MOREANA, GOOD MORNING AND WELCOME TO Q+A. I'M JESSICA MUTCH. TODAY: STEPHEN JENNINGS - NBR RICHLISTER, AND ONE OF OUR MOST SUCCESSFUL ENTREPRENEURS... BACK IN NZ FOR A FLEETING VISIT AND A RARE TV INTERVIEW WITH CORIN DANN. HE'S A FREE MARKETEER WHO WANTS TO TALK INEQUALITY AND EDUCATION ` WE HAVE A LOT OF GLARING FAIRNESS ISSUES. SO WE HAVE ONE OF THE MOST UNFAIR EDUCATION SYSTEMS IN THE DEVELOPED WORLD, FULL STOP. THEN FINANCE MINISTER BILL ENGLISH, AHEAD OF A CRITICAL WEEK FOR HIS PLAN TO MAKE HOUSING AFFORDABLE. HE HAS A MESSAGE FOR FIRST HOME BUYERS. THERE ARE SOME RISKS WITH TAKING OUT A MORTGAGE THAT REALLY STRETCHES TO INCOME HOUSEHOLD RIGHT NOW, SO DON'T BUY, IS THAT WHAT YOU ARE SAYING? WELL, IT'S UP TO THEM BUT I WOULD JUST COUNCIL PATIENCE. AND THEN ` A FAIR GO FOR ALL? NZ LIKES TO THINK OF ITSELF AS A HUMAN RIGHTS PIONEER. BUT IS THAT STILL THE CASE? TODAY FORMER LABOUR MP, PROFESSOR MARGARET WILSON TALKS ABOUT WHY SHE BELIEVES WE'VE SLIPPED BEHIND. DUE TO THE LIVE NATURE OF Q+A, WE APOLOGISE FOR THE LACK OF CAPTIONS FOR SOME ITEMS. AND WE'LL HAVE ANALYSIS FROM OUR PANEL. POLITICAL SCIENTIST DR RAYMOND MILLER FROM AUCKLAND UNIVERSITY. FORMER NATIONAL PARTY PRESIDENT MICHELLE BOAG AND FORMER LABOUR PARTY PRESIDENT MIKE WILLIAMS. HERE BACK HERE NOW, AND TARANAKI SON, STEPHEN JENNINGS, WOULD COUNT AS ONE OF OUR MOST SUCCESSFUL ENTREPRENEURS, BUILDING HIS FORTUNE IN RUSSIA DURING THE WILD DAYS AFTER THE COLLAPSE OF THE SOVIET UNION. FOR THE PAST DECADE, HE'S BEEN INVOLVED IN MASSIVE URBAN DEVELOPMENT PROJECTS IN AFRICA WITH HIS COMPANY RENDEAVOUR. HE RARELY GIVES INTERVIEWS, BUT SAT DOWN WITH POLITICAL EDITOR CORIN DANN LAST WEEK. THAT INTERVIEW IN A MOMENT, BUT FIRST A BIT OF BACKGROUND - HERE'S WHENA OWEN. HE'S BEEN DESCRIBED AS AN UNASSUMING KIWI, FROM THE 'NAKI TO BOOT. AND PROBABLY WAITARA'S ONLY BILLIONAIRE. STEPHEN ARMSTRONG JENNINGS WAS BORN THERE TO A FARMING FAMILY 56 YEARS AGO. HE GREW UP PLAYING RUGBY, ATTENDED SPOTSWOOD COLLEGE, THEN WENT TO MASSEY THEN AUCKLAND UNIVERISITIES. AS THE LANGIE GOVERNMENT TOOK OFFICE, JENNINGS LANDED A JOB AT TREASURY IN THE ENGINE ROOM OF 80'S PRIVATISATION, CORPORATISING TELECOM, PORTS, AIRPORTS AND ELECTRICITY. IN THE EARLY '90S, AN INVESTMENT BANK SENT HIM TO RUSSIA FOLLOWING THE COLLAPSE OF THE SOVIET UNION. WITH HIS FREE-MARKET BACKGROUND, JENNINGS EXECUTED THE FIRST COMPANY PRIVATISATION IN RUSSIA ` THE BOLSHEVIK BISCUIT COMPANY. HE STARTED HIS OWN INVESTMENT BANK, RENAISSANCE CAPITAL, AND WENT ON TO PRIVITISE 5000 MORE COMPANIES, STAYING ON IN RUSSIA FOR TWO DECADES. VERY IMPORTANT GUEST HERE IN THE STUDIO. RUSSIA KNEW HIM AS THE KIWI OLIGARCH. IN 2008 HIS ESTIMATED WORTH WAS $5.2B, BUT HIS COMPANY WAS HIT BY THE RUSSIAN FINANCIAL CRASH AND THE GFC. WITH AN EYE FOR EMERGING MARKETS, JENNINGS SOLD HIS SHARES IN RENAISSANCE AND SHIFTED HIS FOCUS ON TO THE AFRICAN CONTINENT. HE NOW HAS URBAN DEVELOPMENT PROJECTS ON THE GO IN FIVE AFRICAN COUNTRIES. LAST YEAR THE NBR RICH LIST ESTIMATED HIS WEALTH AT $980M. THE FATHER OF FOUR STILL HAS A HOUSE ON THE TARANAKI COAST. HE RETURNS THERE TWICE A YEAR TO SURF. I THINK THE BIGGER CONTEXT IS THE WESTERN WORLD AS A WHOLE IS UNDER STRESS. THE WESTERN MODEL IS BREAKING DOWN, AND WE SEE THAT IN THE ECONOMIC PERFORMANCE IN THE SOCIAL DIVISIONS IN THE US, IN THE UK, AND THE VERY RATIONAL POLITICAL DISCOURSE THAT'S EMERGING. BUT YOU HAVE THE SAME ISSUES IN EUROPE. AND THEN, IN OUR CASE, COMPOUNDING THOSE ISSUES WE'VE HAD THIS LONG HISTORY OF VERY VERY LOW PRODUCTIVITY GROWTH. SO OUR RANKING IN GLOBAL PER CAPITA GDP HAS FALLEN VERY DRAMATICALLY. WELL, WHAT DO YOU MEAN, 'PRODUCTIVITY GROWTH'? WHEN YOU TALK ABOUT LOW PRODUCTIVITY, WHAT DO YOU ACTUALLY MEAN? WHAT WE ARE GENERATING FOR EVERY HOUR WE WORK, SO WHAT OUR INPUTS ARE GENERATING. AND ULTIMATELY, THAT IS THE DETERMINANT OF OUR INCOMES, THAT'S THE DETERMINANT OF OUR PROSPERITY. SOME MIGHT ARGUE, THOUGH, THAT, IN FACT, NZ'S DONE PRETTY WELL, COMPARATIVELY, COMPARED TO OTHER WESTERN COUNTRIES, CERTAINLY. WE'VE GOT THROUGH A GLOBAL FINANCIAL CRISIS, AN EARTHQUAKE. WE'RE GROWING AT AROUND 3% AND HAVE DONE FOR THREE YEARS OR FOUR YEARS NOW AND A BIG DAIRY SLUMP, OUR BIGGEST COMMODITY EXPORT. ISN'T THAT A PRETTY GOOD PERFORMANCE? NZ HAS SOME FANTASTIC STRENGTHS. THERE'S NO DENYING THAT. WE HAVE TREMENDOUS INSTITUTIONS. WE'VE HAD EXEMPLARY FISCAL POLICIES. OUR DEBT SITUATION IS VERY GOOD BY WESTERN STANDARDS. SO ONE HAS TO ACKNOWLEDGE THE THINGS THAT HAVE BEEN ACHIEVED, BUT THOSE GROWTH NUMBERS ARE INFLATED BY IMMIGRATION, THEY'RE INFLATED BY THE HOURS WORKED, AND WE HAD A HUGE PEAK IN OUR TERMS OF TRADE, BUT WE DIDN'T HAVE A HUGE PEAK IN OUR GROWTH RATES. SO THE WARNING WAS ACTUALLY SEVERAL YEARS AGO WHEN WE HAD BEST TERMS OF TRADE FOR 25 YEARS AND WE STILL ONLY HAD MODERATE GROWTH RATES. WHAT'S THE CONSEQUENCES, IN YOUR VIEW? LOOKING FROM AFAR, FROM OVERSEAS, YOU LOOK BACK AT NZ, WHERE DO YOU SEE IT ALL ENDING UP IF WE DON'T CHANGE? WE WERE A TOP FIVE NATION IN TERMS OF PER CAPITA GDP. WE'RE NOW SLIPPING OUT OF THE 20S. WE HAVE ONE OF THE LOWEST PRODUCTIVITY GROWTH RATES IN THE WORLD OVER THE LAST 50 YEARS. SO WE CAN FALL FROM BEING A TOP 30 COUNTRY TO BEING A TOP 50 COUNTRY. AND THAT HAS IMPLICATIONS FOR, FOR EXAMPLE, OUR EDUCATION SYSTEM. SO OUR EDUCATION SYSTEM IS CLEARLY DETERIORATING VERY RAPIDLY AGAINST INTERNATIONAL STANDARDS AND THE EQUITY OF THE EDUCATION SYSTEM IS DETERIORATING. SO IF WE HAVE THAT ONGOING DECLINE IN PRODUCTIVITY AND GROWTH, IT WILL BE ALMOST IMPOSSIBLE TO FUND A WORLD-CLASS EDUCATION SYSTEM, FOR EXAMPLE. YOU TALK IN HERE ABOUT THE CONTRAST BETWEEN THE EMERGING WORLD AND THE ENORMOUS GROWTH THAT WE'VE SEEN THERE AND THE FACT THAT GLOBALISATION HAS HELPED THE MIDDLE CLASSES, PARTICULARLY IN CHINA, HUNDREDS OF MILLIONS OF PEOPLE MOVED INTO THE MIDDLE CLASS, YET THERE'S BEEN A STAGNATION IN THE WESTERN COUNTRIES, AND YOU RAISE THE QUESTION IF THAT MIGHT EVEN GET WORSE IF WE SEE OTHER THIRD WORLD COUNTRIES DEVELOP AND SPEED UP. WHAT'S GOING ON THERE? THE EMERGING MARKET'S SHARE OF GLOBAL GDP IS 60%. AS RECENTLY AS 2000, IT WAS ONLY 40%. AND YOU'VE GOT BILLIONS OF PEOPLE IN VERY LOW-INCOME EMERGING MARKETS WHO ARE CONVERGING. SO, YOU'VE GOT EVERYONE IN INDIA, EVERYONE IN SUB-SAHARAN AFRICA. SO WE'VE GOT BILLIONS OF PEOPLE COMING ON STREAM. SO THE COMPETITIVE AND LABOUR MARKET PRESSURES FROM THOSE COUNTRIES, THAT OUR COUNTRY WILL BE SUBJECT TO, THAT PROCESS IS AT A VERY EARLY STAGE, ACTUALLY. IS THAT THE TYPE OF FORCE THAT IS DRIVING PEOPLE TO TRUMP, THAT IS DRIVING BREXIT, THAT THIS WESTERN FEELING THAT THEY'RE GOING NOWHERE IN THE WEST? YEAH, IT IS, AND YOU'VE GOT A HUGE SECTION OF THE COMMUNITY IN THE UNITED STATES, BUT YOU'VE GOT THE SAME THING IN THE UK, WHO REALLY HAVEN'T BENEFITTED FROM GROWTH AND THE ELITES AND THE ESTABLISHMENT HAVEN'T REALLY DESIGNED POLICIES TO CREATE A FRAMEWORK THAT IS GOING TO HELP THOSE PEOPLE. SO THE THING THAT'S GETTING BLAMED FOR THAT IS GLOBALISATION, AND IT IS NEO-LIBERAL ECONOMICS. BUT THAT'S, IN SOME WAYS, A PRESCRIPTION THAT WE NEED TO DO MORE OF. GLOBALISATION HELPED CREATE THE UNPRECEDENTED EARNINGS AND LIFE EXPECTANCY AND THE BENEFITS THAT WE HAVE TODAY. GLOBALISATION IS NOT GOING TO GO AWAY, BECAUSE THE EMERGING MARKETS WILL BE MORE ASCENDANT, THEY'LL BE MORE POWERFUL. THEY'LL HAVE MORE IMPACT ON THE GLOBAL ECONOMIC FRAMEWORK. SO WE CAN'T FIGHT THAT. WE HAVE TO MAKE THE MOST OF IT AND WE HAVE GOT TO GET IN FRONT OF SOME OF THE ISSUES THAT HAVE CREATED SUCH A MESS IN THE US AND THE UK. BUT, I GUESS, THE POINT IS WE ARE SEEING A BACKLASH AGAINST WHAT PEOPLE CALL NEO-LIBERAL, FREE MARKET ECONOMICS, AND THE BACKLASH IS THAT THERE HASN'T BEEN A TRICKLE-DOWN ` THAT THEY SAID THERE WAS GOING TO BE ` OF WEALTH FROM THE TOP DOWN TO THE BOTTOM. IT'S ALL STAYED UP AT THE TOP 1%. WELL, WE WENT THROUGH A PERIOD OF INCREDIBLE GROWTH AND RAISING STANDARDS OF LIVING FOR QUITE A FEW DECADES, ACTUALLY, AND THE BENEFITS OF THAT WERE VERY WIDELY FELT. BUT IN THE CASE OF NZ, IT'S NOT ABOUT MORE MARKET OR LESS MARKET; IT'S ABOUT BETTER GOVERNMENT AND IT'S ABOUT GENERATING BETTER OUTCOMES. SOME OF THE PROBLEMS WE HAVE HERE, OUR EDUCATION PROBLEMS ARE VERY SERIOUS. OUR HOUSING ISSUES, THEY'RE EFFICIENCY ISSUES, BUT THEY'RE ALSO INCOME-DISTRIBUTION ISSUES. THE PLANNING COMPLEXITY THAT WE HAVE IN THE REGIONS IS STOPPING A LOT OF REGIONAL DEVELOPMENT. LET'S DEAL WITH A COUPLE OF THOSE. ON THE HOUSING ISSUE, YOU, IN YOUR SPEECH, ARE A STRONG ADVOCATE FOR A CAPITAL GAINS TAX. NOW, YOU SEEM TO BE SUGGESTING THAT'S AN ISSUE ABOUT EQUALITY, ABOUT THE FAIRNESS FACTOR INVOLVED IN A CAPITAL GAINS TAX. WE HAVE A LOT OF GLARING FAIRNESS ISSUES. SO WE HAVE ONE OF THE MOST UNFAIR EDUCATION SYSTEMS IN THE DEVELOPED WORLD, FULL STOP. WHY? BECAUSE THE RANGE OF OUTCOMES THAT WE HAVE, AND THE CORRELATION OF OUTCOMES DEPENDING ON WHAT EARNING DECILE YOU'RE FROM, IS AS HIGH HERE AS ANYWHERE ELSE. SO, OUR EDUCATION SYSTEM IS FAILING PEOPLE IN THE BOTTOM TWO DECILES. OUR EDUCATION SYSTEM IS FAILING MAORI AND PACIFIKA STUDENTS. THEY'RE BEING LEFT BEHIND TO A DEGREE YOU DON'T SEE IN OTHER COUNTRIES. WHAT IS YOUR SOLUTION TO THAT? IT SEEMS TO BE YOU'RE SAYING PAY TEACHERS MORE, PERFORMANCE PAY. ARE WE SAYING MORE CHARTER SCHOOLS? IS THAT THE PRESCRIPTION? WE ARE TOO SCARED IN NZ AND WE'RE TOO AFRAID IN A LOT OF WESTERN COUNTRIES TO CONFRONT THE POWER OF THE TEACHERS AND THE TEACHERS' UNIONS. THE TEACHERS AND THE QUALITY OF TEACHING, AS EVERYONE AGREES, IS AT THE CENTRE OF A QUALITY EDUCATION SYSTEM. BUT YOU CAN'T HAVE A SITUATION WHERE 99% OF TEACHERS GO THROUGH AN APPRAISAL PROCESS AND ARE PROMOTED. YOU CAN'T HAVE A SITUATION WHERE GOOD PERFORMANCE ISN'T PROPERLY RECOGNISED AND DEVELOPED. HOW WOULD YOU RECOGNISE WHAT A GOOD TEACHER IS, THOUGH? BECAUSE THAT IS NOT AN EASY THING, NECESSARILY, TO DO, BECAUSE THERE IS A SUBJECTIVE ELEMENT TO THAT. I DON'T THINK THERE'S A SINGLE SECTOR I'VE BEEN INVOLVED IN IN REFORMING WHERE THE STARTING POSITION HASN'T BEEN, 'WE'RE DIFFERENT. YOU CAN'T REFORM US. THE NORMAL RULES OF ECONOMICS DON'T APPLY TO US.' YOU HAVE COUNTRIES WHERE YOU HAVE VERY GOOD PRIVATE SECTOR EDUCATION, INCLUDING A LOT OF THE EMERGING MARKETS. THEY DON'T RAISE THAT AS AN ISSUE. BUT THERE'LL BE PEOPLE WATCHING WHO WILL SAY THAT'S THE POINT, THOUGH, THAT YOU DON'T WANT ECONOMICS IN EDUCATION, THAT IT'S A CORE PUBLIC SERVICE, AND AS SOON AS YOU BRING ECONOMICS INTO IT, YOU'RE MESSING WITH IT. WELL, IT IS A CORE PUBLIC SERVICE, BUT THE BOTTOM 10% OF TEACHERS HAVE A HUGE IMPACT ON AVERAGE EDUCATIONAL OUTCOMES. AND WE HAVE A SYSTEM WHICH ENABLES THE BOTTOM 10% OF TEACHERS TO STAY WITHIN THE SYSTEM THROUGHOUT THEIR ENTIRE CAREERS, AND THAT IS HURTING OUR EDUCATION OUTCOMES, BUT IT'S PARTICULARLY HURTING OUR LOWER INCOME AND DISADVANTAGED PEOPLE. COMING BACK TO THE HOUSING, WOULD A CAPITAL GAINS TAX SLOW THE HOUSING MARKET, OR ARE YOU SAYING THAT IT'S ABOUT PEOPLE MAKING JUST TOO MUCH MONEY IN HOUSING? THE KEY ISSUE WITH HOUSING IS ABOUT PLANNING. LESS THAN 1% OF NZ IS BUILT UPON. WE'RE NOT TALKING ABOUT MANHATTAN HERE. WE'RE TALKING ABOUT VERY SIMPLE REGULATORY ISSUES. SO, IF THE PLANNING CONSTRAINTS WERE EASED - IN THE CASE OF AUCKLAND, IF IT WAS EASIER TO HAVE GREATER DENSITY AND GREATER HEIGHT - THOSE ISSUES WOULD GO AWAY VERY QUICKLY. THEY'RE NOT FUNDAMENTALLY COMPLEX ISSUES. BUT I GUESS WHY I'M COMING BACK TO CAPITAL GAINS TAX IS THIS IS ONE OF THOSE ISSUES THAT POLITICIANS IN NZ SIMPLY DO NOT WANT TO DEAL WITH. WE'VE GOT A BRIGHT LINE TEST, WHICH IS A SORT OF PSEUDO CAPITAL GAINS TAX, BUT, HEAVEN FORBID, WE BETTER NOT CALL IT THAT. IF WE LOOK AT THE EXPERTS, IF WE GO BACK TO THE MAJOR TAX ENQUIRY, THE MCLEOD REPORT IN 2001, IF YOU GO BACK AND READ IT, THEY SAY OUR CURRENT TREATMENT OF HOUSING CAUSES INVESTMENT DISTORTIONS, OUR CURRENT TREATMENT OF HOUSING IS INEQUITABLE. CLEARLY IT IS. AND THEN THEY SAY IT WOULD BE POLITICALLY UNPALATABLE TO IMPLEMENT A TAX ON HOUSING. BUT THE REALITY IS MANY OTHER COUNTRIES HAVE TAXES ON HOUSING. IT'S A QUESTION OF POLITICAL WILL. DO YOU SEE ANY OF THAT POLITICAL WILL HERE? THE LAST GOVERNMENT AND THIS GOVERNMENT HAVE BEEN VERY BIG ON INCREMENTAL CHANGE. THEY DON'T WANT TO MAKE BIG, DIFFICULT, CONFRONTING CHANGES. I'M NOT REALLY QUALIFIED, BECAUSE I DON'T LIVE HERE, TO COMMENT ON THE DETAILED DYNAMICS OF POLITICS. BUT IT'S VERY VERY CLEAR WE HAVE A SET OF ISSUES THAT IF WE DON'T ADDRESS ARE GOING TO CAUSE MAJOR PROBLEMS, INCLUDING THE KIND OF POLITICAL CHAOS AND LACK OF INTELLIGENT DISCOURSE THAT YOU NOW SEE IN THE US AND THE UK. WE'VE GOT THE OPPORTUNITY TO GET IN FRONT OF THOSE ISSUES. AND THESE ARE ISSUES THAT CUT ACROSS LEFT-RIGHT PARTY DIVIDES. BUT IF WE DON'T GET IN FRONT OF THOSE ISSUES, THE ECONOMIC CHICKENS AND THE SOCIAL INEQUALITY ISSUES ARE DEFINITELY GOING TO COME HOME TO ROOST FOR US. YOU'RE SPENDING MOST OF YOUR TIME IN AFRICA AT THE MOMENT, AND I GUESS THAT MUST BE QUITE A CONTRAST TO WHAT YOU'RE SEEING IN THE WEST RAPID GROWTH. JUST GIVE US A SENSE OF WHAT IT IS LIKE THERE TO BE DOING BUSINESS, WHAT'S HAPPENING ON THAT CONTINENT? SO, AFRICA'S BEEN GROWING AT 6% OVER THE LAST 15 YEARS. SIX OF THE 10 FASTEST-GROWING ECONOMIES IN THE WORLD ARE AFRICAN. OBVIOUSLY FROM A VERY VERY LOW BASE, BUT, YES, VERY BROADLY BASED, STEADY GROWTH, MODERNISATION, POLITICAL REFORM AND THE LIKELIHOOD THAT THAT WILL CONTINUE FOR A LONG TIME TO COME. SHOULD AFRICA BE ON NZ'S RADAR? IS IT TOO FAR AWAY OR SHOULD WE BE TRYING TO GET IN THERE? I THINK WE HAVE TO ACCEPT GLOBALISATION IS HERE TO STAY, AND WE HAVE TO GET GEARED UP. OUR LARGE EXPORTERS, OUR GOVERNMENT AGENCIES, HAVE TO BE MUCH MORE GEARED UP TO INTEGRATING WITH THESE FAST-GROWING, NEW EMERGING MARKETS, BECAUSE THEY ARE THE FUTURE. IT DOESN'T MATTER THAT IT'S A LONG WAY AWAY. THEY'RE MAINLY ENGLISH-SPEAKING COUNTRIES; MANY OF THEM HAVE A COMMONWEALTH BACKGROUND. BIG MARKETS, LOW BARRIERS TO ENTRY AND A LOT TO DO WITH AGRICULTURE, SO ANOTHER LINKAGE FOR US. IT'S INTERESTING BECAUSE YOU ALSO SPENT A BIG PART OF YOUR CAREER IN RUSSIA AND IN YOUR SPEECH YOU DO MENTION ABOUT FONTERRA AND SOME OF YOUR DISAPPOINTMENTS THAT THEY WEREN'T ABLE TO TAKE ADVANTAGE OF THE RUSSIAN MARKET. YOU SEE SOME PROBLEMS WITH FONTERRA AND THE STRUCTURE AROUND THAT COMPANY? IN THE TIME I WAS THERE, THE RUSSIAN ECONOMY GREW SIX TIMES. WHEN I WENT, RUSSIA HAS A SMALLER ECONOMY THAN THE NETHERLANDS. IT HAS ONE OF THE BIGGEST OPEN DAIRY MARKETS IN THE WORLD, AND IT'S AN OPPORTUNITY THAT WE REALLY LOST BY NOT HAVING THE VISION AND NOT BEING ENTREPRENEURIAL ENOUGH. SO AFRICA WILL BE MUCH BIGGER, BUT IT'S AT AN ANALOGOUS STAGE WHERE OUR MAJOR PRIMARY PRODUCERS NEED TO GO IN AND BUILD BRANDS, BUILD DISTRIBUTION, BUILD INFRASTRUCTURE. BUT IS FONTERRA'S STRUCTURE INHIBITING IT, IN YOUR VIEW? I BELIEVE IT ABSOLUTELY IS INHIBITING IT. IT'S NOT A BRAND-DRIVEN BUSINESS. IT'S NOT A HIGHLY ENTREPRENEURIAL, RISK-TAKING BUSINESS. AND IF YOU BENCHMARK FONTERRA AGAINST COMPANIES LIKE DANONE OR NESTLE, WHICH I'VE WORKED WITH IN MANY JURISDICTIONS, IN MANY MARKETS, THERE'S JUST A VERY DIFFERENT BUSINESS PHILOSOPHY. SO WHAT? SHOULD WE TAKE AWAY ITS MONOPOLY POWER? WHAT SHOULD BE DONE WITH IT? I DON'T THINK IT SHOULD HAVE ANY MONOPOLY POWER, BUT I THINK WE WOULD BE BETTER OFF HAVING SEVERAL SMALLER ENTITIES WHICH ARE FORCED TO COMPETE, FORCED TO BUILD BRANDS, FORCED TO BE MORE INNOVATIVE. IF YOU LOOK AT OUR WINE INDUSTRY, LOOK AT OUR GROWTH IN REVENUES, LOOK AT OUR GROWTH IN PRODUCTION, LOOK HOW HIGH OUR PRICE POINT IS, BUT IT'S BEEN ENTIRELY DRIVEN BY THESE VERY FOCUSED, BRAND-DRIVEN ENTERPRISES. BUT WASN'T THAT THE WHOLE POINT OF FONTERRA? THAT IF THEY MERGED, THEY WOULD STOP BEING ABLE TO PLAYED OFF BY SUPERMARKETS IN THE UK? WELL, I THINK IF YOU LOOK AT THE WINE INDUSTRY AND THE VALUE THAT'S BEEN CREATED AND YOU LOOK AT FONTERRA AND WHAT THEY'VE ACHIEVED, I THINK THERE ANSWER IS RIGHT THERE, ACTUALLY. YOU TALK ABOUT RUSSIA, AFRICA. WE, OF COURSE, ARE FOCUSED HEAVILY ON CHINA. HAVE WE PUT TOO MANY EGGS IN THAT BASKET? CHINA HAS HAD A GREAT RUN. IT'S BEEN GROWING IN A STRAIGHT LINE SINCE 1978, BUT IT HAS A LOT OF STRUCTURAL ISSUES. IT HASN'T BEGUN ITS POLITICAL TRANSITION. SO THERE WILL BE A MAJOR SHOCK AND A VERY MAJOR SHOCK IN CHINA AT SOME POINT. NO ONE KNOWS WHEN THAT'S GOING TO BE. IT'S GREAT TO HAVE THE CHINA EXPOSURE, BUT WE DON'T WANT TO BE OVEREXPOSED TO CHINA. IS THAT WHY WE NEED TO BE LOOKING AT AFRICA BUT ALSO THINGS LIKE THE TPP? WE NEED THE TPP, BUT WE NEED A DIFFERENT, MORE ENTREPRENEURIAL APPROACH TO THE EMERGING MARKETS, GENERALLY. AND IN MY VIEW, WE NEED A LESS TOP-DOWN, GROUP-THINK TYPE APPROACH THAT ALLOWS MORE EXPERIMENTATION, DIFFERENT SOLUTIONS. HOW WOULD A GOVERNMENT GO ABOUT FOSTERING THAT? I THINK OUR TRADE CAPABILITIES CAN DEFINITELY BE IMPROVED. MY EXPOSURE TO WORKING WITH OUR EMBASSIES IN OUR TRADE EFFORTS ` THEY'RE PRETTY WEAK COMPARED WITH WHAT I'VE SEEN WITH MANY OTHER COUNTRIES, INCLUDING THE AUSTRALIANS. I DON'T THINK WE HUNT AS A PACK IN THE WAY THAT WE COULD. I DON'T THINK WE'RE AS TRANSPARENT ABOUT WHAT WE'RE TRYING TO ACHIEVE. I DON'T THINK THERE'S A LOT OF ACCOUNTABILITY. SO I THINK THAT'S DEFINITELY AN AREA THAT NEEDS TO BE TUNED UP. IS THAT JUST A PROBLEM OF WE'RE A SMALL COUNTRY AND WE CAN'T GO EVERYWHERE? OR DO YOU THINK THERE'S JUST A LACK OF...? I THINK THERE'S AN ISSUE IN PHILOSOPHY AND ACCOUNTABILITY. HAVING WORKED WITH THE AUSSIES IN QUITE A FEW GEOGRAPHIES ON TRADE ISSUES, THEY HAVE VERY GOOD PEOPLE, THEY'RE VERY PUNCHY, AND THEY DO WHATEVER IT TAKES TO ACHIEVE THE OBJECTIVES THAT THEY HAVE IN MIND. WELL, THAT'S A PROBLEM THAT'S BEEN 20 YEARS IN THE MAKING. AUCKLAND SPENT A LOT OF TIME OVER THE LAST TWO DECADES WITH PLANNING RULES DESIGNED TO PREVENT AUCKLAND GROWING OUT, AND THEY NEVER REALLY SUCCEEDED IN PERSUADING AUCKLANDERS THAT IT SHOULD GROW UP. AND SO NOW WE'RE DEALING WITH THE CONSEQUENCES OF THAT PLANNING AS WELL AS A SHARP DOWNTURN IN 2008 WITH THE GFC, AND THAT TOOK ALL THE CONFIDENCE OUT OF THE BUILDING INDUSTRY, SO NOT MUCH GOT BUILT FOR A WHILE, AND NOW THERE'S A VERY SUBSTANTIAL CATCH-UP GOING ON NOW. SO THOSE PRICE INCREASES ARE PUSHING THE MARKET TO PRODUCE MORE AND MORE HOUSES. THERE IS A LOT OF WORK GOING ON IN HOUSING. YOU TALK ABOUT 40 HOUSES, OR CONSENTS, A DAY, DEPENDING ON HOW YOU WANT TO PUT IT. WHEN WILL WE SEE THE PEAK BUILD? WHEN WILL WE SEE THAT NUMBER OF HOUSES START TO MATCH THE SUPPLY? WHEN ARE YOU FORECASTING THAT YOU'RE GOING TO SEE PRICES STABILISE? YOU MUST HAVE DONE SOME WORK ON THAT. NO, WE DON'T HAVE A PARTICULAR DATE. AND IN ANY CASE, IT'S NOT IN OUR CONTROL, BECAUSE THAT'S CONTROLLED BY THE AUCKLAND CITY COUNCIL. THEY MAKE ALL THE DECISIONS, AND THEY'RE ABOUT TO MAKE A BIG ONE, WHICH IS THE AUCKLAND UNITARY PLAN. AND WHAT DO YOU EXPECT THEM TO DO? WHAT IS YOUR BOTTOM LINE ON THAT UNITARY PLAN? WHAT DO YOU NEED TO SEE? WELL, IT HAS TO ENABLE ENOUGH SUPPLY THAT PEOPLE CAN SEE THAT SUPPLY IS GOING TO MEET THE DEMAND. THE DEMAND IS STRONG; THE SUPPLY IS GROWING FAST AT THE MOMENT. THAT PLAN NEEDS TO MAKE SURE IT CAN GROW FASTER FOR LONGER. AND IF IT DOESN'T? WELL, THE GOVERNMENT WILL HAVE TO CONSIDER ITS OPTIONS. CAN YOU JUST TELL US WHAT THOSE OPTIONS ARE? IT MAY BE THAT THE COUNCIL IS PRESENTED WITH A PLAN BY THE INDEPENDENT PANEL. IF THEY TURN IT DOWN, THEN WE WOULD CERTAINLY BE HAVING DISCUSSIONS WITH THEM ABOUT THE NEED TO TAKE UP THE PLAN, NOT TURN IT DOWN. SO THAT'S WHERE YOU'D GET TO COMMISSIONERS ACTUALLY STEPPING IN? NO. NO. WELL, WE HAVEN'T CONSIDERED COMMISSIONERS AT ALL, NO. WE HAVE CONSIDERED OR WOULD CONSIDER WHETHER THERE'S SOME KIND OF PERSUASIVE OR LEGISLATIVE PROCESS TO ENSURE THAT IF THE PLAN IS SOUND, THAT THE COUNCIL ADOPTS IT. WHAT IS YOUR MESSAGE TO A FIRST-HOME BUYER IN AUCKLAND RIGHT NOW? LOOKING AT THE MARKET` YOU'RE OBVIOUSLY HOPEFUL THAT YOU CAN STABILISE THINGS IN A YEAR'S TIME OR WHENEVER IT IS. YOU'VE GOT THE RESERVE BANK LINING UP TO WHACK FIRST-HOME BUYERS WITH DEBT-TO-INCOME RATIOS. YOU'VE GOT A HUGE EFFORT GOING IN TO TRY AND STABILISE PRICES. WHAT WOULD YOU TELL A FIRST-HOME BUYER THAT'S LOOKING TO TAKE OUT A BIG MORTGAGE IN AUCKLAND RIGHT NOW? I THINK JUST PATIENCE. THERE ARE SOME RISKS WITH TAKING OUT A MORTGAGE THAT REALLY STRETCHES A TWO-INCOME HOUSEHOLD RIGHT NOW. SO DON'T BUY? IS THAT WHAT YOU'RE SAYING? WELL, IT'S UP TO THEM, BUT I'D JUST COUNSEL PATIENCE, BECAUSE YOU CAN SEE THE SUPPLY PICKING UP FAST. THE SUPPLY IS COMING. EVEN IF THE DEMAND STAYS PRETTY STRONG, IT'S LIKELY THAT PRICES ARE GOING TO FLATTEN OUT, AND SOME PARTS OF THE MARKET MIGHT DROP BACK A BIT. THIS HAS HAPPENED IN CHRISTCHURCH. WHY SHOULD THEY BE PATIENT, THOUGH? BECAUSE IF THEY WAIT ANOTHER YEAR OR SOMETHING, THEN THAT'S ANOTHER 100,000 ON THE AVERAGE HOUSE PRICE IN AUCKLAND. WELL, AS I SAID, THEY HAVE TO MAKE THE DECISION. THEY'VE GOT THE HOMESTART PACKAGE SITTING THERE. WE'RE ADJUSTING THE PARAMETERS FOR IT. THEY'VE GOT RISING INCOMES, WHICH IS GIVING THEM A BIT OF CONFIDENCE. INTEREST RATES ARE LOW. BUT, HANG ON, SO ON THE ONE HAND, YOU'RE SAYING BE PATIENT, BUT ON THE OTHER HAND, YOU ARE TALKING ABOUT LIFTING THE CAPS ON THE KIWISAVER LENDING, YOU KNOW, UP TO 700,000 POSSIBLY, PRESUMABLY. DOES THAT MAKE SENSE? WHY WOULD YOU BE ENCOURAGING FIRST-HOME BUYERS TO BORROW UP TO $500,000, $600,000 IN THIS MARKET? WELL, LOOK, AGAIN, IT'S UP TO THEM TO MAKE THE DECISIONS. ALL I'M SAYING IS THAT IF PEOPLE FEEL LIKE THEY CAN'T REALLY MAKE IT NOW AND FEEL SECURE ABOUT BEING ABLE TO SERVICE THAT DEBT, THEN IF THEY'RE PATIENT, THEY WILL SEE A HOUSING CYCLE. THERE'S A BELIEF IN AUCKLAND HOUSE PRICES WILL GO UP FAST FOREVER. THAT IS NOT THE CASE. BECAUSE THE REALITY IS IT'S 40% OVERVALUED, ISN'T IT? THAT'S WHAT ARTHUR GRIMES, FORMER RESERVE BANK CHAIRMAN` DON BRASH IS SAYING THAT, YOU KNOW, YOU NEED TO CRASH IT BY 40%. SO THEY'RE SAYING IT'S 40% OVERVALUED. THAT'S AN ENORMOUS RISK, ISN'T IT, FOR ANYONE TO GET INTO? WELL, YOU'D NEED TO TALK TO THE PEOPLE TAKING THE RISK. YOU KNOW, IT'S UP TO THEM TO MAKE THE DECISIONS ABOUT WHEN THEY BUY AND HOW MUCH DEBT THEY TAKE ON. BUT IT'S HAVING A MAJOR EFFECT ON THE ECONOMY, HOUSE PRICES, ISN'T IT? BECAUSE THE RESERVE BANK IS IN A SITUATION NOW WHERE IT'S VERY NERVOUS ABOUT CUTTING INTEREST RATES, WHEN YOUR MANDATE TO THAT BANK IS THAT, ARGUABLY, THEY SHOULD BE CUTTING INTEREST RATES. THAT'S UP TO THE BANK. WE'VE GOT A 3% ECONOMY. IT'S NOT NECESSARILY ONE WHERE YOU WOULD AUTOMATICALLY CUT INTEREST RATES. BUT IT'S UP TO THE BANK TO SORT THAT OUT. WELL, YOUR MANDATE SAYS THEY'VE GOT TO HIT 2% OVER THE MEDIUM TERM, AND THEY HAVEN'T BEEN NEAR 1% IN ABOUT SIX QUARTERS OR SOMETHING. WELL, THAT'S ANOTHER WHOLE ARGUMENT. YOU'VE GOT TO SEE THEIR DECISIONS THERE IN THE CONTEXT OF WORLD INTEREST RATES, WHICH NOW JUST KEEP ON DROPPING. AND WE'VE NOW GOT ONE OF THE HIGHER INTEREST RATES IN THE DEVELOPED WORLD. AND A VERY HIGH CURRENCY, WHICH IS HURTING EXPORTERS AND HURTING THE REAL GROWTH, YOU COULD ARGUE THE EXPORT-DRIVEN GROWTH THAT WE NEED LONGER TERM TO MAKE THIS COUNTRY SUSTAINABLE. WELL, LOOK, THESE ARE THE DILEMMAS THAT THE BANK HAS TO DEAL WITH. THAT'S WHY THEY'RE AN INDEPENDENT INSTITUTION WHO MAKE THOSE DECISIONS. YEAH, IT WAS INTERESTING TALKING TO STEPHEN JENNINGS YOU KNOW, NZ BUSINESSMAN WHO'S DONE VERY WELL OVERSEAS, AND HE'S COME BACK AND GIVEN A SPEECH HERE. HE RAISES THE POINT THAT THE GROWTH IN NZ IS BEING DRIVEN BY IMMIGRATION AND BY NZERS WORKING LONGER SO THEY'RE WORKING HARD BUT NOT SMARTER THAT WE DON'T GET` OR WE HAVEN'T GOT THE PRODUCTIVITY GROWTH. AND HE'S PRETTY GLOOMY, THINKS THAT WE'RE HEADING FOR AN ICEBERG HERE. WELL, I JUST DON'T AGREE WITH THE HEADING FOR AN ICEBERG. MEASURED PRODUCTIVITY AROUND THE WORLD SEEMS TO BE LOWER AFTER THE GLOBAL FINANCIAL CRISIS. WE'VE GOT, I THINK, IN NZ, THOUGH, A GROWING LEVEL OF INVESTMENT IN TECHNOLOGY AND INNOVATION; A LOT MORE INVESTMENT IN OUR SCIENCE; IMPROVING COMPETITION, FOR INSTANCE, IN THE GOVERNMENT SOCIAL HOUSING MARKET, WHICH IS ONE IN EVERY 16 HOUSES IN NZ. QUITE A LOT OF THINGS GOING ON. BUT WE DO HAVE A PRODUCTIVITY PROBLEM, DON'T WE? EVEN TREASURY SAYS THAT. AND WHAT I MEAN BY PRODUCTIVITY IS WE'RE NOT ABLE TO SELL THINGS AT A HIGHER PRICE OVERSEAS, YOU KNOW, REALLY GET THOSE EXPORTS GOING, ARE WE? WHETHER IT'S A PROBLEM OR NOT IS QUITE ARGUABLE. WHAT WE DO HAVE GOING ON, THOUGH, IS HIGHER LEVELS OF BUSINESS INVESTMENT, MORE INNOVATION, THE GROWTH OF OUR IT SECTOR NOW 14%, I THINK. A NUMBER OF OUR INDUSTRIES DOING QUITE WELL, DESPITE THE FACT THAT THE DOLLAR IS HIGHER THAN THEY EXPECT IT A LOT OF OUR INDUSTRIES` IN FACT, MOST OF OUR INDUSTRIES, EXCEPT DAIRY. SO THERE IS IMPROVEMENT TO BE MADE IN PRODUCTIVITY. IT'S VERY DIFFICULT TO SHOW DIRECT IMPACTS OF INVESTMENT DECISIONS OR POLICY DECISIONS ON PRODUCTIVITY, BUT THE OUTLOOK FOR THE ECONOMY IS PRETTY POSITIVE. I MEAN, LOOK, I'D MUCH RATHER BE IN A 3% ECONOMY WHERE THERE'S A PRODUCTIVITY IN CHALLENGE THAN MOST DEVELOPED ECONOMIES, GROWING AT 1% TO 2%. THEY DON'T EVEN GET TO TALK ABOUT A PRODUCTIVITY; THEY'RE JUST TRYING TO GET SOME GROWTH AT ALL. SURE. AND I GUESS THE BIG CRITICISM IS THAT, YES, WE ARE GROWING, POSSIBLY, SOME ARE SAYING, EVEN CLOSER TO 4% THIS YEAR, BUT THAT IT'S DEBT-DRIVEN, THAT IT'S NOT SUSTAINABLE AND THAT IT'S SETTING NZ UP FOR A NASTY CORRECTION AT SOME POINT. WELL, AGAIN, I DON'T AGREE WITH THAT. I MEAN, PEOPLE HAVE BEEN SAYING THAT IN DIFFERENT VERSIONS FOR THE LAST SEVEN OR EIGHT YEARS. FIRST IT WAS CHRISTCHURCH, THEN IT WAS THE DAIRY PRICES, NOW IT'S THE HOUSE PRICES. WELL, IT'S ACTUALLY` BUILDING HOUSING IS REAL ACTIVITY. THERE'S, YOU KNOW, 40,000 MORE PEOPLE DOING IT THAN THERE WERE A NUMBER OF YEARS AGO. NOW, IT'S NOT GOING TO RUN ON FOREVER, BUT THERE'S OTHER DRIVERS OF GROWTH TO COME. YOU'RE GOING TO SEE THE EXPORT SECTOR CONTINUING TO GROW. SO, YOU KNOW, WE'VE GOT A BIT OF CONFIDENCE THAT, IF THE WORLD` GIVEN THE RISKS IN THE WIDER GLOBAL ECONOMY, THAT THE NZ ECONOMY IS ABLE TO GROW ACTUALLY FASTER THAN MOST DEVELOPED ECONOMIES. ONE OF THE OTHER ARGUMENTS HE MAKES IS AROUND THE CAPITAL-GAINS TAX, AND THIS IS INTERESTING, BECAUSE IT IS COMING FROM SOMEONE WHO'S A NEO-LIBERAL, EFFECTIVELY. HE'S RIGHT OUT THERE ON THE RIGHT, IN SOME WAYS. BUT HE'S SAYING TO YOUR GOVERNMENT THIS IS AN EQUITY ISSUE, THE CAPITAL-GAINS TAX. DON'T WORRY ABOUT WHETHER IT SLOWS DOWN THE HOUSING MARKET OR NOT, BECAUSE THE BRIGHT-LINE TEST YOU'VE GOT DOESN'T SEEM TO BE DOING THAT. IT'S ACTUALLY ABOUT TAXING THE INCOME ON CAPITAL GAINS IN A FAIR WAY. DO YOU THINK HE'S GOT A POINT THERE THAT PERHAPS PEOPLE ARE MAKING HUGE AMOUNTS OF MONEY IN THE AUCKLAND HOUSING MARKET? IS THAT FAIR FOR THE REST OF THE COUNTRY, THAT'S MAYBE BATTLING AWAY, ARE RENTERS, WORKING JUST AS HARD? THE UNFAIRNESS IS IN THE DRIVER OF THE CAPITAL GAIN, WHICH IS THE PLANNING RULES. AND POOR PLANNING IS TOUGH ON LOW- AND MIDDLE-INCOME HOUSEHOLDS. THAT'S WHO PAYS THE PRICE OF POOR PLANNING. YEAH, BUT YOU COULD'VE` 85% GAINS IN HOUSE PRICES OVER THE LAST FOUR YEARS IN AUCKLAND. IF YOU'D HAVE TAXED THAT PROPERLY, YOU COULD'VE GOT A LARGE AMOUNT OF MONEY, WHICH YOU COULD THEN HAVE DISTRIBUTED, PRESUMABLY, TO PEOPLE WHO ARE STRUGGLING. I MEAN, YOU COULD'VE DONE THAT. THAT'S AN EQUITABLE THING TO DO, ISN'T IT? WELL, ACTUALLY, THE PROPERTY TAX SITUATION HAS CHANGED QUITE A BIT IN RECENT YEARS. WE ABOLISHED DEPRECIATION, WHICH GIVES US ABOUT ANOTHER $900 MILLION A YEAR. THE COMBINATION OF THE BRIGHT-LINE TEST AND IRD ADMINISTERING THE CURRENT LAW WITH GREATER RESOURCES, PARTICULARLY NOW THEY CAN TRACK THE TAX NUMBERS, MEANS THAT PEOPLE WHO ARE TRADING IN PROPERTY PAY FULL INCOME TAX. AND DO YOU KNOW HOW MUCH THAT'S NETTING THE GOVERNMENT? WELL, THEY'LL BE ABLE TO TELL US` I CAN'T TELL YOU THE NUMBER OFF THE TOP OF MY HEAD. BUT THE CAPITAL GAIN IS BASED ON PLANNING RULES THAT LIMIT THE SUPPLY OF LAND, AND THEY HAND CAPITAL GAIN TO EXISTING OWNERS OF HOMES, AND THAT ENCOURAGES SPECULATION. IT'S REALLY IMPORTANT THAT COUNCILS UNDERSTAND WHEN THEY MAKE THOSE RULES THAT RESTRICT THE GROWTH OF THEIR TOWNS AND CITIES, THEY'RE HANDING CAPITAL GAINS TO PEOPLE WHO LIVE IN EXISTING HOMES AND HELPING LOCK OUT FIRST-HOME BUYERS AND LOW- AND MIDDLE-INCOME HOUSEHOLDS. THE PRIME MINISTER OF TURKEY HAS DESCRIBED AN ATTEMPTED COUP OVERNIGHT AS A 'BLACK STAIN' ON TURKISH DEMOCRACY. ALMOST 300 PEOPLE DIED AND THOUSAND OF MEMBERS OF THE ARMED FORCES HAD BEEN ARRESTED. THE BBC'S KATY WATSON REPORTS FROM ISTANBUL. LESS THAN 12 HOURS AFTER THE ATTEMPTED COUP BEGAN, SOLDIERS SURRENDERED, WALKING FROM TANKS WITH THEIR HANDS HELD ABOVE THEIR HEADS, EQUIPMENT ABANDONED IN THE CHAOS. LAST NIGHT THE PARLIAMENT BUILDING IN ANKARA BECAME THE FOCAL POINT OF THE VIOLENCE. THE COUNTRY'S PRESIDENT TOOK TO VIDEO MESSAGING, URGING PEOPLE TO COME OUT ON TO THE STREETS TO OPPOSE WHAT WAS HAPPENING. AND SO THEY DID. THIS WAS THE BOSPHORUS BRIDGE IN ISTANBUL. THE REBEL SOLDIERS STOOD FIRM AGAINST PROTESTERS LOYAL TO MR ERDEWAN. SOME MOUNTED THE TANKS, GRABBING GUNS FROM SOLDIERS HANDS. YUVUZ WENT DOWN TO THE BRIDGE WITH HIS PREGNANT WIFE. HE SHOWED ME THE PHOTOS OF THE TANKS AND THE CROWDS. IT WAS, AT TIMES, VERY TENSE. ARMY MEMBERS WERE REALLY BRUTAL. THEY WERE SENDING BOMBS TO PEOPLE FROM TANKS. THEY WERE PASSING BY FROM THE PEOPLE AND MY FRIENDS, WHO WERE ON THE BRIDGE, WHO WERE ON THE BOSPHORUS BRIDGE, THEY WERE GETTING SHOT. THIS MORNING THE BRIDGE WAS REOPENED. Life may be starting to return to normal, but the government is still asking people to remain in protest. The Prime Minister has condemned what has happened. What happened is a black stain on Turkish democracy. The people that attacked us are worse than the PKK terrorists. Britons in the country are told to stay indoors. They are working very hard to do the best for the many Brits that are there. They should follow the travel advice. Flights in and out of the country are chaotic. MEANWHILE, FIVE PEOPLE HAVE BEEN ARRESTED IN CONNECTION WITH THE LORRY ATTACK IN NICE WHICH LEFT 84 PEOPLE DEAD. THE GROUP, CALLING ITSELF ISLAMIC STATE, SAYS THE BASTILLE DAY ATTACK WAS CARRIED OUT BY ONE OF ITS FOLLOWERS. LUCY WILLIAMS IS IN NICE. WHAT MAKES A LOCAL MAN TURN ON HIS COMMUNITY AND KILL? THIS IS WHERE MOHAMED BOUHLEL PLANNED HIS ATTACK ` THIS QUIET BLOCK OF FLATS ON THE OUTSKIRTS OF NICE, A BLUE PATTERNED TOWEL STILL HANGING FROM THE RAILING. INSIDE, A NEIGHBOUR SHOWED US WHERE HE LIVED, ALONE AFTER HIS MARRIAGE BROKE UP. FRENCH OFFICIALS SAY HE WAS PROBABLY RADICALISED, BUT YASMIN TOLD US HE'D SHOWN NO SIGN OF IT. TRANSLATOR: NOT AT ALL. HE DRANK ALCOHOL. I SAW HIM DURING RAMADAN WITH A YOUNG WOMAN CUDDLING HIM. I WAS SHOCKED. YASMIN'S 14-YEAR-OLD DAUGHTER RANG HER FROM THE PROMENADE ON THURSDAY WEEPING, TERRIFIED, INTO THE PHONE, NOT KNOWING THAT SHE WAS RUNNING FROM THE MAN WHO LIVED UPSTAIRS. THE PROMENADE HERE HAS NOW REOPENED AND THE BRUTAL REMINDERS OF WHAT HAPPENED ARE FADING UNDER THE BUZZ OF NORMAL LIFE. BUT THIS ATTACK LEFT FRANCE WITH SOME UNCOMFORTABLE QUESTIONS LIKE WHY DOES THIS KEEP HAPPENING? AND WHO ARE ITS ENEMIES? COMMITTED JIHADISTS OR JUST ISOLATED, ANGRY RESIDENTS FROM EVERY CORNER OF FRANCE? POLICE ARE QUESTIONING FIVE PEOPLE AND SO-CALLED ISLAMIC STATE HAS CLAIMED RESPONSIBILITY FOR THE ATTACK. BUT FRANCE'S INTERIOR MINISTER SAYS THIS APPEARS TO BE A NEW, MUCH LOOSER KIND OF AFFILIATION, MUCH HARDER FOR THE AUTHORITIES TO PREDICT. THE FAR RIGHT LEADER MARINE LE PEN QUICKLY TOOK TO SOCIAL MEDIA CALLING ON HIM TO RESIGN. 'FRANCE IS A GREAT COUNTRY,' SHE SAID, 'AND IT HAS THE MEANS TO DEFEND ITSELF, 'BUT BECAUSE ITS LEADERS ARE PUNY, THEY DON'T KNOW HOW TO DO THIS, 'OR EVEN WANT TO.' FRANCE'S LEADERS SAY THE COUNTRY'S VALUES ARE THE TARGET. BUT THE CHOICES ARE GETTING HARDER. SECURITY, LIBERTY BROTHERHOOD HOW TO HONOUR THEM ALL? MORE THAN FIFTY PEOPLE INCLUDING FIVE CHILDREN ARE STILL IN A CRITICAL CONDITION IN HOSPITAL FOLLOWING THE LORRY ATTACK. CLIVE MYRIE SPOKE TO STAFF AT THE CHILDREN'S CITY HOSPITAL. She was killed trying to save the little one. She was pulled into water, but was hit by the truck. She died on the way to hospital. These children are now motherless. Many families take their children to the shrines to pay respect. It was a harrowing thought that the killer could see who he was hitting. Babies and children are fighting for their lives in hospital. For those children that survived, the journey now starts to stop a lifetime of painful memories. We tried to contain the emotion. Her mother asked me if I had some magic pill. Words are all we have. The tragedy is a lesson in life for this woman's daughter. Our life will change for the better. My children must not be afraid. Bastille day will now represent fear and panic. COMING UP ` AS HELEN CLARK MAKES HER CASE FOR ONE OF THE TOP JOBS IN GLOBAL POLITICS, WE SPEAK TO HER FORMER PARLIAMENTARY COLLEAGUE MARGARET WILSON ABOUT WHAT'S HAPPENED TO EQUALITY FOR WOMEN BACK HERE. I've had so much experience in the fast lane at the top making hard calls, showing the vision, and I know I can do it. My little country is from the South Pacific and it's never had a Secretary-General either so I think when we look at the scale of the challenges our world is facing, we need a global search for the best talent. This is a critical job. The best talent. THAT WAS HELEN CLARK TAKING PART IN THIS WEEK'S TELEVISED DEBATE FOR CANDIDATES VYING TO BE THE UN'S NEXT SECRETARY GENERAL. NZ PRIDES ITSELF ON AS BEING A PLACE WHERE ANYONE CAN GET A FAIR GO AND A BEING A WORLD LEADER IN HUMAN RIGHTS. BUT IS THAT REALLY CASE? THAT WAS THE QUESTION PROFESSOR MARGARET WILSON SET OUT TO ANSWER IN HER NEW BOOK WITH PROFESSOR JUDY MCGREGOR AND HUMAN RIGHTS LAWYER SYLVIA BELL. SHE JOINS ME NOW FROM WELLINGTON. Thank you for your time this morning. What did you think of Helen Clark's performance? What do you think the chances are? I thought she exhibited what she is - extremely competent, well-prepared, forthright. My only query as it's not really an appointment on merit as it? The people in the room were not making the decision. In terms of the Eastern European card, people saying it's the turn, do you think that's going to be the major factor here? I think we've got to rely upon the people making the decision on the Security Council and the few who are the permanent members. They're not stupid. They say they have to have good, competent leadership in the UN. I hope that prevails over any political or geographic consideration. That really seems rather juvenile when you're talking about such an important position. You've known her for a long time in her early political career as well. As she always been aiming for this? I don't know if she was always aiming for it. I think she always saw herself as having a role in public life. I think she's prepared herself for it. She's got the experience. It's like life. You use one experience to go to the next experience and then take the opportunities as they arise. There's been a lot of talk about the UN needing a female secretary general this time around. Is that doing people like Helen Clark of the service? Even when people say there has to be a woman near, normally you will find that women are not appointed and other factors come into the case. It's become a little bit of an embarrassment that you've got women in leadership positions are Siua and why not in the UN? You talk about an embarrassment. Hillary Clinton and more women in global politics. Do you think that making a difference? we should focus on the middle management level? New Zealand has had times when there's been several women including myself that held positions in public life and the new look today in their not via. It's a question of where do you get that structural and institutional change. Theresa May has in fact appointed more women to the Cabinet something that didn't happen Margaret Thatcher's time. Do women lead differently to mean? We lead from our experience. Women's experiences different from men's experience. Therefore there are times when there are different approaches. But if you are a woman brought up in a male environment, you will lead in the same way. You've worked in the legal world in the political world. Quite often mild dominated. Do you think that affected the way that you lead? I was very conscious of the fact that I felt differently and expressed myself differently from men. I did believe that one stage they probably came from Mars. It's a human relationship when you're working with people, and we're all different so you must accommodate that. Another aspect want to talk about its human rights for children. We've signed up to the UN convention. It's something you talk about your book. Do you think we're meeting the criteria? Know. No. There is much we can be proud of, to be honest, but what we found was going forward, I'm not so sure. That's why we called at fault lines. We can see already the gaps are growing and there's no way we can see they are going to be close. Do we need to make a measurement? One of the things the UN committee kept on saying is where is your data? We need to really understand what's happening there. And the into relationship, because child poverty is related to not being good housing. Why do you think we don't measure poverty? Is it just hard? It is hard but that doesn't mean to say it can't be done. I don't think it's entirely political because it is a political issue. The government can make policy which addresses these issues. But Wembley to run away from a but. The growing gap from the haves and have-nots. All this over a period of time feeds into a situation and you can't reverse quickly overnight. After the breakup panel will analyse all the issues WE LOOK BACK TO WHEN NZ RATIFIED A MAJOR UN TREATY TO PREVENT DISCRIMINATION AGAINST WOMEN. WHO WAS OPPOSED TO IT? IT COULD AFFECT THE FAMILY BY DRAWING CHILDREN AWAY FROM THEIR PARENTS AT A VERY EARLY AGE. Let's bring in our panel and have a chat to them this morning. I want to talk to you about Bill English. You talked about first-time owners be patient with the big message. I don't think first-time buyers are going to be terribly reassured by all of that. There is a blame game that goes on between central government, local governmentin the reserve bank. And to be told to wait and see. People are on the treadmill running frantically fast and still standing still. My guess is that if there was some subtle date... My guess is that there will be a next year's election when people will make the final judgement on this particular issue. Michelle, what do you think about Bill English as comments? Do you think first-time buyers need to sit tight and wait. I think he was highlighting the dangers for people Are becoming over levereaged which is a real danger all the experts say there will be a correction. And the government is very aware of that And very cautious. What we're dealing with a structural failures over a long, long time. The point was made about the GFC and impact on construction. You can't just magic outhouses tomorrow. You have to get the land freed up, infrastructure in place, builders. There's a really great demand. We are importing builders to meet the demand. That's happening all over Auckland city. It's not a problem that you can just magic away in a second. That's when he was reflecting. Is this a sticky situation for the Minister, Mike? A lot of those voters have a house and are sitting pretty and don't want the market to change. This is classic wedge politics situation. That would be politically very very unpopular as the bubble went pop. That was a tetchy interview. It was playing the blame game. The housing crisis is not generated by the Auckland Council. It's everywhere. National's overnight polling is showing the same as Labour's overnight polling. The last report I got was the Labour green block was on 45 in national was on 41 and that's not a good position to be in. The real problem is the housing market is entirely driven by the private sector. It is a simple fact that the developer will not build an affordable house with the $50,000 profit when he can build a expensive house with the $100,000 profit. Is national stressing out about the housing issue in saying we had to do something because the poll numbers are shifting? I think they should be nervous because they've really been on the back foot of this issue. There was never any overall plan. This was the problem. There have been several ministers dealing with housing at the same time. There is a sense in which a lot of voters feel the government has really never gotten on top of this issue. The fact remains that the government can't go and build houses. That simply untrue. That is what has happened again and again and again in New Zealand's past. Vast tracts of Auckland started off estate houses. We had to get back into that business. The state is the only outfit that can build affordable houses in large numbers. They still rely on builders, consents, infrastructure. Just because the government says we will pay the bill ended the day, you still have to have all those other things in place. As Bill English said, we're playing catch-up over a very lengthy period. The housing market is one of the issues of inequality that Stephen Jennings talked about. In New Zealand, we seemed to work hard but he said we're not working smart. I think it goes much deeper than simply a question of statistics. He was talking about the extent to which some things we will spend a lot of time looking at like rising house prices and high immigration numbers which masked fundamental problems in our economy. One is the social inequality that is growing inside New Zealand. It's interesting to see someone who endorsed the free market taking this view. We're looking overseas and seen the like of Donald Trump and Brexit in the UK and we're wondering whether there is going to be a contagion effect. Will the political alienation had New Zealand? I have a feeling that MMP acts as a safety valve for small parties that come out with some of these. Nevertheless there is concern which Mr Jennings expressed about what will happen if we don't get on top of this with respect to education and housing. Michelle, do think some of the solutions are politically palatable to voters? It is very easy for someone to identify the solutions. It is more difficult for someone to implement them. He talked about performance pay for teachers. We've seen how that's been resisted. Part of his speech was talking about the need to sell SOEs. The prescriptions he's talking about are all things which I think the left would not want. And recognising inequality, everybody recognises inequality, but the approach that this government has taken has been a social investment one where they measure we are the best places to intervene to try and correct those inequalities. It's a very brave approach because you don't get those results in two years, you get those results in 20 years. But the fact that Bill English is persisting with those in policy terms goes to show what a dedicated politician he is. Certainly part of Mr Jennings prescription is politically very very hard to sell. I don't agree with him about the state of our education system. We may be slipping a little bit from the very elevated levels we reached, but we have one of the best education systems on it. The interesting thing was him talking about redistribution. This is where the government has got to look very hard. Give them some credit. They put benefits up by $25 a week. There has to be more than that because a large chunk of people are being left behind. The housing crisis is part of it. Those people are turning into renters. What happens when you're on superannuation and you are renting? The general attitude of the public to the government at the moment as they have been like headless chocks on this housing issue. Only last week he had Paula Bennett talking about transit camps. On that headless chickens and allergy we will leave it there. EARLIER, YOU WILL HAVE HEARD MARGARET WILSON TALK ABOUT THE UN HUMAN RIGHTS TREATIES NZ HAS SIGNED UP TO. THE CONVENTION OF THE ELIMINATION OF ALL FORMS OF DISCRIMINATION AGAINST WOMEN IS OFTEN DESCRIBED AS AN INTERNATIONAL BILL OF RIGHTS FOR WOMEN. NZ RATIFIED IT IN 1978, BUT NOT BEFORE THE PUBLIC HAD A CHANCE TO HAVE A SAY, AND SOME OF THEM DIDN'T LIKE IT. THE UNITED NATIONS CONVENTION FOR THE ELIMINATION OF ALL FORMS OF DISCRIMINATION AGAINST WOMEN IS NOT ONLY A MOUTHFUL; IT STICKS IN THE THROAT OF ITS OPPONENTS. IT PROMOTES EQUAL RIGHTS FOR WOMEN ` A PRINCIPLE ALREADY ACCEPTED IN LAW HERE. BUT IT GOES MUCH FURTHER. IF WE RATIFY, WE SUPPORT CONCEPTS OF STATE CHILDCARE, PAID MATERNITY LEAVE AND THE END OF STEREOTYPED ROLES FOR MEN AND WOMEN. THE CONVENTION'S MAIN OPPONENTS, WOMEN FOR LIFE, FIND THIS TOTALLY UNPALATABLE. THEY SAY IT ENDANGERS THE FAMILY. DRAWING CHILDREN AWAY FROM THEIR PARENTS AT A VERY EARLY AGE BY INSISTING ON CHILDCARE, ON STATE-CONTROLLED EDUCATION, ON REVISION OF CURRICULUM ACCORDING TO PARTICULAR PATTERN, ON MODIFICATION OF TEXTBOOKS ` IT'S VERY SPECIFIC ABOUT THIS SORT OF THING. GROUPS AS DIVERSE AS NATIONAL COUNCIL OF WOMEN, YWCA, CATHOLIC WOMEN'S WELFARE LEAGUE AND THE ADVISORY COMMITTEE ON WOMEN ARE URGING THE GOVERNMENT TO DO THIS. THEY SAY RATIFICATION WILL HELP LESS FORTUNATE WOMEN OVERSEAS. WE SHOULD BE RATIFYING IT. WE HAVE NOTHING TO LOSE AND WE HAVE MUCH TO GAIN INTERNATIONALLY. HUNDREDS OF LETTERS HAVE POURED INTO THE MINISTER OF FOREIGN AFFAIRS' OFFICE. I THINK THAT THERE'S A LOT OF GOOD IN THE DOCUMENT. THE REAL PROBLEM IS NOW WE HAVE THE EXTREMES ` THE ANTIS AND THE PROS. AND THERE HAS TO BE MUCH MORE, I THINK, LEARNT ABOUT THE CONVENTION. IT REALLY WON'T CHANGE LIFE FOR WOMEN IN NZ. MR COOPER SAYS THERE'S LITTLE DOUBT WE WILL RATIFY, BUT HE WANTS WIDE PUBLIC DISCUSSION FIRST. WAKA HUIA IS NEXT. REMEMBER Q+A REPEATS TONIGHT AT 11.35 PM. THANKS FOR WATCHING AND THANKS FOR YOUR CONTRIBUTIONS. THOSE WERE THE QUESTIONS AND THOSE WERE THE ANSWERS, THAT'S Q+A. SEE YOU NEXT SUNDAY MORNING AT 9. CAPTIONS BY JAKE EBDALE AND JESSICA BOELL. CAPTIONS WERE MADE POSSIBLE WITH FUNDING FROM NZ ON AIR. COPYRIGHT ABLE 2016