zealand ministers of the Crown is anything to go by. Supposedly updated on February 22, it still gives George Hawkins, Margaret Wilson, Paul Swain, Marian Hobbs and Taito Phillip Field as members of the Clark Administration. The American spooks are sufficiently interested in our international relations to have noted that Winston Peters is now Foreign Minister, but the other minor-party leader propping up the Labour-led Government, Peter Dunne, doesn't rate a mention in the list. His portfolio, Revenue, is listed as being held by Michael Cullen. And many of the other portfolio allocations are wrong as well.

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Kate Jonas from Te Awamutu writes: "I live on a dairy farm in Te Awamutu, which my husband manages. In a few weeks we will be moving to Raglan to work on the family farm. I have a few chickens and two pet pukekos (who think they are chickens and were hand-raised). I decided to move the chickens and pukekos to Raglan a few weeks ahead of time. The pukekos hung around their new home for about three days. Then they disappeared. I figured they were somewhere on the farm and they'd be fine. I went back to Te Awamutu a week later after going to the Stevie Nicks concert in New Plymouth and I heard my husband yelling, "Quickly! You won't believe it!" It appears we have a homing pukeko who had travelled 70km from Raglan to Te Awamutu. An incredible journey indeed."

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He says: "Regarding your item from a single female in need of more males in the 20-49 age group. Being such a New Zealand male in the prime of contention I would point out to your female reader that if Kiwi women changed their stuck-up and holier-than-thou attitude for the better, males such as myself would then consider going out with them." (Yes, single ladies, he has a point).

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She says: "The reason your mathematician finds more men than women registered on local internet dating sites, when there is supposed to be a shortage of single men, is that many of the men on these sites are not actually single. A fact any woman using them soon discovers..." (Sideswipe received a number of emails saying the same thing.)

Editorial: Tipping point for sentiment

There is nothing like a negative figure to turn economic warnings into reality. The discovery that gross domestic product fell 0.1 per cent in the last quarter of 2005 spells the end to more than five years of continual growth.

The figure for the December quarter is worse than private economists' median expectation of 0.2 per cent growth over that period, and much worse than the Reserve Bank's forecast of 0.4 per cent growth.

If the contraction has continued over the current quarter, which finishes on Friday, we are officially in the recession the Reserve Bank has been trying to avoid. But at least it means the bank will need to revise its view of inflation and interest rates and business can probably look forward to a relaxation of rates this year rather than next.

Perhaps more important, for exporting industries, the dollar's recent sharp fall in foreign exchange is likely to continue, improving their returns and making imported products more expensive to ordinary consumers. The rest of this year is likely to see the thrust of economic activity shift from household consumption, which has been driving our prosperity for the past several years, to farming, fishing, forestry, tourism, horticulture, winemaking and all the productive sectors we can develop.

That assumes that the December GDP result is not a mere glitch that will be followed by resumed growth. Ordinary experience makes it very hard to tell.

The domestic economy still looks and feels quite lively. Construction projects abound, shops are busy, households and individuals are still consuming happily, riding the confidence of wage and salary increases and rising real estate values.

Despite the contraction overall, household consumption continued to grow in the December quarter, up 0.3 per cent. Household spending over the whole of 2005 rose 4.6 per cent. Clothing and footwear sales were particularly strong, gaining 2.9 per cent over the final quarter.

But this spending is probably the last spree of the growth phase rather than an indication of things to come. The dollar's fall in March has been steep and steady and, although it seems to have survived a big maturity of uridashi bonds without falling through the floor, there is another $14 billion of bonds due next year.

That very prospect, against the background of a deep external deficit and, now, negative growth, means the dollar is likely to fall faster and further than we might hope.

The problems of a high dollar - diminishing export returns and a current account deficit that plunged to 9 per cent last week, the worst in 30 years - are academic to most people. The effects of a low dollar are not. It means more expensive petrol and other imported goods, lower household consumption, less employment, all the pain of a slump - unless the economy quickly improves productivity, especially in exportable goods and services, and wealth quickly spreads through the rest of the economy.

The challenge for the Government is obvious. This is the first serious sign of recession it has faced and markets will watch closely for a reading of its nerve. A wintry turn in the economy should favour the Prime Minister's declared priority for her third term, the long quest to diversify and add value to our tradeable products.

The message needs to be clear that a low dollar does not point the way to a better economy. It merely gives a cyclical boost to our commodity exports. The aim remains to develop finished goods and services that might raise our incomes to Australian levels at least, and pay for the lifestyle we have been enjoying so far on credit.

John Armstrong: Turia speech an inspired Act

You had to keep pinching yourself. Was that really Tariana Turia up at the podium giving a speech to Act's annual conference?

The conference's "mystery guest speaker" was truly a surprise choice for a speaking slot usually reserved for some disciple of market liberalism.

It was also an inspired choice on Rodney Hide's part.

It mattered little what the Maori Party's co-leader actually told the conference. Her appearance during yesterday morning's session provided news enough for a party struggling to make the news.

Mrs Turia's presence also had the benefit of upstaging yet another outburst from Sir Roger Douglas. It is hardly news that Sir Roger is unhappy with the direction he sees Mr Hide taking the party. But the timing of the Act founder's renewed criticism of the leader was considered unhelpful, prompting dark mutterings of "treason" around the conference.

Mr Hide had other, more strategic reasons for asking Mrs Turia along.

Act's fundamental problem is that it is trapped on National's right flank. Act has two only votes in Parliament. It votes the same way as National. It has no leverage.

The Maori Party is unpredictable when it comes to casting its four votes. It can thus determine the fate of legislation. It has leverage.

Act could emerge from National's shadow were it to support Government measures occasionally. That would differentiate Act from National in an instant. While not necessarily going that far as yet, Mr Hide clearly wants some of the leverage Mrs Turia and her colleagues enjoy.

Forging ties with the Maori Party is a first step in Act trying to adopt some kind of broker's role which helps National, United Future, NZ First and the Maori Party to strike deals on legislation and hamper the Government.

Sharing a platform with the Maori Party and stressing what the two parties have in common is also part of the Act leader's efforts to give voters an idea of how a centre-right government might be configured - something National has neglected woefully.

Addressing the conference earlier, political scientist Raymond Miller agreed National's poor understanding of MMP politics had been a hindrance to Act.

However, Dr Miller also touched on reasons closer to home why Act had struggled. He suggested the pursuit of scandal made it difficult for voters to see anything different between Act and other populist parties.

That is a huge beef for those who joined Act as the party of radical, innovative ideas.

The election of Hamilton businessman Garry Mallett ahead of the more pragmatic Hawkes Bay farmer John Ormond is a message to Mr Hide that the party wants him to use his superb communication skills articulating Act's vision.

The leader insists he is merely doing the job expected of an Opposition MP in "holding the Government to account".

But he appears willing to meet his critics halfway.

In his keynote speech to the conference, Mr Hide said Act should not only ask the tough questions of the Government, it had to deliver answers as well.

His speech was followed by questions from the floor. That was a gamble. But a fairly safe one. It was unlikely any of the 80 or so delegates present were going to confront Mr Hide over his populist tendencies in front of the media.

Mr Hide can now say no one raised concerns when they had the chance. However, those who might have said something may have already voted with their feet.

Brian Rudman: Wrecker's ball makes mockery of heritage rules

Ten months ago Mayor Dick Hubbard was heralding "sweeping" new regulations "to save the city's character suburbs" from "the unannounced bulldozer".

He declared that "what we're proposing sends the strongest of signals that we are serious about protecting our heritage and neighbourhoods".

What a shame no one seems to have told the developers, the real estate agents and council staff of this crusade. In the Weekend Herald came news that celebrity couple Adam Parore and Sally Ridge had won their battle to demolish a 100-year-old house in the inner-city heritage suburb of Freemans Bay, and that council officials had nodded through the demolition of a century-old house in Marine Parade, Herne Bay.

And to demonstrate what some in the real estate industry think of Mr Hubbard's crusade, what about the headline in Saturday's real estate section under a picture of an old villa in Picton St, Freemans Bay, just a block or two from the Parore property.

"!!DYNAMITE!! Innovate or Detonate!" was the come-on from Maxine Lees of Ray White Real Estate. To be absolutely fair, the small print underneath did say "this precious gem, once properly cut and polished, will once again shine ... "

But if you really believe this, then why the emphasis on dynamite and detonate accompanied with a picture of the million-dollar sea-view freed up if the dynamite was to go off?

The proposed plan changes, which are still snailing their way through the system, affect zones Residential 1 and 2. The Residential 1 change was "to protect the built historic character of Auckland's early established residential neighbourhoods" and the Residential 2 change "is intended to protect the spacious and tree-filled qualities of sites characterised by generously sized lots, wide roads and lower densities, often with period housing".

The change requires that the demolition or removal of any building constructed prior to 1940 in either zone requires a resource consent as a restricted discretionary activity.

Council will review the structural and physical condition of the building and permission to demolish a building may be declined. Previously houses in these two zones could be demolished without a resource consent.

At least the Parore house went to a planning hearing. There, the commissioners, while acknowledging it had heritage value and was repairable, decided demolition would only have "minor effects on the streetscape, visual amenity and heritage character" of the neighbourhood. Which to me at least, seems to ride roughshod over the spirit of the pending new rules.

But the 29 Marine Parade case is risible, suggesting the mayor has his work cut out dragging his staff into brave new world.

Council planner Mike Watson ruled the house on the site was built after 1940 and was therefore not subject to the new rules. What was the basis of this decision? First a report from "building consultant" Alex Burrell who concluded "the building has been subject of many alterations and modifications in its life, which in the absence of council files [before 1960], is most accurately dated early 1950s. It is not an example of heritage building from the pre-war era."

Mr Burrell, better known as Auckland's demolition king, whose business card proclaims "It takes balls to wreck buildings", decided that on the basis of the construction materials used, "the house was built during the early 1960s and substantially renovated in the late 1970s".

He did however concede that "access to the upper levels of the property were not possible due to tenancy reasons, however the basement was accessed ... "

On the basis of this report, council advisers Meridian Planning Consultants declared "this report conclusively demonstrates that the building that exists on the site today did not exist on the site prior to 1940".

Mr Burrell made his judgment based on poking around the exterior and basement of the building. But once demolition began, the telltale 30mm kauri flooring and scrim-lined walls of a pre-1920s home were revealed.

Council officials seem to have taken no note of Quotable Value New Zealand listing it being built between 1900 and 1909, nor of a drainage plan dated 1915 on council files.

This building might have been doomed even under the new rules, but if the perfunctory treatment it got from council staff was an example of the "getting serious" promised by the mayor, then no heritage building is one bit safer.

Mai Chen: Maori push over Treaty may end up in court

The constitutional status of the Treaty of Waitangi is unlikely to change in the short to medium term through the actions of either the Executive or parliamentary branches of Government. But the Supreme Court might be prepared to give direct effect to the Treaty if a suitable case was brought and leave was granted.

There appears to be a growing consensus among Maori of the need to improve the constitutional status of the Treaty, as evidenced in submissions to the Constitutional Arrangements Committee by Maori groups, in a recent major hui designed to discuss the place of the Treaty held at Te Tii Marae in Waitangi in 2005, and in the Maori Party's policies.

Maori are also in a better position to push for that outcome. They are more numerous. Latest projections from Statistics NZ (April 2005) indicate that the proportion of the population that identifies with European ethnicity will drop from 79 per cent in 2001 to 70 per cent in 2021.

The proportion identifying with Maori ethnicity will increase from 15 per cent to 17 per cent, with a Pacific ethnicity from 7 to 9 per cent and with an Asian ethnicity from 7 to 15 per cent. If 14,000 Maori shift to the Maori roll in the Maori option starting on April 3, that will create an eighth Maori seat. If all Maori voters sign up, there will be 13.

The Maori Party is now established and has four MPs. Its influence may grow. The number of Maori MPs has increased in every MMP Parliament. An increasing number of Treaty settlements, including the fisheries settlement, have resulted in a significant transfer of wealth in monetary and asset terms back to Maori, putting them in a better position to focus on realising their constitutional aspirations, and resourcing them to do so.

However, a series of recent events - starting with the Court of Appeal decision in Ngati Apa on the Foreshore and Seabed, and followed by the "one law for all" platform, which has gained political traction - has turned public sentiment against the Treaty and Maori issues more generally, and the Government's sensitivity to the wider electorate means that it is unlikely to pursue the enhancement of the Treaty's constitutional status.

The problem for Maori as a minority is that unless they can reach an accommodation with the majority, non-Maori population, they will not achieve their constitutional aspirations for the Treaty.

It is unlikely that significant constitutional change (in a non-revolutionary sense) could take place without a majority at a referendum or an extraordinary majority in Parliament supporting such a proposal. Neither of these avenues is likely to be successful if the proposal for constitutional change is to include the Treaty in a supreme constitution or an entrenched Bill of Rights.

The key question remains whether the majority will accept that Maori should receive preferential treatment from the rest of the population based on race, as that is fundamental to Maori constitutional aspirations to the Treaty.

The enhancement of the Treaty's constitutional status would allow Maori to assert rights to preferential treatment based on race, and depending on the degree of enhancement, the judiciary may be able to strike down legislation and Government actions for inconsistency with the Treaty. Even steps short of this position may be suspiciously viewed as a Trojan horse to reach this ultimate objective and are thus likely to be strongly resisted by the majority.

Thus, although the Government cannot stop the pressure for reform of the constitutional status of the Treaty from building amongst Maoridom, which will increase as their population and political influence grows, Maori are unlikely to be able to gain majority support for their constitutional aspirations any time soon.

The way forward may lie in NZ's developing sense of nationhood and unique identity, which were strong themes in the Prime Minister's statement recently delivered at the start of the new term of Government. Maori and the Treaty are generally accepted as an integral part of NZ's unique identity.

Identity raises questions not just about flag design and the words of our national anthem, but about who we are as a nation.

Questions about whether we should retain our British colonial roots as a constitutional monarchy or become a republic will have an impact on how power is distributed in our constitutional system, which may also require a reconsideration of the status of the Treaty.

The judicial branch of Government has sometimes been a counter-majoritarian force and the purposes of the legislation establishing the Supreme Court include establishing a new court of final appeal comprising NZ judges to, inter alia, resolve Treaty matters "with an understanding of New Zealand conditions, history, and traditions", and for the purposes of determining leave to appeal "a significant issue relating to the Treaty of Waitangi is a matter of general or public importance".

Although the Supreme Court Act also provides that "nothing in this act affects New Zealand's continuing commitment to the rule of law and the sovereignty of Parliament", extra-judicial comments by the Chief Justice made after the Ngati Apa (foreshore and seabed) case question whether the rule of law requires recognition that the Treaty of Waitangi imposes limits on the sovereignty of Parliament.

In her 2003 article, "Sovereignty in the 21st Century: Another spin on the merry-go-round" the Chief Justice said:

"The sovereignty obtained by the British Crown was a sovereignty qualified by the Treaty [of Waitangi]. It has not been treated as so qualified as a matter of domestic law. But the elements of our unwritten constitution have never been fully explored to date. We have assumed the application of the doctrine of parliamentary sovereignty in New Zealand. Why, is not clear.

"Whether there are limits to the law-making power of the New Zealand Parliament has not been authoritatively determined. Parliament is bound by the constitution which may partly be expressed in earlier legislation. The constitution evolves. Saying what it is in a case where the content of the constitution directly arises is ultimately for the courts. This is because the conditions of valid law-making are law. Parliament is supreme as legislator but it legislates under the law of the constitution."

After setting out the arguments to support these comments, the Chief Justice concluded that the limits of the law-making power of the New Zealand Parliament have not been authoritatively determined.

Hoani Te Heu Heu Tukino v Aotearoa District Maori Land Board, which established the principle that the Treaty of Waitangi only has effect to the extent that it is incorporated into statute, was decided in 1941 by the Privy Council.

If an appropriate case arose to challenge that precedent and the sovereignty of Parliament in New Zealand was found to be constrained by the Treaty of Waitangi, even where the Treaty is not specifically incorporated into statute, there would be a profound impact on the status of the Treaty, and a fundamental shift in the distribution of power in New Zealand's constitutional system.

No doubt the Supreme Court that overturns the Privy Council decision may find itself unpopular with the Government, with Parliament, and with the majority of New Zealanders.

But the court's role is to interpret and apply the law; and if the limits to the law-making powers of the New Zealand Parliament have not been authoritatively determined, as the Chief Justice opines, and Maori find their constitutional aspirations for elevating the Treaty status blocked in the Executive and parliamentary branches of Government, then we might well see Maori claimants seeking to explore these limits in the courts.

* Mai Chen is a partner in Chen Palmer, Barristers and Solicitors. This is a summary of her paper on "A Public Law Assessment of the Treaty of Waitangi's Constitutional Future", delivered at the 8th annual Public Law Forum on Wednesday.

Readers' Views

I am suprised that someone with a legal mind like Mai Chen would not have thought through the obvious extra step in her absurd column. If the courts find that parliament has no legal existence and therefore law does not take precedence over the treaty, their own existence disappears in a puff of Red Dwarfian absurdity. Courts and judges are established by statute, thus if parliament has the power to establish courts it has the power to make law. If it does not have that power, a judge is not a judge, merely a pompous fool in a wig.
- Phil Sage, UK

Claire Harvey: A successful young woman with a feminist dilemma

My friend Eliza (not, obviously, her real name, but chosen because real girls with practical names like Eliza are probably far too tough and sassy to get stuck in this kind of pickle) has a lying, cheating boyfriend.

He admits to lying and cheating, this boyfriend. When he was away recently for a business trip, he slept with a prostitute. Without using a condom.

Then he came home to the Asian city where he and Eliza are living as expats, and slept with Eliza. Without using a condom.

Eliza had no idea what he had done until he showed up on the doorstep one Friday night, sobbing, to say that he had been diagnosed with syphilis.

He said he was also, naturally, worried that he had other sexually transmitted diseases, like Hepatitis C or (although neither of them mentioned this little acronym) HIV, but would not know his final test results for several weeks.

Through his tears of shame, guilt, self-pity and who knows what else, the whole story came out, as he stood there on the doorstep and she leant her forehead on the open door, one hand up to her mouth.

He was, he says, drunk and alone in Hong Kong when he somehow ended up paying some girl for an hour's pleasure.

"There ain't nothing like the kisses from a jaded Chinese princess," sang Jimmy Barnes once, about doing exactly this in Hong Kong one sweaty night - but Eliza's boyfriend says he can't even remember if he enjoyed it.

After a week of sleepless nights he went to a doctor to be tested. So here they are, both waiting for their test results, to find out if she also has syphilis, to find out if they both have HIV.

Eliza is 29, and a model of 21st-century feminine success. She has two university degrees, a good job, adoring parents, enough money, and beauty more serious than just the freshness of young skin and clear eyes.

Now the initial shock is gone, Eliza says she is not really considering a break-up.

She's angry, but she says she loves him, and everyone makes mistakes, and he has told her the truth now, and of course he has sworn on Bibles and grandmothers and Cub's Honour that it will never happen again.

And there's another big reason they're staying together: she's already been through half a dozen relationships and breakups. She has had other men apologise to her for infidelities or inattentions or just indifference, and she has been guilty of the same offences.

She wants children and happily ever after, and she thinks this relationship is her best bet yet, despite the problems.

To her friends, even to Eliza, it sounds so compromised and 1950s, so far from the liberated glow of do-anything womanhood we were raised to expect.

Growing up, many of our generation rejected even the title "feminist", with its aura of hairiness and misandry, because sexism just didn't seem to happen in any overt way any more. We all studied what we liked, got the jobs we wanted, shared the flatmate vacuuming roster equally and still waxed our legs, even while older women complained how ungrateful we were for all they'd achieved.

Feminist author Kathy Lette said last week in Auckland that any young woman who calls herself a post-feminist has "kept her Wonderbra and burned her brain ... feminism is not the ultimate f-word, and all the things we have won could so easily be lost."

But when it comes to Generation Y gender relations, the cold truth is that many young women don't feel like the empowered, bra-less, independent warrior queens we were supposed to be.

Many of today's 20-somethings, no matter how many credit cards, are just as afraid of loneliness and spinsterhood as any Jane Austen heroine, and deeply unsure of whether they are supposed to still be manning (or, indeed, personning) the gender-war barricades.

As a society, we're always hearing about the dilemma of modern manhood, how men are confused about whether they're supposed to open doors or jam-jars for women, or if they'll get attacked as chauvinist pigs for offering to change a tyre.

"The problem with young girls is they've kicked the pedestal out from underneath themselves, love," my beloved 95-year-old friend Reg said once.

But the dilemma for young women is just as tricky - is it all right for someone like Eliza to admit she's desperate to have a baby, even if it means compromising her values?

Is it un-feminist to forgive infidelity for the sake of family? Is it her duty to kick him out, roaring like Helen Reddy as she slams the door? Would Virginia Woolf be horrified by the sight of smart city girls embracing pole-dancing classes and plastic surgery?

Eliza truly wants to forgive him, to make it work - but her own expectations are making her miserable, making her decision to stay with him feel like a failure of feminism, like she is not strong enough to live up to the expectations of the women who struggled for the very freedom of choice which makes her so unsure.

The feminist revolution might have baffled the blokes - but if it's any consolation, fellas, we are as confused as you are.

Gwynne Dyer: Settlements block a lasting security

It's a trade-off," said Dror Etkes, director of the Israeli organisation Settlement Watch, just after Prime Minister Ariel Sharon carried out the dramatic withdrawal from the Jewish settlements in the Gaza Strip last August.

"The Gaza Strip for the settlement blocks; the Gaza Strip for Palestinian land; the Gaza Strip for unilaterally imposing borders. They don't know how long they've got. That's why they're building like maniacs."

But they are going to have lots of time: Ariel Sharon may be in a permanent coma, but his project is doing just fine.

The new party he founded, Kadima, will do extraordinarily well in the Israeli elections on tomorrow, probably winning almost as many seats as the two traditional major parties, Labour and Likud, combined.

The only question about the new government is whether Kadima will have to include either of those major parties in the new coalition.

Neither is there any doubt about what Acting Prime Minister Ehud Olmert will do once he is Prime Minister in his own right, with a solid majority behind him. In far blunter terms than Sharon had used in recent years, Olmert sketched out the new government's policy last month.

"Reality today obliges us to separate ourselves from the Palestinians and to remodel the borders of the state of Israel," said Olmert, "and this is what I will do after the elections.

"This will force us to evacuate [some] territories held by the state of Israel [in the West Bank, but] we will hold on to the major settlement blocks. We will keep Jerusalem united. It is impossible to abandon control of the eastern borders of Israel."

In other words, there will be no more peace negotiations. The Palestinians will just have to live within the 680km of tall fences that mark out Israel's new borders, in a pseudo-state surrounded and almost cut in half by Israeli settlements.

The whole Jordan valley will stay in Israel's hands, cutting Palestinians off from the rest of the Arab world except for one Israel-controlled border crossing into Jordan at the Allenby Bridge and one that crosses into Egypt from the Gaza Strip.

The 200,000 Arabs living in the old city of Jerusalem are already cut off from the rest of the Palestinian territories by a ring of new Jewish suburbs and a maze of gates that they cannot pass through without magnetic cards.

New settlements linking the Jewish suburbs east of Jerusalem with the settlement block of Maale Adumim will push Israel's frontier most of the way across the West Bank in the centre, effectively cutting off the northern West Bank from the southern part.

All the big settlement blocks in the West Bank - Ariel, Gush Etzion and Maale Adumim - will formally become part of Israel, sheltering behind the walls that divide them from the misery and desperation on the other side.

Some isolated settlements will be abandoned, and the estimated 60,000 Jews who live in them will be moved to join the 185,000 people who already live in the bigger blocks.

The Israeli Army will police the areas that remain Palestinian, making incursions as necessary. And there you have it: the permanent solution to the Israeli-Palestinian problem.

Israelis justify this highly one-sided "solution" with the argument that there is nobody on the Palestinian side to negotiate with, and since the victory of the radical Hamas party in Palestinian elections two months ago that argument sounds more plausible.

But we arrived at this sorry situation because Israel was unwilling to negotiate fairly with any of the previous, more reasonable incarnations of the Palestinian leadership either. The settlements always got in the way

As former US president Jimmy Carter, who negotiated the 1978 Camp David peace accord between Israel and Egypt, wrote in the Israeli newspaper Haaretz last week, "The pre-eminent obstacle to peace is Israel's colonisation of Palestine. Israel's occupation of Palestine has obstructed a comprehensive peace agreement in the Holy Land, regardless of whether Palestinians had no formalised government, one headed by Yasser Arafat or Mahmoud Abbas, or with Abbas as President and Hamas controlling the Parliament and Cabinet."

For 20 years, while one peace initiative after another died due to Israeli stalling and the patience of moderate Palestinians eroded, the settlements doubled and redoubled in population, taking up more and more Palestinian land. So now, since the Palestinians are too radical to talk to any more, the settlements must become part of Israel.

Most Israeli voters are willing to accept this logic at present, but it does not serve Israel's long-term security.

Now, Israel holds all the cards in the Middle East. Its Army and economy are incomparably stronger than those of its Arab neighbours. It has hundreds of nuclear weapons and they have none. And it has 110 per cent support from the United States, the world's only superpower.

But a prudent Israeli leader would conclude that now is therefore the right time to make a permanent peace with the Arabs, including the Palestinians, because nobody can be certain that it will still hold all those cards in 25 or 50 years' time.

Israel cannot have a permanent peace and the settlements, too. It is making a bad trade.

Mark Peart: Pessimistic farmers stuck with half-empty glasses

Assessing the medium to long-term economic prospects for the rural sector is a bit like weather-forecasting.

It's not for the faint-hearted and there's a better than even chance that the forecaster will end up with egg on their face.

So rather than forecasting, I'll precis some of the current thinking.

Optimism and pessimism are subjective concepts.

When one looks, for example, at the latest Rabobank/ACNielsen Rural Confidence survey, it pulls no punches in suggesting that New Zealand farmers have a "strongly pessimistic" view of the future.

Rabobank New Zealand executive manager Hamish Midgley's reaction to the survey reflects the notion that people can either see the economic glass as half-full or half-empty.

Midgley says the main driver for the decreased confidence among dairy farmers appears to be a growing view that they will not receive more than $4/kg milk solids next season.

"The survey shows that 40 per cent of dairy farmers believe their incomes will be lower in the next 12 months and more than 80 per cent of all farmers expect cost of production to increase," he says.

But, as he acknowledges, therein lies the rub.

He thinks farmers are likely to be reacting to short-term messages rather than looking into next year and beyond.

"We can't underestimate the short-term effect that the combination of high interest rates and the value of the New Zealand dollar have had on returns this season and therefore on farmers' confidence levels," he says.

But there is a silver lining on the horizon, right?

Right. Rabobank's agriculture in focus report acknowledges tougher times this year, predominantly driven by exchange and interest rate impacts, but says there are positive market signals.

"Rabobank's view is that our major markets for sheep meat, beef and dairy products are sound," Midgley says.

"Demand continues to increase and global economic growth in excess of 4 per cent is forecast. New Zealand remains a competitive supplier of high-quality products."

So surely it's just a case of battening down the hatches and weathering the storm.

BNZ chief economist Tony Alexander says a falling currency delivers an income boost to current exporters but by itself will not encourage a swathe of new exporting industries.

He says New Zealand has suffered because of its inability to grow and spread its export base.

"What's of great concern at the moment is the way in which businesses are pulling back on their capital expenditure."

Farmers are no exception to this rule.

According to Rabobank, they continue to have a conservative approach to further investment.

Sheep farmer investment intentions are at the lowest point since the Rabobank survey began.

A net 10 per cent of dairy farmers intend to invest in their businesses in the next year, which is at least one indicator that might nudge the glass more towards half-full than half-empty.

Alexander says hopefully businesses will get their cash flows under control.

From that should stem a structural lift in capital spending from next year.

"If not, then our current account deficit will continue to remain large, our currency will trend downward over time, income gains will remain good for commodity exporters, but more Kiwis will leave for countries like Australia to gain incomes which, when converted into Kiwi dollars, will be trending upward strongly over time relative to what can be earned here."

That suggests things could be okay for the rural sector, measured strictly in bottom-line terms. But skill shortages are another issue and one that needs to be closely monitored.

* Mark Peart is a Dunedin-based freelance writer.

Des Hunt: Rules for company success

What do successful companies have in common?

While there is no single prescription for becoming a successful company, I am a firm believer that certain characteristics do increase the probability that a company will be viewed as successful.

Conversely, and perhaps even more importantly given the importance of capital preservation to the average investor, when these characteristics are lacking I sense alarm bells and prefer to place my funds elsewhere.

Good governance and communication at board level:

In my experience, successful companies tend to have experienced directors and senior management teams who openly seek to increase shareholder wealth. However, it is not just experience as such, but the breadth and depth of relevant experience that I consider fundamental to long-term business success.

Few boards in New Zealand could be accused of lacking in accounting and legal expertise, but just as few jump out as having a healthy mix of operational, technical and marketing experience. I see such a mix as essential for a board to be able to effectively evaluate and contribute to the strategies being pursued by the CEO and senior management team.

I also look for clear and open communication from boards. Few things make me more nervous than a chairperson who responds to questions at an AGM with long-winded and irrelevant responses more reminiscent of a politician than a representative of shareholders.

Similarly, I am wary of boards that seem unable to admit mistakes and take responsibility for their actions (or inaction), especially if those same boards, when the going is good, have been quite capable of taking direct credit (and rewards).

Proactive and informed strategic decision-making:

Successful companies tend to make proactive decisions based on an awareness of their own and their competitors' position in the marketplace, combined with an understanding of their customers' needs.

This results in, for example, the timely introduction of new or modified products and or services, often involving collaboration with key customers.

On the other hand, poorly performing companies tend to be more reactive in their decision-making, whether responding to competitor behaviour, consumer and market demands, or regulatory changes.

Poorly performing companies are likely to make major decisions without adequate research and evaluation of potential consequences. Often key senior executives are not actively involved and the advice of external consultants is relied upon.

While not dooming every initiative to failure, a lack of rigorous internal analysis and debate, including at the board level where major expenditure and/or changes in strategic direction are involved, is not a recipe for consistently good decision-making.

Acquisitions provide a good example of major transactions that successful and less successful companies tend to approach differently.

Successful companies are not afraid of acquisitions but do not underestimate the difficulties associated with such transactions and are not afraid to walk away from deals that offer marginal returns or require bold assumptions about "turnaround potential".

Few successful companies rely on highly leveraged acquisitions of struggling companies to generate long-term growth.

Successful companies devote significant senior management resource to acquisition decisions and to the ongoing management of successful takeovers, in addition to financial resources.

Large acquisitions and those that take firms into new territory, eg, the purchase of an overseas company, will typically see the CEO and other key senior executives actively involved.

Organisational structures and remuneration strategies devoid of unnecessary complexity:

Most successful companies have relatively simple organisational structures with only a few layers of management and quite small head offices. This is more conducive to transparency and constructive communication as opposed to stifling bureaucracy.

Consistent with a simple organisational structure is a logical and transparent remuneration policy that is clearly linked to relevant drivers of individual and organisational performance.

Successful companies are also less likely to have jaw-dropping discrepancies between remuneration packages at different levels of the organisation.

Less successful companies are more likely to have complicated organisational structures with many layers and a large head office. Managers tend to be based in a different location than those they are managing, resulting in less regular communication, particularly of the informal and open kind.

Such organisations are likely to apply different "logic" to the way that remuneration decisions are made across the organisation and have larger pay differentials.

Successful companies generally have lower staff turnover and retain the right people.

This retention of top performers who also tend to be more engaged in their work is crucial to the development and leveraging of intellectual and human capital over the long-term, which builds competitive advantage and a platform for ongoing success.

Lower staff turnover also makes the case for significant employee training and development stronger as the company is likely to benefit more from such training the longer it retains the staff concerned.

Judicious use of external consultants:

Successful companies are likely to make much less use of consultants. Less successful companies make what I perceive as excessive use of consultants for one or more of the following reasons:

* Management does not have the experience or confidence to carry out sound analysis and make genuinely informed decisions. A complicated organisational structure results in managers not having clear responsibilities and preferring to avoid decision-making themselves.

* Management is unable or unwilling to simply acknowledge poor performance and seeks a variety of "explanations" from a theoretically impartial source to divert attention from their own shortcomings.

* A weak board seeks external validation for questionable decisions, often regarding CEO and senior executive remuneration.

This is not to say that consultants do not have their place. My point is that successful organisations use consultants where they can genuinely add value and where permanent resource cannot be justified.

As an investor I am simply not endeared to already top-heavy companies who make almost permanent use of external consultants to do what I perceive to be the work of senior management, the CEO, and the board.

* Des Hunt is the director of corporate liaison at the New Zealand Shareholders Association.