A Brash move

By CARROLL DU CHATEAU

Four years ago I tailed Don Brash on what the then-Reserve Bank Governor called his National Economic Roadshow. The trip lasted two weeks, involved 23 speeches, took in about 4000km and was designed to explain the thinking behind Reserve Bank monetary policy. I bailed out after two days and about five meetings, but not before I'd gained a little insight into the governor.

As I wrote: "He stands there at the front of the room - all by himself, no driver, no staff, no introduction - glasses glinting, suit trousers just a little too short, rocking on his toes, enjoying himself - and hammers home his message while the rain thunders outside."

I didn't mention that during his speeches the then-58-year-old Brash was scrupulously conservative and resolutely apolitical, but off-duty there was a trace of wistfulness in the grey eyes when the conversation turned - as it tends to with Brash - to politics.

As he drove from Kumara in the wet West Coast through Arthur's Pass and on to Christchurch on the South Island leg of the trip, the governor's thoughts would return repeatedly to his favourite subject: What can be done to turn New Zealand into the prosperous, classy country it once was? From memory his answers centred around plantation tree planting, education, biotech, added-value, entrepreneurism.

Another part of Brash's philosophy was to be seriously mingy with the Reserve Bank expense account. He lunched on pies, Ernest Adams ginger gems and Diet Coke, took up the motel's offer of a free glass of wine with dinner and, I later found out, washed his own socks in the handbasin - after his final check of the money markets on his laptop.

And always there was the feel that beneath the extraordinarily discreet mantle lurked something of a goer.

Despite Brash's obvious fascination with politics, only once in the intervening years did I notice him throw off his Reserve Bank straitjacket. It was at the Knowledge Wave conference last August and Brash's comments on the high price of welfare dependency caused Helen Clark to bristle. "We pay Don Brash to run monetary policy, not social policy," she growled. She probably didn't like him saying that teachers were "scandalously underpaid" either.

The outburst did not go unnoticed in National Party circles. "They approached me a few times," says Brash. "Then Michelle [Boag] approached me directly. It was April 21st, a Sunday. I was home in Khandallah and had to make a decision very quickly."

Why? "I think it's intolerable that someone from the Reserve Bank contemplate a political career and work on decisions about interest rates," says the discreet, super-ethical Brash. There were other reasons, too. He had been at the bank 14 years, his contract was due for renewal in August next year and another five-year term "frankly wouldn't have been good for the bank".

On Anzac Day, Brash decided. Although "I hugely enjoyed my other job" he would switch. When he resigned next day he took a salary drop of 83 per cent - from just over $500,000 a year to around $80,000 as an opposition MP, if he gets in.

This late-career change did not just hit Brash in the pocket. His Singaporean-born second wife, Je Lan, who works for the Cabinet Office, felt obliged to offer her resignation when her husband decided to stand for the Nats.

Luckily for him it was not accepted, but it is likely that things were a little stony in Brash's household for a couple of days. "My wife did say, 'If you'd always regret not doing it when you get to the grave, you'd better do it', though she wasn't sure it made sense."

"So why did I do it?" Brash ponders the question. "On the face of it, it seems absolutely crazy giving up a well-paid job where people could trust my motives to take up a less well-paid one where most people are inherently suspicious of my motives."

This son of a moderator in the Presbyterian church and a milliner who hauled himself to the top via a traditional New Zealand education (Christchurch Boys High, Canterbury University), before going on to the Australian National University to take a PhD in economics, continues: "I wanted to preserve the thing that makes New Zealand special - a society which enables people from any background to have access to decent education, health care, and to achieve what they want to achieve.

"If New Zealand's living standards continue to decline relative to places like Australia and other countries where skilled New Zealanders can readily move, the kind of society we've grown up in is seriously at risk.

"We're heading for large income differences because eventually we will be obliged to pay some approximation of what people can earn in Sydney to hang on to them - and these high increases will come out of the hides of everybody else.

"Which means we risk an income distribution like they have in Latin America - a very small number of highly affluent people and a very large number of very poor people ... We're still getting better off, but the gap gradually widens."

Brash's children have stuck around, despite a marriage breakup that their father describes as the toughest thing in his life. Son Alan, 33, works for the Gibson Group where he helped to devise TV3's raunchy The Strip. His daughter, Ruth, 34, was with Holeproof in Auckland before taking on the full-time mothering of her two children. His youngest child, Thomas, 9, is at Wellesley College in Days Bay.

T ODAY the MP-elect is like a kid himself. Although Brash's chances of becoming Finance Minister this time round are probably non-existent, at four on National's list he is almost assured of a place on the opposition benches after July 27.

The new-found freedom is obviously heady. The grin is toothier, his eyes sparkle behind the glasses as he gives the message he's been itching to push for probably 14 straight years.

Last week he had a go at Finance Minister Michael Cullen, who suggested the Reserve Bank should aim for the high side of the 0-3 per cent inflation target set by the Labour-instigated Reserve Bank Act.

"We haven't had that sort of political interference since Rob Muldoon was Minister of Finance," said Brash.

"The worst thing about the minister's comments is that they imply a bit more inflation will buy more growth. Wrong."

The 61-year-old Brash takes the pace in his lanky stride. As a list MP, the entire country is his electorate. Appointments crackle through the cellphone from party president Michelle Boag who is working her new candidate hard in this frantic run-up to the election.

After this interview Brash flies to New Plymouth, delivers two speeches, then moves on to Wellington and then Nelson to appear on a TV programme with Nick Smith. In the morning he will help to host Smith's campaign launch, then it's back to Wellington to pick up a couple of clean shirts before flying to Auckland, on to Kerikeri then back to Auckland on the Nats' hired helicopter. "Please don't mention that [the helicopter]," he says, anxious as ever to distance himself from the fat cats.

Despite his protestations and modest habits - his idea of a great summer holiday is a couple of weeks pruning vines at his Pukekohe kiwifruit farm - Brash moves in prosperous and powerful circles.

He talks to international bankers in the same way most of us quote our neighbours. Men in expensive, pin-striped suits greet him constantly in Queen St and after the election he will probably move north and closer to the country's business leaders.

If National performs badly and Brash misses out, he would probably take an overseas job ("I'm not sure if I mentioned that I was offered a pretty attractive job overseas late last year but turned it down") or consult internationally from a New Zealand base. But, says Brash, "I'm not really expecting to lose!"

Thursday, and Don Brash stands in front of 50 North Shore Nats rounded up by MP Wayne Mapp, who introduces him as "Don, the man with the plan".

Even though he is late and this creamy, comfortable group, including Diane Foreman of Business Round Table fame, have already downed a couple of glasses of savignon blanc from the walnut cabinet, Brash handles his audience adroitly.

After a couple of mildly anti-Labour jokes around his Qantas flight that took off 45 minutes behind schedule and his crawling progression through spaghetti junction, he heads into his five-point action plan for growth.

This is not Brash's first time on the hustings. In the early-80s he stood twice for National and lost both times. As George Gair, who has crawled from the other end of the beach in his flash car, says, the loss in East Coast Bays last time was predictable. The bridge toll was steeply increased days before the election [possibly by a malevolent Muldoon who did not want a dryzabone economist on his side of the floor].

Brash's plan is plain. No silver bullet, just five key points:

One, ensure excellent, free, education from pre-school to 7th form. "One of the saddest things this Government has done is to abolish bulk funding. I have never met a principal whose school was bulk funded who wanted to go on to central funding yet ... too many kids come out of the system unable to read and write."

Two, try to stimulate growth by cutting the top personal tax rate to 30 per cent and company tax to 30 per cent, so matching the Australian company rate. "Our company tax rate is the highest in the Asia Pacific."

Three, reform the welfare system "to reduce the devastating impact of 350,000 people of working age on benefits (excluding super). What worries is that we have got the lowest unemployment in 13 years and employers in many parts of the country say it is almost impossible to find even unskilled staff ... It's like we're trying to ride the bike with the back brake on".

Four, reduce compliance costs. "Again and again I hear the Resource Management Act is used by two groups - those blocking their competitors and others who have almost no involvement in what is happening. Eventually what happens is blackmail - a person wants to build a factory, money changes hands, and the objection gets withdrawn."

Five, get Maori on board the bike. "The failure of education is particularly acute in Maori. I also worry that a lot of tribal assets are not being used as productively, then there's the Treaty ... "

And no, Brash says he's not racist. "I support the fact that things that were done were unjust and wrong." He lowers his voice and fixes his audience with a steely eye, commenting that although the gravy train is an issue, what bothers him is, "If you tell anyone that their economic prosperity rests on someone writing a cheque in the future, it is seriously damaging".

"My basic proposition is that we have to get more growth, and to do that we have to look at the things that are anchoring the bike - and I suspect the current structure of the welfare system is one of them."

Both the message and the tone are different from the ones Brash gave on his Economic Roadshow four years ago. He doesn't bounce on his toes to this group of converts in quite the same way. But the conviction I remember from 1998 is there still, the drive to get his message across is all-consuming.

Physically there are a some improvements. The middle-aged spread seems to have vanished, the trousers of his double-breasted suit drift fashionably low over his shoes, the shiny gold and blue tie is much brighter than anything else I've seen him wear.

But at the core Brash is still the same - still modest, thoughtful and amusing, still preaching the gospel of hard work and thrift, still carrying a reservoir of numbers in his head: Australia has been running a mandatory superannuation scheme for nine years and their Reserve Bank is not yet persuaded of its increased total savings ...

How much will Michael Cullen's super fund actually earn? Answer, "Not the 9 per cent Labour is calculating on". What Fonterra expect to pay for milkfat this year: "$4 a kilo ... Do you realise how much tax people are actually paying when you add the over $60K rate and GST together? Answer, almost 50 per cent".

The applause on the Shore when he finishes is reasonably energetic for a crowd that would have liked Brash to deliver a silver bullet or two - or at least a whiff that National might manage to sneak up in the polls again. But Brash is not that sort of guy. He is not a talker-up like Bill Clinton.

What he is though is thoroughly believable - and predictably frugal."Parking charges are awful in Auckland," he tells me after leaving his shiny blue rental wagon ("much cheaper than taxis") in the hands of the Stamford Plaza valet. "But this is really very good value."

How did he know? Homework. Already the cash-aware Brash had checked-out - and remembered - the parking rates downtown, not to mention those nearer St Patrick's Cathedral. Which, I suppose, is a reassuring trait in a prospective National Party Treasurer.

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