FTA Could Allow More Chinese Migrants - Goff

The Government is considering an agreement with China which could see more Chinese workers enter New Zealand’s labour market in exchange for better trade conditions.

Trade Minister Phil Goff said today on TV One’s “Agenda”, that the Government was considering a trade off because significant gains could be made by New Zealand business and the economy.

“We said that that [the deal] might be on if there was a very ambitious offer from their side, in terms of allowing our firms to trade in services.”

However, Mr Goff said the negotiation point put forward by China and called “Mode Four” would be restricted, only allowing skilled migrants into New Zealand.

“It's about teachers of Mandarin, it's about people that are expert in Chinese cuisine, it's about people expert in traditional Chinese medicine,” he said.

“This has to be strictly limited. New Zealand has migration both permanent and temporary migration based around gaps in the skilled labour market, that is the area that we'd be looking at.”

He also said the deal would have a limited impact on the labour market because only a small number of workers would be accepted.

“If we were then we are taking aboard very low numbers, we are not taking aboard extensive numbers.”

©Front Page Ltd 2007 but may be used provided attribution is made to TVOne and “Agenda”

RAWDON Earlier this week the Minister of Trade and Defence Phil Goff, suggested that New Zealand may have to look closer to home if the Dohar round of world trade talks fails to deliver. This comes as Prime Minister Helen Clark leaves for a one week visit to Malaysia and Indonesia. Almost 40% of our trade is now with Asia and the relationship is strengthening in other ways too. Phil Goff joins Guyon Espiner now.

GUYON ESPINER

Well Phil Goff you heard Rawdon Christie there mention the Dohar round the socalled the world trade talks. New Zealand stands to gain what 1.5 billion dollars from the successful completion of that round, how is it going?

PHIL GOFF – Minister of Trade and Defence

Well we might not gain 1.5 billion but it would be a substantial sum of money, we made a billion a year out of the Uruguay round, we estimate that a successful conclusion of a reasonably ambitious round would be about the same. How's it going? Well these things are long drawn out, they're frustrating, we think that we're almost there then somebody will find a new difficulty a new obstacle. The G4 countries that’s the United States, European Union, Brazil and India were the four big parties that were meant to work together to overcome the obstacles, that broke down and I think that process is dead, but the round is not dead, the round is very much alive and in Tuesday next week New Zealand time you'll get the two chairs of the negotiating committees, one for agriculture, one for manufacturing that will produce texts which will set out where an agreement might lie, then there'll be a discussion over that, there'll be the summer recess in the Northern Hemisphere, the serious negotiations begin again in September. So it's still alive, we'll be giving it our best shot, it is the best answer for developing countries and the world as a whole and of course New Zealand will also be a big beneficiary, so that’s why it's our number one priority.

GUYON But immensely complex, something like 150 countries in the World Trade Organisation, isn't our future to look more simply at country to country deals?

PHIL Well it is complex but only through a multi lateral round can you get some of the things that New Zealand is really trying to achieve. For example what are the things that do damage to agriculture? It's the fact that big countries or groupings like the European Union, the United States, spend about 300 billion dollars a year subsidising their agriculture to compete not only unfairly with an efficient country like New Zealand but really to push some of the small third world developing countries out of the trade picture altogether. Only by multilateralism can we get rid of that, only by the multilateral round can we get rid of the fact that the Europeans are spending a huge sum of money on export incentives.

GUYON Okay well let's move on to one of those country to country deals and move on to Asia. The big game for New Zealand in terms of country to country deals is China. You’ve been negotiating this since what 2004, what has been agreed so far?

PHIL Well we're into round 13 and so far it's on track. We've got agreement at the top level of the Chinese government that this is a deal that they want to do, what's it worth to New Zealand, it would probably increase our trade by something between 260 – 400 million dollars a year over and above the normal growth, a savings in tariffs of probably around 100 million a year, but also a free trade agreement actually bring the countries together to look at the widest range of trading relationships.

GUYON Okay well what have you achieved so far?

PHIL Well what we've achieved so far is that we've moved through quite a lot of the chapter texts, we've reached agreement on a lot of things, there are a few outstanding issues that I discussed with the Chinese Vice Minister in Cairns last week.

GUYON Presumably one of those is agriculture, China has something like 200 million small farmers, it's not gonna be a surprise if they're going to resist our efforts to open up their markets to our agricultural goods.

PHIL That’s exactly right and what's the big issue, the big issue is dairy, dairy is 20% of our exports, we're the most efficient dairy exporter and the biggest exporter in the world.

GUYON Are they bending on this then?

PHIL We've made huge progress. One of our bottom lines was that we needed to eliminate all tariffs on goods, that was a huge ask, this is the first time that China has ever negotiated a deal with a developed country, so it's big for them and obviously big for us. China, our fourth largest trading partner you know in years to come perhaps is going to be our second biggest trading partner. So we've got a few steps to take yes, we think that we're on track, the goal was to finish this trade negotiation by the 1st of April 2008, we are confident that we will do that.

GUYON You're on track for that, okay well what about some of the things that the Chinese want. We hear that they want greater access to our labour markets, will there be more Chinese workers in New Zealand after we've signed this free trade agreement.

PHIL They would like what's called Mode 4 where skilled labour can come in to fill labour gaps. We said that that might be on if there was a very ambitious offer from their side in terms of allowing our firms to trade in services. I don’t think that we'll get to that level of ambition that will lead to a significant labour market change.

GUYON So you're willing to trade off access to our labour market for greater access to our goods and services, is that what you're saying?

PHIL Not in an open ended way at all. This has to be strictly limited. New Zealand has migration both permanent and temporary migration based around gaps in the skilled labour market, that is the area that we'd be looking at. At the moment the negotiation is as narrow as this, it's about teachers of Mandarin, it's about people that are expert in Chinese cuisine, it's about people expert in traditional Chinese medicine.

GUYON Let's get that clear then, so there won't be a quota of Chinese workers that the Chinese want to get into New Zealand who won't be subject to work tests and won't be filling specific gaps?

PHIL That’s a negotiating point on their side, it's not something that New Zealand has agreed to.

GUYON So come back to my original question, are we going to see more Chinese workers in New Zealand as a result of this agreement?

PHIL If there were we are talking about very low numbers, we're not talking about extensive numbers.

GUYON Just on this China free trade deal again, some of the concern is about the differences in size and diversity or our economies, I mean how can New Zealand businesses be expected to compete with the very low wage rates and environmental standards which they simply don’t have to comply with that New Zealand businesses do?

PHIL Well a couple of points, first of all New Zealand removed most of its tariff barriers 20 years ago, so the tariff barriers that are significant at the moment from our point of view are on textiles, clothing and footwear. Where we took those tariff barriers down with the free trade agreement with Thailand our exports in those areas actually went up not down. So New Zealand has already largely removed its protectionism, we're talking about removing protectionism against our agricultural and other products in China. It does work both ways but it clearly is very much to our advantage. On labour and the environment, one thing that we have done with all of our trade agreements is to say that we want a parallel agreement both on labour standards and on environmental standards. Labour and trade, environment and trade and what we're looking at doing there, it's not a huge deal it's saying that we want our trading partner to be consistent with international requirements such as the requirements of the International Labour Organisation or the major standards set in environment through the United Nations.

GUYON Okay let's broaden this out a little bit to Asia. At the Action Asia Summit which I think you were at in Auckland this week, John McFarland the CEO of ANZ group said that our future lay with Asia not only economically but politically too. Do you agree with that?

PHIL Well economically 12 of our top 20 trading partners are now in Asia, so it's huge, 40% of our trade with Asia, that makes Asia a critical part of our trading relationship and that’s a good thing because Asia is the most dynamic and fastest growing economic area of the world.

GUYON Okay but does it flow on to politics because a lot of countries see these agreements these trade agreements as political and strategic and defence agreements too. Is that what we're going to see that New Zealand's relationship, a strategic shift to Asia and away from some of our traditional allies?

PHIL Well not so much away from our traditional allies, we'll maintain those relationships but strategically and politically do we want better relationships with Asia, of course we do. Asia is critical to New Zealand's future, not only for trading reasons but also for security reasons.

GUYON So will we see anything specific on that, you're Defence Minister also.

PHIL Yeah, I mean one of the advantages of being Trade Minister is that you also maintain you're defence relationships with countries that you might not otherwise have a great deal to do with. So yes there is a fair amount of confidence building in the relationships that we've built up, sometimes with countries that we've worked alongside for a long time, Japan and Korea, but increasingly countries like China and Vietnam, areas of commonality, working against terrorism, working against people smuggling, working in peacekeeping areas, working for disaster relief, makes a lot of sense to cooperate with those other countries in those areas as we saw at the time of the tsunami when we were called upon to work alongside the International Community to our immediate north in particular in Indonesia and Thailand.

GUYON As Trade Minister you are basically the representative for our exporters. Now despite all your efforts when you look back New Zealand's exports as a percentage of our total economy have remained static for 30 years, now isn't broadly our trade policy failing?

PHIL No our trade policy isn't failing but do we need to do better in exports, of course we do. We've got a current account deficit that has dropped from over 9% but it's still at 8.5%, New Zealanders are spending more in importing goods and services than we are in exporting, we have to turn that around, that’s partly a product of trade negotiations and we've made good progress over that period of time, I mean with Australia for example the best probably bilateral trade agreement anywhere in the world, now negotiating with China, that’s huge, but it's also about building up capacity with exporters, that’s why we've got export year 2007, building up aspirations, building up capabilities and capacity, money in the budget about opening five new offices in China.

GUYON Well you talk about money in the budget and you touched on a couple of economic things there, you took on an associate finance role in 2005, is that role that you want to expand, do you want to take a greater role in finance in this Labour government?

PHIL I'm pretty busy with Trade and Defence and Pacific Island Affairs at the moment.

GUYON Would you like to do that though?

PHIL It's useful particularly in regard to my trade portfolio also to have one foot in the area of finance because economic policy obviously has a critical effect on trade and relationships.

GUYON Let's get this on the record while you are here because there has been speculation that you want to take over the finance role. What about it?

PHIL No. We've got a very good Minister of Finance at the moment, I would put Michael Cullen as the most talented Member of Parliament on any side of the House in terms of his intelligence, in terms of his economic knowledge, he has wide ranging experience in that area, the position is not vacant and I'm not chasing it. That’s on the record.

GUYON What about the speculation about leadership, it's always been something that’s been speculated, would you like to take on the leadership of the Labour Party?

PHIL Of course it's been speculated about but my same comments apply. In Helen Clark we have the most committed, determined, intelligent and motivated Prime Minister that I've ever served under, she's doing a fantastic job and I have no ambitions to take over her job whatsoever. I fully support her position and what she's doing.

RAWDON We're joined by our panel Chris Baldock and Bernard Hickey. We were talking about where our trading future lies. Bernard let me ask you what struck you as most interesting in that interview.

BERNARD HICKEY – Head of Digital, Fairfax Media

I thought it was fascinating the discussion about whether or not we should encourage Chinese skilled workers to come to New Zealand. It seems the Chinese would love us to take a lot more and we're saying well let's not, but the biggest problem New Zealand business faces right now is a shortage of skilled workers. The other biggest problem we've got is that we're not growing exports to China fast enough, we're lagging way behind growth of exports from the rest of the world into China. One way to do that is to have a lot of skilled Chinese people working in New Zealand creating those connections with China. I'd like to ask the Minister why not open it up, why not bring in a lot more Chinese technologists, engineers, computer scientists, it's desperately what we need, why not encourage more skilled Chinese to come to New Zealand?

PHIL Well the first point is yes we do have a skilled labour shortage, that’s natural because we've created 347,000 extra new jobs since 1999, but that is happening now, it's happening now, I think the Brits are still the biggest supplier of new skilled labour but after that it's people from China, people from India, people from South Africa. We are getting skilled labour in but that is kept at a particular level that the economy and the community can sustain, kept at that level because first point while we've brought unemployment down, 25,000 I think registered unemployed now, that’s a great track record, we still want to make sure that the employers put emphasis on training New Zealanders first. Second when we have migration yes it's important but it's also important to match new migrants to the job vacancies that are available, that’s why immigration policy is being fine tuned. We are getting people in with high levels of skill, they are making a major contribution but we need to take various other factors into account, the ability to settle new migrants, particularly when they come from different cultures, and secondly the matching of migration to the ability of the housing market and infrastructure market to meet those demands.

BERNARD But isn't our basic problem that we don’t have enough skills to produce the goods and services we need, that’s why we've got inflation problem that’s driving the Reserve Bank to push up interest rates, surely we need just more skilled people coming to New Zealand. The great story this week, the School of Surveyors in Dunedin is saying that we simply don’t have enough surveyors to build the infrastructure we need, why don’t we bring them in?

PHIL Well Bernard I'll go back to the first point that I made. I wouldn’t want to see a situation there we simply said when we have a skill shortage all we do is bring people in from outside the country, I think there is an obligation on the government on the community and on the employer to make sure that young New Zealanders have those skills first. We don’t want a pool of unskilled or low skilled or unemployed New Zealanders and then say all we have to do it's cheaper than training New Zealanders we'll bring people in. I don’t go with that philosophy, I do go with the philosophy of meeting skill shortages in a parallel way, training New Zealand, putting the extra money we are into education, into the modern apprenticeship scheme and so on, and bringing in people alongside. I think that you follow both of those paths you don’t put one path ahead of the other, you don’t simply rely on migration to meet that need.

RAWDON Chris let me ask you here, okay so we fill our skilled worker shortage from China what will people at home be thinking at this stage, are they going yep that’s it, this is a win win for everyone.

CHRIS BALCOCK – Editor, Sunday News

Well I don’t think that’s the sort of reaction you get when these subjects come up at all, you know there's obviously an element of suspicion and you know Kiwis are losing jobs or whatever, but we have got you know this case, the one I came across a couple of years ago where you’ve got a trained, fully trained doctor who was able to diagnose a problem in a family member that other people hadn’t picked up, but she was nursing and she was starting from the bottom rung, incredibly frustrated, she had the qualifications, do we need to look at what sort of qualifications we're accepting, are we too elitist about these things?

PHIL No we have got a higher English language requirement, slightly higher than for example that you'd fine in Australia across the Tasman, I think the IELT's rating is 7.5 rather than 7, but it is important that when people go to the doctor they have confidence that the person has skills that are the equivalent of the skills that we provide in New Zealand, and it is important in an area that’s important as your personal health that the doctor is able to properly communicate. Having said that yes we have a lot of people that are working in the medical field from outside New Zealand, I mean the figures are hugely high at maybe 40%, most actually from England and Scotland, but also from areas like India and they make a huge contribution. I want to say this about the Chinese community and I think Rawdon what you were inferring before that there might be prejudice about it. I represent an electorate that the most multicultural in the country, a third of my electorate are Chinese or Indian, the other night I presented Fulbright Awards in Auckland, two of the students were students from my local school of Mt Roskil Grammar, both were Chinese students, both had been brought up in New Zealand, both were proud of their Chinese origin but equally proud of being Kiwis and they'd reached the highest level of educational achievement. I mean I think that’s a great contribution to our community, but we need to be sure that as we bring new people into our country we're doing the right thing by them as well and making sure that they're properly settled. If you leave it open slather then clearly you're going to get problems, social problems as well as the other problem, economic problems. What we can't afford to do which they did in the past was bring in doctors or bring in people that had very high levels of qualification but those qualifications didn’t match with labour market needs. One of the best things that we've done I think is to allow employers to go out into the market and recruit people for the specific jobs that they have and then take responsibility for settling them in New Zealand as well.

RAWDON Mr Goff can I just come back to where our trade agreements lie, because we moved very quickly into talking about China China China here, is the US relationship knocked on the head as trade goes because the World Trade Organisation thinks unless something happens very quickly the whole Dohar round is just going to collapse.

PHIL No the US relationship is hugely important to us. United States is our second biggest trading partner, I would say, and actually don’t just take my word for it, take the United States Ambassador to New Zealand's word for it that our relationship is the best that it has been in 20 years, I work very closely with the United States Trade Representative, Susan Swabb, we get on very well personally, we work together very well professionally. I believe that New Zealand can get a free trade negotiation with the United States but the United States lacks one thing at the moment, it's called a Trade Promotion Authority, it expired on the 30th of June. Unless a democratic congress gives that to a republican administration the United States won't be in a position to negotiate any trade agreement with anyone, we still have our eye on that ball, we're working hard on the hill, the capitol, with the congress people, we're working hard with the business people, I think we're building up quite a strong basis of support and that is a priority for us.

RAWDON Guyon, China going to be an easy one to push through?

GUYON Well, I think we're getting down to the real nitty gritty now, will they give us access to agriculture and some of the issues the Minister's talking about today they want access to our labour market, and it will be controversial as our panellists have said and I think that will be reflected in the vote, I mean these will have to go through parliament and I wouldn’t be surprised to see Labour relying on National to actually pass this agreement through parliament, because the New Zealand First Party and the Greens and others with interest to the Labour Party perhaps the Unions will have concerns about these things, but also interesting to hear the Minister talk today about the commitment to Asia more broadly, we see Helen Clark leaving today to Malaysia and to Indonesia, so just that whole shift towards Asia I think is quite an interesting development.

RAWDON And what have you taken out of the interview so far today, what's the most important thing you’ve taken out of that?

GUYON Well I think the socalled Mode 4 which sounds fairly arcane and innocuous but actually means potentially Chinese labour coming into New Zealand, I think that could be quite controversial from both elements, I mean people are saying there are shortages that need to be filled in our economy, that’s a legitimate argument but there will also be concerns from ordinary people about people coming in and threats to jobs and you know it's always controversial when you have immigration and labour issues tied up, so there is a lot to play out on this China New Zealand free trade agreement and I think we're starting to get to the nitty gritty of it.

RAWDON Guyon thanks very much.

INVESTING WISELY

How to stretch your property dollar

RAWDON This week there have been conflicting reports about the future of the property market. Some predict another boom while others say it's cooling off, so should we still be buying and if so where. Stephen Hart is head of Home Finders, a residential property consultancy and author of The Streetwise Home Buyer, he joins me now from Taupo. Stephen I'm lost, one day I'm told the market's powering on the next it's slowing down, what's really going on?

STEPHEN HART – Property Expert

Good question and I honestly believe that unfortunately nobody really knows the answer to that. I think the one thing that is sure is that any sort of bubble bursting or slow puncture it's in the post, it's on the way whether it's this month next month or three months down the track, a lot of people have predicted it wrongly in the past but there's no doubt about the fact that property prices especially in Auckland but all around the country are rising faster than incomes, and that means that the continual pressure in terms of demand must weigh in at some point. Up until now buyers have been able to buy anything and get away with it, because even mediocre properties in poor areas bought too expensively eventually you'll make money on them. That’s gonna change.

RAWDON So those golden days are over, where would I be best to put my buck then?

STEPHEN Where best to put your buck. In terms of property I still think it's a very good idea, but you’ve gotta make sure that you're buying quality property in quality areas and that could be anything from in terms of – of course most of us are really thinking about an investment, it's gotta be for lifestyle reasons and I think one of the problems that most people face is they have a natural inertia to the areas that they know best rather than knowing all the areas that are available, so it's more knowledge it's more homework, it's more asking questions, it's getting in the car and going finding out places, it's doing homework.

RAWDON In one of your books you mention the ideal, the perfect property, is a period property in a cul-de-sac near a main arterial I think there's one other criteria, good school zone that’s right, and then you add the bonus is the flat section, the north facing and the sea view. I thought sea views was what it was all about, particularly in Auckland.

STEPHEN It is, it is, particularly in Auckland, but there's a very very small amount of people that can afford to buy sea views, but I think the point that I'm getting to with sea views is that it is all about supply and demand. If you are buying a finite number of properties whether it's coastal properties or cliff top, sea view, good school zones, then there's a relatively fixed number of that property stock yet more and more people will always want to buy for those unique characteristics, so there's always going to be demand. The problem is when you're talking about commodity properties and they're these taupe boxes in Dannemora or Botany Downs or an ordinary apartment in Auckland city or Wellington city or anywhere else, they become almost like tradable commodities when the market dips, so that’s what to avoid, buy something special in other words.

RAWDON What about a two bedroom place near Gore which went for 39,000 this week, our cheapest property, interestingly enough it went to an overseas buyer which raised the heckles of many.

STEPHEN Yeah, probably a country music lover presumably.

RAWDON If I'm not in Auckland should I be trying still to get a slice of the Auckland market or should I be looking closer to home?

STEPHEN I think again it depends what you want to do. Auckland was one of the first places that experienced significant property rises and it's probably one of the first that will experience any significant downturn, so I think you’ve got to question your own risk profile, I mean there's a real possibility that Auckland may see some immediate downturn, unless you're buying well, if you're buying well with good advice, good knowledge and access to the right sort of references, and most importantly are doing the homework and prepared to make offers on all sorts of properties until you get a bargain then I think Auckland is the best place to be but it's the worst place to be if you're buying without the correct information.

RAWDON Great Stephen thanks very much, Chris does the property market worry you?

CHRIS Yeah it does absolutely and I was reading a number of bloggs this week you know and there's a real sense of impending doom amongst a lot of people and people questioning the investment value going forward of property, but I think the big concern is I'd be interested to hear your views on this, have we just given up on the first time buyer, the couple who are bringing in 50,000 a year between them, and are just in a blind panic about where they go?

STEPHEN I think in terms of the first time buyer it's a critical market, they're a critical component in the whole equation. The reality is first time buyers they may have been brought up in the eastern suburbs or the affluent eastern suburbs of Auckland or Wellington or Hamilton, they're gonna move out, they're gonna move to Papakura, they're gonna move out to Te Awamutu or other areas and this will become inevitable and this is why cities spread.

CHRIS But the government talks about shared equity schemes and things like that but that’s surely just gonna keep the market inflated isn't it?

STEPHEN I think that it's an important thing morally for the government to be seen to be supporting young people but you're right it does provide an artificial input into the marketplace which complicates the whole issue.

BERNARD Just looking at timing of buying into the market, isn't it a dangerous time right now to buy in when interest rates are approaching 10% for most people where home loan affordability, particularly for first home buyers is frankly impossible if you look at the percentage of after tax pay you need to service the mortgage on an average home now, it's close to 80% in places like Auckland, why would anyone buy into the market right now when most people are saying it's going to be flat or possibly even worse?

STEPHEN Of course most people have been saying that for the last two years that we should be expecting the drop. The last two years have seen a significant increase and of course people who bought during that period have realised significant appreciation and gain, and that may – then of course it can be revalued and they’ve made a substantial gain on the whole thing so the reality is it's always a good time to buy quality property, but it's definitely not a good time to buy anything, and I think this is the key thing. You know there are 50,000 transactions per year in the Auckland area for example, there are not 50,000 smart buyers. The thing that’s more important than ever now is to make sure that you're spotting a bargain because it's that that will determine whether you make capital gain rather than just natural appreciation, so yes I still think it's a great time to get into buying property in Auckland but never has there been a time that you need to be better prepared and smarter and on the ball.

RAWDON Stephen Hart thank you very much indeed.

FINAL THOUGHTS – GUEST COMMENTATORS

RAWDON Bernard you hung your head almost in despair when you heard the three billion dollar figure come out there in regard to building an Auckland harbour tunnel.

BERNARD Just imagine what you could do with a light rail system with three billion dollars, that is nuts, the idea of tunnelling under the sea when you could spend the money to build a decent light rail system to the North Shore. Currently we have appalling public transport particularly to the North Shore and it seems crazy.

RAWDON And this wouldn’t address the public transport issue at all would it, I mean this is just to get cars across.

BERNARD No why not just spend your three billion dollars in building a light rail system throughout the North Shore that takes people over the current bridge.

CHRIS But the point is you’ve still gotta get people to use public transport and as we all know having spent some time there London has got fantastic public transport but the roads are still jammed, people will still get in cars and the one point I thought was quite interesting was the portals for the tunnel, as the guy said you're gonna take some traffic off the bridge but you're gonna cause chaos at either end, so I think what we really need to see is a cohesive and workable plan for the whole of Auckland and feel that all these things are gonna come together not disparate elements that seem like a good idea. I'm not convinced these things are being thought through as well as they should be.

RAWDON And I'm sure if you don’t live in Auckland you're really shaking your head here cos you know that money's coming out of your pocket.

CHRIS Absolutely it just confirms everything you think and know about Auckland I guess, but you know we have councils debating a survey which said that peak hour traffic had shifted and wasn’t as high now say across the bridge as it was say ten years ago. Well hullo you know it's just spread through the day people are not stupid they're not gonna go at seven o'clock and you don’t know when the traffic jams are coming any more, so that’s just minor detail.

BERNARD And it's not just traffic as well you could spend that 3 billion dollars investing in a broadband network for all of New Zealand which means that people can work from home instead of jumping in their cars and if you're looking for a Green solution to this problem why not spend your 3 billion dollars on something like that instead of a big hole under the sea which people will then drive their cars into spewing out yet more carbon dioxide, it just seems what I call a big solution to a problem which really needs a lot of little solutions.

RAWDON Very romantic idea though isn't it? Having our own tunnel.

CHRIS But maybe you’ve gotta drag people screaming on to public transport and do what Ken Livingstone has done in London and put in the five pound tax you know for going into the centre and what have you, people hate it but you know certainly I did notice a difference there when I was back there last year, maybe those are the ways, you’ve gotta beat people around the head with a stick.

BERNARD And the rest of New Zealand would love it, to have a congestion charge on people going into the centre of Auckland. It did work in Britain to force people on to the public transport and to simply stop: people going into the centre of town, and it forced a lot of people for example to buy scooters which are not charged.

RAWDON Well I think you can also now buy a green hybrid car whatever you don’t have to pay the congestion charge, so they're using it to tackle other issues.

CHRIS But it's still a vehicle on the road isn't it, you know that’s the bottom line.

RAWDON What else do you think will be coming up in the news this week, I know it's a bit difficult to predict, what other issues do you think are going to be sort of driving us over the next few days?

BERNARD Well I thought the Minister's discussion about immigration and particularly from China is one that hasn’t really forced itself on to the public agenda and the public consciousness and I hope it gets a really good discussion, New Zealand needs a real discussion about its immigration policy, there was a lot of noise in the late 90s around Winston Peters, that sort of died away but we have a significant problem in New Zealand right now, we do not have enough skilled people to produce what we need without inflation, that inflation is driving up interest rates to the point where as we discussed this week we're gonna drive the economy into a standstill because we don’t have enough productive skilled people to produce the goods and services that we need, why don’t we bring them in, why don’t we find other ways to do it. We need a national debate about how we're going to get round this productivity crisis, this skills crisis that we have right now which is forcing us into extremely high interest rates and extremely high dollar which will grind the economy to a halt.

RAWDON That’s all quite doom and gloom really which is where we started isn't it? What about you Chris?

CHRIS Well on a lighter note but maybe not such a lighter note I think the All Blacks you know they play their last two games before they go to the Rugby World Cup and I mean if the reaction to defeat in Australia is anything to go by and results don’t go our way over the next week or so then it's gonna be a month or six weeks of angst and brow beating you know before we actually kick off in France and the reaction and weight of expectation to everything the All Blacks do is incredible, we've had suggestions that Richie McCaw be sacked this week for godsake you know, let's just all chill out.

RAWDON Was that trying to sell papers?

CHRIS No I don’t think so. I think it was on an inside page, but yes heaven help us if we get to that point anyway.

RAWDON Well I'm delighted we managed to get rugby in before on test match day even if it was right at the end.

Thanks to our panellists Chris Baldock and Bernard Hickey and thank you for being with us. We'll be back at the same time next week, see you then.

ENDS

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