Phil O'Reilly: Taking care of business

Phil O’Reilly fronts up to have a chat about the state of the nation

BusinessNZ chief executive Phil O’Reilly has long been the good cop to Business Roundtable head Roger Kerr’s bad cop. Is it all a glossy veneer of blind optimism, or does the sanguine Santa of Kiwi business really see such a rosy future for New Zealand?

Phil O'ReillyYou might imagine that heading up BusinessNZ keeps O’Reilly off the streets and out of the video parlours. The spokesman says he’s lucky enough that his variety of “busy” is never “boring busy” – someone else gets to do the boring stuff. In between catching up with incoming ASB chief executive Barbara Chapman (an old mate) and handing out awards to kids, the man the Listener fingered as a top influencer curls up with Idealog and puts the world to rights.

There’s a lot of talk about “catching up” with Australia. Which countries could we legitimately aspire to emulate – and we beg you, don’t say Australia?

I think that’s the wrong question. It’s just try-hard of us to say we want to be more like Denmark, or more like the Nordics, or more like Australia. The best way of thinking about it is, how do we become the best us? If we think we should aspire to having a fantastic health system, let’s go find the best health system in the world we can aspire to and emulate that. And if we think that successful communities or successful cities matter, let’s go find the best country in the world that does that an emulate that. We’re looking at it from the top down, not the bottom up. Wanting to be like Australia is a little too glib. We’re not like the other guys – for example, we’re much more ethnically diverse than any of the Nordics, for a start. The idea of building social consensus in our country is very different from what it would be like in Finland, which – when I last looked, was full of Finnish people.

Forget the Aussies then. What are two initiatives that would help us move forward?

Firstly, we need to get bigger on innovation. We’re getting better – five years ago, when I talked about compliance costs, 500 would turn up and if I talked about innovation, five would turn up. Now it’s the opposite. We need to turbo-charge that conversation, spend more government money and more private sector money. We need to get organised about it. Second, we need to get better at connecting schools and educational institutions and business. We have way too many kids who do social studies on Friday and then nothing on Monday – because they leave school. Often the pathways between compulsory education and tertiary education and on to work are poor to non-existent. It’s particularly an issue for Maori and Pacific Island people. Far too many of them disconnect from education and skills and they’ll lead a life that’s poorer, that’s less healthy, less successful. That’s what the statistics tell us.

What are you sick of hearing New Zealanders say about ourselves?

Where would I start?! The one I hate is the bach, BMW, and boat. It gives me the shits. It’s often spoken about as code for New Zealand businesspeople being lazy and risk-averse. It should be code for New Zealand businesspeople being logical. If I had a bach, boat, and BMW and someone said to me, risk it all on taking on the US or China, maybe not. We’ve got to get away from this idea in that coded reference that we’re lazy as a nation or risk-averse. It’s much more risky, for New Zealand business to start exporting lamb than a Danish business, because they drive 10 minutes across a border, we have to fly for three and a half hours. It’s a much harder task.

What would you have us risk then?

I want to see us as an outlier on some aspects of government spending. I think we’ve got to get hard and fast and spend more on innovation R&D, and also investing heavily in early childcare. The first three years of a child’s life, I’d invest big bucks there. It’s a risk, it might not lead to more successful communities and societies, but I’m pretty sure it does. I would radically rethink the whole idea that we put people in prison. Our attitudes to crime and punishment, they seem strange to me. According to the stats we’re the most peaceful country on earth, but we have one of the highest prison rates per capita. Far too often they’re being deterministic about who goes to prison – people who can’t pay their fines go to prison. We’ve got a bit of a lock-em-up mentality. To say anything different makes you soft on crime.

You’d still lock up the dangerous and dodgy ones though, right? (Please say yes)

Of course. You’d lock up the murderers and the violent ones. I’m pretty confident that we’re probably sending way too many middle-aged Maori women and young Maori kids to jail for not much of a good reason, I suspect, for circumstances around their ability to pay a fine or nature of their representation or their family circumstances. I have a fundamental disagreement with, for example, three strikes and you’re out.

Is there anything you’ve majorly changed your stance on over time?

I grew up with a dad who was a serious Muldoon supporter, big time. He was a paid-up member of Rob’s Mob. So I grew up with all of that in my head – the idea that New Zealand should be protected, that laws and controls were the option, to be suspicious of things and people that look different to you. I doubt I’m much different to a lot of others. The suspicion of change, of competition, of openness. I can’t imagine that I ever thought that, but clearly I did when I was a young fulla.

What would you most like to see come out of the ETS review this year?

A clear recognition of New Zealand’s place in the world. This is a personal view – I believe a price on carbon is a right thing. I believe we should have an ETS not a tax, because a tax is a creature of politicians and politics, and trading schemes are the creatures of business and capital. There’s no point going in hard to an ETS when the rest of the world is not doing much. That doesn’t mean we do nothing about carbon, but the idea that a price mechanism wound up tightly in New Zealand when it’s not happening anywhere else, that is the definition of a pointless exercise. We need to be doing our bit on pricing, research, fuel efficiency, environmental management, but the ETS is only one part of this.

What do you make of Pure Advantage?

I enjoy them, they’re good. One of the problems with the sustainability debate over the past 10 years is that it got very politically tribalised. You got the last Labour government talking about sustainability in what I felt was quite often an anti-business way, disconnecting language like carbon polluters and coming up with heavy-handed regulation. You get a lot of businesses offside and you get into a trench warfare debate. Then this government comes in and we didn’t have much of a debate about sustainability at all for a while. Both are wrong. Sustainability is a profound change in consumer and business behaviour, being led often by business – sometimes by consumers, but often by business – and government is actually third. Government is a relative laggard in thinking about this.

Who’s on your list of businesses to keep an eye on?

Douglas Pharmaceuticals. Rakon is scary good. Silver Fern Farms is interesting, Geoff Cooper is thinking about brand in a different way, branding his meat into supermarkets. Living Cell Technologies – they will cure diabetes, I’m confident. And then they’ll cure Parkinsons or something. Their passion for curing illnesses is eye-widening.

Time for the hard questions. What do you eat for breakfast?

Way too often, bad stuff. I try to eat good stuff but way too often I’m in hotels or the Koru Club, which means I graze on rubbish – toast and quiche and scrambled eggs and bacon and stuff that’s bad for me. When I’m at home, cereal and fruit. But I’m usually not at home. It’s bad.

If you were stuck on an island with Paul Henry, Bill English, Terry Serepisos and Darren Hughes and you had to kill and eat one of them, who would it be?

It’d probably be Serepisos, simply because it’d taste rich.

In a post-Alasdair Thompson world, what are you doing to promote women in the workplace?

We’ve been members of the EEO Trust since it started. We take a view that gender is part of a wider issue, I’m not suggesting we take our foot of the gender debate, but we need to think about the role of ethnic groups in society that are underrepresented in these areas. We’ve done some work with the Ministry of Women’s Affairs publishing reports about the importance of gender diversity on boards, for example. One of the difficulties is that passing laws sounds like a good idea and it’s not, it makes it a compliance issue. What you need is hearts and minds, and you’re never going to unleash the creativity of businesses if you make it the law. It’s not just a business problem – it’s a New Zealand problem. Look at the leadership not only of businesses but also of sports groups, community groups, unions even. You’ll often see a preponderance of white men at the head of them. We should stop chucking rocks and sit down and realise we’re all part of the problem and we’re all going to have to solve it.

Sometimes it feels like all we’re doing with these issues is sitting around in a circle, holding hands and singing Kumbaya…

I’m not suggesting we do that but we do need to reach a new societal consensus around what it is we’re doing. We’re achieving it in innovation, hopefully one about the importance of education for young people. If the alternative to discussing things and trying to jump on board with initiatives and make sure this is talked about as a New Zealand issue is to pass a few laws and feel happy, we won’t have succeeded.

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