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Home / Business / Economy

<i>Fran O'Sullivan:</i> Hail Palmer's open debate

Fran O'Sullivan
By Fran O'Sullivan,
Head of Business·
24 Nov, 2007 04:00 PM5 mins to read

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Fran O'Sullivan
Opinion by Fran O'Sullivan
Head of Business, NZME
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KEY POINTS:

Top New Zealand company chairman John Palmer is on a mission to promote an open public debate on the consequences of the Government's climate change policies.

Palmer applauds the Government's aspiration for New Zealand to be a carbon neutral country and to be 100 per cent powered by
renewable energy sources by 2025: "Fantastic".

But he believes the policies have not been tested sufficiently, or subjected to enough vigorous and open debate to ensure New Zealand "as a nation" makes the right decisions on a policy framework that will hugely transform the economy.

Palmer, who chairs Solid Energy and Air New Zealand, is one of New Zealand's most-experienced directors.

At Solid Energy's annual parliamentary soiree 10 days ago, he took a swipe at Peter Neilson, the CEO of the Business Council for Sustainable Development, for rubbishing economist David Skilling's report advocating New Zealand should be "fast followers" on climate change policies.

Palmer had been out of New Zealand when the Skilling report was published. But he said it was a "very bad sign" when different views were trashed.

"It's in the interests of New Zealand Inc that we do have an open debate on the options in front of New Zealand and evolve the framework carefully. We deeply need the best decisions for New Zealand."

The Solid Energy board has resolved that it has a legal responsibility to its Government shareholder to report on any issues that might affect the company's value, future revenue and profits.

It also has to give regard to the interests of the communities it serves by ensuring a proper discussion on energy policy and climate change and ensure vigorous debate.

Damning views the Government does not like as "Neanderthal or unhelpful" was not a good sign.

He was dismayed at the dismissal of the New Zealand Institute's report which urged the country to take a "fast follower" rather than leadership role on implementing greenhouse gas emission reductions.

At the parliamentary meeting, Palmer said we were "only at the start of some of these discussions, not at the end".

The Government should not be trying to discourage debate.

Those present, who included Wellington's top bureaucrats, SOE and business heads, consultants and politicians, burst into spontaneous applause.

Palmer, like the chairs of many New Zealand businesses (and SOEs), has grown increasingly concerned that debate was being squashed. But unlike many of his peers he is doing something about it.

Solid Energy's board authorised their chairman to take his public stand at Parliament. The board includes John Spencer, Alan Broome, Helen Cull, John Fletcher, John McDonald, Tony Williams and Adrienne Young Cooper.

But Palmer's message was not to everyone's taste. A gob-smacked Neilson button-holed Palmer directly after his speech.

But Solid Energy, which is one of the council members, is not alone in feeling frustration over Neilson's predilection for acting as a Government echo chamber on climate change, using external polling to bolster his claims, instead of taking a balanced approach by first canvassing his members.

Palmer's stand is a courageous one. But for a public debate to get off the ground it will take a number of company chairs to put their heads over the parapet and support him.

Directors of public companies have a requirement to act prudently, particularly when it comes to investment decisions that could affect future profitability.

In Solid Energy's case, the SOE is New Zealand's second-largest producer of indigenous energy.

But it has had to put on hold contract negotiations with New Zealand Steel because of the uncertainty over future carbon prices.

The company is not without credentials in the climate change space: it has committed to spend $100 million on developing energy and climate change technologies appropriate for New Zealand.

Palmer is clear that Solid Energy's future business viability will depend on understanding the future business environment as well as, or better than, anyone else.

This presents a conundrum for this Government.

We've been here before as a nation. In the early 1980s, when Sir Robert Muldoon was still in power, the editor of the Australian Financial Review, Paddy McGuinness, labelled New Zealand an "economy of fear".

McGuinness had been astounded to find on his fact-finding tour that businessmen were too frightened to speak out about our economic direction, in particular an excessively regulated economy and the Think Big imported fuel substitution projects of the Muldoon Government.

If they stepped out of line, Muldoon would swipe them verbally.

The Clark Government has made great play over the negative impact of the transformative policies which were put in place by David Lange's fourth Labour Government without major public debate.

This week, Finance Minister Michael Cullen said the earlier transformative wave resulted in a huge increase in poverty, stubbornly high unemployment and a general decline in the fairness that underpins the economy.

Cullen assured a climate seminar that the Labour-led Government knows the only way to succeed in the next wave of transformation is by continuing to work closely with the business sector and workers, using the consultative approach to the Emissions Trading Scheme as an example.

Problem is, Cullen used that same speech to insinuate that major polluters and emitters were resorting to research consortiums, marketers, and increasingly sophisticated tactics in an attempt to raise doubts about the wisdom of the path ahead.

"The days when industry-funded think-tanks can get away with distorting the huge scientific consensus on climate change through the media are gone."

The barely disguised swipe at the New Zealand Institute proves Palmer's point. Cullen did not whack the institute over its earlier reports on savings and housing affordability, which played into his own policy agenda.

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