NOTE: CAPTIONS COMPUTER GENERATED USING OCR FROM DVB-SUBPICTURES. CA. OAPTIONSWEREMADEPOSSIBIE WITH FIIIDING FROM NZONAIR. NOTE: CAPTIONS COMPUTER GENERATED USING OCR FROM DVB-SUBPICTURES. CA. LooPvnueo-rrmmmq NOTE: CAPTIONS COMPUTER GENERATED USING OCR FROM DVB-SUBPICTURES. CA. GOOD MORNING AND WELCOME TO THE NATION. I'M LISA OWEN. THIS MORNING, IS THE FARM RUNNING DRY? FONTERRA FRONTS UP. THE BIGGEST RISKS ARE WHAT IS GOING TO HAPPEN AROUND THE RUSSIAN SITUATION AND WHAT IS GOING TO HAPPEN IN THE MIDDLE EAST. AND THEN THERE'S CHINA'S DETERMINATION TO BEAT US AT OUR OWN DAIRYING GAME. SO JUST HOW WORRIED SHOULD WE BE ABOUT NZ'S ECONOMIC FUTURE? FONTERRA BOSS THEO SPIERINGS, THE MAN ULTIMATELY RESPONSIBLE FORA QUARTER OF NZ' EXPORTS, JOINS ME TO DISCUSS FOREIGN LAND OWNERSHIP, DIRTY RIVERS AND EBOLA. THEN - FANS OF THE TRANS-PACIFIC PARTNERSHIP SAY IT'LL MAKE US RICH; CRITICS, THAT lT'LL MAKE US AMERICA'S PAWNS. AS NEGOTIATORS ARRIVE IN AUSTRALIA, TORBEN AKEL EXPLAINS THIS KING KONG OF A TRADE DEAL. LATER - GANG LEADER JAMIE PINK IS A 'FEED THE KIDS' VIGILANTE. ONCE A HUNGRY CHILD AND AN ANGRY YOUNG MAN, HE NOW MAKES SANDWICHES FOR WAIKATO KIDS. I SO WHATS HIS MESSAGE FOR JOHN KEY? I I THE RETURN ol= CORBETFAND EGO. I AND ON OUR PANEL, HELEN KELLY, BERNARD HICKEY AND HEATHER ROY. THANKS FOR SHARING SOME OF YOUR LABOUR WEEKEND BREAK WITH US. I IF YOU'VE GOTAN OPINION To SHARE... l IT'S ONE OF THE MAIN ENGINES OF THE NZ ECONOMY, BUT IS DAIRY POWERHOUSE FONTERRA RUNNING OUT OF GAS? COULD FOREIGNERS BE STEALING THE COW THAT GIVES THE GOLDEN MILK? AND AS MORE AND MORE FARMS CONVERT TO DAIRY, HAVE WE REACHED PEAK COW? OUR LARGEST COMPANY HAS BEEN HIT WITH A NEAR 50% SLUMP I m DAIRY PRICES THIS PAST YEAR I AND SLASHED ITS MILK PAYOUT FORECAST TO A SIX-YEAR LOW. THE MAN AT THE HELM OF NZ'S LARGEST COMPANY, THEO SPIERINGS, WAS IN THE STUDIO EARLIER, AND I BEGAN BY ASKING WHY BANK ECONOMISTS DON'T THINK EVEN THE REVISED FORECAST IS REALISTIC. BUT THAT, LISA, IS WHERE I REALLY DISAGREE WITH BANKS, BECAUSE IT'S VERY EASY TO LOOK BACKWARDS FOR ONE OR TWO MONTHS AND THEN EXTRAPOLATE THAT LINE GOING FORWARD, BUT THAT'S NOT FORECASTING. SO WHAT I'M DOING IS WE ARE WHERE WE ARE. WE KNOW OUR DEMAND POOLS, WE KNOW THE SUPPLY POOLS, SO FORECASTING MEANS FROM TODAY, NOT LOOKING BACKWARDS. IF I LOOK AT THE LAST FOUR GDT EVENTS AND I LOOK FORWARD, I MIGHT LAND ON A FIGURE STARTING WITH A FOUR, BUT I HAVE TO FORECAST BASED ON WHAT DO I SEE ON SUPPLY, WHAT DO I SEE ON DEMAND. SO THAT'S WHERE- SO HOW CONFIDENTARE YOU THAT YOU'RE RIGHT? GIVE ME A PERCENTAGE - HOW CONFIDENT? I IT'S STILLA FORECAST, I I BUT EVERYBODY IN THE WORLD KNOWS - I AND I'M TALKING TO MILK TRADERS BUT ALSO ALL THE MILK COMPANIES - AVERY FAIR PRICE LEVEL FOR DAIRY IS 3500, SO WE'RE WAY BELOW THAT PRICE POINT RIGHT NOW. I SO WE WILL COME BACK TO THAT LEVEL, I WHETHER IT'S IN FOUR MONTHS OR IN SIX MONTHS, I BUT WE wll.l. GET BACK THERE. I BUT YOU THINK DEFINITELY BY SIX MONTHS, YOU WILL BE ON THE UP? THAT IS IN OUR FORECAST RIGHT NOW, SO THE LAST GDT EVENT FOR MILK PRICE PRODUCE WAS SLIGHTLY UP. SO LET'S SEE IF CHINA COMES BACK, AND THEY WILL COME BACK IN DECEMBER, I THEN WE WILL LOOK AT BETTER PRICES. I SO VVHAT DO YOU THINK ARE THE BIGGEST RISKS FOR YOU RIGHT NOVV AND IN THE NEXT YEAR? WHATARE THE BIGGEST RISKS FOR YOU ACROSS THE GLOBE? THE BIGGEST RISKS - LOOK, CHINA IS STABLE, AND CHINA MIGHT SHOWA LITTLE BIT LESS GROWTH, BUT THATS FROM A 6% VOLUME GROWTH TO A4% VOLUME GROWTH, I AND ll"s STILL STRONG. I SUPPLY ONLY GROWS BY 2%, SO THAT GAP IS INCREASING. I so CHINA ls STABLE. I THE BIGGEST RISKS ARE REALLY WHAT IS GOING TO HAPPEN AROUND THE RUSSIAN SITUATION AND WHAT IS GOING TO HAPPEN IN THE MIDDLE EAST. I so ll"s MORE GEOPOLITICAL. I AND, LOOK, ALL THE SUPPLY POOLS, WE CAN TRY TO MAKE A FORECAST, BUT THAT'S KIND OF THE WEATHER FORECAST. IF YOU HAVE ONE WEATHER EVENT IN ONE MILK POOL, SO IF EL NINO HITS OR WHATEVER, THEN ONE SUPPLY POOL WILL BE AFFECTED, YEAH. IF DEMAND IS STRONG, PRICES WILL COME UP VERY FAST. THE MIDDLE EAST AND AFRICA ARE IDENTIFIED AS A GROWING MARKET FOR YOU. YOU'VE MENTIONED EBOLA. WHAT IMPACT COULD THAT HAVE FOR YOU? WHAT YOU SEE IS THAT COUNTRIES ARE LOCKING DOWN THEIR BORDERS, I so THAT LIMITS us LOGISTICALLY. I SO WEST AFRICA - MOVEMENTS IN WESTAFRICA BECOME MORE AND MORE DIFFICULT, SO THAT LIMITS MOVEMENT OF FOOD AS WELL, MOVEMENT OF PEOPLE - PEOPLE GOING TO THE MARKET, DOING THEIR GROCERIES - SO YOU SEE DEMAND REALLY DROPPING PRETTY FAST. AND EBOLA- THE QUESTION IS CAN IT BE CONTAINED QUICKLY, BUT IT DOESN'T FEEL TO ME LIKE THAT IT IS UNDER CONTROLAT THE MOMENT, I AND I'M SAYING IT MILDLY. I SO HOW WORRIED ARE YOU ABOUT THAT? AND I'M SAYING IT MILDLY. SO HOW WORRIED ARE YOU ABOUT THAT? I'M QUITE WORRIED ABOUT IT, YEAH. I'M WORRIED ABOUT IT, AND I'M WORRIED THAT IT WILL SPREAD, BECAUSE I'VE LIVED IN WEST AFRICA, AND IT'S VERY DIFFICULT TO CONTAIN AN EBOLA VIRUS OR WHATEVER VIRUS TO A CERTAIN REGION BECAUSE PEOPLE ARE USED TO TRAVELLING, CROSSING BORDERS. ITSA HEAVILY POPULATED REGION. SO POTENTIALLY, WHAT IMPACT COULD THAT HAVE ON YOU AND FONTERRA'S BUSINESS? I MEAN, IF WESTAFRICAN DEMAND WOULD SLOW DOWN OR DROP OFF, YOU'RE TALKING ABOUT 100,000 TONNES OF POWDER VERY VERY QUICKLY, RIGHT. I AND WHAT noes THAT MEAN m MONEY? I THAT IS OF OUR TOTAL, THAT IS ABOUT... I YOU TALK- LET ME QUICKLY THINK. I I THAT'S ABOUT 5%, 6% OF OUR EXPORTS. I SO YOU TALK, YEAH, 150 MILLION OR SOMETHING LIKE THAT, YEAH. I SO HUGE CONSEQUENCES FOR YOU? I I THOSE ARE ans CONSEQUENCES, I BUT THAT'S WHY WE ARE CONSTANTLY LOOKING AROUND THE GLOBE - I WHERE ARE THE OPPORTUNITIES? I NOW THERE'S OPPORTUNITIES, FOR EXAMPLE, IN THE US, ARBITRAGE OPPORTUNITIES WITH BUTTER - I VERY men PRICES. I I WE CAN COME m WITH OUR PRICES. I I so WE use THAT OPPORTUNITY. I SO YOU'RE TALKING THERE ABOUT DIVERSIFYING YOUR MARKETS, BUT SO MUCH OF OUR WEALTH AS A COUNTRY IS DEPENDENT ON CHINA'S GROWTH AT THE MOMENT. BUT THAT IS A COUNTRY WHERE THE GOVERNMENT IS AGGRESSIVELY ENCOURAGING THE GROWTH OF ITS OWN DAIRY INDUSTRY. I DOES THAT KEEP YOU AWAKE AT NIGHT? I I No, NO, BECAUSE- OF COURSE, I THAT THEY DEVELOP THEIR OWN DAIRY INDUSTRY, IN MY OPINION, THAT'S EVEN GOOD BECAUSE THAT IS, IN MY OPINION, FROM A FOOD SAFETY QUALITY PERSPECTIVE, NUMBER ONE. IF YOU LOOK AT FROM 2008, MELAMINE, TILL NOW, THE CHINA MILK POOL WAS 35 BILLION LITRES AND STILL IS 35 BILLION LITRES BECAUSE OF FOOD SAFETY ISSUES BUT ALSO BIOSECURITY ISSUES. SO EFFECTIVELY YOU SEE A FLAT LINE, AND YOU'VE SEEN DEMAND GROWING. THE GAP IN CHINA BETWEEN SUPPLY AND DEMAND NOW IS 1O BILLION, AND WE'RE EXPECTING BY 2020 TO BE 2O BILLION, AND THEY ARE GOING TO RELY- IN SAYING THAT, THOUGH, ONE AUSTRALIAN DAIRY BOSS HAS SAID THAT CHINA SHOULD BE - THOSE WERE HIS WORDS - SELF-SUFFICIENT IN DAIRY IN THE NEXT FIVE YEARS BECAUSE AUSTRALIA IS SELLING THEM LIVE DAIRY COWS, AND WE'RE DOING THE SAME THING, AREN'T WE? WE DO THE SAME THING, BUT DAIRYING IS NOT ONLYABOUT COWS. FIRST OF ALL, YOU NEED TO HAVE A PIECE OF LAND WHICH IS SUITABLE FOR DAIRYING, I AND PROBABLY THE MOST SCARCE-I SO YOU'RE SAYING THERE'S A SKILLS ISSUE THERE AS WELLAND LAND, BUT DO YOU THINK THAT THEY COULD REACH THAT SELF-SUFFICIENCY WITHIN FIVE YEARS IN TERMS OF DAIRY? IF THEY WOULD HAVE A SINGLE-MINDED FOCUS ON DAIRY, I'M NOT GOING TO SAY TO YOU THAT THEY CAN'T, BECAUSE THEY CAN. BUT THEY HAVE MANY OTHER PRIORITIES, LIKE THE MEAT INDUSTRY. I PIG FARMING ls MASSIVE. I IF THE CHINESE GOVERNMENT HAS TO CHOOSE WHATARE WE GOING TO DO - PIG FARMING OR DAIRY- THEY WILL CHOOSE PIG FARMING BECAUSE THAT'S PART OF THE STAPLE- BUT IF THEY DO TAKE AN AGGRESSIVE APPROACH OR A SINGLE-MINDED APPROACH, AS YOU SAY, I WHERE DOES THAT LEAVE YOU? I I THINK THAT THE RELATIONSHIP BETWEEN CHINAAND OUR COUNTRY I HERE ls EXTREMELY STRONG, I SO THERE IS A VERY STRONG GOVERNMENT-TO-GOVERNMENT RELATION. I'M VERY CLOSE, BUSINESS TO GOVERNMENT. WE DO TALK TO GOVERNMENT AS WELL. WE SEE THE DYNAMICS IN CHINA. THEY ARE NOT ADAMANT ABOUT SELF-SUFFICIENCY. THEY ARE ADAMANT ABOUT PEOPLE LIKE US DEVELOPING THE MILK POOL AND FROM A FOOD SAFETY QUALITY PERSPECTIVE AND LOCAL PARTNERSHIP. BUT IF THEY DEVELOP THEIR OWN RESOURCES, THERE'S LESS OPPORTUNITY FOR US, LESS BUSINESS FOR US. THERE'S POSSIBLY LESS AT THE BEGINNING OF THE SUPPLY CHAIN, BUT THERE IS STILLA LOT OF MONEY TO BE MADE DOWNSTREAM. I WE HAVE To no BOTH. I WE DO FARMING. WE DO INGREDIENTS. SO IF YOU LOOK AT THE VALUE CHAIN, WE ARE AT THE SOURCE - FARMING - WE DO THE INGREDIENTS, AND WE DO BRANDS. SO WE CAPTURE WITH OUR BRANDS THE ENTIRE VALUE CHAIN. IT'S FUNNY YOU SHOULD RAISE THAT, BECAUSE LOCHINVER STATION, WHICH IS GOING INTO CHINESE HANDS, THAT'S ONE OF THE BIG STAGING STATIONS FOR LIVE CATTLE EXPORTS, SO THERE IS A FEAR IN SOME QUARTERS THAT BASICALLY CHINA IS AIMING TO OWN THE WHOLE SUPPLY CHAIN, <i>I</i> AND THAT wouu: SHUT YOU OUT. <i>I</i> SO THEY'D GETA FARM HERE WITH STAGING FOR LIVE CATTLE, THEY GETA PROCESSING PLANT, I AND THEN YOU'RE OUT. I NO, BUT CHINA REALLY THINKS IN PARTNERSHIP, AND, OF COURSE, THEY WANT PEOPLE TO CREATE VALUE ON GROUND, LIKE WE ARE DOING, IN CHINA, BUT YOU ARE RIGHT. THEY WOULD LIKE TO PARTNER WITH COMPANIES LIKE US AND OTHER COMPANIES IN OTHER MILK POOLS IN AUSTRALIA OR NZ. THATS WHY THERE'S THE BEINGMATE DEAL FOR US. FOR BEINGMATE, IT IS VERY IMPORTANT TO HAVE ACCESS TO ANOTHER MILK POOL RATHER THAN CHINA. SO THESE PARTNERSHIPS - THEY ARE DEFINITELY THE TOP OF THE AGENDA I OF THE CHINESE GOVERNMENT. I BUT DOES FOREIGN OR CHINESE OWNERSHIP OF PRODUCTIVE NZ LAND - DOES THAT WORRY YOU? LOOK, I'M NOTA POLITICIAN, AND YOU KNOW THAT- I NO, BUT YOU'RE A BUSINESSMAN. I YOU ARE A BUSINESSMAN, AND THIS IS BUYING UP ELEMENTS OF A BUSINESS THAT YOU ARE INVESTED IN. CORRECT, BUT IALSO HAVE TO GO BACK TO PRINCIPLES AND THE ROOTS OF DEMOCRACY. I MEAN, IN CHINA, NOBODY CAN OWN LAND. I THE QUESTloN-l No, NO. m CHINA, NOBODY CAN own LAND. NOT EVEN THE CHINESE CAN OWN NO, YOU LEASE IT, BUT DOES IT WORRY YOU THAT OUR LAND - OUR PRODUCTIVE LAND - NZ PRODUCTIVE LAND IS BEING BOUGHT BY CHINESE, FOR EXAMPLE? IAM- WHAT IS IMPORTANT FOR ME IS THAT ONE RULE APPLIES AND THAT THERE'S NO DISCRIMINATION. AND I THINK IF I CAN BUY LAND AS A DUTCHMAN, THEN IT'S VERY STRANGE IF A CHINESE PERSON CANNOT BUY LAND. SO YOU DON'T THINK THERE'S ANY NEED FOR FURTHER RESTRICTIONS? AGAIN, I'M NOTA POLITICIAN, BUT IF WE HAVE PROPER PARTNERSHIP, LIKE WHAT WE DO WITH BEINGMATE, THAT WE ARE IN THEIR MILK POOL, THEYARE WORKING TOGETHER IN OUR MILK POOL, THAT WE WORK TOGETHER IN THE ENTIRE VALUE CHAIN AND IT'S NOT US AND THEM, I'M NOT WORRIED. AT THE MOMENT, WE HAVE - I'M JUST GOING TO CHECK THESE FIGURES SO THAT I'VE GOT THEM EXACTLY RIGHT - 4.7 MILLION DAIRY COWS ON 1.7 MILLION HECTARES OF LAND CURRENTLY. I SO WHEN DO WE REACH PEAK COW? I I I DON'T KNOW WHAT YOU- I <i>I</i> THAT'S FROM DAIRY NZ 201:5. <i>I</i> NO, BUT I DON'T KNOW EXACTLY WHAT YOU MEAN WITH“PEAK COW. SO OPTIMUM NUMBER OF COWS -WHEN HAVE WE HIT THE CEILING? ARE WE THERE NOW? THAT DEPENDS, REALLY, ON THE SYSTEM YOU RUN. I MEAN, I COME FROM A COUNTRY THE SIZE OF THE WAIKATO, I wm-a THREE MILLION cows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so WHEN ls rr?I IN EVERY CATCHMENT, BECOMING 1O YEARS, WE CAN STILL GROW WITH 60%, BASED ON CONVERSIONS AND MORE ANIMALS AND 40% IS PRODUCTMTY. SO IN A DECADE YOU THINK THAT WE WILL BE AROUND THE PERFECT EQUILIBRIUM? I THE BALANCE. I THE BALANCE. NOW, JUST BEFORE WE GO, I'D LIKE TO ASK YOU A QUESTION DEAL. WE'RE GOING TO BE TALKING ABOUT THE TRANS-PACIFIC PARTNERSHIP I ABOUT THIS A BIT LATER IN THE SHOVV. ARE YOU CONFIDENT THAT WE'RE GOING TO REACH A DEALAND WHEN, DO YOU THINK? WHEN I CAME INTO NZ AND I HAD THE FIRST INTERACTIONS AND I WENT TO THE US AT THE END OF 2011, I WAS PRETTY POSITIVE ABOUT REACHING A DEAL IN THE NEAR FUTURE. I BUT THE LONGER THESE THINGS TAKE - I AND YOU LOOK AT THE COMPLEXITY OF WHO WANTS WHAT -AMERICA HAS AN AGENDA, CANADA HAS AN AGENDA, I AUSTRALIA HAS AN AGENDA. AND, AGAIN, I I'M NOTA POLITICIAN, BUT I'M AVERY CLOSE CONTACT WITH THE MINISTRY AS WELL- SO YOU'RE TELLING ME YOU DON'T THINK IT'S GOING TO HAPPEN? I THINK IT WILL TAKE TIME. WHERE THE WORLD IS RIGHT NOW, WE SHOULD NOT BE OVERLY OPTIMISTIC ON REACHING THIS- I so NOT m THE NEXT YEAR? I WHAT I CAN SEE, IT'S GOING TO BE VERY DIFFICULT WITH ALL THE ISSUES YOU SEE IN THE WORLD AT THIS POINT IN TIME. ALL RIGHT, THANK YOU VERY MUCH FOR JOINING ME THIS MORNING. THEO SPIERINGS FROM FONTERRA, THANK YOU. I OKAY, THANK YOU. I LATER ON THE NATION - WHILE POLITICIANS ARGUE ABOUT HOW TO FEED THE KIDS, ONE GANG LEADER IS GETTING ON WITH IT. HE'S LIVE. BUT NEXT, TORBEN AKEL TAKES A LOOK AT THE GOOD, THE BAD AND THE UGLY OF A CONTROVERSIAL TRADE DEAL. ARE MEETING IN SYDNEY THIS WEEKEND TO TRY AND MAKE HEADWAY ON THE CONTROVERSIAL TRANS-PACIFIC PARTNERSHIP AGREEMENT, OR TPPA. THEIR GOAL IS TO CREATE A PACIFIC RIM TRADE BLOC I COVERING ATHIRD OF ALL WORLD TRADE. I I BUT TALKS HAVE DRAGGED ON FOR YEARS. I IF YOU'VE LONG WONDERED WHATALL THE FUSS IS ABOUTAND WHAT IT MEANS FOR [IE HERE'S REPORTER TORBEN AKEL TO BOIL DOWN THE TPPA. TRADE MINISTER TIM GROSER IS A MAN ON A MISSION TO CONCLUDE A TRADE AGREEMENT THAT'S SPANNED MUCH OF HIS CAREER, AN AGREEMENT WHICH, WHILE FAR FROM IMPOSSIBLE, IS UNLIKELY TO BE COMPLETED ANY TIME SOON. WE'VE DONE A HUGE AMOUNT OF POSITIVE WORK, I AND ro SAY ao% OF rrs none. I BUTAS ALWAYS IN LIFE, IT'S THE LAST 20% THAT REALLY MAKES THE DIFFERENCE BETWEEN MEDIOCRITY AND EXCELLENCE. IT'S EXACTLY 12 YEARS SINCE HELEN CLARK STARTED NEGOTIATING A PACIFIC RIM TRADE PACT WITH THE LEADERS OF CHILE AND SINGAPORE AT THE 2002 APEC MEETING IN MEXICO. NOW WE'RE ONE OF A DOZEN COUNTRIES IN THE TRANS-PACIFIC PARTNERSHIP, OR TPP, INCLUDING THE US, AUSTRALIA, VIETNAM, CANADA, AND JAPAN, WHICH ONLY JOINED JUST LAST YEAR. IT IS, AS GROSER LIKES TO SAY, NOW 'BIGGER THAN KING KONG', A BLOC WHOSE CURRENT MEMBERS ACCOUNT FOR A THIRD OF ALL WORLD TRADE. THE AGREEMENT THEY'RE NEGOTIATING - THE TPPA- IS EQUALLY MONUMENTAL, WITH 29 CHAPTERS COVERING EVERYTHING FROM GOODS AND SERVICES, INVESTMENT, INTELLECTUAL PROPERTY, LABOUR AND THE ENVIRONMENT. PRO-TPPA LOBBYIST STEPHEN JACOBI SAYS ONCE COMPLETE, lT'LL BE A MODEL FOR WIDER ASIA-PACIFIC COOPERATION. TWELVE NEGOTIATING PARTIES ARE BUILDING THIS NEGOTIATION OR BUILDING OR THIS AGREEMENT UP FROM THE GROUND UP. THAT'S WHY THIS NEGOTIATION IS TAKING SO LONG. IT'S BECAUSE YOU'VE GOTTA FIND THE CONSENSUS AMONGST THE 12 PARTIES TO GET IT RIGHT. BUT OPPONENTS, LIKE LAW PROFESSOR JANE KELSEY, SAY IT'S LESS ABOUT COOPERATION AND MORE ABOUT ISOLATING CHINA. IT REALLY IS SEEN AS A TEMPLATE ORA COUNTERFOIL WHERE THE US CAN STAMP ITS MARK, ITS RULES, ITS CORPORATE INTERESTS IN THE ASIA-PACIFIC AS A COUNTER TO THE GROWING INFLUENCE OF CHINA. TIM GROSER'S OTHER FAVOURITE METAPHOR FOR THE TPPA IS THAT IT'S A BIT LIKE A BUS - A BUS NZ CAN'TAFFORD NOT TO BE ON AS ITS PASSENGER LIST CONTINUES TO GROW. THE TPP BUS, IF WE CAN GET IT TO STOP IN TOKYO, WILL MOVE ON TO OTHER - UNKNOWN AT THIS STAGE - DESTINATIONS. IN RECENT MONTHS, THOUGH, THE TPP BUS HAS HIT ROADWORKS IN THE FORM OF JAPAN, WHICH IS REFUSING TO ELIMINATE TARIFFS ON MANY AGRICULTURAL PRODUCTS, INCLUDING DAIRYAND BEEF, OF WHICH NZ IS THE TPP BLOC'S FIRST AND THIRD LARGEST EXPORTER, RESPECTIVELY. JAPAN'S STANCE MEANS THE MUCH-QUOTED ESTIMATE OF WHAT WE STAND TO GAIN FROM AN AGREEMENT... I ABOUT $5 BILLION To NZ BY 202s. I ...IS EVEN MORE DOUBTFUL THAN SOME SUGGEST. DERIVED FROM THIS 2012 STUDY PUBLISHED BY A PRO-GLOBALISATION US THINK TANK, ECONOMIST DR GEOFF BERTRAM SAYS HIS REVIEW FOUND IT LACKS SOLID FOUNDATION. THE SURPRISE WAS HOW FAIRLY SMALL THE CREDIBLE POSITIVE NUMBERS WERE AND HOW MUCH OF THE NUMBERS THAT THEY WERE PRODUCING WERE COMPLETELY ESSENTIALLY FICTION. DR BERTRAM'S MOST SCATHING CRITICISM IS OF THE STUDY'S CLAIM THATATHIRD OF OUR GAINS WOULD BE DUE TO AN INCREASE IN INTERNATIONAL INVESTMENT. THEY ARE TALKING ABOUT EVERY TIME YOU MOVE ONE DOLLAR OF CAPITAL FROM ONE COUNTRY TO ANOTHER IT SUDDENLY RAISES GLOBAL OUTPUT BY A FACTOR OF ONE THIRD - ONE THIRD OF THE DOLLAR INVESTED. I NOW, THIS ls COMPLETELY NUTS. I DESPITE OFTEN CITING THAT FIGURE, GROSER SAYS SUCH STUDIES ARE OFTEN “HEB AND CAN EVEN UNDERESTIMATE THE GAINS. IF YOU LOOKED AT THE MODELLING DONE WHEN WE SIGNED THE FTA WITH CHINA, THEY UNDERESTIMATED THE TRADE GAINS BYA FACTOR BETWEEN 1O AND 17 TIMES. SINCE I SIGNED THATAGREEMENT, OUR EXPORTS HAVE GONE FROM $2 BILLION TO $11 BILLION A YEAR. I ll"s BECOME OUR LARGEST MARKET. I INDEED, TRYING TO QUANTIFY THE LIKELY GAINS AND COSTS OF ANY AGREEMENT IS DIFFICULT UNTIL THE TEXT HAS BEEN FINALISED. AND WHILE THE BROAD OBJECTIVES OF THE TPPA HAVE BEEN PUBLISHED, SUCH AS WHAT'S ON THE US TRADE REPRESENTATIVES WEBSITE, THE FINER POINTS AND THE VARIOUS COUNTRIES' BARGAINING POSITIONS I FOR THE MOST PART REMAIN UNKNOWN. I WHEN YOU'RE DEALING WITH HIGHLY SENSITIVE MATTERS, YOU NEED DISCRETION. I CAN REMEMBER SEVERAL DISCUSSIONS LED BY NO LESS THAN PRESIDENT OBAMA, AND THERE WAS ABSOLUTE UNANIMITY ON THIS, THAT THE BEST WAY TO DESTROY THIS AGREEMENT WOULD BE TO PUBLISH INCOMPLETE, HALF-THOUGHT-THROUGH NEGOTIATING PROPOSALS. IN SPITE OF THAT, SOME OF THOSE INCOMPLETE PROPOSALS HAVE ALREADY BEEN LEAKED. JUST OVER A WEEK AGO, THE DRAFT OF THE INTELLECTUAL PROPERTY CHAPTER, FROM THE VIETNAM TALKS IN MAY, WAS PUBLISHED BY WIKILEAKS, NO DOUBT TIMED TO COINCIDE WITH THIS WEEK'S TALKS IN AUSTRALIA. THE INTELLECTUAL PROPERTY CHAPTER COVERS SEVERAL DIFFERENT ASPECTS. ONE IS THE PATENTS AND MEDICINES ASPECT, AND THE SECOND IS COPYRIGHT, THE INTERNET AND SO ON. THE LATEST LEAKED DRAFT SHOWS THE US CONTINUING TO FIGHT HARD FOR ITS EXPORTERS OF INTELLECTUAL PROPERTY, AND IN PARTICULAR THE ENTERTAINMENT AND PHARMACEUTICAL INDUSTRIES. AND WHILE HOLLYWOOD'S EFFORTS TO ENFORCE ITS COPYRIGHTARE WELL KNOWN HERE, PERHAPS OF MORE SIGNIFICANCE TO MOST KIWIS IS THE DRUG INDUSTRY'S DESIRE TO EXTEND THE LIFE OF THEIR PATENTS, AND THUS DELAY THE ENTRY OF CHEAPER GENERICS ON TO THE MARKET. CURRENTLY, THE MAXIMUM PATENT TERM HERE IS 2O YEARS, WITH NO EXTENSIONS. FORMER ACT MP HEATHER ROY, WHO NOW LOBBIES FOR PHARMACEUTICAL FIRMS, I SAYS THAT'S OFTEN NOT ENOUGH TIME. I ONE OF THE DIFFICULTIES THAT COMPANIES HAVE IS IT TAKES 12 YEARS ON AVERAGE TO DEVELOP A MEDICATION, AND THE PATENT STARTS ROLLING ON DAY ONE. AFTER THAT TIME, ON AVERAGE, IT TAKES PHARMAC 3.6 YEARS TO FUND A MEDICATION, AND SO WHEN YOU LOOK AT THE EFFECT OF PATENT TIME, AT THE END OF THAT PROCESS YOU'RE LOOKING AT ABOUT 4.4 YEARS. SO FOR A COMPANY THAT HAS INVESTED A HUGE AMOUNT OF MONEY IN RESEARCH AND DEVELOPMENT, THEY'RE GETTING VERY LITTLE OPPORTUNITY TO RECOUP THOSE COSTS. LAW PROFESSOR SUSY FRANKEL SAYS INTELLECTUAL PROPERTY LAW IS A BALANCING ACT BETWEEN REWARDING INNOVATION AND MAXIMISING PROFITS. AND OF COURSE, IF ONE PERSON INCREASES THEIR PROFITS, OR ONE COUNTRY INCREASES THEIR PROFITS ON EXPORTS, THEN THE IMPORTERS HAVE TO PAY, AND NZ IS A NET IMPORTER OF INTELLECTUAL PROPERTY-RELATED PRODUCTS, I so WE'LL BE PAYING MORE. I HOWEVER, ROY SAYS INITIAL FEARS IN AUSTRALIA THAT THEIR 2005 TRADE DEAL WITH THE US WOULD RAISE DRUG PRICES I HAVE SINCE BEEN PROVEN WRONG. I PRICES DIDN'T INCREASE IN AUSTRALIA, AND IN FACT, SEVERAL OF THE PRICES WENT DOWN. THAT SAID, THERE IS ANOTHER WAY THE COST OF DRUGS COULD BE FORCED UP HERE DUE TO THE TPPA- A PUSH, OUTLINED IN ANOTHER LEAKED DOCUMENT, TO MAKE STATE DRUG-BUYING AGENCIES LIKE OUR OWN PHARMAC MORE TRANSPARENT WHEN IT COMES TO THEIR FUNDING DECISIONS. COMPANIES SHOULD HAVE THE OPPORTUNITY TO HAVE SOME INPUT INTO THAT PROCESS, I WHICH PRESENTLY THEY DON'T HAVE. I ALTHOUGH FRANKEL SAYS THAT 'TRANSPARENCY' WOULD APPEAR TO BE A ONE-WAY STREET. THEY WANT TO SEE INTO WHAT PHARMAC'S DOING, I BUT NEITHER PHARMAC OR THE PUBLIC I GET TO SEE INTO THE COMMERCIAL DEALINGS OF A PRIVATE PHARMACEUTICAL COMPANY. WHAT'S MORE, AS OWNERS OF INTELLECTUAL PROPERTY RIGHTS, THOSE COMPANIES WOULD BE TECHNICALLY CLASSED AS INVESTORS. AND AS PER THIS LEAKED DRAFT OF THE TPPA'S INVESTMENT CHAPTER, IF ONE FELT IT'D BEEN TREATED UN FAIRLY, IT COULD PURSUE WHAT'S CALLED 'INVESTOR-STATE DISPUTE SETTLEMENT, ARGUABLY THE MOST CONTROVERSIAL ASPECT OF THE TPPA. PUT SIMPLY, ISDS PROVISIONS LET FOREIGN COMPANIES SUE GOVERNMENTS IN OFFSHORE TRIBUNALS IF THEY BELIEVE A GOVERNMENT HAS BREACHED THE TERMS OF ATRADE AGREEMENT AND HARMED THE VALUE OF THEIR INVESTMENT. THE ORIGIN OF INVESTOR-STATE DISPUTE SETTLEMENT IS THAT IN SOME COUNTRIES YOU CANNOT GET GOOD RESOLUTION I m THE DOMESTIC COURT SYSTEM. I WHAT WE'RE SEEING NOW IS EVEN IN COUNTRIES WITH VERY GOOD COURT SYSTEM, SUCH AS AUSTRALIA, I INVESTORS CAN CHALLENGE THE LAW. I IN FACT, THE MOST PROMINENT CURRENT ISDS CASE IS PHILIP MORRIS VERSUS AUSTRALIA OVER AUSTRALIA'S PLAIN-PACKAGING OF TOBACCO LAW. AT THE SAME TIME, EGYPT IS BEING SUED FOR INCREASING ITS MINIMUM WAGE BY THE SAME FRENCH MULTINATIONAL WHOSE SUBSIDIARY RUNS AUCKLAND'S TRAINS. THERE'S ALSO AN AMERICAN DRUG COMPANY SEEKING HALF A BILLION DOLLARS FROM CANADA BECAUSE CANADIAN JUDGES INVALIDATED TWO OF ITS PATENTS. AND GERMANY IS FACING A MULTI-BILLION-EURO ISDS SUIT OVER ITS DECISION TO PHASE OUT NUCLEAR POWER. SUCH EXAMPLES OF ISDS HAVE MANY HERE WORRIED ABOUT THE IMPLICATIONS OF THE TPPA. I IT REALLY, m MY VIEW, I STOPS COUNTRIES BEING ABLE TO TURN THE CLOCK BACK I ORA NEW GOVERNMENT BEING ELECTED, I EVEN IF IT HAS THE MANDATE TO RETURN ELECTRICITY COMPANIES BACK TO THE PEOPLE OR TO STOP PRIVATE PRISONS, I OR To GET RID OF CHARTER SCHOOLS, I THEY MAY FIND THEMSELVES BECAUSE OF THIS AGREEMENT, IF IT DOES GET PASSED, THE NZ GOVERNMENT ACTUALLY BEING TAKEN TO INTERNATIONAL TRIBUNALS AND SUED FOR MANY MILLIONS OF DOLLARS. TAKE, FOR EXAMPLE, IF GOVERNMENT WANTED TO RAISE THE STANDARDS I FOR RIVER QUALITY, FOR CLEAN RIVERS, I FOREIGN INVESTORS WHO'VE BOUGHT UP DAIRY FARMS RECENTLY WOULD BE FACING INCREASING COSTS. IF YOU'RE LOOKING AT MINING AND HOW MINING REGULATIONS MIGHT BE TIGHTENED UP, I AGAIN, FURTHER COSTS. I THOSE WOULD ALL BE THE BASIS FOR A FOREIGN INVESTOR TO TRIGGERA CLAIM IN ONE OF THESE OFFSHORE TRIBUNALS. 270 HEALTH PROFESSIONALS EXPRESSED SIMILAR CONCERNS IN A LETTER TO JOHN KEY BACK IN MAY. NEW INFORMATION IS CONSTANTLY COMING TO LIGHT, NEW DATA, NEW EVIDENCE, NEW STUDIES, AND WE MUST MAINTAIN- THE GOVERNMENT MUST MAINTAIN THEIR ABILITY TO BE RESPONSIVE. I MEAN, ASBESTOS, FOR EXAMPLE, WAS USED EXT ENSIVELYAND WIDELY, AND NEW INFORMATION CAME TO LIGHT AND SOMETHING HAD TO BE DONE VERY QUICKLYABOUT IT. BUT THE USE OF THESE ISDS MECHANISMS UNDER THE TPP WOULD CREATE A SORT OF A THREAT ANDA KIND OF CHILLING EFFECT ON CHANGES IN POLICY THAT MAY BE NECESSARY AND IN THE INTERESTS OF THE HEALTH OF NZERS. BUT GROSER SAYS ISDS PROVISIONS ALSO PROTECT NZERS INVESTING OVERSEAS, SUCH AS FONTERRA, AND ARE ALREADY PART OF OUR TREATIES WITH CHINA, SOUTH-EAST ASIA AND AUSTRALIA, WITH WHAT HE CALLS 'ROBUST SAFEGUARDS THAT PROTECT IMPORTANTAREAS OF REGULATION', INCLUDING THE ENVIRONMENT AND PUBLIC HEALTH. SIMILAR SAFEGUARDS IN THE TPPA, GROSER ASSURES US, ARE CURRENTLY 'UNDER DISCUSSION. YOU'VE GOTTA EXHAUST CERTAIN PROVISIONS HERE THROUGH YOUR DOMESTIC LEGAL PROCESS. I so IT WON'T BE 100% CLEAN, I BUT IT WILL BE A VERY STRONG SET OF JUDICIALAND PROCEDURAL STEPS THAT WILL STOP ANY LUDICROUS LITIGIOUS BEHAVIOUR. I BUT JANE KELSEY ISN'T so SURE. I WE'RE TOLD NOT TO WORRY, THAT NEW GENERATION INVESTMENT RULES ARE GOING TO PROVIDE LOTS OF SAFEGUARDS. WELL, THE LEAKED INVESTMENT CHAPTER FOR THE TRANS-PACIFIC PARTNERSHIP AGREEMENT SHOWED THAT THOSE SAFEGUARDS ARE, IN FACT, EXTREMELY WEAK. AND NO DEAL, NO TPP, WILL BE ACCEPTED BY THE US UNLESS IT HAS STRONG INVESTOR PROTECTIONS IN IT. I THINK THIS WILL PROVE TO BE JUST ANOTHER OF THESE MYTHS, AS I SAY, ONE OF THE SCARY MONSTERS UNDER THE TPP BED THAT WHEN AS AN ADULT YOU LOOK UNDER THE BED, I YOU FIND THEY'RE NOT REAL. I BUT IF THEY DO TURN OUT TO BE REAL, IT COULD BE VERY DIFFICULT TO RUN AWAY. YOU WOULD HAVE TO BE CONFIDENT THAT THE DAMAGE DONE TO YOUR ECONOMY BY WITHDRAWING WAS LESS THAN THE BENEFITS THAT YOU WOULD GAIN FROM THAT WITHDRAWAL. IT IS ALMOST IMPOSSIBLE TO STEP AWAY FROM. THERE ARE ALL SORTS OF CONSEQUENCES, WHETHER THEY'RE DIPLOMATIC CONSEQUENCES, WHETHER THEY'RE THREATS OF INVESTOR FLIGHT, THAT STOP GOVERNMENTS FROM BEING ABLE TO DO THAT. AND WITH A NEW NATIONAL GOVERNMENT VIGOROUSLY PURSUING A PRO-BUSINESS AGENDA, THE QUESTION IS HOW MUCH SOVEREIGNTY THEY'D BE PREPARED TO GIVE AWAY IF OUR CASH COWS CAN JUMP THE GATES INTO THE US AND JAPAN. WHICH IS EXACTLY WHAT GROSER WILL BE DISCUSSING WITH HIS COUNTERPARTS IN SYDNEY OVER THIS WEEKEND. TPP LEADERS ARE ALSO SCHEDULING SIDELINE TALKS AT APEC IN BEIJING NEXT MONTH, BY WHICH TIME, TOO, OBAMA WILL KNOW IF US MID-TERMS HAVE DELIVERED HIM ENOUGH VOTES IN CONGRESS TO SECURE WHAT'S CALLED 'FAST TRACK AUTHORITY'. FAST TRACK COMMITS CONGRESS TO HAVING AN 'UP OR DOWN' VOTE ON THE FINAL OUTCOME. THAT IS TO SAY, A VOTE IS TAKEN - YES OR NO - BY THE CONGRESS, AND THE CONGRESS DOESN'T GET THE CHANCE TO OPEN UP THE NEGOTIATION. AT WHICH TIME A NOT-QUITE-ASFDEMOCRATIC PROCESS WOULD BE UNDERTAKEN HERE. CABINET WOULD FIRST NEED TO APPROVE THE TEXT BEFORE IT GOES TO PARLIAMENT... IT'LL BE EXAMINED BY THE FOREIGN AFFAIRS AND DEFENCE COMMITTEE. ...BUT THERE'D BE NO OPTION TO MAKE ANY CHANGES, AND ONLY THE EXECUTIVE WOULD NEED TO RATIFY IT. GROSER SAYS THE ELECTION HAS GIVEN THEM A MANDATE. THATS THE DEAL. THAT'S WHAT OUR REPRESENTATIVE DEMOCRACY IS ABOUT. I ll= HE'S GOTA MANDATE, I WHERE IN THE CAMPAIGN DID HE MENTION THE DETAILS OF THE TPPA? IT WOULD BE VERY UNWISE FORA GOVERNMENT TO ENTER INTO AGREEMENTS ON A PARTISAN BASIS RATHER THAN BIPARTISANSHIP. IT IS A CASE TO HAVE A HIGHER THRESHOLD I FOR SIGNING ATREATY LIKE THIS. I IN ANY EVENT, GROSER SAYS THE TPPA IS UNLIKELY TO BE FINALISED FOR AT LEAST SIX MONTHS. AND THE ODDS HE GIVES OF IT NEVER BEING CONCLUDED? I'D SAY A 25% CHANCE THAT THIS SIMPLY MAY BE A BRIDGE TOO FAR. OF COURSE, A LOT OF WATER MUST GO UNDER THAT BRIDGE FIRST, I AND A LOT OF PLANES BOARDED TOO. I IT WAS BACK TO BUSINESS IN PARLIAMENT THIS WEEK. HERE'S HOW POLITICS PLAYED OUT IN THE TWITTERSPHERE. I MPS WERE SWORN m THIS WEEK, I WHICH MEANT EMBARRASSING MIDDLE NAMES WERE READ ALOUD IN PARLIAMENT. LABOUR MP PHIL TWYFORD TOOK IT ON THE CHIN, QUIPPING THAT 'STONER' WOULD WIN HIM VOTES IN WESTAUCKLAND. PRIME MINISTER JOHN KEY SAID HE NEVER SPOKE TO BLOGGER CAMERON SLATER <i>I</i> m <i>l-lls</i> CAPACITY AS PRIME MINISTER. <i>I</i> GIOVANNI TISO WONDERED IF THERE WERE OTHER SITUATIONS WHEN KEY IS NOT THE PRIME MINISTER, I LIKE WHEN HE'S NOT WEARING ATIE. I LABOUR LEADERSHIP HOPEFUL DAVID PARKER SAID THE PARTY SOMETIMES FELT LIKE A LITTLE BIT OF A CULT. DANYL MCLAUCHLAN SAYS THEY SHOULD BE SO LUCK. AND STILL TO COME, THE GANG LEADER MAKING SANDWICHES FOR HUNGRY KIDS I AND WHAT HE WANTS FROM POLITICIANS. I PLUS THE LONG-AWAITED RETURN OF POLITICS IN 6O SECONDS. JUST THIS WEEK THE GREENS PICKED UP HONE HARAWIRA'S 'FEED THE KIDS' BILL AS THE PRIME MINISTER ACKNOWLEDGED ABOUT 15% OF PUPILS IN LOW DECILE SCHOOLS I NEED BREAKFASTAT SCHOOL. I TWO AND A HALF YEARS AGO, JAMIE PINK AND HIS WAIKATO GANG TRIBAL HUK DECIDED TO DO SOMETHING ABOUT IT. EVERY DAY THEY MAKE 500 SANDWICHES AND DELIVER THEM TO SCHOOLS AROUND THE REGION. AWAIKATO TIMES STORYABOUT THE GANG OF SANDWICH MAKERS WENT VIRAL LAST WEEK. JAMIE PINK JOINS ME NOW. MORENA, JAMIE. I HELLO, LISA. KIA ORA. I TELL ME, WHYARE YOU DOING IT? WHAT MADE YOU START? OH, A LOT OF US WERE HUNGRY KIDS WHEN WE WERE YOUNG. AND TO SEE SO MANY HUNGRY KIDS AROUND, SPECIALLY 270,000 IN THE COUNTRY, I WE SEE THEM AROUND, IT'S NOT GOOD. I WE GOT THE RESOURCES HERE. OVERSEAS THEY HAVEN'T, OBVIOUSLY, BUT I THINK THERE'S NO EXCUSE IN NZ TO HAVE ONE IN EIGHT OF OUR POPULATION HUNGRY, I ESPECIALLY THE LI1'I'LE FOLK. I YOU KNOW WHAT IT'S LIKE TO HAVE GONE HUNGRY TOO, DON'T YOU? YEAH, WE HAD IT PRETTY HARD WHEN WE WERE YOUNG. IT'S NOT GOOD FOR THEM, NOT GOOD FOR THEIR SOUL. GROW UP A BITANGRY. AND WE DO OUR Ll'l'I'LE BIT. WE CAN DO A BIT MORE NOW, HOPEFULLY. A LOT OF PEOPLE HELPING US OUT WITH FOOD AND THINGS LIKE THAT. SO HOW DID YOU KNOW IN YOUR COMMUNITY THAT THERE WAS A NEED? WHAT WAS THE SIGNAL FOR YOU THAT YOU NEEDED TO DO SOMETHING? YOU SEE LITTLE KIDS WALKING TO SCHOOL WITH NO SHOES IN THE WINTER. YOU JUST SEE IT WHERE WE ARE. I'M ORIGINALLY FROM NGARUAWAHIA, I AND HAMILTON'S us Too AS WELL. I BUT IT'S NOT SO BAD OUT THERE; MAORI PEOPLE ARE PRETTY GOOD AT LOOKING AFTER EACH OTHER. BUT IT'S EVERYWHERE, ALL OVER THE COUNTRY. I THINK SOMETHING'S GOTTA BE DONE ABOUT IT. YOU'RE A GANG LEADER, SO ONE WOULD THINK YOU'RE A PRETTY TOUGH FELLA. BUT DID YOU LOOK AT THAT AND IT REALLY GOT TO YOU? YEAH. IT GIVES YOU A REASON FOR DOING SOMETHING. WE REACH OVER 300 KIDS A DAY IN 25 SCHOOLS. WE'RE GONNA EXPAND. WE'LL EXPAND TO HOPEFULLY 40 OR 5O SCHOOLS AFTER CHRISTMAS, THROUGH '15. SO HOVV ARE YOU GONNA DO THAT? HOVV ARE YOU GONNA MAKE IT A BIGGER OPERATION? WE COULD KEEP GOING AT 25 SCHOOLS, BUT WE'VE GOTA LOT OF PEOPLE HELPING US, PEOPLE OFFERING US MONEY. BUT WE'RE NOT WORRIED ABOUT THAT. A LOT OF PEOPLE OFFERING US FOOD, AND WE'LL PROBABLY TAKE THAT ON BOARD. WE'VE GOT FARMS AND WE'VE GOT TWO BIG PIGGERIES. WE'VE GOT OVER 100 PIGS, 5O BEEF AND OVER 60 SHEEP. THATS HOW WE DO IT. WE'VE GOT OVER 150 MEMBERS IN THE CREW, SO EVERY NOWAND AGAIN WE PUTA HATAROUND. SO HOW DID YOU GET THE FARMS? IS IT YOUR FARM? WE LEASE THEM. NO, NO, WISH WE OWNED THEM. WE LEASE THEM, YEAH. SO, HOW DID THE SCHOOLS REACT WHEN YOU GUYS TURNED UP? BECAUSE IT'S NOT WHAT YOU'D EXPECT FROM A GANG, IS IT? I USUALLY GO AND SEE THE HEADMASTER AND THE LADIES IN THE OFFICE, AND WE TAKE SOME SANDWICHES IN AND SHOW THEM THAT WE MAKE THEM WITH HAIRNETS AND GLOVES -AND LOVE. A LOT OF LADIES HELP US. YOU'VE GOTTA HAVE THAT WOMAN'S TOUCH. AND NO SCHOOL SAID NO. JUST WISH WE COULD REACH MORE. WE'LL GET THERE, YEAH. SO DO THEY GIVE YOU A BIT OF A SIDEWAYS LOOK? NO. OH, THE ODD ONE. BUT ONCE THEY KNOW WHAT WE'RE DOING IT FOR, I THEY'RE PRETTY soon, YEAH. I NO PROBLEMS THERE. THEY KNOW THAT WE'VE GOT GOOD INTENTIONS. SO HOW DOES IT WORK ON A DAY-TO-DAY BASIS? WHAT DO YOU DO? WE START THE NIGHT BEFORE AND DO FIVE TRAYS OF EGGS. SOME OF THE LADIES DO THAT. THEN 6 O'CLOCK WE GO GET OUR BREAD FROM COUPLAND'S. THEN WE USUALLY START MAKING THE SANDWICHES BY 7. BY HALF PAST 8, 9 O'CLOCK, WE'RE DELIVERING. FINISHED BY ABOUT HALF PAST 12, 1. SO IT'S A GOOD HALF THE DAY, BUT IT'S WORTH IT. SO IT'S A BIG COMMITMENT FOR YOU GUYS. I AND EVERYBODY TURNS UP ALL THE TIME? I OH, SOMETIMES WE GIVE SOMEONE A DAY OFF, IF THEY'RE LUCKY. THE THING IS THAT GANGS ARE OFTEN ASSOCIATED WITH THE BAD STUFF, WITH CRIME, WITH VIOLENCE, WITH DRUGS. SO HOW MUCH OF THAT IS PART OF YOUR STORY, YOUR BACKSTORY? OH, I'M NOT GONNA COME AND LIE. A LOT OF BAD THINGS, BUT WE TRY TO CLEAN OUR ACT UP. I THINK THERE'S OTHER GANGS DOING GOOD THINGS OUT THERE TOO. YOU ONLY HEAR ABOUT THE BAD THINGS. I KNOW OTHER PEOPLE ARE DOING GOOD WORK. I CAN'T MENTION NAMES, OUT OF RESPECT. GETA BIT OF A BAD RAP. SOME PEOPLE OBVIOUSLY ARE BAD EGGS. WITH MY CREW, WE TRY TO GET OUR PEOPLE INTO WORK, TRY TO DO GOOD THINGS. YEAH, WE SOMETIMES HAVE TO HAVEA BIT OF VIOLENCE HERE AND THERE, BUT I DON'T LET MY BOYS STEALAND THAT. WE TRY TO GO RIGHTAWAY FROM THE OLD WAYS. SO ARE THE TRIBAL HUKS TROUBLEMAKERS, DO YOU THINK, GENERALLY? NO. HUKS' NEVER BEEN TROUBLEMAKERS. THE GANG WAS ESTABLISHED IN '58, LOOK AFTER THE PEOPLE IN NGARUAWAHIA. YOU ALWAYS GOTTA HAVE SOMEBODY. I WAS A BIT OF A TROUBLEMAKER MYSELF WHEN I WAS YOUNG. BUT THESE DAYS, WE TRY TO CLEAN ALL THAT UP AND DO GOOD THINGS. LOVE IS STRONGER THAN HATE. BUT WHEN YOU DO GROW UP HUNGRY, YOU END UP HEADING TOWARDS HATE, YOU KNOW? YOU GO TO SCHOOLAND YOU SEE KIDS WITH NICE LUNCHES, AND IT'S NOT THEIR FAULT - THEY GET LOOKED AFTER - BUT THAT'S WHERE IT STARTS, ANIMOSITY. 'I GOT NOTHING. YOU GOT A HAM SANDWICH.' SO WHY WAS IT THAT YOU GREW UP HUNGRY? OH, MY MUM HAD ME WHEN SHE WAS YOUNG. JUST, YOU KNOW, SHE WAS HAVING A HARD LIFE HERSELF. BUT SHE'S STILLA GOOD LADY. GOTTA LOVE YOUR MUM. SO, JAMIE, YOU SAID YOUR MUM HAD YOU YOUNG; IT WAS TOUGH GOING. DO YOU THINK IT'S STILL THE SAME NOW? IS THAT WHY THESE KIDS ARE HUNGRY NOW? WELL, SOME PARENTS, IT'S NOT THEIR FAULT. YOU'VE GOTA SOLO MUM WITH FIVE OR SIX KIDS, AND NO MATTER WHAT, SHE'S GONNA DO IT HARD. A LOT OF KIDS TO LOOK AFTER. SOME PARENTS ARE OBVIOUSLY NOT DOING A GOOD JOB, BUT I THINK MOSTLY IT'S- WELL, THERE'S NOT MUCH WORK AROUND, IS THERE? THE BENEFITS AREN'T LIKE THEY USED TO BE. SANITARIUM, FONTERRA, PEOPLE LIKE THAT, THEY DO A LOT. I NOTICE THE MILK AND WEET-BIX GOING TO THE SCHOOL. I DON'T SEE A LOT FROM THE GOVERNMENT. MAYBE FRUIT AND THAT. A LOT OF THE SCHOOLS DON'T QUALIFY. I YOU'RE OUT THERE FEEDING THESE KIDS. I WHAT DO YOU THINK THAT THE GOVERNMENT SHOULD BE DOING? OH, A LOT MORE. I LIKE JOHN KEY. HE'S OBVIOUSLY OUR LEADER, AND MUCH RESPECT TO HIM. BUT I STILL THINK HONE HARAWIRA HAD THE RIGHT IDEA, I'LL GIVE HIM THAT. YOU'VE GOTTA REACH THOSE YOUNG ONES. YOU DON'T WANT THEM GROWING UP ANGRY AND HUNGRY. IT'S NOT RIGHT. THEY'VE GOT THE RESOURCES HERE. SHEEP OUTNUMBER US 1O TO ONE. COME ON. YOU KNOW WHATI MEAN? THE PRIME MINISTER RECKONS THAT WE DON'T NEED TO GIVE THEM LUNCHES IN SCHOOL. WHAT DO YOU WANT TO SAY TO HIM? YOU'VE GOT A CHANCE NOW, JAMIE. I WHAT 0o YOU WANT TO SAY To HIM? I NO DISRESPECT, BUT YOU'RE WRONG. GO OUT THERE AND HAVE A GOOD LOOK. HE'S WRONG. FEED THEM. WE SPEND MONEY ON OTHER THINGS. YEAH, JUST NICELY, ALL DUE RESPECT, THAT'S NOT RIGHT. 270,000, YOU CAN'T ARGUE WITH THAT. SO WHEN YOU GO TO THE SCHOOLS, IS THERE ANY SUSPICION THAT YOU MIGHT BE RECRUITING OR ANYTHING LIKE THAT? NO. OBVIOUSLY, PEOPLE CAN BE SCEPTICAL IF THEY WANT, BUT THAT'S NOT WHAT WE'RE DOING IT FOR. I'D RATHER THEM GROW UP EDUCATED AND PUTTING BACK INTO SOCIETY. WE CAN'T HELP HOW WE GREW UP. IT'S JUST THE ENVIRONMENT, YOU KNOW? DOESN'T MEAN WE WANT THAT FOR OUR KIDS. I GOTA GRANDSON AND TWO SONS AND A DAUGHTER. I DON'T WANT THEM GROWING UP LIKE ME. BUT IF SOMEONE WANTS TO BE A GANG MEMBER, YOU'RE NOT GONNA BE ABLE TO STOP HIM. LIVE BY THE CODE AND DO THINGS RIGHT. BUT I'D RATHER THEM BE EDUCATED, AND THAT GOES FOR ALL THE KIDS IN NZ. GIVE THEM A CHANCE. YOU'RE NOT GONNA GIVE THEM A CHANCE IF YOU DON'T FEED THEM. THEY'RE GONNA GROW UP ANGRY AND, YEAH, TAKE THE WRONG WAY. YOU'VE SAID YOURSELF THAT YOU'RE NO ANGEL IN YOUR PAST. YOU'VE HAD SOME VIOLENT DAYS. I'M JUST WONDERING HAS THIS PROJECT CHANGED YOU IN ANY WAY? YEAH, IT GIVES US A REASON FOR BEING. WE LOVE IT. WE HAVEN'T MISSED A DAY IN ALL THAT TIME. COMING UP TO CHRISTMAS, lT'LL BE OUR THIRD YEAR. AND IT'S BECOME A BIG THING IN OUR LIVES. WE WANNA EXPAND. AND THANK YOU FOR ALL THE PEOPLE THAT HAVE HELPED US OUT AND SENT FOOD AND THINGS. WE CAN GO PROBABLY TO 50 SCHOOLS IN 2015. REALLY HAPPY ABOUT THAT. BUT I THINK IF JOHN KEY AND THE POWERS THAT BE GOT THEIR ACT TOGETHER, IT'D BE A GOOD MOVE. IT'D BE A GREAT MOVE, ACTUALLY. THEY CAN DO IT. 'COURSE THEY CAN. THANK YOU SO MUCH FOR JOINING ME THIS MORNING, JAMIE PINK. I KEEP UP THE GREAT WORK. I WE'LL BE GETTING ON WITH OUR PANEL'S THOUGHTS ON THE MONSTER TRADE DEAL LATER - HELEN KELLY, BERNARD HICKEY AND HEATHER ROY. BUT FIRST - THEY'RE BACK, OUR FAVOURITE POLITICAL ANIMALS, JEREMY CORBETT AND PAUL EGO. THE BIG QUESTION THIS WEEK - HOW AWESOME WAS THE STATE OPENING OF PARLIAMENT? WELL, I'M GLAD I LIVE IN AUCKLAND, IF THATS WHAT YOU MEAN. PAUL, YOU HAD THE SPEECH FROM THE THRONE BY THE QUEENISH, YOU HAD THE TOP-DRESSING PLANES SPREADING ALL THAT TRADITION EVERYWHERE. THEY BANG ON A DOOR WITH A STICK. AND HEAPS OF SPEECHES. IT'S GOT IT ALL. HAVE THEY REPAINTED THAT WALL OF TH STUDIO? PAUL, SOME PEOPLE WOULD FIND YOUR KITITUDE A BIT INSULTING. I WASN'T SAYING THAT IN MY CAPACITY AS ME. YOUR ATTITUDE A BIT INSULTING. LABOUR LEADERSHIP - YOUR THOUGHTS. GRANT ROBERTSON AND JACINDAARDERN? GRACINDA, YEAH. UGLY NAME. BEAUTIFUL COUPLE. CLEARLY, LITTLE CHANCE OF SEXUAL TENSION. ANDREW LI'I'I'LE HASN'T GOTA RUNNING MATE YET. WE CAN'T DO A JOINED-UP NAME, SO WE CAN'T REALLY TELL AT THIS STAGE. THERE'S NOBODY IN THE LABOUR PARTY WITH THE SURNAME 'CHANCE, IS THERE? AHH, CHANCE Ll'l'l'LE, YEAH. THERE'S NOBODY IN THE LABOUR PARTY WITH THE SURNAME 'CHANCE, IS THERE? AHH, CHANCE Ll'l'l'LE, YEAH. NO, I MEANT LITTLE- WITH THE SURNAME 'CHANCE, IS THERE? HE COULD JOIN UP WITH JESSE RYDER AND THEY'D BE 'PARK AND RIDE'. THAT'S A WINNER. YEAH. AND THE OTHER ONE? AND THEY'D BE 'PARK AND RIDE'. THAT'S A WINNER. YEAH. AND THE OTHER ONE? AND THEY'D BE 'PARK AND RIDE'. NAH. YEAH. AND THE OTHER ONE? AND THEY'D BE 'PARK AND RIDE'. THATS WHAT NATIONAL SAID. THANKS FOR JOINING US, JEREMY AND PAUL. JEREMAUL. JEREMY AND PAUL. JEREMAUL. OR PAULEREMY. WELL, IT'S JEREMAUL. OR PAULEREMY. WELL, IT'S JEREMAUL. PAULEREMY, PROBABLY. SOUNDS A BIT BETTER, I THINK. PAULEREMY, PROBABLY. SOUNDS A BIT BETTER, I THINK. STARTED WITH JEREMAUL, SO- I DECIDE LATER. I ...STICK WITH WHAT YOU BEGIN WITH. DECIDE LATER. ...STICK WITH WHAT YOU BEGIN WITH. NOTA BIG DEAL NOW. I HIVE NEWS PUBLISHER BERNARD HICKEY I AND FORMER ACT MP AND MEDICINES NZ CHAIR HEATHER ROY. GOOD MORNING TO YOU ALL. BERNARD, WE JUST HEARD FROM JAMIE PINK. WHAT DO YOU MAKE OF THAT MAN'S STORY AND WHAT HE'S DOING? WHATA CRACKING EXAMPLE OF A GROUP IN THE COMMUNITY GETTING INVOLVED AND DOING GREAT WORK, AND TO HEAR THE DETAIL ABOUT WHAT THEY'RE DOING. THERE WAS ALSO A GREAT REPORT IN THE WAIKATO TIMES TALKING ABOUT WHAT THEY'VE DONE, AND HIS CALL THERE FOR THE GOVERNMENT TO LOOK MORE CLOSELY AT GETTING MORE FOOD INTO SCHOOLS IS FANTASTIC TO SEE. AND IT WOULDN'T SURPRISE ME IF THE GOVERNMENT LOOKA BIT MORE CLOSELY AT WHAT HE AND OTHER COMMUNITY GROUPS ARE DOING, I AND MAYBE GETA BIT MORE INVOLVED. I <i>I</i> WHAT DO YOU THINK, HELEN? <i>I</i> WELL, I THINK THEY ARE DOING GOOD WORK, BUT THE REALITY IS BEHIND EVERY HUNGRY KID IS A HUNGRY FAMILY, AND THERE SHOULDN'T BE HUNGRY FAMILIES IN THIS COUNTRY. AND UNDER THIS GOVERNMENT, WITH THE CHANGES THEY'RE MAKING TO EMPLOYMENT LAW, DRMNG WAGES DOWN, THE INCREASING COST OF THINGS LIKE HOUSING AND POWER, THE SITUATION WILL WORSE. COMMUNITY GROUPS LIKE HIS ARE JUST PLUGGING A SMALL GAP. AND GOOD ON THEM. IT'S NICE FOR THEM TO BE DOING THAT. BUT IT ISN'T THE SOLUTION TO A MUCH BIGGER PROBLEM. I HEATHER? I IT IS A GREAT STORY, AND IT WAS GREAT TO HEAR TALKING ABOUT THE PURPOSE FOR BEING, THAT LOVE IS BETTER THAN HATE. SO THERE'S A MOTIVATION THERE, AN INCENTIVE FOR THEM TO GO AND DO GOOD WORK. I THINK IT SETS A GOOD EXAMPLE FOR OTHERS IN THE COMMUNITY. AND I THINK THE REALLY TELLING THING FOR ME WAS THAT 'HUNGRY' MEANS 'ANGRY'. AND THAT IS AN UNDERLYING MESSAGE, I THINK, FOR SOCIETY. I THINK WE COULD HAVE A DEBATE LONG AND HARD ABOUT WHETHER IT'S GOVERNMENTS ROLE TO FEED CHILDREN I OR WHETHER IT'S THE ROLE OF PARENTS. I BUT CERTAINLY, WHEN WE'RE DOING BETTER ECONOMICALLY IN A COUNTRY, PEOPLE HAVE MORE CHANCES. BEING INA POSITION- WHEN KIDS AREN'T HUNGRY, THEY LEARN BETTER, I AND THAT'S THE IMPORTANT THING. I EARLIER IN THE SHOW, WE CHATTED TO THEO SPIERINGS, THE HEAD OF FONTERRA. WHAT DID YOU MAKE OF HIS CONFIDENCE, BERNARD? HE'S CONFIDENT THAT THE PRICE FOR THE GLOBAL MILK PRICES ARE GONNA GO BACK UP, THEY'RE GONNA MEET THEIR TARGETS, YET ALL THE COMMENTATORS ARE SAYING NOT. YEAH. HE'S IN A GOOD POSITION TO SEE THE DEMAND FOR MILK AND THE SUPPLY ACROSS THE WORLD AND TO LOOK AHEAD OVER THE NEXT SIX TO 12 MONTHS. IT'S GOOD THAT HE'S CONFIDENT. THERE'S A FEW FARMERS- I IT'S GOT HUGE IMPLICATIONS FOR us. I YEAH. AND HE'S QUITE CONFIDENT THAT THEY'LL STAY ABOVE THE $5 MARK. WHILE EVERYONE IS SAYING MORE LIKE $4.70, $4.80, BECAUSE THIS MEANS ABOUT $595 BILLION LESS GOING INTO THE COUNTRY'S COFFERS, IF YOU LIKE. IT'S ALSO IMPORTANT FOR THE GOVERNMENT, BECAUSE AS WE SPEAK, THE TREASURY WILL BE GMNG NEW ESTIMATES I OF WHAT THE BUDGET OUTLOOK IS. I AND THE PRIME MINISTER SAID THIS PUTS EXTRA PRESSURE ON THEIR SURPLUS NUMBER FOR THIS YEAR, BUT MORE IMPORTANTLY FOR NEXT AND WITH VERY LOW INFLATION FIGURES THIS WEEK, THE GOVERNMENT HAS A REAL STRUGGLE TO HIT THOSE SURPLUS TARGETS WITHOUT TAKING SOME OTHER ACTION. SO, HEATHER, WE'RE ALL IMPACTED BY THIS. IF THEY DON'T MAKE WHAT THEY THINK THEY'RE GONNA MAKE, IT HAS FLOW-ON EFFECTS. BUT DOESN'T THIS SHOW US HOW VULNERABLE WE ARE WHEN WE ARE RELYING SO HEAVILY ON DAIRY? YEAH, WE'VE GOTTA BE VERY CAREFUL ABOUT HAVING ALL OUR EGGS IN ONE BASKET. SO FONTERRA NEEDS TO BE COGNISANT OF THAT, AND NZ DOES AS A NATION, ON HAVING SUCH A HEAVY RELIANCE ON AGRICULTURE. BUT TO COME BACK TO THE PRICE, FONTERRA DOES HAVE THAT JUGGLE, IF YOU LIKE, BETWEEN ITS TWO STREAMS OF SHAREHOLDERS - THOSE WHO ARE PRODUCERS, THE FARMERS, AND THOSE WHO AREN'T. AND THAT DOES FORM SOME COMPLICATIONS AROUND THE PRICE. HE WAS TALKING ABOUT EBOLA AND THE POTENTIAL IMPACT, SAY, AN INTERNATIONAL INCIDENT, IF YOU LIKE, COULD HAVE ON US. AND I WAS JUST, UH, STRUCK BY- 6%, HE SAID, OFF THEIR BOTTOM LINE. IF YOU LIKE, COULD HAVE ON US. AND HE'S VERY FOCUSED ON THESE FLOWS AROUND THE WORLD. BECAUSE FONTERRA IS OUR ONLY GLOBAL COMPANY. IT'S GOT THESE AMAZING ABILITIES NOW TO DIRECT MILK FROM ONE PLACE TO ANOTHER. AND HE'S INCREDIBLY CONSCIOUS HOW IF THOSE FLOWS ARE DISRUPTED, IT AFFECTS FONTERRA IN A WAY PERHAPS WE DIDN'T THINK ABOUT IN THE PAST. 30, 40 YEARS AGO, FONTERRA SIMPLY PRODUCED MILK IN AND EXPORTED IT MOSTLY TO BRITAIN. NOW IT HAS FARMS AND CONNECTIONS WITH PRODUCERS ALL ROUND THE WORLD, AND THAT MILK IS FLOWING ALL OVER THE PLACE. AND WHEN HE SEES DISRUPTIONS, THAT'S A PROBLEM. NOT JUST FOR THE WORLD'S DAIRY INDUSTRY, BUT FOR FONTERRA, COS IT HAS SUCH A BIG PLACEMENT NOW. HELEN, I WAS INTERESTED IN THE AUSTRALIAN COMMENTATOR WHO SAID CHINA COULD BE SELF-SUFFICIENT IN DAIRY IN THE NEXT FIVE YEARS, THE RISE OF CHINA. ARE WE AIDING AND ABETTING THAT WITH THE SALE OF LAND HERE LIKE LOCHINVER STATION? AND THE FACT THAT WE'RE SELLING THEM LIVE DAIRY, IS THAT THE GOOSE THAT LAID THE GOLDEN EGG AND WE'RE SENDING IT OFFSHORE? SURE, I THINK THAT THE SALE OF FOREIGN LAND TO ANY PERSON NOT LMNG IN NZ HAS BECOME A BIG ISSUE TO NZERS ABOUT WHO OWNS OUR LAND AND HOW WE RETAIN WHAT lS- YOU CAN'T KEEP DUPLICATING LAND. IT'S A LIMITED ASSET. BUT ACTUALLY, THE POINT YOU MADE ABOUT US JUST REDUCING OUR ECONOMY DOWN- THE FACT THAT YOU'RE INTERVIEWING OUR SINGLE BIGGEST COMPANY THAT WE'RE SO RELIANT ON SHOWS HOW VULNERABLE WE ARE. IT MIGHT BE EBOLA, IT MIGHT BE THE SORT OF FOOD SCARE WE SAW IN CHINA, IT COULD BE ANYTHING. AND THE REALITY IS THAT OTHER COUNTRIES ARE GETTING INTO PRODUCING MILK, NOT ONLY CHINA, BUT CANADA AND AMERICA, AND THEY'RE BECOMING HUGE PRODUCERS OF MILK. AND UNLESS WE HAVE A DIVERSE ECONOMY AND THINKABOUT NZ IN THE FUTURE IN MORE WAYS THAN JUST THESE PRIMARY PRODUCTS IN TERMS OF LOOKING AT HOW WE ADD VALUE TO THEM, HOW WE PRODUCE OTHER THINGS, WE COULD BE INTO AVERY BIG SHOCK IN A VERY SHORT TIME. AND IT'S NOT WHAT NZ WORKERS NEED, TO JUST HAVE ONE BIG DAIRY FARM. THAT'S THE PERFECT OPPORTUNITY TO TALK ABOUT THE TRANS-PACIFIC TRADE AGREEMENT, COS SOME PEOPLE WOULD ARGUE THAT THAT IS THE ENORMOUS OPPORTUNITY THAT WE NEED. HEATHER? I AGREE. I THINK IT'S A VERY AMBITIOUS PROJECT. IT'S BEEN SIGNIFICANTLY COMPLICATED BY JAPAN, MEXICO AND CANADA COMING IN LATE IN THE PIECE, WHEN A LOT OF DISCUSSIONS WERE ALREADY UNDERWAY. HOW MUCH SHOULD WE BE PREPARED TO BARTER IN EXCHANGE FOR GETTING RID OF AGRICULTURAL TARIFFS? <i>L</i> THAT'S THE BOTTOM-LINE QUESTION. <i>I</i> I THINK WHEN THE BENEFITS OUTWEIGH THE COSTS AND WE'RE BETTER OFF AS A NATION, THAT GIVE US A BENCHMARK, AND SO THE NEGOTIATING HAPPENS AROUND THAT POINT. SO SHOULD WE BE WILLING TO PAY MORE FOR DRUGS, THEN? I cos THAT'S A POTENTIAL CONSEQUENCE. I THERE'S NOT REALLY AN ARGUMENT ABOUT PAYING MORE FOR DRUGS. A LOT OF PEOPLE SAY THE PHARMACEUTICAL INDUSTRY WANTS RID OF PHARMAC, I THAT'S ABSOLUTELY NOT TRUE. I WE'VE SPOKEN CONSISTENTLYABOUT THAT OVER A LARGE NUMBER OF YEARS. NO, PHARMACEUTICAL COMPANIES DON'T WANT TO HAVE TO BE NEGOTIATING WITH 2O DHBS AS OPPOSED TO ONE PHARMAC UNIT. AND IF THINGS ARE DONE IN THE RIGHT WAY AND MORE DRUGS ARE AVAILABLE, THE POSSIBILITIES ARE GREATER FOR PHARMAC TO NEGOTIATE LOWER PRICES. AND WE LOOK AT THE FREE TRADE AGREEMENT BETWEEN AUSTRALIAAND THE UNITED STATES. PEOPLE THOUGHT THE SKY WOULD FALL IN AND DRUG PRICES WOULD SKYROCKET. THAT DIDN'T HAPPEN, AND IN FACT THE ACCESS TO GENERICS WAS MUCH IMPROVED. LET'S BRING HELEN IN ON THIS, COS OBVIOUSLY YOU HAVE CONCERNS ABOUT THE IMPACT ON WORKERS. YEAH, NOT JUST ON WORKERS, ACTUALLY, BUT ON OUR SOVEREIGNTY. AND OBVIOUSLY WORKERS HAVE A BIG INTEREST IN PUBLIC SERVICES AS WELL. THIS TRADE AGREEMENT IS NOT SO MUCH ABOUT TRADE AS ABOUT SELLING NZ'S SOVEREIGNTY. AND THAT STORY THAT YOU RAN WAS VERY VERY GOOD IN TERMS OF GOVERNMENTS BEING SUED WHEN THEY TRY TO GO NUCLEAR FREE IN GERMANY, GOVERNMENTS BEING SUED IN AUSTRALIA WHEN THEY TRY TO LIMIT THE IMPACT OF TOBACCO SMOKING ON THEIR POPULATION. HEATHER REPRESENTS THE DRUG COMPANIES. THE DRUG COMPANIES WANTA FREE HIT ON OUR BACKS, OUR SOVEREIGNTY, TO BE ABLE TO PROTECT THEIR BRANDS TO STOP GENERIC AND CHEAPER MEDICINE COMING ON THE MARKET. I WANNA GIVE THE LAST WORD TO BERNARD ON THIS. BERNARD, IN ABOUT 1O SECONDS, WHAT ARE YOUR THOUGHTS? IT GIVES US AN OPPORTUNITY TO GET INTO THOSE BIG MARKETS, BUT AS BOTH TIM GROSER AND THEO SPIERINGS WERE SAYING, THE CHANCES OF ITACTUALLY HAPPENING LOOK TO BE MUCH LOWER THAN THEY WERE A FEW YEARS AGO. AND BECAUSE THE JAPANESE ARE AVOIDING GMNG AWAY MUCH ON FOOD, IT LOOKS LIKE IT'S GONNA BE A STRUGGLE TO GET THROUGH ANYWAY. I ALL RIGHT, THANK YOU FOR JOINING US. I WE'LL BE BACK AFTER THE BREAK WITH WHAT WILL BE GOING ON NEXT WEEK IN THE NEWS. DO STAY WITH US. HELEN, IF I CAN COME TO YOU. THE GOVERNMENT IS EXPECTED TO PASS ITS EMPLOYMENT RELATIONS AMENDMENT BILL THIS WEEK. YOU'VE GOT SOME BIG ISSUES WITH IT, AND ARE HEADING TO THE INTERNATIONAL LABOUR ORGANISATION ABOUT IT. WHY? I WHAT THIS LAW DOES I IS IT FUNDAMENTALLY CHANGES HOW PEOPLE WILL BE ABLE TO ACHIEVE PAY INCREASES ALL BEEN DRESSED UP AROUND ISSUES THROUGH COLLECTIVE BARGAINING. IT'S' AROUND FLEXIBILITY AND EMPLOYMENT BUT EFFECTIVELY, IT ALLOWS EMPLOYERS TO NOT CONCLUDE COLLECTIVE AGREEMENTS. 98% OF PEOPLE ON COLLECTIVES GOT A PAY INCREASE LAST YEAR; 43% OF WORKERS GENERALLY IN NZ DIDN'T. SO THIS IS THE MECHANISM FOR GETTING PAY INCREASES, AND THE GOVERNMENT IS DESTROYING IT. NOT ONLY CAN AN EMPLOYER SIT THERE AND REFUSE TO CONCLUDE, THEY CAN GOT TO THE COURT AND GE AN ORDER TO REMOVE THE CURRENT T COLLECTIVE EMPLOYMENT AGREEMENT. IF THEY WIN THAT ORDER, THERE'S A 60-DAY PERIOD WHERE WORKERS CAN'T BARGAIN, CAN'T STRIKE, GOOD FAITH DOESN'T APPLY - THE EMPLOYER CAN OFFER WORKERS INDMDUAL EMPLOYMENT AGREEMENTS. SO YOU SEE ITAS WHOLESALE EROSION OF WORKERS' RIGHTS, PURE AND SIMPLE. IT IS, AND IT EVEN GETS RID OF THE TEA BREAK AND LUNCH BREAK AS A TOSS-IN INSULT TO WORKING PEOPLE. WELL, ACTUALLY THE GOVERNMENT SAYS YOU NEGOTIATE THE TEAAND LUNCH BREAK WITH YOUR WORKER I AND YOU COME TO AN AGREEMENT ON IT. I AT THE MOMENT YOU HAVE A RIGHT TO A TEA BREAK AND LUNCH BREAK. WHAT THIS SAYS IS IF YOUR EMPLOYER DOESN'T WANT TO GIVE YOU ONE, THEY CAN GIVE YOU COMPENSATORY MEASURES. IT DOESN'T SET OUT WHAT THOSE MEASURES ARE, DOESN'T GIVE YOU A 10-MINUTE BREAK, AND THEN THE COMPENSATION MIGHT BE 10 MINUTES' PAY ORA HALF-HOUR BREAK. IT JUST SAYS 'COMPENSATORY MEASURES'. IT COULD BE A SANDWICH AT YOUR DESK; IT COULD BE NOTHING. HEATHER, THE GOVERNMENT SAYS WE NEED THIS TO INCREASE PRODUCTMTYAND CREATE MORE JOBS. YEAH. AND I THINK THERE ARE SOME VALID POINTS THERE. IT'S EASY FOR HELEN TO DISMISS FLEXIBILITY. AT ONE LEVEL, WE HAVE UNIONS AND THE LABOUR SIDE OF THE HOUSE TALKING ABOUT WORK-LIFE BALANCE, I-I THE GREATEST DIFFICULTY I HAVE, I THINK, IS THE BASE ASSUMPTION FROM THE OTHER SIDE THAT EVERY EMPLOYER IS A BAD EMPLOYER. I THINK THERE NEEDS TO BE SOME FAITH IN THE PROCESS, AND FLEXIBILITY IS IMPORTANT. HOW MUCH MORE FLEXIBILITY DO YOU GET-? IMPORTANT. HOW MUCH MORE FLEXIBILITY DO YOU GET-? YOU'VE GOT WORKERS AND EMPLOYERS WHO SHOULD BE ABLE TO HAVE ADULT CONVERSATIONS AND COME TO THE BEST ARRANGEMENTS THAT SUIT THEM BOTH. BUT IS THERE A POWER IMBALANCE THERE, BERNARD? THATS THE CONCERN - THAT YOU INCREASE THE POWER OF THE EMPLOYER TO SET CONDITIONS AND TO SET THE AGREEMENTS, AND YOU REDUCE THE POWER OF THE UNION AND OF COLLECTIVE AGREEMENTS TO COME UP WITH A WAGE. ONE OF THE BIGGER RISKS HERE, AND WE'RE SEEING IT NOWALL ROUND THE DEVELOPED WORLD OVER THE LAST 30 OR 4O YEARS IS THAT THE REDUCTION OF UNION POWER, IF YOU LIKE, AND OF COLLECTIVE AGREEMENTS HAVE ACTUALLY SEEN REAL WAGES FOR LOW- TO MIDDLE-INCOME GROUPS RIGHT AROUND THE WORLD DROP. AND THAT'S ACTUALLY NOT HEALTHY FOR ECONOMIES. ITALSO MIGHT MAKE IT MORE DIFFICULT FOR THE GOVERNMENT TO ACHIEVE ITS OWN TARGETS OF INCREASING REAL WAGE GROWTH FROM AROUND ABOUT 235% TO 375% OVER THE NEXT THREE OR FOUR YEARS. THAT WAS ONE OF THEIR ARGUMENTS BEFORE THE ELECTION, THAT THEIR RECOVERY WOULD SEE WAGE INCREASES FLOW THROUGH. AND WHAT'S INTERESTING IN THE LAST COUPLE OF MONTHS, WE'RE STARTING TO SEE SIGNS IN THE INFLATION FIGURES THAT REAL WAGES AREN'T GROWING MUCH AT ALL. AND THAT'S ONE OF THE CONCERNS HERE, THAT IF YOU ERODE THE POWER OF COLLECTIVE AGREEMENTS, YOU REDUCE REAL WAGES, AND IN THE LONG RUN, THAT ACTUALLY WEAKENS ECONOMIES. THEIR CABINET PAPERS SAY THAT'S WHAT THIS LAW WILL DO. SO THEY'RE FUDGING THAT ISSUE. THEIR OWN CABINET PAPERS SAY 'THIS LAW WILL ENABLE EMPLOYERS TO REDUCE WAGES TO WORKERS'. THAT'S WHAT THEY SAY. WE'RE NOT EVEN MAKING THIS UP. ALL RIGHT, NOW, YOU RAISE FUDGING OF ISSUES. THERE'S ONE THING THAT CAUGHT MY EYE THIS WEEK - THE PRIME MINISTER. WHEN IS HE THE PRIME MINISTER AND WHEN IS HE NOT? THIS WAS IN RELATION TO CONVERSATIONS THAT HE MAY OR MAY NOT HAVE HAD WITH CAMERON SLATER THE BLOGGER WHALEOIL. HE WAS ASKED IN THE HOUSE IF HE HAD EXCHANGED PHONE, TEXT OR CALLS. NOT IN HIS CAPACITYAS PRIME MINISTER, HE SAID, BERNARD. YEAH, THAT'S STRANGE. DOES HE HAVE DIFFERENT SETS OF CAPS? 'HERE'S THE CAMERON SLATER CAP. RIGHT. I'M NOT THE PRIME MINISTER.' 'HERE'S MY WIFE'S CAP. AND HERE'S THE CAP FOR THE CAT.' IT IS QUITE UNUSUAL, AND I WAS REALLY SURPRISED THAT HE TOOK THIS APPROACH IN PARLIAMENT. THE THING IS, WHY WOULD THEY WANT TO TALK TO EACH OTHER IF HE WASN'T THE PRIME MINISTER? WHO WAS THE PRIME MINISTER WHEN HE WAS TALKING TO THEM? WHO WAS ACTING PRIME MINISTER WHILE JOHN KEY WAS ON THE PHONE CONSTANTLY TO CAMERON SLATER? IT IS VERY CUTE. WHEN I WAS A MINISTER, I ASSUMED THAT I WAS ALWAYS OPERATING IN A MINISTERIAL CAPACITY. SO THERE'S NO OFF SWITCH, AS FAR AS YOU'RE CONCERNED? OPERATING IN A MINISTERIAL CAPACITY. THERE'S THE TIME YOU SPEND VVITH YOUR FAMILY. I THINK THAT'S LEGITIMATE. BUT WHEN YOU'RE TALKING TO OTHER PEOPLE WHO HAVE AN IMPACT ON THE POLITICAL SPHERE, I YOU'VE GOT THAT HAT ON, I THINK. I AND WHEN YOU'RE HAVING A GO AT THE PIKE RIVER FAMILIES, USING INFORMATION YOU GOT WHEN YOU WERE THE PRIME MINISTER AND YOU WERE PATFING THEM ON THE HEAD ON THE WEST COAST, TELLING THEM THAT YOU WOULD REMEMBER THEM AND SUPPORT THEM TO GET THE BODIES OUT OF THAT MINE, AND THEN YOU GO AND TALK TO CAMERON SLATER IN WHAT APPEARS TO BE A DEROGATORY TERM, YOU ARE DEFINITELY THE PRIME MINISTER THEN. AND THE SPEAKER DID ACKNOWLEDGE THAT, THAT IN RELATION TO THE QUESTIONS AROUND PIKE RIVER, BECAUSE IT CROSSED OVER TO THE PRIME MINISTER'S ROLE, THAT THOSE QUESTIONS SHOULD HAVE BEEN ANSWERED. BERNARD? AND CAMERON SLATER CALLS HIMSELF A POLITICAL ANIMAL. AND HE'S A PUBLIC FIGURE WHO IS REGULARLY REPORTING I AND COMMENTING ABOUT PUBLIC LIFE. I AT THE SAME TIME, THIS WEEK JOHN KEY SAYS HE USES HIS MINISTERIAL PHONE TO CALL HIS WIFE, AND HE'S NOT CALLING HER AS THE PRIME MINISTER; HE'S CALLING HER AS THE HUSBAND. NO ONE'S ASKING HIM QUESTIONS ABOUT THOSE CONVERSATIONS, ARE THEY? AND WE'RE TALKING ABOUT WORKPLACE FLEXIBILITY. IF YOU'RE WORKING FOR A COMPANYAND YOU'RE USING THE COMPANY PHONE FOR PERSONAL THINGS, THAT'S SOMETHING THAT YOUR EMPLOYER SHOULD KNOW ABOUT. AND WEARE, IN EFFECT, THE EMPLOYER OF THE PRIME MINISTER, AS VOTERS. HE'S USING THAT PHONE AS THE PRIME MINISTER, SO- SOMETHING TO HIDE. HE'S GOT SOMETHING TO HIDE. BUT HELEN CLARK USED TO SAY THIS TOO, 'I'M ACTING IN MY CAPACITY AS PRIME MINISTER, OR I'M NOT.' IT'S A TRICK THAT'S BEEN USED BEFORE, FOR SURE. AS PRIME MINISTER, OR I'M NOT.' ITS A TRICK THATS BEEN USED BEFORE, FOR SURE. JUST AS WRONG, THOUGH. HELEN, WITH THE AMENDMENTS GOING THROUGH THE HOUSE THIS WEEK, ARE YOU EXPECTING ANY PROTESTACTION THIS WEEK? UM, THIS IS GOING THROUGH IMMEDIATELY AFTER THE GOVERNMENT IS ELECTED. WE'VE HAD MASSIVE PROTESTS AROUND THIS. WE HAD 12,000 SUBMISSIONS AGAINST IT. THERE WON'T BE ANYTHING THIS WEEK. THIS IS A FAIT ACCOMPLI. THEY'RE PUSHING IT THROUGH AS THEIR FIRST ACT. AN ATTACK ON VVORKING PEOPLE. WE'LL LEAVE IT THERE. THANK YOU VERY MUCH FOR JOINING ME. A QUICK PEEK AT WHAT'S LIKELY TO MAKE THE HEADLINES NEXT WEEK. THE LABOUR LEADERSHIP ROADSHOW HITS THE SOUTH ISLAND, WITH MEETINGS IN NELSON, CHRISTCHURCH, DUNEDIN I AND INVERCARGILL. I CONTROVERSIAL CHANGES TO EMPLOYMENT LAW ARE EXPECTED TO PASS ON TUESDAY. JOHN BANKS WILLAPPEAL HIS CONVICTION FOR FILING A FALSE ELECTORAL RETURN ON WEDNESDAY. AND ON THURSDAY, THE RESERVE BANK IS TIPPED TO AGAIN KEEP INTEREST RATES ON HOLD. AND HERE ON THE NATION NEXT WEEK, WE'LL INTRODUCE YOU TO THE NEXT GENERATION OF HOMEGROWN TECH STARS. DO JOIN US THEN. YOU CAN ALSO CHECK OUT OUR INTERVIEWS ONLINE AT THENATION.CO.NZ THATS US FOR TODAY. FROM ME AND THE REST OF THE TEAM, ENJOY THE REST OF YOUR LABOUR WEEKEND. I WE'LL SEE YOU NEXT WEEK. I CAPTIONS BY PIPPA EFEIES AND TRAOEY DAWSON. WWW.ABLE.CO.NZ CAPTIONS WERE MADE POSSIBLE WITH FUNDING FROM NZ ON AIR. COPYRIGHT ABLE 2014