Monday, May 08, 2006


An Epsom reader was startled to see this three-legged model in the Ezibuy online catalogue

By Ana Samways

Beware, smugglers of bootleg movies - two black Labradors have been trained as the world's first DVD-sniffing dogs. Canine sleuths Lucky and Flo got their first major live test at London's Stansted Airport and immediately identified packages and parcels containing DVDs for destinations in Britain. The Federation Against Copyright Theft organised the dogs' training to crack down on DVD piracy. The dogs have been taught to identify DVDs in boxes, envelopes and other packaging, and discs that might be hidden in other goods for illegal sale in Britain. "This is the first time dogs have been used anywhere in the world to search for counterfeit DVDs and the results were amazing," federation director-general Raymond Leinster said. More than two million bootleg DVDs were seized in Britain last year. (AP)

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Paul Clark, professor of Chinese at Auckland University, writes: "The latest Mastercard ad, featuring an intrepid couple touring in China, is a hoot. In what the voiceover calls "Guy-lin" (he means Guilin, which rhymes with Grey Lynn) our adventurers clutch a folding map, "cost: 47 yuan" . Priceless indeed, as our couple have paid at least 10 times what they should have for the map."

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A Trade Me humorist tries to flog a telco with an auction description that reads: "One over-priced somewhat defunct CDMA network due to our big cousins in Australia, Telstra, giving us the boot. So in the near future should you wish to roam on a 027 phone, good luck! And now that they have told us that we have to share our pot of gold we are a little worried. (We thought, since the Government has so many shares in us, and they're reliant on us for their super funds, they would look after us.)"

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An unfortunate turn of phrase emerged during the tsunami-that-wasn't coverage on Morning Report last Thursday. People around the Gisborne area had "self-evacuated", they kept saying, which was meant to mean they had left all by themselves. But its repeated use made it sound like the poor evacuees' bowels bore the brunt of the tidal wave scare.

Editorial: National offers little inspiration

Indecisiveness continues to bedevil the National Party. Six months into its third consecutive term on the Opposition benches, it remains close to Labour in opinion polls but shows no sign of going ahead of a Government which until its decision on Telecom last week was becalmed - maintaining itself rather than advancing the country. National is an unconfident opposition against a tentative government. The resulting politics are stagnant.

National's stance on the future of the Maori seats in Parliament is an example of its dilemma. It campaigned last year to abolish the seats. After the election, that created difficulties with one of its possible allies in an unlikely bid to form a government, the Maori Party.

Last week, the deputy leader, Gerry Brownlee, seemed to suggest that the hardline commitment to abolish the seats ought to be reconsidered, given the long-term probability of a bigger Maori Party being a key player in coalition building. His leader, Don Brash, was publicly unmoved and reiterated the standing policy. No Maori seats. This, despite the absence of any popular mood for the seats' removal and the potential recognised by the public for a severe rupture with Maori which New Zealand just does not need.

In the same vein, Mr Brownlee wondered about the party's position on reducing the number of MPs from 120 to 100. Dr Brash came out later to restate National's support for the smaller number, despite Mr Brownlee's logic that his party's chances might be enhanced with the bigger House of Representatives. Again, if the case for 100 seats had traction, it seems to have faded in the public mind.

The disconnects are indicative of a broader problem for National: whether to stay wedded to so-called bottom lines in policy or to eliminate policies that may cause more harm than good in the long-term. The policies may be points of differentiation but, like that on nuclear ship visits which called for a vague referendum on the issue and opened National to attack politics from the left, they must go if the negatives are too high.

National's early performance this term suggests it has yet to work out how to markedly improve its appeal in areas in which it is weak: women, the young, those on modest incomes in urban areas. Looking after its own vote and that of the wider centre-right will not be enough. Even with big tax cuts and the resonance of its one-law-for-all race relations policy at the last election it came up short. Too often the party seems to be making small points well rather than developing something big to put before the public. MPs intent on felling Labour with a death-by-a-thousand-cuts strategy of mini controversies echo the failed thinking of the past six years.

When Labour finally did something telling this term and announced the unbundling of Telecom's local loop, National's response was a blast from the past in more ways than one. First, the man formerly known as Minister for Telecom, Maurice Williamson, showed no feeling at all for the public mood on Telecom's broadband failings and instead resorted to 1990s slogans. Second, while Dr Brash remained out of sight, the former leader Bill English took the fight to the Government on the weakest point of its Telecom bombshell, the leaking of what was a Budget secret. Television images of Mr English speaking on the steps of Parliament with the deputy leader at his shoulder were odd to say the least in the absence of Dr Brash.

In a contest of limited equals, in a climate increasingly unfavourable for an incumbent, National has little momentum. And it offers less inspiration than might have been anticipated with a greatly expanded caucus and Labour's ragtag coalition.

Brian Rudman: Let taxis use Grafton Bridge to ferry the sick to hospital

From the "Only in Auckland" file. First we concentrate all our public hospital services astride a notorious traffic bottleneck. Then, in an attempt to cure the transport problem, we restrict the times the halt and the lame can travel by car across Grafton Bridge, which just happens to be the most direct route to the hospital for much of Ponsonby, Grey Lynn and parts further west.

Don't get me wrong. I'm all in favour of the planned central transit corridor, the new busway linking the CBD and Newmarket via Grafton. If it's going to cut 14 minutes off the bus travel time of 65,000 people a day, that's wonderful. But surely it shouldn't be done at the expense of those heading off to have their cancers zapped or their prostates tickled.

The plan is to ban cars (including taxis) and trucks, from Grafton Bridge from 7am to 7pm, Monday to Friday, to make it easier for buses and bicycles and emergency vehicles to get through. This means patients from the Western Bays will have to cross through the central city to access Grafton Rd from the bottom of the gully, or take the polar route down Khyber Pass Rd to approach the hospital from the south.

Even to a public transport advocate like myself, this seems a tad purist. Surely the sick could be forgiven for leaving their bikes or bus passes at home in such circumstances and succumbing to a little pampering.

Admittedly, sorting the sick from the cheats driving across Grafton Bridge would be an impossible task. So private cars remain a no-no. But why not let taxis ferry the ill across?

A few stakeouts to catch and punish any taxis abusing the system would soon hammer the message home. Alert Taxis part-owner Paul Cafferkey said last week that having to avoid Grafton Bridge would almost double the fare from the city to the hospital. Being ill is costly and dispiriting enough without this.

The need to have to funnel 2600 buses a day across Grafton Bridge at the expense of other road users is the unsatisfactory compromise you end up with in a city where public transport has lingered bottom of the funding queue for the past 50 years.

This latest incarnation of the CTC, involving busways along Anzac Ave, Symonds St and across Grafton Bridge to Newmarket, is but a pale imitation of a scheme dreamed up during the Christine Fletcher mayoralty.

The original plan involved a light rail-bus corridor from Britomart station up Queen St, along Wellesley St, then across the Grafton Gully motorway on its own bridge, continuing in a tunnel under the hospital - with an underground station there - and on to the western rail line at Boston Rd.

The John Banks council canned this. The Queen St route was abandoned for fear of asphyxiating shoppers with diesel fumes, and the buses directed along Anzac Ave to spew fumes at university students instead.

At the time, Transit New Zealand was in the final design stages of its Wellesley St-Grafton Gully motorway interchange.

The sensible solution would have been to incorporate a passenger transport corridor across the motorway into this design. But such was the dysfunction between local and national transport providers and between road and public transport proponents, that Transit blundered ahead with a roads-only solution.

This left Auckland City and its fading CTC project facing the cost of a new bridge, or the less-than-ideal alternative of retrofitting and hi-jacking historic Grafton Bridge.

As a way of siphoning busloads of commuters rapidly back and forth from the CBD to Newmarket and on to the East and South, it's no doubt a perfectly workable and cheap solution. But nothing's free, and in this case the takeover of two-lane Grafton Bridge by buses is the price.

With the anti-suicide barriers poised to trap the belching bus fumes, pedestrians and cyclists will need free oxygen bowsers at frequent intervals to stand a chance.

As for the sick, the least they deserve is the chance to take a taxi by the most direct route. Not via Hamilton.

Lincoln Tan: How a trip to the zoo sealed a deal to stay in New Zealand

Just as we were contemplating a move to Auckland from Christchurch last summer, I got a job offer in Singapore.

"Take it!" my wife Bee said immediately, tempted at the thought of finally getting some stability back into our lives.

Since our move from Singapore to New Zealand in the late 90s, we had been unable to find work in our respective trades - me a journalist, she a teacher - for our lack of "Kiwi experience" and "Kiwi qualifications". So we ran a cafe in Ponsonby, managed a hotel in Mt Hutt and set up a food court in Christchurch.

While the various businesses kept us afloat financially, they were a far cry from what we could have earned in Singapore.

After Bee bowed out of business following the birth of our second child, she supported my dream of starting my own newspaper so I could continue doing what I enjoy doing in New Zealand, and hopefully make a buck.

Just as she was getting settled in Christchurch with new friends, and with our two kids, Ryan, 6, and Megan, 4, at Cathedral Grammar School, I came up with the idea we should move back to Auckland so my Asian-focused newspaper iBall could stand a better chance of making it big.

"Are you crazy?" Bee said when I first suggested it. But after much convincing, it reached a stage where she was ready to entertain the idea.

Then came the job offer. Stability or no stability, I was not prepared to give up what I had started. We made a deal.

We would make a three-day trip to Auckland and, in that time, if I could convince her that a move north could be better for us, she'd agree - otherwise I'd accept the job offer and head back to the land of our birth.

This was my toughest challenge. If you knew Bee, you might say it was mission impossible.

I've always believed that if you put your heart and soul into doing something you strongly believe in, it will succeed. I was determined to show her that New Zealand was where dreams could be turned into reality - and Auckland was the place.

From the moment our plane landed at Auckland, I started my game plan.

Day 1: The way to an Asian woman's heart is through her stomach. Since we'd left Auckland six years ago, there'd been a boom of Asian restaurants and supermarkets. Food is an Asian obsession, so much so that a usual greeting is, "Have you eaten?"

We went on a food tour - the Asian food courts, restaurants, supermarkets, culminating with dinner at a Japanese restaurant in Parnell.

"So?" I asked , hoping I had won her over. She replied there would be more restaurants, and they'd be cheaper, in Singapore.

I looked to my son Ryan for support: "I prefer McDonald's."

Day 2: Home is where the heart is. I knew she liked the beach, and we had lived at Browns Bay before our move south. I took her for a drive to see coastal homes, but being a pragmatist Bee knew we would not be able to afford these houses, so why bother?

We sold our Browns Bay house in the mid-$300,000s before moving to Christchurch, and to buy it back would cost more than half a million dollars.
Day 3: This is one battle I was clearly not winning. Today the plan was a trip to Auckland Zoo for the kids before we headed to the airport.

I was already dreading the fact that the next time I went to the airport would be to quit New Zealand.

We stood looking at the parrot enclosure, watching the parrots feed while sparrows were flying in and out pinching nibbles.

I sighed and told Bee, "We will be just like the parrots if we went back to Singapore. With all the security, food and shelter, we will be caged in with all the restrictions and controls. Here, we are free like the sparrows."

We moved to the chimpanzee enclosure and I commented that this "could very well be me" back in Singapore, having broken some of Singapore's draconian laws during my time in New Zealand. Organising an anti-racism march in Christchurch, facing up to the mayor for calling me naive and extreme for organising that march and even launching a newspaper could have easily landed me behind bars, or at least facing major lawsuits.

Singapore is run like a great five-star hotel - but sometimes I find it hard to call it home because home is also about emotional ownership, which comes only when one is allowed to speak out - something I have been able to do here.

I was speaking for myself, but as we looked at the cages Bee was seeing it from a mother's perspective. Did she want to deprive our two made-in-New Zealand children, citizens by virtue of birth, of everything that is New Zealand?

On the drive to the airport, we were having a singing competition with the kids. They were singing God Defend New Zealand and we Majullah Singapura (Singapore's national anthem).

As we were parking Bee said: "It's funny how it took animals to help us see the treasures that are New Zealand, treasures that go beyond financial stability. It would be wrong to take the kids out of New Zealand, or New Zealand out of the kids. This is where we belong. You win."

Now is the beginning of a new chapter of my life, and I have my children - and the animals at Auckland Zoo - to thank.

I didn't choose to be born a Singaporean but I did choose to put my roots down here. Sink or swim, our fate is now tied to New Zealand's.

Kevin Woods, James Lacey and Williamson Murray: Why Saddam thought he could win

Throughout the years of relative external peace for Iraq after Operation Desert Storm, in 1991, Saddam Hussein received optimistic assessments of his regime's prospects from his top military officers.

Deputy Prime Minister Tariq Aziz described Saddam as having been "very confident" that the United States would not dare to attack Iraq, and that if it did, it would be defeated.

What was the source of Saddam's confidence? Judging from his private statements, the single most important element in Saddam's strategic calculus was his faith that France and Russia would prevent an invasion by the United States, believing in a nexus between their economic interests and his own strategic goals.

According to his personal interpreter, Saddam also thought his "superior" forces would put up "a heroic resistance and ... inflict such enormous losses on the Americans that they would stop their advance".
When the coalition assault did come, Saddam clung to the belief that the Americans would be satisfied with an outcome short of regime change.

An internal revolt remained Saddam's biggest fear. On this basis, Saddam planned his moves.

For example, according to the commander of Iraq's Air Force, Hamid Raja Shalah, Saddam reasoned that the Iraqi Air Force's equipment was useless against coalition Air Forces. Consequently he decided to save the Air Force for future needs and ordered his commanders to hide their aircraft.

When it came to weapons of mass destruction, Saddam attempted to convince one audience that they were gone while simultaneously convincing another that Iraq still had them.

According to Ali Hassan al-Majid, known as "Chemical Ali", Saddam was asked about the weapons during a meeting with members of the Revolutionary Command Council.

He replied that Iraq did not have WMD but flatly rejected a suggestion that the regime remove all doubts to the contrary, going on to explain that such a declaration might encourage the Israelis to attack.

By late 2002, Saddam had tilted towards trying to persuade the international community that Iraq was co-operating with the inspectors of the UN Special Commission and that it no longer had WMD programmes.

But after years of obfuscation, it was difficult to convince anyone that Iraq was not once again being economical with the truth. And when UN inspectors went to some locations, they discovered lingering evidence of WMD-related programmes.

In 2002, therefore, when the United States intercepted a message between two Iraqi Republican Guard Corps commanders discussing the removal of the words "nerve agents" from "the wireless instructions", US analysts viewed this information through the prism of a decade of prior deceit.

They had no way of knowing that this time the information reflected the regime's attempt to ensure it was in compliance with UN resolutions. This tidbit was cited as an example of Iraqi bad faith by US Secretary of State Colin Powell in his February 5, 2003, statement to the United Nations.

Another factor reduced Iraq's military effectiveness: sanctions. For more than a dozen years, UN sanctions had made it difficult for Baghdad to buy new equipment or fund adequate training for the military.

Saddam created the Military Industrial Commission as a means to sustain the military. The commission and a series of subordinate organisations promised new capabilities to offset the effects of poor training, poor morale and neglected equipment.

One senior Iraqi official has alleged that the commission's leaders were so fearful of Saddam that when he ordered them to initiate weapons programmes that they knew Iraq could not develop, they told him they could accomplish the projects with ease.

Later, when Saddam asked for updates on the projects, they faked plans and designs to show progress.

This constant stream of false reporting undoubtedly accounts for why many of Saddam's calculations on operational and political issues made perfect sense to him.

Bending the truth was particularly common among the most trusted members of Saddam's inner circle. A 1982 incident vividly illustrated the danger of telling Saddam what he did not want to hear.

At one low point during the Iran-Iraq War, Saddam asked his ministers for candid advice. The Minister of Health, Riyadh Ibrahim, suggested that Saddam temporarily step down and resume the presidency after peace was established. The next day, pieces of the minister's chopped-up body were delivered to his wife.

According to Abd al-Tawab Mullah Huwaysh, the head of the Military Industrial Commission and a relative of the murdered minister, "This powerfully concentrated the attention of the other ministers, who were unanimous in their insistence that Saddam remain in power."

After the war, several military commanders commonly noted four other factors that affected military readiness:

1. Irrelevant guidance: A close associate once described Saddam as a deep thinker who lay awake at night pondering problems at length before inspiration came to him in dreams. These dreams became dictates the next morning, and invariably all those around Saddam would praise his great intuition.

All of the evidence demonstrates that he made his most fateful decisions in isolation. He decided to invade Iran, for example, without any consultation with his advisers and while he was visiting a vacation resort.

2. The rise of paramilitary forces: After the Shiite and Kurdish uprisings of 1991, the threat of another uprising consistently remained Saddam's top security concern. One of the precautions he took was to create private armies made up of politically reliable troops: the Saddam Fedayeen, the al-Quds Army and the Baath Party militia.

These organisations actually worsened national security by making Army recruitment more difficult and by stripping the military of needed equipment. And when they eventually went to battle against the coalition forces, they were obliterated.

3. Relatives and sycophants: Saddam truly trusted only one person: himself. As a result, he concentrated more and more power in his own hands. No single man could do everything, however; forced to enlist the help of others, Saddam used a remarkable set of hiring criteria.

As one senior Iraqi leader noted, Saddam selected the "uneducated, untalented and those who posed no threat to his leadership for key roles".

Always wary of a potential coup, Saddam remained reluctant to entrust military authority to anyone too far removed from his family or tribe. As a result, in 2001 he placed Qusay Hussein as head of the Republican Guard, making his youngest son the commander of Iraq's most elite combat units - even though Qusay's military experience was limited to a short stint at the Iranian front in 1984, where he had experienced little if any real combat.

4. Security and command limitations: The commander of the Baghdad Division of the Republican Guard provided an example of how hard it was to function: "In the Republican Guard, division and corps commanders could not make decisions without the approval of the staff command.

"Division commanders could only move small elements within their command. Major movements such as brigade-sized elements and higher had to be requested through the corps commander to the staff command.

"This process did not change during the war and in fact became more centralised."

Military commanders also had to contend with at least five security organisations, including the Special Security Office, the Iraqi Intelligence Service, the General Military Intelligence Directorate and various security service offices in the Republican Guard bureaucracy.

Moreover, the number of security personnel in each of these organisations increased dramatically after 1991. In many cases, new spies were sent to units to report on the spies already there.

The Second Republican Guard Corps commander described the influence of the internal security environment on a typical corps-level staff meeting: "First a meeting would be announced and all the corps-level staff, the subordinate division commanders and selected staff, as well as supporting or attached organisations and their staffs, would assemble at the corps headquarters.

"The corps commander had to ensure then that all the spies were in the room before the meeting began so that there would not be any suspicions in Baghdad as to my purpose.

"I spent considerable time finding clever ways to invite even the spies I was not supposed to know about."

* Kevin Woods is a defence analyst in Washington. James Lacey is a military analyst for the US Joint Forces Command. Williamson Murray is a distinguished visiting professor of history at the US Naval Academy.
A full copy of the report is available at the Foreign Affairs website.

Gwynne Dyer: Burning the bridges to Iran

The draft resolution on Iran's nuclear activities that the United States, Britain and France presented to the United Nations Security Council last Wednesday is designed to fail.

By making it a Chapter Seven resolution (one that is mandatory under international law and can be enforced by sanctions or even by military action), the authors have guaranteed that it will ultimately face a veto by Russia and China, neither of which is convinced that such extreme measures are necessary.

They are not necessary, but this resolution burns the bridges on further negotiations (not that the US was willing to talk directly to Iran anyway), and there have been heavy hints in Washington of military action against Iran.

If President Bush follows the same path that he took into Iraq, a "failure to act" by the Security Council is the necessary preliminary to an attack on Iran.

Such an attack would make no military sense, but American foreign policy is still in the hands of neo-conservatives whose mantra used to be that "the boys go to Baghdad, the men go to Tehran".

Even if Iran intends to build nuclear weapons eventually, there is no urgency. As Robert Joseph, US Undersecretary of State for arms control, said in March, the US intelligence community believes that Iran is "five to 10 years away from a nuclear weapons capability".

Attacking Iran is also a military nightmare for American strategic planners.

Former White House counter-terrorism chief Richard Clarke pointed out last month that the Clinton Administration also contemplated a bombing campaign in the late 1990s, but "after a long debate, the highest levels of the military could not forecast a way in which things would end favourably for the United States".

Even US air strikes that killed Iranian nuclear specialists (plus many hundreds of civilians) would only set Iran's programme back a couple of years.

And a land invasion is out of the question: the US Army is already stretched too thin by Iraq.

Iran may be able to close the Gulf to oil traffic - its sea-skimming and underwater anti-ship missiles are good enough to give the US Navy a run for its money.

It could tip the world's oil markets into turmoil just by withholding its own oil exports. And it could set southern Iraq on fire by mobilising its Shiite allies there.

So Iran is unfazed by US threats. Indeed, it chose last week to launch its new Oil Stock Exchange, an upstart rival to the London and New York exchanges where almost all the world's exported oil is currently traded.

This will involve the establishment of a new Iranian "marker" crude, and probably the denomination of its price in euros, not in US dollars. There seems to be no fear of the US reaction.

The prediction that this new oil bourse would attract an avalanche of customers eager to get out of US dollars and lead to the downfall of that currency was always vastly exaggerated.

Contracts made under Iranian law are unattractive to the world's big traders, and the market will struggle to find its feet at first.

But Tehran is aware of the conspiracy theorists who say the US invaded Iraq to punish Saddam Hussein for demanding that his oil be paid for in euros, and warn that Iran may face a similar fate. It doesn't give their warnings a second thought.

Iran will not back down, and neither will the United States. The crash is probably still many months away, but these two countries are on a collision course.

So it may be a good time to reconsider the question of what capabilities Iran is really seeking with its nuclear programmes.

Iran's nuclear weapons programme was started by the Shah, but cancelled by Ayatollah Khomeini after the 1979 revolution because weapons of mass destruction were "un-Islamic".

It is not known when it started up again, but it certainly didn't go into high gear until the late 1990s, probably in response to the Pakistani nuclear weapons tests of 1998.

For although Pakistan is a safe neighbour under its current regime, Shiite Iranians worry about what might happen if the Sunni extremists who are also present in considerable numbers, even in the Army, ever gained power in Pakistan.

Iran's activities nevertheless remained legal under the Nuclear Non-Proliferation Treaty, since all the early steps towards a nuclear weapons capability - essentially, developing the ability to enrich uranium or to reprocess plutonium - are identical to those you would take if you just wanted to have the full fuel cycle for civilian nuclear power generation under your own national control.

And if Iran's major goal is the ability to deter attack if Pakistani nuclear weapons fall into the wrong hands, it is probably only seeking a "threshold" nuclear weapons capability for now: that is, to get to the point where it could build the actual weapons in six months or so, if the local strategic situation suddenly went bad.

There are many other counties with this kind of "threshold"capacity, from Japan and Brazil to Sweden and South Africa.

It's a perfectly legal position to occupy, and given that Iran lives under the shadow of Israeli, American, Russian and Indian nuclear weapons as well as Pakistani ones, it's not unreasonable for Tehran to want to get there.

There is obviously a diplomatic deal to be made here, if anybody's interested.

* Gwynne Dyer is a London-based independent journalist whose articles are published in 45 countries.

David Skilling: Domestic capital key to prosperity

Over the past 15 years New Zealand has pursued a hands-off policy approach to personal savings.

This is based on the twin beliefs that people make systematically rational savings decisions and that the Government has no interest in the aggregate outcomes that are generated such as the current account deficit or the strength of capital markets.

New Zealand has been more or less alone among developed countries in holding to these beliefs. And it has become increasingly clear that this pursuit of purity has come at a very real cost.

New Zealand's household savings rates are the lowest in the OECD at minus 7 per cent of household income, and as a consequence the country is heavily reliant on importing capital from foreign savers.

This reliance on foreign capital is reflected in New Zealand's current account deficit of 9 per cent of GDP, one of the largest in the OECD, and in one of the largest net external liabilities in the developed world.

The current account deficit is driven largely by the investment income deficit in New Zealand, currently 7 per cent of GDP, reflecting the lack of domestic New Zealand savings.

New Zealand is in uncharted territory in running a current account deficit of this size.

The rule of thumb has been to treat a current account deficit of more than 5 per cent of GDP as dangerous.

There are many costs and risks associated with such a large deficit, such as a high cost of capital and vulnerability to changes in investor sentiment. There has been much recent comment in the Economist and the Financial Times about the risks associated with the high current account deficits in small countries like Iceland and New Zealand.

Currencies like our dollar have been supported by "carry trades" in which capital is attracted by the high interest rates that are offered. When this process unwinds, there is the potential for a substantial depreciation in the currency and slower rates of economic growth.

Mitigating these risks is sufficient motivation in itself to take action to raise household savings. Concern about Australia's current account deficit, captured in Paul Keating's famous "banana republic" comment, was a key driver in the establishment of Australia's compulsory savings scheme. But the case for action does not rest simply on demonstrating that serious risks exist.

The more important reason for taking meaningful action to raise savings is to strengthen the economy. Even if a crisis is not thought likely, configuring policy to increase household savings should be a key economic policy priority because of the economic upside this will generate.

First, an increased pool of domestic capital means that New Zealanders will have a larger ownership stake and will obtain a greater portion of the returns generated in the economy.

Since New Zealand has been heavily dependent on foreign capital to finance spending and investment, the economy has a high level of foreign ownership and as a consequence, we exported about $13 billion, or 8 per cent of GDP, to foreign investors in 2005.

For this country to benefit from the success of New Zealand companies as they grow and expand into international markets, a greater ownership stake is vital. It may be that many New Zealand companies are able to obtain capital on global capital markets, but the returns flow offshore to reward the investors who have put up the capital.

Ultimately, it is ownership that drives wealth. New Zealand cannot spend its way to prosperity on the back of foreign credit. Second, for a small, remote economy like ours, a deliberate focus on raising savings is needed to make New Zealand a more attractive place for companies to locate.

There will always be pressure for companies to move from New Zealand to larger markets, but having deep, liquid capital markets will help to counter this agglomeration pressure.

Generating a domestic pool of capital will strengthen New Zealand's capital markets, lead to more aggressive pricing of companies, and provide expansion capital for large and small New Zealand companies. These factors will help to anchor companies here as they expand their operations internationally.

Without a greatly increased level of savings, New Zealand is likely to become an increasingly peripheral economy.

This country will continue to struggle to hold on to New Zealand companies as they grow.

Becoming a "branch office economy" may not be catastrophic, but neither is it conducive to creating a New Zealand economy that can generate high rates of income growth into the future that will enable this country to converge to the income levels of Australia and other developed countries. Our economic future will be much brighter if we increase savings.

Given New Zealand's current savings performance and the importance of increasing savings, it is time to rethink our current policy approach to savings.

It is instructive that Australia's outcomes look very different after 15 years of a very different approach to savings policy.

The Australian compulsory superannuation scheme is widely credited as having been the major factor driving the growth in their capital markets, and has assisted Australian firms to aggressively expand internationally as well as supporting robust economic growth.

Australia's private pension funds under management are currently about $840 billion (compared to $30 billion in New Zealand), are growing at over $100 billion a year, and are projected to approach $3 trillion within the next decade.

The debate in Australia is about the difficulties of having too much capital to fund domestic investment opportunities - not a conversation heard frequently in New Zealand.

After 15 years of these different policy approaches, the evidence is increasingly clear that our approach to savings is not delivering good outcomes. Indeed, policy neglect with respect to personal savings has made us unique in the OECD, and it is unlikely to be a coincidence that we have both the most hands-off approach to savings in the OECD and also among the worst outcomes.

If we continue the current approach, we will remain exposed to serious risks and more importantly the economy will not be strong enough to hit its full growth potential.

New Zealand should learn from countries like Australia and Singapore which have benefited enormously from a more deliberate approach to savings. In this context, the Government deserves credit for introducing the KiwiSaver scheme, even if it only has a modest effect on savings.

Something much bolder is required to respond to the challenges and opportunities described above.

The KiwiSaver scheme does, however, provide a platform on which to build a much more ambitious savings scheme. There is growing awareness of the need for action, and there is a window of opportunity to respond with a strong fiscal position, corporate profitability, low unemployment, and strong wage growth.

But to convert this concern into action, political leadership is required. We need to seize this opportunity with both hands and not squander it as we have in the past.

* Dr David Skilling is chief executive of the New Zealand Institute, a policy think tank comprising business, community and education leaders.

Mark Peart: It's too easy to take water for granted

Until just over a year ago the sum total of my knowledge about water allocation could neatly and squarely occupy the space on the back of a postage stamp.

Then, kicking and screaming and struggling, I was assigned to cover the Waitaki catchment water allocation process. I thought it would be a nine-day wonder and I could move onto other things.

It wasn't and I didn't. Now, you could fit what I know about the mechanics of water allocation on to the back of two postage stamps.

However, you could also now assemble what I've learned about the politics of water and water allocation on the back of several sheets of postage stamps, or maybe even incorporate it into a small book.

Water allocation is an undeniably fraught, complex, and highly politicised science, as the members of the Government-appointed Waitaki catchment water allocation board learned only too well last year.

Competing and conflicting interests abound; farmers, irrigators, electricity companies, recreational users, conservationists, everyone wants their share. Inevitably there will be winners and losers.

It's human nature to take fresh, clean, water for granted. We turn on the tap and out flows the elixir of life, unsullied and unadulterated (hopefully).

It's like flicking on a light switch. It isn't until the bulb blows, or the fuse, that we appreciate just how fragile our existence is without essential utilities.

In a country like New Zealand dominated by alpine regions, water supplies appear to be limitless. Yet they are not.

It is unsurprising then that dairy farmers have been the most vocal in their reaction to the Government's recently released blueprint for sustainable water management.

The Sustainable Water Programme of Action is taking a wide-ranging look at water management, including studying alternatives to first-in-first-served water allocation mechanisms and how the transfer of consents to use water can be improved.

Farmers have a history of claiming first dibs on the use of freshwater resources. They would argue their economic livelihood, and through agricultural exports a large part of the nation's livelihood, depends on it.

The leader of the Dairy Environment Review Group, Jon Penno, said last month: "A whole lot of farmers ... don't want or need further regulations or rules that just roll out and make farming less viable."

That's probably right. But in this wider debate about sustainability, should farmers have the dominant say and the overriding influence?

Water is one of those resources which no one, not even the Crown, should claim ownership of. Sure, the Crown has de facto responsibilities for its prudent management and stewardship. But it doesn't own it.

Penno said the Government's programme and a strategy released recently by his group for protecting the environment had many points of agreement. Dairying clearly needed to use water "in a way that the wider community believes is acceptable".

The wider community didn't consider it acceptable when dairy giant Fonterra, a farmer-owned co-operative, was found to be polluting the Clutha River near its Stirling cheese factory in south Otago this year. The Otago Regional Council and Fonterra now have a revised agreement to remedy the problems at Stirling. And so they should. It took an awful lot of bad press nationwide to make Fonterra face up to its responsibilities.

The Government, for its part, needs to ensure it doesn't start brandishing the big regulatory stick too vigorously.

Hopefully common sense will prevail and the parties can agree without a vital resource being used as a political football.

From now on, I will bow to the kitchen sink in awed reverence every time I go to fill my glass with filtered water and contemplate the challenge we face not to squander and waste it.

* Mark Peart is a Dunedin-based freelance writer.

Jim Eagles: Around the world by blog

The idea for what was probably the world's first internet travel diary was cooked up in a spa pool on Stanley Pt on Auckland's North Shore on a fine January night five years ago.

Freshly arrived from Britain, Dominic and Sharon Stow installed a spa pool in their new home - "because that's what Kiwis do, isn't it?" - and sat back in the warm water to ponder the meaning of life.

Keen travellers, they recalled some of their trips together and bemoaned the fact that while they'd sent lots of newsy emails to family and friends they had no record themselves.

Maybe it was the inspiration of the starry night but Dominic, a software engineer, suddenly came up with the idea of a website where travellers could post their travel diaries for contacts to read and remain a permanent record.

"The more we talked about it the more brilliant it seemed. Ideas just came pouring out. You could post your photos. The site could automatically notify your contacts by email whenever you added a new report. There could be an interactive map so you could trace your journey. We could create personalised e-vaults where people could record secure information like passport numbers and travel insurance details. It was amazing."

It took a while to transform that idea into reality - "because I had a real job and I go windsurfing so the website was written on wet days when I wasn't working" - but by mid-2002 Backpackersdiary went live.

These days blogs are commonplace and there are several travel diary websites but then the concept of posting information on the internet was still in its infancy.

"If I'd taken the idea and run with it when it was new maybe I'd have made a fortune," says Dominic now, "but that wasn't the object of the exercise.

"I just wanted to create somewhere people could record their journeys, let friends know what they were doing - maybe do a bit of online gloating - exchange ideas and get useful information. And that's still what I'm doing."

These days remains a low-key operation, promoted only by electronic word of mouth, which Dominic manages in his spare time.

The site includes all the features he first thought about during his epiphany, plus a few extras like global weather and currency information, but the main thrust is still to allow travellers to record their words, photos and maps, to be shared with friends and preserved for future reminiscences.

Once you've registered you just sign in through an internet cafe or laptop, write your journal, download photos, update the trip map and ask for your contacts to be told there's a new chapter waiting to be read.

It is free, though you will have to pay if you want to store more than 1Mb of photos or to take advantage of a link which allows mobile phone text messaging.

It also remains non-commercial, though he is thinking about trying to find sponsors from the travel industry.

It has around 500 regular users, who send details of their travels to some 2000 contacts, and is expanding by half-a-dozen a day.

"Most of the users are in Britain, Singapore, Australia, New Zealand and the US," he says, "but I am starting to get more from Asia.

"For instance," he adds, checking his laptop, "today I've had people sign up from Indonesia, India, Britain and US ... and here's one from the Philippines, there's quite a few starting to come in from there."

Although the travel blog scene is getting crowded Dominic reckons his is still cutting edge. "I think this is the only free blog offering a secure e-vault for storing personal information and I don't know of any others offering a text message link."

And he is keen to keep it that way. "There are a lot of features I'm working on adding, mainly to take advantage of new technology, like using GPS to update locations or letting people send data and pictures from mobiles.

"I certainly don't make money out of the site. In fact if you were to cost out the hours I put in it would be costing me a lot. I still enjoy it, it's fun to run, and I get a real kick out of knowing there's a lot of people out there using my site to exchange their stories around the world which is what the internet is all about."

Tony Watkins: Rates system past its use-by date

Asking someone if they want the blue door, the red door or the green door is an old and transparent way of avoiding asking them if they want the door.

The whole point of long-term planning is that it provides an opportunity to ask fundamental questions. In the short term you paint the door; in the long term you ask if you still need the door.

In the short term you admit that our property-based rating system has passed its use-by date. In the long term you ponder what you are going to do about it.

The concept of everyone paying rates based on the value of their property made good sense when New Zealand was an egalitarian society with every citizen having the reasonable expectation of owning, and possibly even building, their own home.

Those times have gone, and a gulf has opened between rich and poor. Houses have become investments. We now have a property market, but not everyone is a player.

Those who want a home rather than a house, and those who love living in a place where they belong, are driven out by a process which has nothing to do with them. The injustice needs to be addressed.

Mayor Dick Hubbard put it succinctly when he suggested that the good news about alternatives to our rates-based method of financing local government is that central Government is trying to work out solutions, while the bad news is that in spite of all the reports no progress has been made.

One possible alternative to rates lies within the endlessly repeated conventional wisdom that everyone wants a low valuation to reduce their rates, and a high valuation so they can profit from capital gains.

Property sales could be "rated". Every time a property is sold, about 20 per cent of the sale price could be taken by the council. This alternative would reflect an actual rather than a theoretical ability to pay.

It could be argued that any sale price reflects not only the value of the property itself but also the value of council infrastructure and services which provide a context for the property. The council would be merely taking its due and would no longer need to subsidise those making a profit from the property market.

In one sense this process already exists. Real estate agents, lawyers and financiers benefit from every sale, and if the property turns over regularly the yield can be considerable.

Achieving a high price would fuel another round of inflation which in turn would increase the rates take. Inflation adjustment of rates could be a thing of the past.

Those who felt this system was unjust could simply decide not to sell. In a political sense people would be empowered because they would be able to take control of their own lives.

If the result was more stability in our population that would be an enormous social benefit.

A world-class city knows its stories and respects the keepers of its unique traditions. At the United Nations Cities Summit in Istanbul, placelessness was identified as the most important issue for cities in our time. Placelessness leads to lack of commitment at best and violence at worst. Sustainable development means sustaining and developing our whakapapa.

Good footpaths do not make good communities. Good communities make good footpaths. We need a method of financing which will build good communities.

It would be a simple move to leave behind a tax on a theoretical but unrealised value and to replace it with a tax on realised profit.

Rates rebates may alleviate inequity but they fail to address the real issues.

Auckland City Council needs to take the lead in approaching central Government.

A world-class city will never result from the inaction of providing the right answer to the wrong question.

* Tony Watkins is a ratepayer with more than 30 years' experience in planning.