Outgoing leader sums up state of the nation

RICHARD BRADDELL reports a view of the business-Government relationship.

WELLINGTON - The row over the Employment Relations Bill is taking the gloss off New Zealand at a time when it has a strong international competitive advantage, says the outgoing manager of Comalco New Zealand, Kerry McDonald.

Mr McDonald, aged 58, announced his resignation yesterday after 19 years with the company. While he gives up day-to-day executive responsibility, he will stay on as deputy chairman and will continue to have an advisory role.

Reflecting on the state of the nation, Mr McDonald said there had been a significant sense of goodwill in the business community to the new Government, and that is why it had been slow to react to the income tax rise and ACC changes.

But he said alarm about the Employment Relations Bill was mounting as people began to understand numerous shortcomings which stemmed from its highly prescriptive attempt at dealing with every perceived wrong on the industrial scene.

"Unfortunately, the controversy about the bill is taking place at a time when New Zealand does have a fundamental competitive advantage against a number of other locations," said Mr McDonald. "So if companies are looking at shared services arrangements, concentrating back office activities on a regional basis, New Zealand should be in a strong competitive position to attract that sort of activity."

While Mr McDonald shared the concern about the bill, he disagreed with business interests who felt the Employment Court had been too accommodating of employees' personal grievance claims.

Instead, he said, the less prescriptive regime of the Employment Contract Act required the easy avenue for redress against bad employers that the court offered.

Mr McDonald, who was for six years the director of the Institute of Economic Research before he joined Comalco, is now its deputy chairman.

He is also chairman of the Bank of New Zealand, a director of Carter Holt Harvey and Owens Group, and a chairman of the Japan New Zealand Business Council.

Mr McDonald said his scaled-back involvement with Comalco would leave him in contact with a stimulating global industry, but free him from frequent transtasman travel and allow him to put order back into his life.