Saturday, April 22, 2006

Editorial: Bullying case shows court flaws

Every so often, a court verdict provides compelling reason to wonder about the justice system's soundness. Such was the case when, in the Christchurch District Court this week, Daryl Falcon was fined $500 for assaulting an 11-year-old boy who was bullying his daughter at school.

In many eyes, the sporting strongman should never have been on trial. Judge Jane McMeeken served only to add grist to that viewpoint when she told Falcon that "possibly in years gone by, a charge might not have resulted".

The judge was probably referring to the greater unwillingness today to turn a blind eye to instances of assault, even when, as in Falcon's case, no injury resulted. But others pondered the very nature of a court system that could result in him being charged. Had that system become so straitjacketed that minor acts of assault will inevitably end up in court?

There is plenty to suggest that Falcon's case should not have gone down that path. He was a man with no previous convictions who took action at a time when nothing appeared to be being done about his bullying complaint to the staff of Mairehau Primary School. On the spur of the moment, while having what he described as a "brain explosion", Falcon grabbed the alleged bully by the scruff of the neck, poked him with a finger, and told him: "Stop bullying my daughter."

The seriousness of the assault could be debated. But Judge McMeeken, for her part, seemed most concerned that Falcon had set "an incredibly bad example to that bully".

What is not in question, however, is that the consequences of the conviction far outweighed the severity of the crime. Falcon, with an assault on his record, may not be able to travel to the United States for strongman competitions.

Given all that, and his apparent contriteness, he was a natural candidate for the police diversion scheme. That practice has, since 1988, been widely used to fill the gap between cautions and formal convictions. It allows first offenders a second chance while still requiring them to make amends to the victim or the community.

In this instance, however, diversion rubbed up against victims' rights, a tenet of the justice system rendered increasingly important by public demand. The parents of the boy who was assaulted by Falcon objected to the scheme's use. They, it seems, were determined to have their day in court. Their objective, presumably, was to ensure that the strongman was subjected to the system's maximum weight. Thus, if the court was in a straitjacket, it was one imposed by the victims, not any inherent inflexibility.

Judge McMeeken should never have been placed in the type of position that led her to confess that a lot of members of the community could well understand Falcon's frustration. There may have been a prima facie case against him. But that was also true of several recent high-profile cases, when it was not deemed sufficient to lead to court proceedings.

Nor should it have this time. Falcon's appearance in court invited comparison. That, when compounded with the sidelining of diversion by the victim's family, led to a conviction that, quite justifiably, prompted a public backlash.

The ever-changing nature of society invites collisions. Adroit footwork is required to escape damaging consequences. In this case, a valid response to the increasing prevalence of minor crime crashed into the greater recognition of victim rights. A large dollop of common sense was required if the justice system was to avoid appearing inept and inflexible.

In this instance, it was, unfortunately for Daryl Falcon, in short supply.

John Roughan: Plenty of water down on the farm

The weekend before last a death in the family took me back to the heartland. A cousin I'd scarcely seen since childhood died too young after suffering too long.

Paul O'Connell lived all his 48 years on the farm in western Southland where the rest of us had many an enchanted holiday as kids. Farms are a different world, where liberties are taken with the strictures of life and safety.

You never let on what a near thing it was when the horse bolted under a tree, or how exhilarating it is to cling for dear life to the tray of an old truck bumping across paddocks at full throttle.

Our cousins could drive and handle shotguns at an alarming age. They grew up to love hunting deer in the ranges not far away.

It is a different world down there in the fresh wet southerlies that sweep in from the ocean and turn farmers' faces to leather. People conditioned to that weather have a good grip on reality. They relish the humour of life and deal with grief honestly.

Paul's wife, teenage children, parents and siblings had nursed him at home day and night for the past year but they gave him a funeral in their country hall that reflected the character he was.

Among the tales they told was one that had some resonance for me a week later. It involved his farm's water supply. Previous bores in the area where he had wanted water had been fruitless but Paul was always ready to try his luck, and it was usually good luck. If he bought a ticket in a pub raffle his friends wouldn't bother.

So he called in drilling contractors and when they arrived Paul nonchalantly took a spade, walked a short distance from his shed, made a cross on the ground and said "there".

The drill went down into a generous spring.

Amazed, his brother asked, "What made you think it was there?"

"I thought there was water under the ground everywhere," he replied.

"But why there?" his brother persisted.

"That's as far as the extension cord will go for the motor," he said.

That story came back to mind last week when we read that the Government intends to take tighter control of the country's water resources. They have been softening us for some time to the idea that freshwater has become a scarce commodity.

A previous Environment Minister, Marian Hobbes, used to wail about increasing irrigation and complain that there was not enough water in rivers and streams to satisfy the long-term water demands of all sectors and "sustain in-stream values".

Her "in-stream values"were aquatic life, swimming and kayaking and "waters with their mauri or life force unimpaired".

Last week Jim Anderton, now Minister of Agriculture, and a new Minister for the Environment, David Benson-Pope, duly announced a plan to put all rivers, lakes and ground water under a regime of national priorities and directives.

"The days of taking the unlimited use of water for granted are over," they said.

Sometimes Wellington seems a million miles from reality. Doesn't anybody drive outside that city with their eyes open?

On the journey south I crossed the Canterbury Plains, which use three times more water than any other region. The land there is a thin layer of soil on shingle beds deposited by the rivers that thread their way from the Southern Alps to the sea.

Cultivators have to spend a fortune on irrigation and it must feel like watering a gravel pit. But without it, they would have the grey dust you see on the floors of the pine forests.

They could probably save some water by irrigating only at night, though it seems hardly necessary.

For even now, at the end of a summer so dry in the hydro catchments that the country probably faces power shortages this winter, and even in the thirstiest region of all, there appeared to be plenty of water in the rivers. (I couldn't swear to their mauri.)

Take to the air, fly the length of New Zealand and almost everywhere, even at this time of year, there is plenty of water on the ground. The only freshwater that needs closer attention is in lakes such as Rotorua and Rotoiti, poisoned apparently by farm run-off. But that is a different problem.

This "water shortage", I suspect, is another of those planetary environmental concerns that simply don't apply to this country.

At the election last year Labour lost practically all the rural, or partly rural, electorates it had held. The lack is beginning to show.

Farmers, more than any other people, have their feet on the ground. They know the value of what they do for the economy. They also know the value of their environment and its recreational resources. The lifestyle it provides is often the main reason they work for a return they say is quite modest when they calculate the hours they put in. Many need employment off the farm as well.

Water use for industry and agriculture is already managed by regionally issued permits and even the Environment Minister says the system for the most part is working well. So why fix it?

The explanation in his written statement could have been lifted from a Yes Minister script: "Changing circumstances, including increasing demand and competition for water, require a new, more dynamic and flexible strategy for managing our water sustainably into the future."

Imagine running that one past Paul O'Connell as he strode out with his spade to mark the spot for his water bore. He might have paused long enough to adjust his baseball cap, fix the policy maker with a frank stare of wonder and offer some words of rustic wisdom: "Get off the grass."

Fran O'Sullivan: NZ Inc presents united front in Washington

The Government has put the ball clearly in the United States' court over long-standing irritants in the bilateral relationship.

And just six months after the election it is clear the major fault-lines that had emerged between Labour and National are rapidly closing.

In Washington this week Labour's Phil Goff and National's Don Brash presented an NZ Inc face to the Bush Administration in a series of separate high-level bilateral meetings before the inaugural United States-New Zealand Partnership Forum began.

Goff has already faced up to a US request to "have a conversation" with New Zealand on issues such as the anti-nuclear policy, which has long been a thorn in the Americans' paw. Instead of waiting for the US to pose questions he initiated discussions directly with the Bush Administration's hardman.

It's too early to tell yet if US Defence Secretary Donald Rumsfeld was convinced by Goff's importunings. That is not expected to filter out for some time until the Pentagon and the US State Department have had time to consider all Goff's messages.

What is at issue is whether the US will simply "return service" or get into a lengthy but much more friendly game with New Zealand, where both parties really benefit.

The original US request was tabled last year by former US Ambassador Charles Swindells and re-emphasised by his successor Bill McCormick. But the US moves were dismissed then as an attempt to interfere in New Zealand's domestic affairs - not simply a polite request to talk about the "dead cat on the table" that the policy had clearly become after some 20 years of mutual stewing.

From the smaller partner's perspective it is important that New Zealand is seen to be driving the effort to transform the bilateral relationship, and in Goff's words "establish a new foundation" for a 21st century which presents a whole series of shared security and economic challenges to both countries.

US officials had repeatedly let it be known they were concerned that a country that wanted to forge a closer trading relationship with the US would not even "hold a conversation" about the major irritant in the relationship.

But the "undiscussables" that used to irritate US politicians and officials are now clearly on the table - put there by our Defence Minister.

Brash has resisted the temptation to undermine the Labour Government's new frankness, instead playing a longer-term game in New Zealand's overall interest.

After the heat and bitterness of the election-time rhetoric this is a refreshing change. And, frankly, a necessary one if this country were not to continue to run the risk that the US - or, for that matter, any other major power such as China - would play Labour and National off against each other in pursuit of its own self-interest while our major parties scored cheap political points. This is a risk both politicians concede.

My own soundings indicate the Labour Cabinet ministers - who had painted Brash as an American lapdog during the heat of the election campaign and accused him of trying to sell out New Zealand's iconic anti-nuclear policy to get better market access to the United States - have, in fact, been quietly talking for some months with his key foreign policy and trade advisers, Murray McCully and Tim Groser.

At issue was how to put the politicking behind them after the electorate's clear indication it was not keen on National's plans for a public referendum on the policy which has been such an obvious thorn in the bilateral relationship since the ban on nuclear ship visits was imposed nearly two decades ago.

This did not come out at the time but was clearly part of the sub-text to McCully's announcement that he wanted National to execute an about-turn on the referendum plans earlier this year. It also enabled both Labour and National politicians to take a much more confident approach to the frank discussions over the relationship which were expected to be aired at the forum, safe in the knowledge that a united front could be presented in this area.

Brash says National will also underline this bipartisan approach in discussions with other foreign partners such as China. Goff is resisting the temptation to crow over National's about-face.

It was Goff, after all, who ignored diplomatic convention two years ago and released the transcript of notes taken by a Foreign Affairs official which said Brash had told some visiting US Republican senators that if it were up to him the nuclear ships ban would be "gone by lunchtime".

Brash then had to face down further attacks when Labour alleged that a US billionaire was pulling National's policy strings in return for campaign funds.

The upshot was that Brash was unable to get electoral purchase for his party's pledge to hold a referendum on whether to change the nuclear policy.

But both sides clearly believe that realpolitik dictates it is in New Zealand's interests to have a strong relationship with the world's superpower.

There are still minor nuanced differences which will inevitably be probed by State Department officials, including Deputy Secretary of State Robert Zoellick, who has harboured grievances over the policy, and Assistant Secretary of State (East Asian and Pacific Affairs) Christopher Hill, who is the "point man" for the bilateral relationship.

But for now Labour and National are virtually on the same page.

Paul Thomas: Hoping for rain won't avert a power crisis

What exactly are governments for? It used to be said that a government's fundamental responsibilities were sound money and the defence of the realm.

Sound money essentially meant price stability - in other words, your money went as far this year as it had last year - and universal acceptance so that when you ventured abroad Johnny Foreigner was only too happy to take your pounds because they were worth a barrow-load of the local currency cum lavatory paper.

Successive New Zealand governments have kept inflation under control by contracting the job out to the Reserve Bank and have adopted the Pontius Pilate approach to the exchange rate, leaving the dollar to sink or swim in the storm-tossed waters of the money markets.

As for defence of the realm, that hasn't been on our government's to-do list since we decided to leave it to the Aussies (on the assumption that any predators wanting to get their hands on us would come via Australia) and geography.

So what's left?

Well, you'd think that ensuring the power supply would be up there. Without it, industry and commerce can't function, workers don't get paid, children and old folks starve to death and the able-bodied huddle together for warmth in a miasma of candle smoke and body odour.

Let's hope it doesn't come to that but, after the usual equivocation and arse-covering, it's being admitted that we may have to put up with power cuts this winter. How do we know autumn has arrived? The days are shorter, the nights are colder, leaves are falling and power-saving tips are appearing in the media.

Our traditional response is to assume she'll be right but according to the National Institute of Water and Atmospheric Research, that ain't necessarily so. A six-year study has concluded that El Nino's about to take a two to three-decade breather, which means lighter westerly winds, less rain and less water in the lakes.

Dr Jim Renwick, who headed the study, reckons the next 20 to 30 years could be "tricky," which is boffin-speak for cold, dark and miserable.

Successive governments have farmed out responsibility for ensuring the power supply to Mother Nature and, frankly, she's proving unreliable.

You may think that, instead of crossing its fingers and hoping for rain, the Government should get a little more proactive in dealing with the almost annual power crisis. You may think it's time we had a full and frank national debate in which all the alternatives are on the table.

That's unlikely to happen for the simple reason that as soon as some unworldly soul uttered the word "nuclear," he or she would be howled down. Before you could say "Chernobyl" there'd be an official announcement to the effect that nuclear power is not an option; not now, not ever.

This is the paradox of contemporary New Zealand. Despite being in many ways the very model of a liberal society, there's a most illiberal tendency to shut down debate on certain subjects by responding to the mere mention of them with hysteria, bullying and ad hominem argument.

We see it whenever there's a suggestion that we should revisit our stand-off with the United States and we saw it just the other day when the Maori Party's Dr Pita Sharples demanded the resignation of Race Relations Commissioner Joris de Bres. What triggered this call was de Bres' disinclination to endorse the withering critique of our treatment of Maori delivered by some United Nations functionary who felt that 10 days in the country was sufficient basis on which to demand far-reaching changes to our political and constitutional arrangements.

One of the tactics for stifling debate is the assertion that the nation has already made up its mind: being clean, green, neutral and nuclear-free is now at the core of our national identity so to question these principles is to strike at the very heart of what it means to be a New Zealander.

However, it's arguable that these principles were adopted too recently to be accorded this status and that not enough of us have embraced them - as opposed to gone along with them - for them to form part of our national identity. It could even be argued that clean, green, neutral, nuclear-free New Zealand is more a political agenda than a summary of what we as a nation stand for.

But if these things are embedded in our collective consciousness and central to our self-image, then we should be happy to defend them against popgun attacks from fringe-dwellers and contrarians. If their merit is self-evident, it shouldn't be much of a debate.

We're constantly told that global warming poses a deadly threat to the planet. Two years ago Professor James Lovelock, one of the first researchers to sound the alarm about the greenhouse effect and the author of the Gaia hypothesis so beloved by New Agers and the Green movement, called for the world community to embrace nuclear energy as the best strategy for avoiding the cataclysmic consequences of global warming.

He was, of course, denounced and ridiculed and a cone of silence descended, pierced only by the ever more apocalyptic warnings of what global warming means for life as we know it.

Audrey Young: Riots highlight NZ presence

If foreign Minister Winston Peters was looking for a way to show the United States how active New Zealand is in the Pacific, the response to the shocking Solomon Islands riots delivered it.

The riots also showed why Peters' pledge to make the Pacific his number one priority as Foreign Minister was a thoroughly sound one.

Making the Pacific his priority came easy: it has been a constant priority for his New Zealand First Party for its 13 years, Peters has many personal contacts in Polynesia and Fiji, and there was no argument with the ruling Labour Government.

But making New Zealand's role in the Pacific central to his efforts to improve the United States relationship was more carefully thought about.

After saying early on that it was also a key objective to improve relations with the United States, he had painted himself into a corner.

Implicit in the objective was a criticism of how Labour had developed the relationship.

And he had set himself up for failure unless he could make significant movement on the nuclear impasse or free trade agreement.

By restating his objective in February, Peters has set himself a different measure and left those two issues where they rightly should be - with Prime Minister Helen Clark and Trade Minister Phil Goff.

Peters' new objective is for the United States to better understand New Zealand's level of engagement in the Pacific - and how it snugly fits with its own security agenda.

And while Peters has understandably sought to more softly recast his depiction of the United States as ignorant of what is happening in the Pacific, the fact is that his comments went down a treat in voter land.

He and his ministry have already been credited with success by Clark: Assistant Secretary of State Christopher Hill is said to have left New Zealand on a recent visit a lot more informed and impressed by the level of engagement New Zealand has in the Pacific. [Hill is being interviewed live on Agenda this morning from Washington, 8.30am TV One].

It was a quirk of timing this week that Defence and Trade Minister Phil Goff was in Washington at a business forum and was able to personally brief US Defence Secretary Donald Rumsfeld on the evolving Solomons crisis.

Peters was in Russia, meeting Foreign Minister Sergei Lavrov, whom he previously met at Apec and, coincidentally, whom he cited in February as having "understood just how significant New Zealand's contribution has been".

It is probably as well that Peters and Goff were away because if they were at home, they would have been surplus to requirements this week.

Clark has been handling the crisis here, with Australian counterpart John Howard, as she would have done even if the pair had been in the country.

Although the riots are not necessarily a failure of the much vaunted Regional Assistance Mission to the Solomon Islands (Ramsi), which has soaked up millions in aid and defence funding, especially from Australia, and an abundance of hope and goodwill, they have been a blow to Clark.

She negotiated hard with Howard on the ground rules for Ramsi and both have a strong sense of investment in it.

New Zealand insisted on the approval of the Pacific Islands Forum and the involvement of as many island states as possible - not to mention the invitation of the host country.

Sensitivities around Australia's participation in the invasion of Iraq were still strong at the time, as were sensitivities by Australia over New Zealand's non-participation.

As well as being necessary to rescue a failed state, Ramsi was an important way for New Zealand to show it would be more than happy to pull its weight when justified; and for Australia to show it was capable of multilateralism when justified.

Informed commentary suggests the riots this week were a response against corruption, corruption by Taiwan and its interests in the Solomons of what were supposedly clean, democratic elections there this month.

Taiwan denied the heavy hints from Australian Foreign Minister Alexander Downer that the riots were a consequence of Taiwan and its backers bank-rolling sympathetic candidates, as does the new Prime Minister, Snyder Rini. They would, wouldn't they.

Australia has billions of reasons to be unhappy.

At a time when it is trying to tie its huge aid programme to good governance, Taiwan and China's chequebook diplomacy undermines it.

New Zealand is more tolerant than Australia of China's ambitions in the Pacific, taking the view that as long as the Pacific countries welcome China and it respects the Pacific Islands Forum long-term development plan for the region, then it is welcome.

The Solomon Islands is one of six Pacific Island Forum countries that recognises Taiwan, a large enough group to have attracted China's Premier Wen Jiabao and his wallet to Fiji this month to announce more than $600 million in preferential loans to the other lot.

The blowout in the Solomons is a reminder of how brittle peace in paradise really is, particularly in Melanesia, which traditionally falls within Australia's sphere of influence.

Papua New Guinea and Vanuatu appear to be in a perpetual state of instability.

Taiwan was implicated in Vanuatu 18 months ago when Serge Vohor was forced out of office as Prime Minister because he unilaterally pledged a switch in allegiance from China to Taiwan - against the wishes of the Cabinet.

The Sydney Morning Herald reported in the week before the confidence vote in Vanuatu that politicians and their family members were spending up large in Port Vila with wads of US$100 notes.

The Fiji elections are only two weeks away. This is one occasion on which the Labour-led Government in New Zealand will not be praying for the election of a sister party in Fiji.

The concern in Fiji is in every direction: not only over what indigenous nationalists would do with an Indian Fijian Labour Prime Minister, but what the military would do with newly mandated indigenous nationalists flexing new power.

Peters' first visit to the Pacific as Foreign Minister was to Fiji this year where he reportedly delivered a firm message to military chief Frank Bainimarama about governance.

Clark will be expecting a lot more of the same from Peters.

Downer and Peters are planning a joint trip to the Solomons after a meeting at a business forum in Auckland early next month.

Making the Pacific a priority was simple: how to make a difference will be the challenge.

Brian Gaynor: More than one choice for GPG

Tony Gibbs' high-profile stance against the new investment tax proposals has been uncompromising and out of character.

Guinness Peat Group's New Zealand director usually plays his cards close to his chest and gives the impression that he has a number of alternative strategies. But during the past two weeks Gibbs has loudly declared that GPG has only one option: the company will leave New Zealand if it isn't granted an exemption under the new investment tax regime.

His high-profile stance has had a negative impact on GPG's share price and has annoyed many shareholders, particularly those who participated in the recent placement of 51 million shares at $2.60 each.

If Gibbs were true to form he would have stated that he was deeply disappointed with the new tax proposals but GPG had several alternatives and would choose the one that was in the best interest of shareholders. This would give him plenty of time to lobby Government ministers, in public and private. It would also calm investors' nerves.

Gibbs' main case is that GPG should be classed as a New Zealand company because most of its shareholders and directors are New Zealanders. This has never been the basis for determining a company's residency.

Guinness Peat is a UK company that first came under New Zealand influence in March 1987 when Allan Hawkins' Equiticorp acquired a 26 per cent stake. Five months later, Hawkins made a bid for the entire London-based group and ended up with just over 50 per cent.

When Equiticorp was placed under statutory management in January 1989, the GPG stake was transferred to a syndicate of international banks. Hawkins later wrote: "I now think the Guinness Peat investment was the single biggest factor in our later downfall."

In February 1990, Brierley Investments (BIL) made a takeover offer for GPG and ended up with a 63 per cent holding, including the shares held by the international banks. BIL acquired a further 20 per cent from Sir Robert Maxwell's Pergamon Holdings in May 1991.

A month later, BIL sold 140 million shares or 43 per cent of the company at 45c a share (BIL sold its remaining 40 per cent at a later date). The 1991 share sale was allocated as follows: 100 million to NZX brokers for distribution to institutional investors and private clients in New Zealand, 30 million to select brokers in Australia and 10 million to chairman Sir Ron Brierley.

GPG was an ideal fit for New Zealand investors because it was based in a grey list country, where New Zealand investors do not pay a capital gains tax and had more than £90 million of UK tax losses. It also had Sir Ron Brierley at the helm.

GPG listed on the NZX on June 28, 1991. The NZX was its primary exchange as the group had been delisted from the London Stock Exchange at the end of 1990.

Although the NZX became GPG's home exchange it was granted a large number of waivers from the listing rules, including:

* The requirement to have at least two directors resident in New Zealand.

* The requirement to have its secretary resident in New Zealand.

* The requirement for its offering memorandum to comply with clauses of New Zealand's Securities Regulations 1983.

Since 1991, GPG has been able to pick and choose the best of two worlds. It is UK-registered, has had substantial UK tax losses and holds all its annual meetings in London, while the majority of its shareholders are capital gains tax-exempt New Zealanders.

GPG's performance has been phenomenal since the 45c-a-share placement in 1991. Its investment performance has been outstanding and directors have enriched returns by a continuous stream of 1-for-10 bonus issues.

GPG took another important step in 2002 when it merged with UK Brunel Holdings. The catalyst for the merger was the diminution of GPG's original £90 million of tax losses and the large losses available to Brunel.

The merger was effected by Brunel making a takeover offer for GPG on a 1:1 scrip basis and changing its name to GPG after the successful bid. The merged company is more than 98 per cent-owned by original GPG shareholders and has major tax losses.

The proposed investment tax regime will not extinguish these UK tax losses but it will mean that New Zealanders with more than $50,000 of offshore shareholdings at cost will be subject to a capital gains tax (CGT) on non-Australasian shares from April 1 next. It also means that New Zealand-orientated pooled funds (unit trusts) will have to pay an unrealised CGT on their GPG holdings whereas there will be no CGT on New Zealand-resident companies.

Although Gibbs has painted a bleak outlook if GPG doesn't get a CGT exemption, the company has several options. These alternatives, which are summarised in the accompanying table, have to be looked at from a shareholder and corporate tax perspective.

1 The preferred option for GPG and its New Zealand shareholders would be for the Government to classify the company as a New Zealand resident.

This would allow GPG to maintain its UK tax losses, and individual investors and pooled funds would be exempt from a CGT under the new regime.

This is an unlikely outcome because GPG and Brunel were established in the UK in 1919 and 1909 respectively and an exemption would also give GPG an unfair future advantage over all other New Zealand companies.

2 If the Government doesn't grant the exemption, the company could remain in the UK and individual and pooled funds here would be subject to a CGT. This would be the worst outcome for New Zealand shareholders.

3 Individuals and pooled funds would not be subject to the proposed CGT if GPG moves its head office, but not its subsidiaries, to New Zealand. The company could lose its corporate UK tax losses under this scenario but these have probably diminished in importance because GPG has fewer share trading profits and most of its subsidiaries pay their own tax. As New Zealand's proposed investment tax regime only applies to shareholdings under 10 per cent outside Australasia, and GPG has less than 1 per cent of its assets in this category, its corporate tax impost in New Zealand could be fairly minimal.

4 A move to Australia would also exempt all New Zealand shareholders from the proposed CGT. The company's tax position in Australia is more complicated, but the group's tax management expertise could be utilised to minimise the impact of any Australian corporate tax.

Although Gibbs is making a huge song and dance about the new investment tax proposals, it may be a blessing in disguise for GPG shareholders. The group is subject to limited scrutiny, particularly at annual meetings, because most of its shareholders are on the other side of the world. This is an important issue as its directors are ageing and there is no obvious succession plan.

Moving its corporate headquarters to Australasia would remove the threat of a CGT for either individual or pooled funds in New Zealand and allow shareholders to monitor the company more closely. It could also boost GPG's share price because there are a huge number of investment funds in Australia looking for top-class companies to invest in.

Disclosure of interest: Brian Gaynor is a GPG shareholder and an investment strategist and analyst at Milford Asset Management.

Paul McIntyre: Woolworths turns pricing screw

Some of the biggest packaged goods companies in Australia are locked in a feral stoush with Woolworths as the supermarket chain seeks to force them into accepting single-market pricing and trading terms across the Tasman.

It's taken a while for Australian suppliers to fire up after Woolworths' A$2.5 billion ($2.94 billion) acquisition last year of Progressive Enterprises but the tension is now tangible.

None of Woolworths' trading partners are prepared to speak publicly about the giant retailer's aggressive supplier squeeze but they're not at all happy with its tactics to force them into transtasman trading terms and pricing based on the country which currently is generating the best margins for the retailer.

The only public comment so far on the issue is from the peak Australian packaged goods industry body, but it too is treading lightly.

"This is pretty sensitive stuff," says Harris Boulton, deputy chief executive of the Australian Food & Grocery Council. "We're certainly aware that the negotiations are taking place and that a number of members have got concerns ... We understand the concerns are, as you might expect, about price. Exchange rates is an obvious factor."

Although angst has been intensifying among New Zealand suppliers for some time over the implications of Woolworths' takeover of Progressive, some of the retailer's biggest Australian-based suppliers are being dragged into the fray, mostly because of the grocery chain's push to harmonise Australasian pricing, listing fees and other trading terms.

"It's a burning issue for a lot of companies," said one large Australian Woolworths supplier. "If you look at the top companies, they've all got different brands in different positions in both markets. Suppliers are not treating Australia and New Zealand in a generic way."

Woolworths has told its Australian and New Zealand trade partners it wants to rework its trading terms based on which country is currently providing the lowest price for goods and has threatened to ship in the same or a similar product from either side of the Tasman if a local market operation refuses to meet its demands.

The German-owned discount retailer Aldi and Nestle in Australia have just been through a similar scrap where Aldi raised the ire of the packaged goods giant for importing cheaper Nescafe-branded coffee from Brazil and Indonesia without sufficiently disclosing its origins. Nestle's local formulation differs from those two countries.

"Inter-country trading is a nightmare," said another Woolworths supplier facing transtasman deals with Woolworths.

The growing supplier dissension comes as Woolworths this week announced its best quarterly growth in three years and a warning from retiring chief executive Roger Corbett that New Zealand growth could slow as the retailer started to cut into the cost base and roll out system changes.

"New Zealand has a long way to go," Corbett told the Australian Financial Review. "We might well see over the period some short-term reduction in sales and reduction in the rate of growth in sales as a result of what we're going to be doing." Merger benefits would start to flow in the next six to 18 months, he said.

Corbett will retire in September and analysts expect him to produce some flash figures before he goes. They were certainly happy with the March quarter in which sales jumped 22.7 per cent to A$9.7 billion. Sales for the supermarkets division rose 23.5 per cent in the March quarter to A$8.5 billion, which included contributions from the 150 New Zealand and 20 Australian supermarkets acquired last November from Foodland.

With that sort of momentum building it is going to be hard for suppliers to resist the grocery chain's push for harmonised trading terms for Australia and New Zealand.

Certainly, a UK and Australian consumer goods retail marketing adviser believes that Australasian manufacturers have ignored warnings about transtasman retail consolidation for too long.

"They should have known this was going to happen and they've got themselves to blame," says John Eustace, chairman of the UK-based Eustace Towle. "My experience of this happening in the UK is there's very little manufacturers can do but roll over. It's standard operating procedure for retailers. The first thing they do is look at the price book of the company they've acquired and drive down price. When Wal-Mart took over ASDA in the UK, the instructions were to do exactly that."

Eustace says he is "sympathetic to the plight of small manufacturers" but predicts many will disappear as Woolworths marches through Progressive.

* Paul McIntyre is a Sydney journalist

Graham Reid: Living and loving life to the full

My friend Amanda's reputation - some might say cheerful notoriety - is well known around Uzes, a charming medieval town in Provence about 40 minutes north of Avignon.

Amanda's village of St Maximin - 10 minutes outside Uzes and where the writer Jean Racine used to stay - has visitors and residents from all over the world, many of them guests at her huge 18th-century stone maison which commands a view of the rolling valley below.

Because she once owned La Poste restaurant on Auckland's North Shore and was well known here in restaurant circles (and beyond) she regularly hosts Kiwis who come to get lazy or curious in Provence, drink wine around her pool at sunset, and eat the beautiful food that Amanda can whip up as if by magic.

Amanda loves life more than anyone I know. Her website is www.joiedevivre-unlimited.com - and she wonders why she doesn't get interest from Americans? - which perhaps explains why she is so well known in the region.

It's a place of many attractions including the Roman aqueduct at Pont du Gard, the former home of the Popes in Avignon (and that other famous bridge) and quaint but busy Usez, all within an easy drive for her visitors.

But all that busy tourist stuff seeps away when you are seated at the Terroir Cafe in Place des Herbs in Uzes, shaded from the summer sun by the broad leaves of the plane trees, and where watching the lazy fountain and reaching for a glass of wine count as activity.

It was here with some ancient locals and a lunch of carpaccio and sun-dried tomatoes I had the first hints of how widely Amanda's reputation has spread.

I was chatting with the owner who spoke English like an American, French like a local and came from Switzerland.

"You're a Kiwi," he said. "I can tell by your accent."

He asked how long I had been in Uzes and I told him. Then he asked where I was staying. I said, "St Maximin."

"You're at Amanda's, then?"

A few hours later my wife was in an antique shop admiring wonderful things, of which there were many, and she got talking to the owner. It turned out he had done the decor in the restaurant Amanda had introduced us to the previous night. Of course he knew Amanda.

As did the owners of that restaurant - who had asked her advice on the menu and decor - and as did a man I asked for directions when he enquired where I was from.

They all knew Amanda for her generosity to her friends, her rich laugh, her wild blonde hair, and her love of life.

Anyone who has joie de vivre in their email address has a lot to live up to. I suspect around Uzes she has never disappointed.