Foreign Affairs new head issues challenge to NZ business

John Allen has issued a challenge to New Zealand business to

Foreign Affairs' new broom, John Allen, has issued a challenge to New Zealand business to "stand-up and be prepared to take some risks."

The charismatic businessman, who was parachuted into the blue-blooded ministry to oversee what powerful cabinet ministers privately refer to as "regime change", is categorical about what he expects from the private sector: "I want them to get involved in the dialogue over the shape of our markets, how we might best be represented in them, and to be involved in actually developing export capability.

"I know that people say there are risks in getting involved in exports - and undoubtedly there are - but frankly, unless we deepen our export capability and we actually get New Zealand businesses offshore and active in the international markets then we're not going to have that bright prosperous future that we're all looking for."

A further Allen priority is to engage talented Kiwis offshore, "take them seriously and ensure we are doing all that we can to leverage their capabilities, their networks and their relationships to help us position on the world stage".

Allen earned his stripes as a competent commercial operator during his six years as chief executive of NZ Post. But he's no political virgin. Six years as boss of one of the largest state-owned enterprises provided plenty of schooling on how to deal with cabinet ministers. Two years co-chairing the influential Australia New Zealand Leadership Forum, which meets for the sixth time in Sydney today, persuaded the State Services recruiting panel he also had the visionary leadership that Cabinet was looking for to lead a "New Zealand Inc" approach offshore designed to increase the external imprint of our private sector.

Just five weeks after taking up his new role as chief executive of the Ministry of Foreign Affairs and Trade, Allen can barely contain his excitement. "It's been great. The work is just extraordinarily challenging and stimulating; the people are very talented; and the opportunities are real. So, it pushes all of the buttons that I was expecting for a role of this kind."

Allen is relatively coy about his plans for the ministry ("at week five I think it would be naive for me to be setting some enormous prescription for the future") but Foreign Affairs Minister Murray McCully says the pair have had a number of "big picture discussions".

"He brings a very different set of skills to the public sector," says McCully. "We now have a really good chance to carry forward the best of MFAT tradition with the input of the private sector."

The first demonstration of the Allen style came last week with the skilfully managed exit of long-time diplomat Peter Adams as chief executive of the troubled NZ Aid.

NZ Aid had been in McCully's sights ever since concerns over the semi-autonomous agency's dispersal of public funds became so acute that the Office of the Auditor-General began receiving monthly reports on it.

The Foreign Affairs Minister put the skids under Adams' future earlier this year by saying publicly: "NZ Aid looked at the word 'autonomous' and ignored 'semi'."

A reliable source says Adams' contract was due to expire later this year. But he "took the option" of using up unclaimed holiday leave and went early.

Allen hosted a gracious farewell function at Foreign Affairs' HQ then slipped straight into Adams' role to sort out the NZ Aid debacle while simultaneously continuing to run the MFAT mothership.

The upshot is likely to be a much stronger focus on ensuring there are returns on the considerable bucks that New Zealand pumps into foreign aid - something which is anathema to some old-school diplomats but is symptomatic of the robust approaches that New Zealand and Australia are now forging in this area.

Allen's challenge to deliver on the NZ Inc strategy will be less hands-on in the short-term. McCully, who presides over the Cabinet external relations and defence committee, is currently calling the shots as officials determine the extent of New Zealand's footprint offshore.

But Allen's mettle will be tested when he again performs a chairing role at the two-day Leadership Forum. Business attendees will be watching to see he does not deviate from his former robust challenges to the status quo now he also has to carry the bag for ministers. His first stated ambition is to put New Zealand on the agenda in Australia, and make sure it understands the value the smaller partner brings to the relationship.

"It's the fact we do approach issues in slightly different ways that have enabled us - Australia and New Zealand - to work together so effectively in the Pacific," he says. "It's the fact that we have had different relationships with different countries in Southeast Asia that have enabled us to bring together the Australia New Zealand Asean Free Trade Agreement - so some of the elements of difference between the two countries actually enable us to make more progress.

"But it's also the reality that our science community and the Australian science community are collaborating and have more scale and capacity and power; it's the fact that our business community coupled with the Australian business community can create opportunities for greater scale in terms of projecting into the world; and it's the fact that if we work together we have more prospect of successfully attracting the talent, the capital and those sorts of key enablers to this part of the world that will drive our collective and future success."

Yesterday's announcement that air travel across the Tasman will be streamlined has ensured some headlines. News coverage will step up as Prime Minister John Key's state visit to Australia culminates in today's inaugural joint cabinet meeting in Sydney, and tomorrow's Bledisloe Cup match.

Fourteen cabinet ministers - seven from each side - will address the 100-strong forum debating issues like the response to the global economic crisis, defence policy, climate change and clean technology, and the international trade agenda.

Rod McGeoch, who is Allen's co-chair from the Australian side, has injected some novel elements.

Deutsche Bank's Scott Perkins and Booz & Co's Tim Jackson will unveil a scoping study into how to save taxpayers on both side of the Tasman a considerable amount by creating synergies to extract back-of-house costs from areas like joint trade promotion and delivery of aid.

Attendees will be divided into 25-strong groups and challenged to come up with three initiatives to drive the relationship forward.

But there will be some wrinkles.

CEOs from the Australasian banks, who are also underwriting the forum, are expected to talk directly about the practical challenges they face operating transtasman companies.

They are not expected to pull any punches on hot issues like claims their margins on business loans are too high, the upcoming parliamentary inquiry in New Zealand into banking, and the public focus on the cute tax deals their companies arranged which effectively enabled them to skim hundreds of millions of dollars off the New Zealand taxpayer.

NZX boss Mark Weldon and Telecom's Paul Reynolds are also expected to be direct about the challenges for New Zealand firms entering the Australian market.

Allen is sanguine. He'll be delighted, he says, if there is further debate and focus on the issues, as a result of media coverage.

He'll also be happy if there is a commitment to an agenda to drive the single economic market forward for both countries.

"I'll be delighted if we build relationships up at a senior level and understanding sufficient to have a new group of advocates for the relationship standing up with political leaders as we move forward.

"But being realistic - this is really about a long-term game, driving year by year a deeper understanding of the opportunity between the two countries and developing the commitment in both countries that we should realise those opportunities."