What caught the eye in 2015 -- business columnist Fran O'Sullivan looks back at an eventful year

New Zealand's 'White Gold Rush' hits a sticky patch

In retrospect the Herald's headline writer could usefully plead guilty to the understatement of the year.

But in January when I wrote, "This will be the year in which New Zealand dairy farmers, companies, investors and their bankers will find themselves consumed by a crucial question -- is the White Gold Rush finally over or will dairy prices trend upwards again quickly when demand picks up" -- few industry leaders were predicting 2015 would prove such a major wipeout for our key export sector. It's a serious question which wasn't answered by year's end. As we move into 2016, expectations of a mid-year price pick up still look optimistic.

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New Zealand had won a reputation as the "Saudi Arabia of milk". But when China turned the taps off and the Russian market became off limits for geopolitical reasons, the international price for NZ's prime dairy exports plummeted.

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Dairy is NZ's major export sector. But it's also a highly leveraged sector. Farmers were feeling the pain by year's end as the milk payout dropped. So too, our major dairy exporter Fonterra which underwent a major business transformation and shed jobs to take the pressure off its farmer shareholders.

John Key polishes his Rolodex (again)

For the first time in decades a NZ Prime Minister joined global powerbrokers in chilly Davos for the annual World Economic Forum (WEF). John Key said: "Davos is an ideal platform to engage with key international influencers, on a wide range of issues of global importance, as well as to meet bilaterally with international counterparts."

Few New Zealand reporters made the trek to the Swiss mountain resort. But Key did impress attendees due to one simple factor -- the NZ economy was growing.

This will no doubt fuel Key's plans for a post-PM career on the international speaking circuit (along with hopes to score prime directorships offshore).

Financial markets authority adopts absurd Omerta policy

Financial Markets Authority boss Rob Everett proved to be a novice at the Omerta game when Milford Asset Management had to out itself as the subject of a market manipulation inquiry.

The FMA reached a $1.5 million settlement with Milford, which as one of the country's highest profile funds managers has taken a reputational slap.

SkyCity still on a winner despite Government stoush

My punt was that SkyCity Entertainment would spend more than $402.3 million on its international convention centre project. The convention centre will not be an eyesore. SkyCity will look to ultimately defray its overall capital spending on the centre and planned new five-star hotel by making a deal with an Asian investor to build the latter.

We won't know SkyCity's full dollar commitment for some time to come, but it has proved an astute player in scoring a very beneficial deal from the Government who has yet to learn that it doesn't pay to show all its cards first when betting with a casino operator.

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1080 and all that

I wrote that Winston Peters must truly believe "John Key is the House of Cards Frank Underwood of New Zealand politics", such was the mendacity he accused the Prime Minister of over the 1080 baby formula threat.

The truth was that Key's confirmation of the 1080 threat was not geared to deprive Peters of political oxygen. The Government faced down a major threat to NZ's dairy export industry by lining all the ducks up before the threat became public.

This month, a 60-year-old businessman pleaded guilty to two charges of blackmail for financial gain. But despite a police investigation costing $3 million he still has interim name suppression. This is ridiculous.

WTO spying

Tim Groser -- now about to take up his next role as Ambassador to the US -- maintained a poker face while allegations played out that the Government Communications Security Bureau spied on his rival candidates for the top role in global trade, director-general of the World Trade Organisation.

Neither John Key nor Groser denied the Government's intelligence gathering on the former Trade Minister's behalf. Said Groser: "I assume that everything I say on the phone is capable of being intercepted. Whether it is, and who might be intercepting it, I have no idea."

That this is undoubtedly true would not have cut any ice with the Edward Snowdens of this world. Realism rarely does.

Newsman moves on

John Campbell got under the Government's skin. He was not afraid to challenge the Prime Minister directly where some of his rivals have adopted a more supine stance.

But he did not always get it right as with an under-cooked investigation relating to John Key's alleged dealings with the Government Communications Security Bureau over Kim Dotcom.

Campbell has left TV3 and his new career with RNZ gets underway in the New Year.

TV3 had lost its position as NZ's prime current affairs television player. Can it retrieve it in 2016 -- or has it given the game away?

Principles still at stake in Murray McCully's controversial $10 million plan to placate Saudi 'live sheep' investor

Foreign Minister Murray McCully's controversial $10 million deal to buy off an aggrieved Saudi Arabian investor and remove a block to a free-trade deal bypassed the normal Government control channels.

It's also now the subject of an Auditor-General probe.

But McCully covered himself. He presented a paper to Cabinet seeking approval. McCully's paper said "exchanges with ministers in the Key Government underlined the potential for major damage to our trade and economic interests and it was agreed that the Minister of Foreign Affairs would lead efforts to resolve what had become a major relationship issue".

If McCully is to be 'hung for a sheep as for a lamb' other ministers should also find themselves under scrutiny for endorsing what appears to be a still legal deal in NZ.

It did take the shine off what otherwise was a stellar year for McCully with NZ taking its place at the UN Security Council.

Mood of the Boardroom 2015

Boardrooms were split on whether NZ is placing too much reliance on China.

The gloss came off the China market following volatility on Chinese stock exchanges and major commodity slumps which saw New Zealand's dairy export returns dramatically slashed.

The Asian growth story is still compelling -- with China playing a major role as the regional growth driver. Tourism receipts from China are still buoyant and the services trade is promising. Beijing is still reporting annual growth rates at 7 per cent of GDP.

Chief executives in the 2015 Mood of the Boardroom survey were evenly divided on the question of whether New Zealand is placing too much reliance on the China market, with 42 per cent saying Yes, and, 41 per cent saying No.

It is obvious the extent of the Chinese share market collapse is testing the ability of Beijing to moderate the "invisible hand of the market" by the "visible hand of Government".

Craig Norgate missed

The New Zealand dairy industry must be able to recapture some of the elan and verve that the key players displayed when they set up Fonterra. It is an industry which has displayed it can dream and act big when it wants to.

A bit of that feeling came through at the funeral in Hawera for Fonterra's founding chief executive Craig Norgate who died in London at 50 from a heart attack.

His brother Geoff alluded to this when he said "he had a massive heart and perhaps that's why it gave way in the end".

The eulogies revealed Norgate as a man of many parts. Despite rising to great heights in New Zealand business he stayed in touch with his Taranaki mates; was passionately devoted to his family and his rugby and was a businessman virtually 24/7 (the 2am emails were legendary).

The flag... the flag... the flag

Iconic Kiwi businessman Lloyd Morrison did not live to see the realisation of his nationalistic campaign but he would have been pleased to see New Zealanders get a chance to vote for a new flag. Morrison's own alternative flag -- which was designed by Cameron Sanders from Cato Partners -- was flown at half-mast at the Wellington Town Hall during his funeral; another was draped over his casket.

Critics slammed the referendum as a Cabinet-designed "bread and circuses" exercise.

If the nation does ultimately vote in favour of a flag change there will be the potential to mark out the country's identity in a more compelling fashion through the subsequent international and national rebranding exercise.

This will involve changing flags throughout the country and in embassies around the world, re-flagging NZ ships and even changing drivers' licences.

Key has wasted no opportunity to soft-pedal the flag cause in recent months. Many business people can chalk up on the fingers of one hand and sometimes two the number of times that the Prime Minister has taken audiences through his spiel at charity bashes, awards dinners and other celebrations.

Foie Gras on dead rats

Tim Groser's brinksmanship in the final brutal hours of the marathon Trans Pacific Partnership negotiations secured New Zealand a deal on dairy.

The Trade Minister had to swallow a "few dead rats". But there's still plenty of what Groser earlier termed "foie gras" to make for a tasty trade package estimated to be worth $2.7 billion a year for NZ by 2030.

Groser has not secured a gold-plated outcome -- as far as NZ's prime export is concerned -- but considerable gains have been made through controlled market access for dairy to major consumer markets like the Super City, the US, Japan, Mexico and Canada.

The subsequent WTO decision to ban export subsidies will assist NZ exporters but the real gains will come when market access is liberalised and tariffs phased out.

Andrew Little quietens dissent

When I wrote that if Andrew Little was hoping to craft a new Labour playbook, his sop to the party faithful at their annual conference was "remarkably effete" it was attacked as homophobia on my part. The headline writer can take a bow here.

What I have admired about Labour is the guts the party has displayed by tackling intergenerational policies like capital gains taxes and phasing in national superannuation at a later stage.

But Little is nothing but pragmatic when it comes to taking power.

Lochinver again

Bill English again duck-shoved a politically controversial FDI decision by kicking the Lochinver station issue to more junior ministers.

It's an absurd situation given the big fuss senior Cabinet ministers have made about the need to entice foreign investment into New Zealand.

But Paula Bennett's skilful fronting of the rejection of the Pengxin bid for Lochinver shows why she is a force to be reckoned with and a strong leadership candidate when it comes to ultimately replacing John Key at National's helm. The Pengxin appeal is expected to be heard in March.

Underwriting Auckland's growth

The Auckland Council's top executives showed realism by commissioning two leading consultants to come up with recommendations to sell assets, in order to raise funds to underwrite the city's growth.

With Auckland facing significant growth pressure from immigration, and ratepayers increasingly opposed to rate hikes, the option to monetise the council's balance sheet rather than resorting to more debt funding ought to be attractive.

Behind the scenes, the Government has made it clear that an asset-rich Auckland can't expect the taxpayer to fund a disproportionate amount of the city's infrastructure spending.

But it will take political will from Auckland City's councillors to get the proposals over the line.

The ambition for the new Super City was breathtaking. The project was risky. But what project worth doing was ever straightforward?