Episode 29: Sir Robert McLeod

In Leaders Getting Coffee episode 29, our guest is business leader Sir Robert McLeod.

Rob grew up near Gisborne on the East Coast of New Zealand and over the last forty years has become one of New Zealand’s most influential business leaders of our time.

His career started as a tax specialist at KPMG and subsequently Arthur Andersen before he settled into the firm then known as Ernst & Young. There he became the Chair of the New Zealand Partnership, and subsequently CEO before later becoming CEO of EY Australia.

His influence across government policy grew as he took on appointments across a wide range of government appointed taskforces and commissions including Tertiary Education, Justice and an organisational review of the Inland Revenue Department. Most notable was his appointment in 2020 to the Treaty of Waitangi Fisheries Commission and in 2001 to the Chair of the New Zealand Tax Review, in what became known as the McLeod tax review.

His ability to stride both sides of the pollical spectrum is summed up by the fact that he was also the Chairman of the NZ Business Roundtable, a role supposedly not compatible with the Labour Government of the day, and yet he commanded both the Tax Review and the Roundtable with equal measures of independence and pragmatism.

During the Leaders Getting Coffee podcast, Rob speaks with Bruce Cotterill about the wide range of issues affecting the New Zealand economy, including the recent interest in a capital gains tax, the escalating debate about Maori sovereignty and the current challenges within our debt laden economy, including the need to reduce the size of government before implementing meaningful tax reform. And as you might expect, there’s plenty of discussion about what constitutes good leadership.

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:06):
This is an iHeartRadio New Zealand podcast.

Speaker 2 (00:28):
Hi everyone, and welcome back to episode twenty nine of
the Leaders Getting Coffee podcast. My name is Bruce Cottrell
and thank you for joining us for what I'm sure
will be a fascinating discussion with a business leader who
has had enormous influence across New Zealand and Australia in business,
in government policy and in MARI organizations. But before we
get to that, as always, i'd like to thank the

(00:50):
team at endz ME, the team at Newstalk Said be
you who help us put these podcasts together, and of
course the team at the Business Herald, where my regular
column appears. The last of those columns ran on the
twenty sixth of October. It was a Saturday, and the
headline read how the America's Cup can still be New
Zealand's Cup in the wake of our America's Cup victory
off the coast of Barcelona. I just couldn't resist the

(01:12):
temptation to talk about the fact that Team New Zealand
chose not to defend the Cup here and use New
Zealand waters. It's great that we've triumphed again. It's our
third consecutive win and in case you missed it, we
beat the British team by seven points to two. But
the achievement comes with mixed emotions for many Kiwis, myself included,
and the reason is this. The decision to hold the

(01:34):
event in Barcelona left many of us feeling disconnected from
the event and from the team itself. I think many
Kiwis are more than fans of the America's Cup, and
we're more than simply fans of Team New Zealand. We
feel that we're stakeholders, you know. Over the years, the
Red Sox, the taxpayer funding, the city funding, and the
hundreds of thousands of dollars in donations that we've all

(01:55):
made makes us feel like we all have a little
piece of ownership. And so when Team New Zealand decided
to defend the Cup on the other side of the world,
our eye for one, felt a bit let down. This
all comes at a time when we could do with
the boost that the old mud old mug brings to
the economy, the hospitality sector of the marine industry, and

(02:16):
of course a bit of national pride, which we could
all do with right now. And so I can't help
but compare twenty twenty four with twenty twenty one here
in Auckland, which to me was one of the best
sporting events ever held here. The article considers what it
might take to get the Cup back into New Zealand
waters and in my view, it has to be based
around a model that considers the tourism and economic potential

(02:39):
that experience tells us the Cup can bring. But it'll
take all parties, the government, the city and Team New
Zealand themselves to work together on a business model that
makes it work. The Great New Zealand yachting commentator Peter
Montgomery once said that the New Zealand the America's Cup
is now New Zealand's Cup. It's up to us whether

(03:00):
it stays that way. You can read my views in
greater detail at NZ Herald dot cot at NZ it's
under the headline how the America's Cup can Still be
New Zealand's Cup, or under published articles at Dubdubdub dot
Bruce Kottrel dot com, Forward Slash Blog. Have a look
and let me know what you think. Thanks again for
joining us on Leaders Getting Coffee. We'll be back in

(03:22):
a moment with.

Speaker 1 (03:23):
This week's guest.

Speaker 2 (03:33):
Welcome back to episode twenty nine of Leaders Getting Coffee.
I need to warn you about another one of those
massive cvs that we get here on this podcast, and
this one's going to take some time to work through.
And my guest today is one of those people who's
been on my list since we first started the podcast,
and he's someone that I've been fortunate to know for

(03:53):
almost forty years, and I'm proud to call him a friend,
although in his case the word mate feels more appropriate,
and it's because despite the rather grand title, he has
simply put a really good blow. Officially, he goes by
the title Sir Robert McLeod, and as you will hear,
it's a title well deserved. But to most people he's

(04:14):
just playing Rob McLeod. Rob grew up on the East
Coast and attended Lytton High School in Gismond and subsequently
Otago University and Uckland Universities, where he completed as b
com LLB. Post university, he joined a small accounting firm
but quickly moved on to KPMG, where he was installed
as a partner before the age of thirty. And if

(04:37):
you assume that that wasn't enough, pretty soon he set
up his own firm, a specialist tax firm, McLeod Lodgicin Associates.
That firm eventually became Arthur Anderson in New Zealand in
nineteen eighty nine, and he was appointed Managing Partner of
Arthur Anderson in New Zealand a couple of years later.
Soon afterwards, in the mid nineteen nineties, the government came
calling and the appointment started to flow. He was appointed

(04:58):
to the Task Force on Tertiary Education, the Criminal Justice
Focus Group, the Todd Task Force on Tertiary Funding. Then
came the Organized Review of Inland Revenue Department. Hey, there's
a few of us who'd like to be involved in
that one, I think. He was appointed to the Council
of the New Zealand Institute of Chartered Accountants in nineteen
ninety five and the towards two thousand and five Task

(05:20):
Force for that Institute in nineteen ninety eight, and then
around the year two thousand a couple of massive appointments,
the government appointment to the Treaty of Waitangi Fisheries Committee
or Commission, i should say, and subsequently a government appointment
to chair the New Zealand Tax Review and what became
known as the McLeod Tax Review. Along the way, he

(05:42):
became partner and chair of Ventst and Young in New Zealand,
subsequently the CEO of Vents and Young in New Zealand
and a few years later CEO of e Yoceania, which
saw him based in Sydney for a number of years.
But the appointments continued and he was chair of the
New Zealand Business round Table for many many years and
I can tell you did an outstanding job of that.
He was on the New Zealand United States Council Advisory Board,

(06:04):
Vice chair of the Law and econom Association of New Zealand,
the Capital Markets Development Task Force. He was the lead
negotiator for Nadi Perot and their treaty settlement. He was
appointed to the New Zealand Defense Review in two thousand
and nine and the Economic and Policy Committee of the
Australian Business Council. As one would expect with a diary
like that, the honors have come thick and fast, and

(06:27):
he was awarded the MARI Business Leader of the Year
by Auckland University in two thousand and six and a
Distinguished Alumdi Award by Auckland University. In two eighteen he
was awarded for an Outstanding contribution to Finance and Business
by the New Zealand CFO Awards, and in twenty twenty
one he was appointed a Life Member of the Chartered
Accountants Australia and New Zealand, and most notably in twenty nineteen,

(06:51):
he was appointed a Knight Companion of the New Zealand
Order of Merit in the New New Year's Honors for
services to MARII and business. He's a former director of
Telecom now Spark of course, sky City Entertainment, a r
R Fisheries, ames Z National Bank, Gulliver's Travel Group and
Sea Lord Group. And he remains on the board today

(07:12):
or the boards today i should say, of Sandford Limited
where he's the chairman, the Port of Taranga where he's
a director, Nardi Perot Holding Company Limited which is their
commercial arm, and the China Construction Bank. He's married to Joanne.
They have three grown up children and pure after all that,
Sir Rob McLeod, Welcome to Leaders getting coffee.

Speaker 1 (07:31):
Thank you, Bruce, thank you for the introduction, and thank
you for taking the time without too much breaths of
air for getting through my CV which does remind everybody
I think, just how old I am.

Speaker 2 (07:45):
It's been a hell of a life. And as I said,
I've known you for a big chunk of that time.
Do you ever have time to be you?

Speaker 1 (07:54):
I do fortunately. As I say, the years have been
many over the perier that you described. But my family
is very important to me. Right now, I'm actually at
the tail end of the labor week end at Kennedy Bakermandel,
where I'd like to spend a lot of time with family.
So family and non business contexts are very important to me,

(08:14):
as they are I'm sure to most people.

Speaker 2 (08:17):
Well, it's something that I was going to mention. You know,
many of our listeners will be business people grappling with
what we all call the so called work life balance.
And I recall you and I had a couple of
sons in the same basketball team at one point, and
despite your schedule at the time, we sat alongside each
other for many many a game and I often thought,

(08:39):
you know, bearing in mind that your wife was a
partner in a law firm while you were the CEO
of a sort of a global accounting firm, I wondered
how you got to so many of those games. How
do you manage the family side of things? What's the secret?

Speaker 1 (08:54):
Well, it's not perfect and I learned a long time
ago that perfection's not really of this world. So compromise
is inevitable. But it's a bit like I heard you
say on one of your former podcasts about luck, and
somebody was talking about, you know how luck comes about.
Mar was wanting to put the words in the mouth,

(09:15):
which was that you make your own luck. And I
think it a sense. You know, you have to make
your own diary and prioritize what's important to you because
the demands that are on your time do exceed the
time it's available. So like everything in life, things are
scarce and you've got to allocate them. And I don't
get it all right, and when certainly the family from

(09:36):
time to time remind me that I misprioritize, and they
are right to do so, and yes I often do that.
It's just one of the costs and the crosses that
you've got to bear. But so long as you're picking
and choosing, you know what you want to do, what
you enjoy doing, at least you come through it not perfectly,
but you come through it with a smile on your
face and most of the time that's me.

Speaker 2 (09:58):
Yeah, fantastic And the introduction Rob I mentioned the East
Coast upbringing. What were you like at school?

Speaker 1 (10:05):
Yeah, I enjoyed Scott. I grew up in a little
place called Mannatookie on the outskirts, southern outskirts of Gisbon.
It was a school that was dominated by Mary Child
children and I had fantastic relationships with the community. When
you're that young, you know, you're not as precious about

(10:25):
stuff and you're not necessarily as analytical. You know, you
just get on with living when you're a primary school kid.
And the people I went to school with at Manatokia particularly,
I have particularly fond memories of, even though you know,
it's been years ago and we don't maintain the sort
of contact. I think probably most Kiwis don't have a

(10:48):
lot to do with the primary school because that they
went to, unless pants you come from a place like
Auckland where you stay geographically proximate. So if you're in
a provincial town Bruce, you come away from the town
and it does definitely dilute that. So, yeah, I had
a great time at school, and yeah, and it was
a good part of my life.

Speaker 2 (11:08):
Were there really signs that the career that you've had
was beckoning or did that come much later?

Speaker 1 (11:16):
I think it did come much later. I can remember
at my marriage my father saying that Rob or Robert
as my parents called me, exceeded their expectations, and I
think that was probably true in the sense that I
enjoyed school and my priority wasn't necessarily scholarship, which it

(11:38):
kind of became later in life. I mean, people who
know me now know that I think in frameworks, and
I think that frameworks and conceptual thinking as well as
practical thinking is important to combine. I think that aspect
of me has changed. When I was at school, I
was a more pragmatic individual, living each day in largely

(12:00):
enjoying it.

Speaker 2 (12:02):
What were your interests outside of school when you're a
young fellow.

Speaker 1 (12:06):
I always liked fishing my father. I got that from
my dad because we had a boat and we would
we would spend any weekend we had, we would take
that boat down to a little place called Brown's Beach
where the White Pawa River enters Poverty Bay, just within
a stone's throw of Captain Cox's discovery of New Zealand.
Young Nick's head and we'd go out there fishing, and

(12:28):
so I've never lost my keenness on it. If anything,
it's a bait of a little in terms of how
much of it I do, but I that was part
of part of it. At a school like Manitoki with
a lot of Mary boys in particular, it was a
co ed you know, Mari kids just natural sportsman most
of them, and so the sport element was just natural

(12:53):
in that community. I wouldn't put myself at the front
of any particular sporting team, but in the summer we
played tennis mainly and did a lot of swimming, and
then the winter, the winter sport was dominated by rugby,
and we had a team in that school, particularly the
Form two year. It was one of those schools that
ran all the way through the intermediate included the intermediate

(13:14):
two years of forms one and two. But essentially that's
when I took his school won all the rugby competitions
and practically every year I was there, not because of yours, truly,
because of the amazing talent that was around me on
the rugby field.

Speaker 2 (13:33):
So you went off to university after your time at
Lytton High boy from the East coast turns up at Otago.
Do you remember your first couple of days?

Speaker 1 (13:42):
I do, yes. It was a bit of a wrenching
experience at the beginning, because of course I lived an
idyllic life in Gisbon, the city of the Sun as
they say, and a lot of good and enjoyable memories.
To go all the way down to Dunedin was a
hell of a wrench from what I had been used to.
And I remember the first time I actually went down

(14:03):
there was we a native mine who was at the
same university going me at the same time. We bust
from Gisbon to Wellington. Then we got on a Littleton ferry.
Those days we had the christ Church Wellington system rather
than just an affect them system, and then we picked
up a train from christ Church and trained to Otago

(14:27):
to dun Eden and basically just to save money, I
think that cost thirty dollars from memory to go from
Gisbon to dinedon on that occasion.

Speaker 2 (14:37):
Well, that's that's how we did things in those days,
isn't it.

Speaker 1 (14:40):
We did exactly exactly.

Speaker 2 (14:42):
I actually remember a couple of times hitchhiking from de
Eden back to Tarangen for the holidays. I wouldn't recommend
that today in today's world, but we did whatever we
could do to get up and down the country.

Speaker 1 (14:54):
That's true. I was just going to say, Bruce, you
hardly see hitchhikers on us on roads anymore, do you No?

Speaker 2 (15:00):
And it's probably a good thing, given what's happened to
a few of them over the years.

Speaker 1 (15:04):
Well, that's true, but it's also a bit of a
sat comment trait, isn't it? Yeah?

Speaker 2 (15:07):
It is, it absolutely is so, Rob you got onto
your career and as you've said, you started with a
little firm and completed your studies in parallel with that,
as I understand, and then you know quite quickly you
were a partner in a big four firm before the
age of thirty. I think you're about twenty eight. But

(15:30):
you quickly decided to establish your own firm with McLeod Lodgkin.
What prompted that.

Speaker 1 (15:36):
Well, perhaps just backing up to the partner opportunity that
I had. In fact it I was made partner in
the four runner firm of KPMG. It was Pete Marwat
Mitchell and Co. And that actually I took office as
a partner on the first of July nineteen eighty five.
I was actually a rising, a rising twenty eight year old.
So I was actually twenty seven, and that was unique

(15:59):
at that time.

Speaker 2 (16:00):
And that sounds like a young man in a hurry.

Speaker 1 (16:02):
Yeah, well, I've got a lot of it. There was
an event in that firm where the tax leadership left
the firm to join a public company and the two
tax partners of the day vacated it along with the
senior manager. So I was the most senior of the
staff that was that was left. I can recall it.
I was in the pipeline for partnership from the first

(16:24):
of January the following year anyway, So the practice decided
to accelerate it. In a sense, I think it was
somewhat inevitable. Tax was a specialty. It wasn't something that
another partner could be transferred into very easily. Although we
did have a they did put a Castodian handholding partner

(16:45):
in place just to interact with us, to basically hold
our hands as young me as a young partner, and
the managers that reported to me as young people, and
so that was that was the context. I think. So,
you know, luck plays its usual role. It can be
good or bad, but I think I've been reasonably lucky
in it, a lot of it. So that when we departed,

(17:09):
which was actually on the first of April at the
moment where it was hominus being April's full it's how
things happened on April one, but nineteen eighty seven, so
it was only a couple of years later, I suppose
two and a half years or so that a group
of us decided to go and set up on our own,
and that was largely in response to poll factors. It

(17:30):
wasn't POSH, KPMG or Gilfilms as it was at that
so you know, it was Pete Mark at that time.
That was a very good firm. It was the largest
of the big I think we were the Big eight
at that time in overy these large accounting firms. Is
now four. So it was a very good firm and
it was It was probably one of the hardest decisions

(17:52):
of my life actually to depart with a group, but
we did, and that's all behind us, but largely because
of opportunity and in a sense to specialize in the
finance sector as a tax group and perhaps call our
own shots, make our own decisions.

Speaker 2 (18:11):
Good stuff. Well, that that period out there on your
own was short lived because Arthur Anderson came knocking, didn't they.

Speaker 1 (18:19):
That's true, Well, of course what happened. You know, here
we go one April eighty seven, as I've mentioned, and
we have the October shere market crash in eighty seven
of that year. Yeah.

Speaker 2 (18:28):
Time is everything.

Speaker 1 (18:30):
Time is everything. So I've talked about luck, and that's
a bit of bad luck. Iman. The reality is that
we were approached by Arthur Anderson because again, what had
gone on coincidentally at that time was that Lawrence Anderson Buddle,
which was a representative firm of Arthur Anderson, had broken
up in New Zealand and decided to go their respective ways.

(18:52):
About fifty percent of them went to Price Waterhouse and
the other half ended up with Deloitte, and so Anderson
lost its representative Fern And interestingly, in New Zealand, they
never had a firm in their own name, and that
was because economically they shared their profits as Arthur Revson
on a global basis, and you had to meet their

(19:13):
stats in order to become integrated. It meant so much
revenue per partner and that kind of thing. And if
you didn't make the grade. Then the next best arrangement
was an association, which is what Lawrence Anderson Buddle had
and really the reformation of fitting themselves into the Arthur
Edison's shoe with impact on partners, who was partner, possibly

(19:35):
the reduction of partners. It was too difficult, so they
decided to simply just join and hitch their wagon to
another network firm, leaving Anderson unrepresented. And of course they
came along to us and said, well, you could probably
fit our model and we'd be keen to take you.
So that's what happened. We was a flight to safety

(19:56):
in the way Bruce, Yeah, of course. So we kicked
that arrangement off from the first of September of nineteen
eighty nine, so not that long after McLeod Lodgical had
been formed.

Speaker 2 (20:08):
Yeah, it was a tough time in New Zealand business too,
because yes, we whilst the Sharmaket crash happened in eighty seven,
we experienced fall out for about five years, so that
was right in the middle of.

Speaker 1 (20:20):
It, exactly exactly.

Speaker 2 (20:24):
You went on. Arthur Anderson became absorbed by the Ernst
and Young organization and during that period, you know, as
I mentioned, in the introduction. A huge range of government
appointments came your way, Yes, and then and then the
big one, I guess, as I recall, was the tax
review and being appointed the chair of chair of that.

(20:48):
I get. Firstly, how did those appointments come about? Does
somebody ring you up and say, hey, do you want
to do this?

Speaker 1 (20:53):
Or are you asked to put in a proposal? How
does it work? Yes, well, it's it's possibly it's a
bit like the puff of whitesmoke from the Vatigan perhaps,
but the reality is that you're in the system. Bruce
with it, Like if you just take the tax review
which I achieved, which was two thousand and one, I had.

(21:15):
First of all, I had become known as a tax
expert in the country and I had actually served on
the Valad committees, which Valad took over from Don Brasho
was a former guest on on your podcasts. Yes, and
Don brash led quite a few of those earlier tax
reviews under the Roger Douglas government, and then Vallard took

(21:38):
over about halfway through them and carried them on and
I was on the last one of his. So I'd
had the credentials of being in these various committees. But
essentially the officials have a lot to do with it
because there it's the government that's making the appointment. But
the officials are typically working with the government on who

(22:00):
will be the suitable committee members, and invariably those relationship
it's matter. So they come together and then your should attacked.
You're invited typically to form the committee. Typically the committee
is its members are decided by the government when all
of its members are approached, and typically the chair is

(22:24):
also identified by the governments in their work with officials.
So that's how that happened.

Speaker 2 (22:31):
So you're appointed chair, but you don't get to pick
your team.

Speaker 1 (22:36):
No, you don't get to to pick the members of
the committee. It's probably fair to stay to try to
recall that informal conversations may may go on between politicians
or officials and particular members of the impending committee. That's unusual,
but I think that may have occurred with me, particularly

(22:57):
with the officials side of it, not so much the government.
The Minister of Finance at the time in my review
was Michael Callen. I was remember chairman of the Business
Roundtable at that time, so it was a little unusual.
Probably for a labor government to appoint me given my
role as chair of the Business Roundtable. And I think

(23:19):
that that's kind of a mark of Michael Cullen, a
guy I came to respect quite quite highly, and he
put that to the side. The other thing was, remember
that was a coalition labor government with Jim Anderton, and
there were some extremes extreme views in that government about

(23:39):
what should go on in the tax system, and there
were calls for a whole lot of new taxes, taxes
on financial transactions and alike. And I think in reality
Callen was interested in getting a more conservative middle of
the roader to lead the committee in order to keep

(24:00):
the prospects of some strange recommendations at day. Although he
might have ended up staying in fact, he did end
up saying that some of our recommendations were not necessarily
politically that palatable. And if you have a look at
his autobiography, he does mention I think in there that

(24:22):
my recommendation of the McLoud review to put a tax
on houses actually shut down his phone system single handedly.
I think he mentioned to me that no one else
had had the honor not being able to do that.

Speaker 2 (24:37):
So you made a range of recommendations. Did they pick
up much of what you talked about?

Speaker 1 (24:42):
No, I mean not really. I mean essentially, I'm very
philosophical about it. Some of the major recommendations were to
abolish excise taxes. For example, we said that the GST
was a better tax than the exercise taxes. In fact,

(25:03):
we calculated that if we increase the GST tax right
from I think at that time it was twelve and
a half percent, so it hadn't gone to fifteen, and
we said if we took it the sixteen percent, it
would raise the same revenue and a better quality of
revenue than the excise taxes, which were in a sense
that they were a syntax. Those excise taxes were regressive,

(25:24):
but that means essentially is the poorer you are, the
more of it you pay. And we also argued that
they weren't that effective in because the argument for the
exercise is essentially if we tax the hell out of them,
that we get less of the activity. But really, you know,
when you get addictive activity like gambling, drinking, and smoking,

(25:46):
it's not clear to me to us that essentially those
prices really deterred the consumption. In fact, we did it
We did a lot of scientific work on that and
trained the conclusion that it didn't didn't hold water.

Speaker 2 (26:01):
That argument fascinating. Was there anything that came out of
the view that you're especially proud of?

Speaker 1 (26:10):
Well, in some respects one, I mean, there were some
things that we were known for in terms of advising
the gard but not to do we actually advised against
the capital gains tax. So I think we're early, reasonably
early in the peace. Although the Mcare Committee and the
Ross Committee that had preceded us, they also had been

(26:32):
anti capital gains tax. There's been very few of these
committees really that have been pro and so we gave
a I think we gave a more fulsome economic explanation
for why the CGT did not make sense, and so
I think the report is remembered for that. It's quite
often you'll see with officials that came on later, with

(26:54):
later reviews, that that Mathaud Review was referred to. It's
referred to quite often in terms of just some of
the principles that were developed at that time. We also
reinforced a lot of the very good things about the
New Zealand system that stayed with us for a long time.
One of them being the broad base and the low rate.

(27:15):
Mould Doon had basically developed a tax system which was
the opposite, narrow base, high rate. Most people will be
too too young to remember that he had our personal
tax rate at sixty six percent two thirds.

Speaker 2 (27:29):
Of I remember, how can I forget exactly?

Speaker 1 (27:33):
So you know, so when your base is narrow, are
you going to obviously have on the average, you're going
to have a high tax rate. So Roger Douglas was
the author of GST as we know, and it was
really the GST event that really brought that based broadening
element to the party and of course maybe gave us
the ability to bring our marginal tax rates right down

(27:55):
into the thirties, which was unique. That's been unique in
the OECD. It's been one of the arguments about, you know,
the rich in New Zealand getting away with tax rates
that have been too low, because it is fair to
say that by comparison to the OECD, most of the
OECD have higher toppy and tax rates. But again that's

(28:16):
because they have a tax bree threshold. Something that people
don't realize. If you give a tax breath threshold, you're
giving it to everybody, including the rich. And your society
and your tax system and the maths of that is
the largest single contributor to why you end up with
a higher marginal tax rate at the other end, at
the top end, the Cloud Review said, get rid of

(28:37):
the tax breath threshold and keep the top end rate
down and the average rate down, and you'll get more revenue.
And so that those sorts of principles bruts, I think
is what that review was more known for and what
I'm particularly proud of, I suppose.

Speaker 2 (28:54):
And a lot of those principles are still with us today.
Where with Rob McLeod will be back in a moment.
Back with Sir Rob McLeod. We've been talking text, but Rob,
I just want to jump briefly into your sajourn across

(29:16):
the Tasman when you were the CEO of e Y Australia.
What were the differences you noticed in working with an
Australian team.

Speaker 1 (29:27):
Well, the straight off the back difference is the size
of those ferms in Australia competed to New Zealand. They're
a lot bigger, so you know, something like as much
as ten times the size and revenue. And it's an
interesting thing. The population multiple isn't isn't ten times, but
the and it's an interesting question as to why those ferms,

(29:50):
the big four there, you know, are so large competing
New Zealand And. And I think it's it's a reflection
really of the complexity of the federal system. Yeah, I
think it explains most of it for me. So that
was one one big difference. The other thing of horses
that just you know, I'm now in charge of a

(30:12):
country practice in Australia with six to seven officers, and
so that immediately means I've got to be traveling around
and your leadership obligations are a lot Taugher, I suppose
in terms of just logistics in the handling. In the
prior life that I'd had leading New Zealand firms, I

(30:34):
had always made a particular emphasis of maintaining practice. I
had clients, and I was very keen for my own
self interesting to learn my own relevance to maintain practice
with clients. Because your professional colleagues, whether they be partners
or staff, I think they their respect is a function

(30:56):
of you doing what they do and you demonstrating that
you can lead or do what they do. So I've
never been a fan of a chief executive and prepare
services that is not actually doing professional services. Now that
can be a debate point, but it served me well.
And when I look around at the leaders that I

(31:18):
admired and the other firms, they were of a similar elk.
They were also doing client work, so that was important.
I found it tougher to maintain that in Australia for
two reasons. One was the size I've just mentioned, but
the other, of course being a tax guru. New Zealand
tax and Australian tax not the.

Speaker 2 (31:38):
Same, nothing quite different, right, It's quite different.

Speaker 1 (31:41):
So the ability to actually be a client partner in
Australia was in a sense taken away from me. So
I had to develop other leadership skills and other points
of emphasis. And because I've always been interested in public policy,
and of course, as you know brew so I had
a lot to do with public policy through the Roundtable
and other assignments which you've referred to. I kind of

(32:03):
got stuck into that aspect a lot more and broke
into the media over there by talking a lot more
about tax policy and also just general government and other
public policies. And I also ended up focusing directors and
chief executives and becoming more business oriented in conversations and

(32:27):
relations with that category of commercial person in that market.
And I also like to take senior partners who were
well connected in each city along with me and met
the senior partners. And then of course you've also got
the other relevant stakeholder of the staff and finding time

(32:48):
to interact with them, Bruce. And also, I mean we
had them just trying to remember, we had something like
six hundred partners I think it was in the national practice,
and every partner that was employed, it was appointed a
partner I had to interview. Yes, that took a big
chunk of my annual diary, let alone weekly or a

(33:12):
monthly diary. And so that just emphasized in professional services
how important the people stakeholder is. And it's a very
rich stakeholder environment. Bruce. And I know that you've always
been keen on leadership, and I've always been keen to
read your stuff on leadership because it's a context. It's

(33:34):
highly relevant for people leadership because we don't we're not
widgets and manufacturing. We are personal services and human beings.

Speaker 2 (33:42):
Yeah, and Rob, some of those challenges are very similar
to what I had with Colliers across Australia and New Zealand.
Same thing. I mean, accountants and lawyers don't like their
businesses being compared with real estate organizations. But the reality
is they're all about people. And in my case, we
had twelve hundred odd people across Australia another three hundred

(34:02):
here in New Zealand, and you just had to be
constantly on the road in front of those people so
they so as you got to see what they were doing,
and they got to see what you were doing.

Speaker 1 (34:13):
Yeah, I mean, I think, you know, often when we
get together and talk about business, there's a natural inclination
for business people and also people that are observing business
to think industrial, think manufacturer. So even a question on leadership,
you know, even if you go back to the early
textbooks they've written about manufacturing firms, you know, the big

(34:36):
car companies like Forward and so on, professional services tends
to be in the shadows of the conversation. And it's
always been a bit ironical to me that, you know,
when you look at for example, GDP and the OECD
right now, labor is the bigger contributor to the GDP
than capital. Labor has taken it over and when we

(34:59):
talk about management, we talk about human beings, the challenge
and the interest in the job of management. The JOVA
leadership is actually people. And I've always been keen to
point out professional services, or indeed any services your business
at Collier's is. I call that professional services. Absolutely. You know,
I call the Treasury in Wellington as part of government,

(35:22):
but it's professional services, sure, and the way it needs
to run and operate, it needs to sort of we
need to learn from one another about how to do it. Absolutely,
it's all about people.

Speaker 2 (35:33):
And speaking of people, you had stint, a long stint,
I think the longest as chairman of the Business round Table.
A lot of our younger listeners won't have heard of
the Business round Table, but it was a group that
was very influential in New Zealand business and in New
Zealand policy. You were probably its most influential chair. What

(35:54):
do you reflect as you reflect on that period of
your career. What are a couple of the highlights from
the contribution that the Roundtable made?

Speaker 1 (36:03):
Yeah? No, well, thank you for that question. I think
I should just add that there were some pretty pretty
high quality and famous chairs that preceded me and have
come after me, no doubt. I mean we had Sarron
Trotter as an inaugural chair, and we had Doug Myers,
and so you know, these were New Zealanders who were
pretty amazing and gay freely of their time as well.

(36:25):
So I'd be keen to point out that I was
in I think I was in a team and in
the shadow of in reality, and also again back to
what we were just talking about, Bruce, in terms of
my background professional services, it was probably a little unique
at the time for Roger Kerr and others to appoint me.
Roderic Dean had a strong hand in advocating for my appointment,

(36:49):
and of course Roger Partridge, who came to succeed me,
who now leaves the initiative, was chair of Bell Gully.
It's good to see that professional services backgrounded people are
becoming accepted or became accepted as being relevant to business
a bit more relevant than they had been. I think

(37:10):
my historically, so in terms of things I remember from
those days, I mean I was there from two thousand
and two to twenty ten, I think was my leadership period,
and so I sat down handed over to Roger Partridge
when I went across to Australia. But Roger here deserves
special mention. You know, people who know him admire him.

(37:32):
He deserves great admiration. He was an amazingly capable individual.
I learned a hell of a lot from him. A
bit of an understated individual, but an amazing mind and
a very generous individual. Now, because the institution, including Roger,
are kind of on the market side of debates, you know,

(37:56):
less a fair and you know, the words libertarianism and
all that sort of stuff's come up and recent comes
up in recent times as fancy labels and around perhaps
David Seymour and the Coalition and that kind of thing
with the marriage stuff that's going on. You know, there
are but I just call I just talk about about

(38:16):
the emphasis as being a market emphasis and an emphasis
on liberty, freedom. You know, that's you know, that's that's
how to make it simple for people to understand that
ultimately government has got a very legitimate role in the society,
very important one. But governments over reach and there's a

(38:38):
lot of a lot that governments can't do as well
as the private sector. In fact, you know, as you know,
we look around us and look at what's in our lives.
We get most most things that people value, I would argue,
come from the private sector, not the public sector. And
it's an unfortunate reality, not only in New Zealand but
all around the world that people look to government to

(39:00):
coerce their way into the system and coercively, you know,
transfer you from one segment of society to the other.
And so that's the mold in which the business around
table is shaped. It was there to try and actually
minimize the size of government and minimize regulation that goes
with it. Governments regulating, they tax, and those two things

(39:24):
have a malignant effect on commercial activity. Now, don't get
me wrong, we do need some regulation. I mean the
criminal law is a necessary element, and criminal law or
contract law, etc. You can put that under a broad
brush banner of regulation. We need some of it, but

(39:46):
it's crucial that you don't take it too far because
there is a point at which the returns to additional
regulation to a negative And right now, I think that
our challenge is to really cut back the government and
to cut back the regulation. David Seymour's obviously sponsored a

(40:06):
Apartment of Regulation, and I think the ambition there is
to do that. So I'm pleased about that. But the
Business around Table had a big hand and first of
all shaping those general principles I've just tried to summarize,
but not only that. Then in Roger and his team
were very productive and constructive in helping shape and design

(40:29):
the actual policies and legislation that government and the officials
in particular implement it. So in a way that McLoud
review in terms of tax policy, you know, we had
as a committee we're doing the work of the Business
around Table analogously there of helping officials and government decide

(40:49):
what principles should be applied, but also give a bit
of the detail. Often that's where the devil resides, and
you've got to give the detail often to actually be
of real assistance to government policy makers.

Speaker 2 (41:07):
It's a fascinating discussion and it sort of creeps into
all sorts of things that we'll talk about shortly, including
the performance of our current government. But before we do,
I just wanted to pick up on the fact that
you moved on from professional services into a very extensive
professional directorship's career which continues to this day. You've been

(41:34):
on boards that have probably seen the writing on the
wall for companies or subsidiaries within companies. I recall you
were part of the board that sold Yellow Pages from Telecom.
You were part of the board that sold Gulliver's Travel
Group into a conglomerate in Australia that subsequently crashed and burned.

(41:58):
What I've ended up picking up the pieces of a
couple of those, I should say, but your role as
a director. You know, there's a lot of people out
there who aspire to be professional directors. We all come
across those people from time to time. What are the
important lessons you see for people contemplating a professional governance

(42:23):
career in the current environment that we now have.

Speaker 1 (42:27):
Yes, well, there's some things that never change. I mean,
I think that you're a part of a team. If
you're on a board, a board as a team. Perhaps
a more negative term would be committee. It's a committee,
and I think, you know, without being being negative, I
think it's important to note that it is a committee,

(42:50):
an operation, committee, and it's got all of those. So
when it makes a decision, that decision invariably is a blend.
So often the analogy to the cabinet in the government cabinet,
collective responsibility is something that arises in that forum because
once the board makes a decision, really the directors need
to support it in terms of the stakeholders that the

(43:12):
board is interacting with. So just just rules of the game. Essentially,
the board is a governance institution and a lot is
made today of governance, and you know, governance is important
and it's important that we, you know, follow the roles.
The public companies that I've been on have to pay

(43:33):
close attention to the m z X and of course
you know at the asms every year governance issues will
typically play out. So knowing the rules that you've got
to operate by in the context of which you're operating
is quite demanding. MZX rules are quite detailed and complex,
and most boards have a retained legal advisor giving them

(43:56):
input on that. Because of that complexity and detail, you've
also then got to know the business and that that
is a detailed complexity. When you come on to a board.
Often the skills matrix that's been constructed will mean people
will be bought onto the board that don't necessarily have
the sector skill sector skill don't get me wrong, sector

(44:16):
skill in the portfilio of the board. Because that's the
way I think about it board. It is a portfolio
and you've got to construct it as a team of skills,
and in some of those skills have to be non
sector like it would be one possibility. And again there
the others will argue, well why do you go for

(44:37):
that kind of specialist as a board member. You can
buy that as an advisor. But there comes a time,
it comes a point, depending on the company context, where
some of those functional skills are importantly represented on the board.
And then the question then is while you're bringing somebody
on that may be weak relatively speaking as an individual

(44:59):
on the sector skill. So that's an important point to
I think emphasize it. You're building a jig saw a
puzzle with the board and you're building a team of
collective skills. So it means that not every one of
those directors is skilled in everything that the other director is. Right.

Speaker 3 (45:18):
I'm sorry to interrupt you, but one of the former
board colleagues, Rod mcgeeok from Australia, former chair of sky City,
was on the telecom board with you.

Speaker 2 (45:28):
I remember Rod saying you assemble boards one person at
a time. That's it exactly, Which is which is what
you're talking about, isn't.

Speaker 1 (45:35):
It agreed exactly, you know, and so when the when
the board is in session, we take we should be
able to take leadership from particular directors with regard to
those backgrounds. And if you've got if you've got the
mixed correct. There are obviously other elements that have come

(45:56):
into board composition. Gender, the various equities of your gender
in particular, and clearly that has meant that more women
have come into the space over recent years and more
women are our leading as chairs in these companies compared
to the past. It's interesting with my mari background, you

(46:20):
know that I don't. I'm not. I don't experience the
ethnic diversity being spoken about as much. I don't think
it hasn't been spoken about as much as the gender diversity.
And I've also liked the advocates of diversity themselves. I've
also emphasized that really it's the diverse of goal is

(46:41):
not one that justifies getting dumbing down the board. It
doesn't justify that, and I don't think any serious contender
or advocate for these kinds of diversity would say that
it is. But ultimately you do bump into scarcity, you know.

(47:02):
When it's interesting how when you're compiling a list of directors,
despite the fact that there is quite a strong number
that are interested in becoming directors. When boards are sitting
around going from I think most boards feel and sense
a degree of scarcity and actually finding the right peg

(47:23):
to put into the right hole in that portfolio exercise.
Scarcity is something that I certainly still feel and others feel,
I think, And so that's why the diversities have got
some challenge in the sense that sometimes if you take
ethnic diversity, the numbers of people that are available that

(47:44):
fit the whole that you're trying to fill is limited
and can be behind the demand.

Speaker 2 (47:52):
I think. I think you've made a number of good
points in there, and one of the things I was
actually going to ask you, and you've sort of touched
on it. Do we end up with too many and
this is no disrespect at all to your good self, sir,
do we end up with too many accountants and lawyers
on our boards as a result of what you're just saying, Yes,
I think.

Speaker 1 (48:12):
I think so. I think if you go back in
time there were more accountants and lawyers than there are today,
I would I would say, and I think again, the
scarcity theme explains it. Some would say, oh, it's really
the old boys club that it's a part of, you know.
But it's interesting to me that I've never in my

(48:35):
life I don't really regard the accountants and the lawyers
as having the power holding the power base in these
large corporates. It's typically the industrialist executives, the CEOs you know,
and the people from within those companies that if there
is a kind of a ghostly power base hovering, it's

(48:55):
kind of more that that fraternity. How on earth, you know,
being a managing partner of an accounting firm gives you
power base isn't on the corporate selection side as beyond me.
So I think when you therefore see these patterns that
you're referring to, Bruce, I think ultimately it's more likely
that the low hanging fruit or the people that are

(49:19):
available have those kind of qualifications. But you're quite right.
I have been from time to time criticized by shareholders.
When nominations have come for the directors at the ASM,
you will often get the feedback, well, why have you
got an accountant or a lawyer? Because you can actually again,

(49:39):
you can get that skill by hiring them in. And
that's true. Indeed, the big four accounting firms have as
their client base all of these companies and they're providing
tax and the rest of it. So that is on display.
The question. The answer I would give you as to
why the odd lawyer, accountant or whatever gets on is

(50:01):
a their skill set makes them commercially relevant. They've actually
got an individual characteristic typically that makes them desirable.

Speaker 2 (50:12):
Where with Sir Robert McLeod, and we'll be back in
a moment, Back with the Sir Rob McLeod, Professional director,
former CEO and chair of Ernst Young or e Wyers

(50:35):
are now known. Rob, I'd like to talk about the
new government. Well, they're not so new now they've been
in place for a year. They talk about their mess,
they inherited, there are three party coalition, there's all sorts
of challenges in that. How do you think they're going
twelve months in Well, I.

Speaker 1 (50:53):
Definitely think that they're an improvement on the government that
they've succeeded to and I also have optimism about this
team getting better. I think the biggest criticism I would
level at them is that they're too slow. Three years

(51:13):
is a very short time to get things done and
the lag effects on policy is such that that three
years is going to whiz by. A year has already
gone since the last election, and we've only got you know,
so we're a third through two thirds left and they're
going to have to sprint the more, you know, they
leave things now. I can probably hear Luxeon's words ringing

(51:37):
in my years, saying well, look at this, that and
the other. But I speak to other business people. I've
listened to your podcast, for example, Bruce in this comment
is coming from others as well. Sure, and ultimately I
think that that's a pretty good testimony as to that happening.
I think also some of the toughest stuff that they've
got to deal with, like you know, perhaps crime and education,

(52:04):
that they are particularly slow. One thing I'm very keen
about is David Seymour's Charter Skull initiative, and because I
had an involvement with that when he had to go
at it last time round, and that some of these
initiatives do take a while to bet in. That's a
good example one that does. So you've got to be practical.

(52:24):
But they've got to realize that time is not their friend.

Speaker 2 (52:28):
If you look at the way that coalition is working.

Speaker 1 (52:31):
Has that surprised you, Yeah, I mean, basically, I suppose
I'd start by saying that I think it's worked pretty
well for a diverse trio of public policy backgrounds. So
I think they deserve credit for that. I think I
don't know what perhaps explains it, but they seem to
be more proactive. Onston Peters has been a coalition partner

(52:52):
and many governments through history, and I feel that he's
been more proactive as a leader in this coalition, and
he's self assured, and you know, I think the he's
doing a great job here. And Shane Jones and he's
on First, I think are doing a great job. And
also I think David Seymour's presence is a very good

(53:15):
balancing and discipline. I mean, I think, you know, what
we've seen is that these smaller minority parties can bring
balance and discipline. I think, for example, he's on the
First probably did a bit of the Adan government and
they're doing it here, so that's good.

Speaker 2 (53:34):
Yeah, I agree. I think one of the things I
worry about, not just with government but right across New
Zealand society is the debt burden we have it at
a private level. We certainly have it at a local
council level. And of course the government is carrying a
heck of a debt burden relative to what we're useful,
relative to what we're used to with a financial and

(53:59):
tax background. Are you as concerned about our debt burden?

Speaker 1 (54:03):
Yes, I am. I think, I mean, I think the
New Zealand debt burden of it what it's about forty
three percent. I think it is currently as estimate, it's
by world standards. It's not a it's not a big lard.
You can go into Europe and find far bigger debt
burdens as a pig of GDP. But New Zealand has

(54:25):
kind of has for a long time now had the
mantra of keeping the government debt small, you know in
the build English wanted it in the twenties of JUVP,
and I think that that's proven for a country like ours.
Often in these comparisons we're comparing large countries with bigger debt.
I mean, America is way out there, the United States

(54:48):
is way out there. And in fact, you know, commentary
about their level of borrowing as such that how can
they get away with the how do they manage to
do it? And yet the economy is still keen scenes
to surge on well, America, United States. America is a
unique place, right, It's not New Zealand is not the USA,

(55:08):
so we've got far more risks. So I think we
do need to be far more prudent there. It's also
a way of just keeping your government fiscal management in check.
We've just come through this big inflationary period trying to
get inflation the inflation dragging back into its cage has
been challenging, and government spending is not a plus in

(55:30):
that mixin and borrowing is really the flip side of spending.
The real disease and economies, in my opinion, including New Zealand,
is the spending, yes, right, But the borrowing is financing
of the spending. So is the tax system, Bruce, The
taxes are and I've always for a long time. Now

(55:50):
not too many people are listening, but I got this
idea from Roger that the best measure of the national tax,
right is the government spending is a fraction of the GDP. Yeah,
that that government spending has to one day be repaid
through taxes. Yes, So if you're looking for a national
tax rate, your average national tax rate is spending over

(56:13):
GDP at the moment, that's about forty percent. We're a
four point one point five billion economy. We spend forty
percent of that, or the government, I should say st
percent of that. There's your average tax rate. The tax
take to GDP at the moment is about thirty two percent,

(56:33):
which is eight percent below the spending. So that gives
you an eight percent deficit. Right, So my forty percent
as the average tax rate, which is spending to GDP,
is inclusive of the deficit and inclusive of the surplus,
which is the better way to think about it. But

(56:54):
what I found also is that the other thing that's
good about instead of debating about GST, capital gains tax
and what the composition of the tax faces and fixing
our taxes through the dates around composition, the first thing
that we need to focus on to get our tax
under control is to reduce the spender correct. And that

(57:16):
comes home to you as a concept. If you measure
the national tax rate as government spending to GDP, and
you think about all the other stuff which is tax
and debt, tax and borrowing, you think about that as
balance sheet or financa. Not unimportant, but the real originator
of our woes or of our oxygen is the spending level.

Speaker 2 (57:40):
Boy. I wish you could explain that to the people
in Wellington, Rob, It makes perfectly good sense to me.
You've touched on. You've touched on a couple of times now.
Capital gains tax. Stephen Joyce recently wrote a column in
The Herald. I don't know if you saw at the
headline said. I think it said why a capital gains
tax is pointless? And included in the commentary was this quote.

(58:05):
It's very hard to make a dollar running a business
in this country. We're small in number, well spread out,
not especially wealthy, and isolated in world terms. It's much
easier to set up and run a business almost anywhere else,
including Australia. The lack of a capital gains tax is
one of the few points in our favor. Do you
agree is no?

Speaker 1 (58:25):
I do agree with that. I think I remain unfriendly
towards a CGT concept. Again, Bruce, I think I often
try to point out that the debate about whether we
should have a seat, sorry a CGT, that debate is
about the composition of our tax pace. Yes, that's what

(58:46):
that debate has focused on. The first debate that we
need to have is how much of GDP should we
be taxing? Yes, okay, that comes before how you deploy out?

Speaker 2 (59:00):
How you get the money?

Speaker 1 (59:01):
Yep, how you get the money? And I take the
view and I argue this for a long time time
that the combination of GST and income tax will finance
quite comfortably at least one third of the GDP to
be collected. And actually, if if you pushed it, you
can get up to forty forty five percent through income

(59:25):
tax and GST. So if the first thing I just
pose is why are we constantly debating new taxes? But
the mass taxes that we have go back to Mouldoon.
We didn't have the GST part of it. We only
had the income tax without the CGT. Right, So here

(59:45):
we are now we've got the GST and we've got
the income tax, and we now want to load more on.
And I think that to me reveals a bit of
the New Zealand psiche. I've soaked the rich and get
Because really the CGT debate does need to be first
of all thought about in two dimensions. One is the
distribution of the tax burden fear. Yes, and right now

(01:00:09):
that's where the composition of the tax base is in
direct discussion. So I'm not denying that right as to
whether it's a relevant piece of the puzzle on grounds
of equity. Right. The other ground that we are interested
in efficiency is the sea is the capital gains tax
an efficient tax, I would argue on balance in general. Nor.

(01:00:35):
One of the features of the capital gains tax, for example, Bruce,
is that if you go and look at countries that
have it, they've got rollover relief embedded within those systems. Now,
those reliefs are immunizers or their rules to exempt you
from capital gains tax when the government thinks it's a

(01:00:55):
bad idea to put the capital gains tax on you.
And the example of that is when businesses are restructuring
their assets and they've got a disincentive to restructure because
it requires it sale of an asset, yes, and they
can qualify for an anti CGT wrong yes, which allows
them to roll those assets without attracting the CGT. Well,

(01:01:16):
my argument is actually there's a hell of a lot
of other bad things that happen with a CGT. They,
for example, people defer the sale of the capital assets. Yes, right,
from the time that that's actually suitable to them in
the markets because of the presence of the tax. Or
if you've got a capital asset that's got a loss
that's unrealized, you're going to accelerate the timing of that.

(01:01:39):
See slow down the sale of those with profits, speed
up the sale of those with losses. All these kinds
of distortion. I've got a few other Let you have
a bit of space.

Speaker 2 (01:01:53):
No, No, that's right. I mean, there's there's nothing like
the passion that comes when you get a tax man
talking about tax wrong.

Speaker 1 (01:02:01):
And it's kind of like watching paint dry for a
lot of the others.

Speaker 2 (01:02:06):
I for one, get your comments, and I agree with
your comments, but but you know, some of some of
our political parties seem desperate to get this that particular
topic on the table. I think the other topic that
that is is interesting and that you will have a
unique view of and possibly equally passionate is the debate,

(01:02:27):
or the escalating debate that we've got in our country
now around MARI sovereignty. And I didn't want to let
the opportunity to go to talk to you about that
because you do occupy a unique position, having having worked
worked across across the New Zealand business community in its full,
fullest sense, and that sense includes a lot of work

(01:02:50):
if you've done with with Ewi and and with you know,
the Mari economy. But the debate continues to escalate, not
probably probably driven by small numbers of people. What's your
view on on the Maori sovereignty debate.

Speaker 1 (01:03:09):
Well, look, I am proud of my Mara ancestry. I
am Nahdi Pidau. Both my parents are Nati Piddau and
my father was an officer in the Mardi Battalion and
native Mari speaker one in nineteen thirteen. Of that generation.
His father was an Anglican priest on the East coast

(01:03:31):
who was a close friend of srapat and Anguta, the
man on our fifty dollars. Note, Yes, i am very
proud of my mariiness, but I'm also I'm also proud
of my parkiher ancestry. And I know that a lot
of my Maori finoga which is the word for cousin,
are also proud of the pakiher ancestry. So when I

(01:03:55):
look at the fucker pappa, which is the genealogy of
people and their notebooks on their computers, they don't admit
their parkiher lines. This is mar my Maori for Knowinger.
So that's where it starts for me. I'm a proud
New Zealander and I want New Zealand to be a
successful country. Right now, these racial differences that we all have,

(01:04:20):
we can celebrate those. But those I regard as private,
private matters. They're not political matters in my opinion. Now,
I think that would be a very controversial statement to
have said that it's not political, because it has become
political obviously. But to your particular question, I'm also a lawyer.

(01:04:41):
As you know, the legal position on sovereignty is clear today.
The Queen and the King in Parliament is the sovereign.
If anybody tried to actually argue otherwise or behave otherwise,
they'll soon come up short. Right, the Government is still
meeting in Wellington as far as I know, procuring an

(01:05:05):
enacting legislation. How could they do that if the Parliament's
not the sovereign. So I think the only thing that
therefore people are arguing about is should should the current
arrangement over sovereignty, which is the King in Parliament as
the sovereign? Should that be the case? Well? I mean,

(01:05:26):
that's a rather radical debate, and it's not one that
I spend a hell of a lot of time thinking about,
because I'm not particularly interested in reforming it. But if
we are wanting a different answer to that question of
who is the sovereign, we are going to have to
engage in law reform and change the law. The other

(01:05:47):
reason why this is being debated is an historical matter.
Historians have noticed that there are two versions of the
treaty and our version. In an English version, the English version,
Article one is quite clear that sovereignty has vested in
the Queen in the crown, unambiguous. In the English version

(01:06:10):
of the treaty. The Mari version uses the term kawanatanga
an Article one, which is a transliteration of governorship, and
to most people, including mine, governorship does not mean sovereignty. Therefore,
one of the arguments that comes in about this is
that you know, the Maori didn't seed sovereignty. But my

(01:06:33):
point again is that at the courts, including the Privy
Council of nineteen forty one, Lord Atka have declared, as
a matter of our law that the King in Parliament
is the sovereign. So you can argue about the history,
and there may be some merit and arguance, and there
is a bit of a curiosity clearly as to why
the Mari version, which was one that was the one

(01:06:54):
that was discussed with the chiefs of eighteen forty and
White Angy, why they use that term Kaulanatanga. But that
doesn't deny the fact or contest the fact that the
courts have already declared on the matter on several occasions.
The other aspect of the argument, Bruce, is this notion
of partnership which has come in through the Land's case

(01:07:18):
President Cooka nineteen eighty seven. He said that he had
to interpret. He was a court asked to interpret what
are the principles of the Treaty of White Hanging, So
he couldn't duck the job, and he said one of
the principles is partnership, and that's a court decision. But
in my opinion, when you read the judgment, he is

(01:07:39):
talking metaphorically. He's not talking about it. You know, if
you said that your marriage was a partnership, I could
point out to you as a lawyer that no, it
isn't you, but colloquially it is.

Speaker 2 (01:07:52):
You're treating it that way.

Speaker 1 (01:07:53):
Yep, yeah, so I and I think that's essentially that's
the way that that Land's case is reasoning, is reasoning metaphorically.
Partnership is a principle abstraction. Principles are abstraction. What are
the drivers and essentially what was saying has four of
the other judges agreed with them that essentially, when you

(01:08:15):
have a session of sovereignty by treaty, you've got something
in the nature of a compact on my land, whe
something in the nature of a contract where two people
are coming together to form something where there are two
people form a unity out of two people. I'm not
overly offended by the term partnership to describe that, right,

(01:08:40):
But of course people have most are anti debate is
about the Mario sovereignty issue, the anti you know, the
people that are fighting and debate against that. And I've
just outlined my views which is not sympathetic to that
concept either. But most people are saying that they don't

(01:09:00):
like this partnership notion, and I can understand what they
mean and what they're saying because I think that so
they're thinking of the literal meaning of partnership. But I've
got a moderated view that it's actually it's a metaphorical
use of the term, which gives you a different reaction.

Speaker 2 (01:09:18):
I knew i'd get a pragmatic explanation from you on
that one, Rob, so think thank you. We're we're so
far over our time limit, it's not even funny. But
I'm enjoying the conversation. So so so I've got a
couple of questions left, and the first one, perhaps you

(01:09:39):
could give me in sixty seconds, what's been your most
important leadership lesson?

Speaker 1 (01:09:44):
The most important one I think is that leadership is
a relationship, and leadership ability or skill is conferred on
you by the people that you lead. If they don't
confer that on you, then in a sense, by definition,
they're not going to follow you. Yes, So the relationship

(01:10:06):
is where I would emphasize that that and it brings
in all of the elements of relationship management that actually
create a respect for you in the minds of those
that are being led. There's a famous proverb in Marii
which is about the kremera it's not for the camera
to profess its own sweetness. And what that proverb means

(01:10:30):
is other people confer that status on you. Is their
privilege to confer it on you, it's not for you
to self assert it. And I think the leadership's got
a bit of that in a practical sense. I mean,
i'd ask you the question, do you think that a
person can be an effective leader if they're disliked or disrespected?
And I think that what that emphasizes to me is

(01:10:53):
the is the sense of conferral those that are being
led determine your success. The question then becomes, well, what
is what do you have to be or do to
be successful? And I think that there are some really
human elements to that in the relationship sense.

Speaker 2 (01:11:10):
Great answer, Thank you, and I totally agree with you.
I you know, I always talk about being clear about
what you're trying to achieve and making sure you get
that message to your people, and so clarity, communication, and
then thirdly acting in a manner that's consistent with those things,

(01:11:33):
and finally caring about your people. So I sort of
go to my four c's clarity, communication, consistency, and care
and with a bit of luck, you do all those
things and your people follow.

Speaker 1 (01:11:47):
I've only got one.

Speaker 2 (01:11:47):
More question for you, sir, Rob McLeod, And you know
what the question is going to be, if you could
be the Prime minister for a day, what's the one
thing you'd like to do.

Speaker 1 (01:11:58):
Yes, well, a day, as everyone is sort of responding
to you, Bruce on that question, is time in which
to be impactful. And I think I know what you mean.
I think that I would be a lot clearer on
my public policy agenda, my priorities, and I would emphasize those,

(01:12:21):
and I would I like Luxon's ninety day plan, and
I think he needs to go back to those in
the context of a three year period. Prioritize what he's
going to do and commit to them. Burn the bridges
behind you and commit to them so that you actually
get more commitment, more contribution from your colleagues as well

(01:12:43):
as the nation on achieving those things. Because we've got
a lot of stuff to get done. I'm not sure
that in three years he can do all of it.
He's got to go for more than one term, as
all governments do try, but he needs to get what
he can get done, you know, in this term. So
that's hopefully a pragmatic answer. Make a list, prioritize them,

(01:13:06):
and commit to achieving them, and let the electorate and
let the opposition have a lever on you to hold
you accountable to that, because that's the way that's analogous
to burning the bridges behind you.

Speaker 2 (01:13:19):
Yep, fantastic, well sir, Rob McLeod, thanks for joining us
on leaders Getting Coffee. It's been an hour and a quarter.
It's been a fantastic hour and a quarter. It's been
an absolute pleasure having you join us. You strike me
as one of those people and you've always struck me
this way. Who don't really realize I guess how wonderful

(01:13:42):
your leadership story is. You have had a remarkable career.
You've made a remarkable impact in the many, many, many
things you've touched, and I really appreciate you just taking
a snippet of your time, especially a snippet of your
holiday time down at Kennedy Bay, to share a small
part of your story with us. So Rob, thank you

(01:14:04):
very very much for joining us on Leader Getting Coffee.

Speaker 1 (01:14:07):
Well, thank you, Bruce go. I just say before you
finished that you too, are doing your bit through these
podcasts and your articles. I know that they've become very
very popular within the certain perhaps ideological segments of our society,
but they are an important contribution. It's a team effort
and well done to you too, Bruce, and keep it up.

Speaker 2 (01:14:31):
Thanks Rob, thank you very much, and thanks again for
joining us. Finally, folks, my leadership tip of the week,
and I was sort of thinking about what I mentioned earlier.
Rob's very very busy life, and we've heard some of
the lessons and stories from that busy life, and it

(01:14:52):
reminded me to go and pick up a quote from
Mark Twain that I read many, many years ago, and
it goes like this, twenty years from now, you will
be more disappointed by the things that you didn't do
than by the things you did do. Twenty years from now,
you will be more disappointed by the things you didn't
do than by the things you did do. And that
came from Mark Twain. And of course, listening to Rob McLeod,

(01:15:15):
I'm sure he's aware of a few things he didn't do,
but boy, he's certainly done plenty, so he's got a
good reason.

Speaker 1 (01:15:21):
Not to do them.

Speaker 2 (01:15:22):
That's about it for another week. Thanks again for joining
us on leaders Getting Coffee episode number twenty nine with
our guests, Sir Robert McLeod. As always, if you have feedback,
please get in touch at info at leaders getting Coffee
dot com. Remember our favorite charity is Bike for Blokes
dot cot on enz and we'll look forward to seeing
you again soon with another great leadership story. Until then,

(01:15:44):
have a great couple of weeks and we'll catch you
next time.