In the money: Life's rich tapestry

By TIM WATKIN

The crowd perched on padded chairs under auctioneer Peter Webb's gaze are as artfully arranged as the paintings on the walls. The clothing is well cut, the accessories designer and the hush polite. The bids go up in $1000, $5000, $10,000 lots; wealth on display with every nod or raised finger.

Not all this wealth is the same. New and old money are here tonight. You can tell them apart, even on a night like this when bidding is low. The old money is canny, shopping for bargains. One such collector picks up a Colin McCahon, conditionally, for a mere $85,000.

Lacking the writing and dark landscapes, it's not obviously enough a McCahon for the new lot. They open their wallets instead for a more typical Tony Fomison, which is bought by inner-city property developers. The evening's only genuine bidding war takes the price from $25,000 to $51,000 in little more than a minute.

In Europe or the US, especially its eastern seaboard, the distinctions between old and new money have long been signalled in accent, address and old school tie. In this country the social distances were never so great. Young, small and prosaic, we have not developed the complex social strata common overseas. In Europe, all New Zealand money would be considered brashly new, whereas in the US, almost all fortunes in this country would be too small to be significant.

In her PhD thesis titled "Wealth and Income in New Zealand c.1870-c.1939", researcher Margaret Galt concluded, "the top of the New Zealand wealth hierarchy was equivalent to the second rank in New South Wales, the third rank in Britain, and would not even have rated as wealthy in the US".

What's more, the country's pioneering and egalitarian spirit influenced even our richest, many of whom had left the old world to escape the strictures of class.

Yet look closely and lines of contrast remain; some fading, others growing increasingly firm.

In New Zealand, the phrase "old money" is something of a misnomer, as the money is at best half a dozen generations old and, more commonly, three or four. Not old enough to create its own sub-class, but old enough to develop some defining characteristics.

The oldest money was made on the farm, by the large land-owners in the South Island, before the flow of migrants to the young cities led to the rise of wealth among merchants and manufacturers in the first half of the 20th century. Newer than the landed wealth, they are now old money as well. New money is postwar, counted as self-made and created in a lifetime.

Even the oldest money was no aristocracy though. In his Montana Award-nominated, No Idle Rich, historian Jim McAloon writes, "the colonial wealthy of Canterbury and Otago [1840-1914] were a thoroughly bourgeois group, living their lives by the bourgeois values of thrift, hard work, and moderation".

Wealthy cliques didn't emerge until into the 20th century, as the population moved north and inheriting generations grew used to prosperity.

"Marriages mainly took place between people who had made money and had large homes and large families," says Angela Caughey, author of An Auckland Network, which traces the intermingling bloodlines of prominent families such as the Hortons, Winstones, Yateses and her own. The women even had calling cards.

"This was the upper crust. But they weren't old gentry from England. They had come out here and created their own gentrification."

They viewed new money as the upper-class British viewed brash Americans. "Those families thought of themselves as old families," she adds. "They still think well of themselves."

What exclusivity they had has been nibbled away, however. In short, old money isn't as different as it used to be.

Annabel Lush, director of advancement at the University of Auckland, finds it refreshing. English-born and the university's prime fundraiser, she says New Zealand is simply not big enough to sustain sub-strata among the wealthy. There are only so many posh streets, schools and restaurants. While the English old school hates it when the nouveau riche, like the Beckhams, move in next door, here it's not an issue.

"Remuera people wouldn't care if I won money and bought the Fernyhough place," she says.

In many cases, old money can't afford to be indignant any more. Some third and fourth generations haven't shown the wealth-creating acumen of their forebears and others haven't adapted to the business conditions ushered in by the new entrepreneurs.

"After the '87 crash a lot of old money went up in smoke," says Auckland mayor John Banks, who has made an estimated $16 million in property and health foods. "I think there is a lot less old money in this country."

The new methods employed by the coming rich in recent decades - more ruthless, says one financial adviser; less loyal, says another - have caused "great bitterness," says Caughey.

"When I wrote An Auckland Network [in the mid-80s] all those families were at the helm of their companies, but as you know now they have disappeared. They have been taken over by the next generation of wealth, the Brierleys, etc, who saw the chinks in their armour and took over their companies."

In other cases, family trees and trusts have soaked up the wealth. Most of the old families' patriarchs put a lot into charitable trusts; consider the Fletchers, Kellihers and Caugheys. What was handed down is spread ever more thinly with each new generation.

"We always chuckle," says Caughey, "because people say the Caugheys are immensely wealthy, but what they don't realise is that that store helps to keep maybe 600 family members."

In contrast, self-made millionaires have only one or two generations to support. Says Harry White, a merchant banker and descendant of the Dominion Breweries-founding Kellihers, "new money can afford to add a few more zeros".

Perhaps most of all, old-money elitism has also been undermined by the rise of the prosperous middle class. You can see it amid the mirrors and wood trim at Marilyn's, the Shore Rd hair salon. Owner Marilyn Whelan has been doing the hair of the Remuera and Parnell set for 26 years. It used to be all shampoos and sets. Now a greater range of styles is sought by a clientele that is younger and more casual. The professional middle class - albeit the upper end - has worked its way in.

Whelan says the big properties on the hill above her salon have been subdivided, families have moved in for the schools and "everyone's got a BMW these days".

Where once only old money could talk about their winter holidays, now even members of the middle class can have seven nights in Fiji for around $1000. Locking in a superior upper class was always going to be tough in this country, where, as one old-money family member says, "a few generations ago we were all sheep-stealers. That's where we came from."

James Wallace, a descendant of several prominent pioneering families but who has made his own fortune in meat plants, tanneries and farming, says, "The social and financial mobility is, unlike a lot of countries, egalitarian in the sense that anyone can make new money and be respected by old money without any question. In your own lifetime you can make yourself into old money."

Nevertheless, new money seems to have a very different agenda and a quite different attitude to wealth.

"[New money] people do have a different attitude than the older clients," says Brent Proctor, the financial planning partner at PriceWaterhouseCoopers. Where old money is about wealth preservation and tends to be more conservative, new money is all about wealth creation. It's in a hurry. "They are creating 20 per cent growth in their business and can't understand why you can't do the same [with their investments]."

With the exception of the newly rich farmers, who often have generations of struggle to make them cautious, they tend to spend more and risk more, sanguine in the belief "you can always make more". They are not as flashy as in the US, in part because wealth is not as celebrated here, but they are confident.

"Those born into it find it a hell of a lot harder if they lose it, from my experience," says Jim Boult, the multimillionaire owner of Shotover Jet. "If you come from nothing and it all goes pear-shaped, you're only back where you started and can always start again."

It's an easy-come, easy-go culture that old money - with its roots in Calvinist pioneers who sought wealth for the sake of their descendants and business-owners used to a welfare state - can find irresponsible.

White asks where are the industry builders, such as the original Fletchers and Watties. "People are trying to establish wealth for the sake of it, rather than a long-term, multigenerational industry," he says.

New money, made in more laissez-faire times, can find the old uptight. Making your own money and not passing it to your children is seen as a virtue.

Warehouse owner Stephen Tindall has publicly told his children not to expect to inherit his half-billion-dollar fortune. Shotover's Boult is pleased his parent never gave him "a red cent. It encouraged me to go out and do my own thing ... I hope my kids do really well, but they'll do it by themselves, not because I handed them a truckload."

Neither Julie Christie, founder of TV-production company Touchdown, nor Peter Leitch, aka the Mad Butcher, hobnobs with the elite, even now they are multimillionaires. They are too busy working and their success, typically of the new, is about lifestyle, not prestige.

"My money is for me being able to do what I want to do," says Leitch. "I turn them down [the invitations to society events], and they don't invite me any more. Lots of them have their heads up their asses."

Murray Thom's office is open-plan, with a view over St Helier's Bay. Lattes appear from the cafe below as we settle into comfy cane furniture. He points out three works of art on the wall - black-marker doodles on white paper, done by Neil Finn, Dave Dobbyn and Wayne Mason, the men who wrote the songs voted as New Zealand's top three of all time.

Several days later, the contrast couldn't be more stark in the dark wood-panelled corridors on the seventh floor of Fletcher House. In Sir James Fletcher's office, deep amid the factories of Penrose, the art is from the 19th century.

Yet both men share the same concern about new wealth - that it lacks heart. Thom, who made his millions in music, is a picture of new money, but he doesn't like the label.

"I think if you wanted to define new money you'd say fly-by-night, you'd say rip-off," he says, brows furrowed by the association. He draws a line between producers such as himself and the wheeler-dealers of the past two decades. "I admire people who are putting out a world-class product and making world-class profits from that, not the guys who stand in the middle of a deal."

Sir James remembers the days when Fletcher Construction carried many staff through the Depression, and shakes his head.

"Many of these who have made a lot of money, they've done it purely for themselves. It doesn't matter about the shareholders or staff. It's purely their gain and they'll be with you as long as it suits them and if it doesn't, they're gone the next day.

"It's just something that has evolved since the Gibbs, Fay and Richwhite era, and I think it came from a totally different culture," he continues. "When I started, you signed on for life ... They don't have a loyalty to employers and they don't have a loyalty to the staff."

Sir James also laments the choice of millionaires such as Doug Myers to move overseas. "They have made their money here and owe it to the country to stay." While acknowledging Myers' charitable donations, Sir James says, "It's not the same as living here and continuing to help the economy and the community".

Andrew Carnegie, the billionaire philanthropist, spoke of "the duty of wealth" - to treat personal wealth as if you held it in trust for the community. Wallace frets that new money - especially its younger members - hasn't learned that lesson.

"It's almost always typical that new money is displayed in obvious ways, such as your house, boat and dinners," he says. "I suppose that's your statement to say you've arrived and you're here.

"And that's fair enough in some ways, as long as everyone feels that they have an obligation to the society that allowed them to get to that point to put something back, and in doing so to enrich the society they're in. That's absolutely fundamental.

"The sad thing for me is that there's a great deal of new money generated, but that has not shown up by those new entrants being philanthropic, particularly with regard to the arts."

Wallace is behind the art trust and the award that bear his name, the former owning the country's biggest private collection of contemporary New Zealand art. The difference between old money and new money, he adds, is that new money is busy working and accumulating.

It is uncertain how long its days in the sun will last. Philanthropy kicks in only "when you lift up your head, having become successful, and look around and see what world you're in".

Not surprisingly, new money doesn't agree. Boult says he and others like him make a point of giving something back. If anything, he thinks their sense of responsibility is greater, because they are still doing business here.

Often, Lush has found, new money has its wealth tied up in the business, making more wealth, but former National Party president Michele Boag says new money is extremely generous. "But those in business have a more commercial focus and therefore are more likely to be looking at sponsorship rather than donations; something that will work for their existing business."

After all, business is where all of this wealth, old and new, initially came from. And if there is one thing they have in common, it is an understanding of just what money can buy, be it lifestyle, prestige, or a cut-price McCahon.

Not in the big league

When it comes to money New Zealanders don't rate in the big league.

Even if the fortune controlled by American-based New Zealander Peter C. Cooper is more than $3 billion, as reported in last week's Weekend Herald, it would not get him into the top 200 of the Forbes global listing of the world's wealthiest people.

Businessman Graeme Hart's worth, which has been estimated at $1.2 billion, looks like small change compared with Forbes' assessment that Bill Gates is worth $69 billion, give or take a few dollars.

Larry Ellison, whose yacht became familiar to us when he was here for the America's Cup, is ranked by Forbes at No 6, with an estimated wealth of just over $28 billion.

While the Forbes listing recognises no New Zealanders, three Australians get into the top 400. Media magnate Kerry Packer ranks at 147 with $4.2 billion, the Westfield shopping operators Frank Lowy and family rank at 222 with $3 billion and Richard Pratt, who made his money from packaging, gets in at 386 with a meagre $1.86 billion.

Russia is reported to have 17 billionaires.