Qantas award-winning journalist Rebecca Macfie interviewed embattled financier Allan Hubbard for the Listener last month. In this extract from her story she charts his rise from poverty to being one of the South Island – and New Zealand’s – biggest financiers.
Hubbard - financier, entrepreneur, philanthropist, workaholic, one-man economic development agency for South Canterbury - is a child of the slump. He was born in 1928 into an impoverished North Dunedin home, where his mother brought up five children in a three-roomed cottage with no electric lighting, sacking on the beds and apple boxes for furniture. He says his father, a plumber, was unemployed during the Great Depression and was sent to plant pine trees at a work camp at Waipori where he lived in a tent, coming home every few months.
At home "we had bread and dripping, and just one main meal a day. I was aware we were very poor".
He would gather kindling and pick raspberries for the markets to earn extra cash to give to his mother. The children often spent time in Presbyterian Support homes when she was too ill to care for them.
Although the family weren't religious, Hubbard got involved in Sunday School and Bible class. One night, before he was due to sit his final civil service exam in the hope of getting a Government job, his Bible class leader brought him a book about Fergus McLaren, a Presbyterian minister who was killed in combat in World War II. "In the middle of the night I heard voices. Somebody spoke to me. I knew the next day I was a different animal, I was a different person ... It formed my ideals."
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The day after this epiphany, Hubbard did badly in his crucial maths exam, closing off the option of a career in the civil service. His first job was on a Taieri dairy farm, before he became a clerk with Trustees Executors, run by Peter Smellie, the father of his Boy Scout friend Robert Smellie (who went on to become a High Court judge).
On his first day his new boss gave him a lecture on success in life, and told him to enrol at night school. Over the next two years he completed School Certificate and University Entrance while working for Smellie, then studied part-time at the University of Otago towards an accounting degree, which he finished at the University of Canterbury after Trustees Executors transferred him to Christchurch.
In 1953, he and Jean, whom he had met at the University of Otago where she was doing a BA, moved to Timaru. He worked part-time doing the books for the posh girls' school Craighead, set up the accounting firm Hubbard Churcher, and began slowly building what was to become a powerful financial empire spanning finance, helicopters, farming, shipping, horticulture and technology.
One of Hubbard's earliest goals was to save enough money to buy his mother a new house, but she died before he could do this. "I gave the money to Presbyterian Support in her memory. My mother had a dreadful life, really."
From the beginning of his six-decade business career, the working-class boy from Dunedin was a deal-maker with a long view. In the mid-1950s he backed Timaru grocer Doug Shears in setting up Helicopters New Zealand, which grew from tentative beginnings to become the country's biggest helicopter company, whose contracts include working in Laos recovering the remains of US servicemen shot down in the Vietnam War and servicing the Australian mining industry.
He bought his first farm in 1962, and proceeded to accumulate many more, including a one-third share in Dairy Holdings (now part of SCF), owner of 58 dairy farms. He has been pivotal in the development of intensive irrigated farming in Canterbury. When the Opuha irrigation scheme was struggling to generate farmer support in the mid-1990s, Hubbard underwrote the project by buying all the shares and, when irrigation water finally started flowing in the late 1990s, on-sold them to farmers for the original price. When the proposed Central Plains Water scheme ran out of money to fund its resource consent, through Dairy Holdings he ploughed in $1 million to keep it going. He has also underwritten other irrigation schemes, says Nigel Gormack, a partner in Hubbard Churcher: "There were no fat fees, no giant documentation."
Throughout Hubbard's career, Hubbard Churcher and South Canterbury Finance - the small-time lender to local businesses and households that he took control of in the 1950s - sat at the core of his growing power base. As his fortune grew (to a peak of $650 million in 2008, according to the National Business Review's Rich List), he and Jean continued to live what he calls a "simple" life, the most famous emblem of which is his 1971 mustard-coloured VW Beetle, bought second-hand 36 years ago.
His widely stated intention is to distribute his fortune - or whatever might be left of it after his present crisis - to his family and to charity. He estimates that over the decades he has already ploughed about $200 million into various causes, including Presbyterian Support, the Timaru hospice, cancer research, the Bible College Foundation and the Marsden Cross Trust.
Associates say he operated on a handshake, and liked to back "battlers" with a strong work ethic. In business deals he loved the chase. "He was all for going wherever the growth was," according to one source, who says he was very self-assured and strong-willed, but underestimated the role of good process. "And he had been getting away with it for 60 years."
To read Rebecca Macfie's full story, see the May 22 issue of the Listener.