Governance Bites #144: a brief personal history, with Rt Hon Sir William Birch

Sir William (Bill) Birch brings decades of high-level public leadership and governance experience to the conversation. A senior figure in New Zealand politics for more than two decades, he held several key ministerial portfolios, including Finance, National Development and Energy. During his time in government he was closely involved in major economic reforms and policy decisions that shaped modern New Zealand’s public sector governance. Since leaving Parliament, Sir Bill has remained active in the governance community, serving on a range of corporate and public sector boards. His experience spans government decision-making, board oversight, and strategic leadership, giving him a rare perspective on how governance works across both the public and private sectors.
In this episode, Sir Bill talks briefly through his history - life, politics and governance. It is a fascinating conversation, from a man who was a Member of Parliament through both the Sir Robert Muldoon era, and the Jim Bolger era. 
Books: 
"Bill Birch: Minister of Everything" by Brad Tattersfield, https://natlib.govt.nz/records/42822277
"Power Surge: How Think Big and Rogernomics Transformed New Zealand", John Boshier, https://upstartpress.co.nz/product/power-surge-how-think-big-and-rogernomics-transformed-new-zealand/
#leadership, #corporategovernance, #boardcraft, #decisionmaking, #makingadifference, #ceo, #Governance, #GovernanceBites, #NZPolitics, #NewZealand, #SirWilliamBirch, #Leadership, #BoardOfDirectors, #MinisterOfFinance, #ThinkBig, #EnergyPolicy, #MauiGas, #ClydeDam, #MinisterOfEverything, #PublicSpeaking, #StrategicPlanning, #Freightways, #Surveying, #PoliticalHistory

Transcript

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Hi, welcome to Governance Bites. My name is Mark Banicevich, and today I have the absolute honour to spend time with Sir William Birch. Sir Bill, thank you very much for your time today. Sir Bill was a Minister of Parliament in New Zealand; the Right Honourable Sir William Birch is his correct title, for 27 years, right through from Minister of Energy and through a number of ministerial portfolios, culminating in the Minister of Finance. Retired in 1999, he was a Minister of Parliament through both Sir Robert Muldoon's governments up 'til 1984, from '72 to '84, and then in the governments from 1991 onwards through to 1999, as well. And left government and pursued a governance career. So, an absolutely amazing man to spend time with. I'm really privileged. Thank you very much for your time. You're very welcome. My background, Mark, is in the rural community. My family were farmers during the war years. They were in Tokoroa. My father bought a lantern survey farm there, and they were dairy farmers, and during the war he was asked to run a farm at the Ruakura Research Station. So that sort of disrupted our family life. But my mother kept on dairy farming, and we shifted to a dairy farm in Netherton for a while, and my eldest brother was sent off to Japan during the post-war period of occupation. And so my mother then shifted to Ruakura, and we lived in Ruakura for many years, and from there I went to the Hillcrest Primary School. I used to walk to primary school about three miles in those days across a metaled road. My children complain, well, my daughter in particular complains, about walking about one and a half kilometres to school. And then I went to Hamilton Tech and did five years there. I left Hamilton Tech with the University Entrance examination and decided to take a cadetship as a surveyor. So I became a survey cadet, and that's sort of a five-year cadetship, and you have to sit some pretty difficult papers on astronomy and geodesy and all sorts of papers. It takes five years of good hard work to qualify as a surveyor under that system, under the cadet system. More lately, it's become a university degree at Otago [University]. But anyways, I've always been a private enterpriser, and I was very keen to get into my own business, and since I qualified, I looked around for an opportunity, and there were no surveyors in Pukekohe at that time, although there had been one previously for many years, but he had passed away, and so I opened an office in Pukekohe. I leased an office from the mayor, which was very convenient, and he was a lawyer and the mayor, and he was in the office next door. He was very helpful, giving me advice, and gradually that built up. I went into a number of partnerships, and it became quite a big business. And I got involved in most of the groups that were active in Pukekohe, like the Junior Chamber of Commerce. I found that pretty good. They had some pretty good leadership programmes and chairmanship programmes. We had people coming in and teaching us about how to be a good chairperson and how to do public speaking and how to chair meetings and that sort of thing. So that was quite an interesting introduction to governance, at a very junior level. But anyway, in 1972 the current MP [Member of Parliament] Alf Allen [Alfred E. Allen] retired, and he was the MP, he was Speaker of the House at the time, but he was the Member of Parliament for Franklin, which included Pukekohe and Papakura, where he lived, and the Pukekohe people were very keen to get a Member of Parliament who lived in Pukekohe, and they came and saw me. I said, "Well, I know. Look, I've got four"young children, and I've got a very good business, and I'm very happy where I am."You better go and find somebody else, but if you can't find anybody else, come back"and have a talk." So they did that. They went, I sent them to see Graeme Calvert, actually, who was very involved in the Dairy Board, who I had been to school with at Hamilton Tech, and he was a leader in the dairy industry, and he lived at Pukekohe just across the river, and I thought Graeme potentially would be interested, but he said, "No, no, Bill Birch is the guy to go and see," and they sent him back to me. So I agreed to stand, and I said,"Well, look, I'll stand on one condition:"that you make sure that I get the nomination, that you've got enough members" under the national system of each branch having a number of delegates who participate in the selection of the candidate. So Pukekohe was probably the biggest branch, but they built it up to being a very big branch. And so, when I went into the selection process of making speeches in front of the selection committee. I knew that I had a lot of support from the members in the local branch, and then I was selected. And so I transferred the ownership of my survey practice to some of the cadets that I'd trained; they took it over for me, and I concentrated on becoming the potential Member of Parliament for Franklin. So I worked hard at that, and I sought to help the branches build up their membership, so that we went into the election in a pretty strong position, and we won the national seat without too much trouble. I think we had a 5,000 majority or something like that. And so in 1972 I entered parliament, caught up with Jim Bolger. He was in pretty much the same position as me, coming in from the King Country. He had been pretty active in farming activities in the King Country area, and he was pretty much seen as a potential leader, or potential parliamentarian at that stage. So we met up at the National Party candidates' training sessions pre-election, and we became very firm friends. We had a lot in common, and our wives got to know each other pretty well. So right through my parliamentary career of 27 years, Jim and I were good mates, and Joan and my wife Rosa were good mates, as well. So that was really quite good. In a parliamentary sense, you become isolated, and it's good to have people that you can sit down with and absolutely be frank with and share everything with you. And that's just the way that Jim and I worked. We had no secrets between us. Although we became a bit competitive, and when leadership came along, people wanted me to be the leader, and people wanted Jim to be the leader, but I thought Jim was probably the best choice, and he became the leader over the course of time. And I started off in '72 as a backbencher, and then [Sir Robert] Muldoon made me Junior Whip and then Senior Whip, and ultimately he appointed me as a Minister back in, I think it was the 1980 election. I became the Minister of Energy, and he said to me,"Bill, I want you to sort out this Māui gas thing. I want you to work out how best we use that Māui gas,"because the Labour government have entered into a sale and purchase agreement," or an agreement that they would take the gas or pay for it even if they didn't. It was a take or pay agreement. That's right. And that was going to cost the government a lot of money, was to the benefit of the oil companies that own the Māui gas. And so I saw that as my primary task, and it was coincidentally during the oil crises. And the oil crisis came along, and we were advised that there was going to be a potential serious shortage of imported gasoline and jet fuel and diesel, which was important to the agricultural community. So it was a bit of a challenge to work out just how we were going to make that decision. But I had the advantage of the ear of [Sir] Colin Maiden, who had been General Manager of General Motors in the US [United States], and he was pretty much an expert in energy matters, and the previous Labour government had also used him and set up a Maiden Committee for Advice on Energy. So it was just really a ready-made source of good, sound, knowledgeable information on energy. So I got very close to Colin Maiden, and on his advice we also established the Liquid Fuels Trust Board, and the task of the trust board was to provide recommendations to the government on how to use that Māui gas, and that's how converting the Māui gas to synthetic petrol came about. That was their recommendation. So we set up the liquid fuel trust board, and we appointed, Colin Maiden was involved, and there was just a group of experts in the energy field to look at the various proposals that were made as to the conversion of the Māui gas into a liquid fuel, and they came back after quite a long period and recommended that it be used for, use the Mobil process for converting it to synthetic petrol. Then the question is: how can you be sure that their advice takes into all the considerations about what happens if it becomes outpriced, if petrol prices drop, say? I mean, they were estimated to rise to $100 a barrel US even in those days, which is a very high price, and there was a question of shortage, in any case were we going to have a rationing system, or were we going to have something else? And we went down the car days passage, which people criticise today, but quite frankly it was far less painful than having rationing. Yes. And I recall at the time the US price was about $35 a barrel, something like that, I think, and so talking about rising to $100 a barrel is tripling in price a significant change. Anyway, the Motunui Mobil process was a success. We were able to produce the synthetic petrol. But then along came the election, and Labour won the election, and they ideologically wanted to poison the "Think Big" projects. And [Sir] Roger [Douglas], particularly, set about looking for buyers for the Motunui plant that had been built by then to produce the synthetic petrol. We knew that in the event of synthetic petrol being outpriced or not being required any longer, that you could convert it to methanol, which was in very strong demand on the international markets. Right. So we always knew that it was a fallback position. But Sir Roger Douglas put it on the market, and of course Fletchers [Fletcher Challenge Ltd] came along, and they knew that methanol was going to be an option for them, and they got it at a giveaway price. Right. It was really a very stupid decision by the government to pass on the benefits of all that work to the private sector. As you imply, it was a way they could blame the previous government for these projects, rather than actually maximising the value they could have gotten from it. Yeah. It really was a political move to persuade the public that the decisions in Think Big was a mistake. In fact, it turned out to be a real great benefit to Fletchers, they got it. There's a book written by John Boshier, who was a Ministry of Energy high-level official at the time, and he just confirms that it was a giveaway price to Fletchers. They made a lot of money out of it. Anyway, as it turns out, oil crises come and go, and the petrol price came back, and there was plenty of supply. It was converted to methanol, and at one stage it was the largest single export earner for New Zealand. Its total value was more than the dairy industry. Wow, I didn't know that! For a short period. It was a very large export earner. Wow! I also look at, among those Think Big projects, you had the Clyde Dam, and the Clyde Dam at the time, from reading your book, actually, I'm going to hold up your book, I remember it saying that there was concern that it was producing too much capacity for the New Zealand market and it was a waste of money. Now it's 5% of our electricity usage. So there was a lot of foresight in producing that dam, and that's done a lot of things for the hydroelectricity industry and the generation of electricity in this country. Yeah, well, I think sometimes you've got to look beyond just the immediate costs and look at the potential for the country at large. I mean, to make electricity from hydro dams is a no-brainer. It is the best way of actually generating electricity, and the cheapest way. And I'm surprised that we haven't capitalised more on the climate change increase in rainfall, and increasing our storage and increasing our hydro. I think it's an opportunity for the government to look at the lifting of the hydro dam levels and creating new hydro. I mean, it's going to be of huge long-term benefit, even though it does create a little bit of aggro [aggression], in that you take a little bit of land, but it's really at the edge of existing lakes in many cases. Or even local hydro. And local government is very keen on having their own hydro dams and making a contribution to the electricity supply. I'm thinking, if Clyde for one can produce 5% of our electricity generation, if we had five of them, that's a quarter of the requirements for the country. Yeah, absolutely. And there was a bit of a fuss about what are we going to do with the surplus? Who's going to buy the surplus? But inevitably the surplus is in demand. Electricity is in demand. It is the issue of today, I think, because unless you have adequate electricity and a good guaranteed supply at a reasonable price, then you cannot produce the products that require an electricity input, and this has led to the closure of pulp and paper mills in Tokoroa, and over in, you know, out of Rotorua, and a huge loss of jobs simply because we have been short of electricity, and I think that's a great tragedy at the moment, and it's one of the big issues I think the government has got to make sure that they can build confidence that supply will be guaranteed at a reasonable price for industry to expand. Yes, I agree. So you had the energy portfolio as the first ministry that you were responsible for, your first ministerial portfolio, but over the time of your 27 years in parliament you took on a lot more portfolios and ultimately Minister of Finance, weren't you? Yeah, well, I had picked up one or two that were dropped on my lap when Simon Upton resigned as Minister of Health. Prime Minister [Jim] Bolger said,"Well, no one wants it. If you want to fill that gap,"in addition to the portfolios you already hold." But I enjoyed some of the less prominent portfolios, like Pacific Island Affairs, and I know the Pacific Island people were very glad that I was able to help in one or two issues that they were having with the government, and I thought they were issues that the government should help them with. Anyway, I ended up with, I think, 15 different portfolios over 15 years. Hence the title of the book, "Minister of Everything". Yeah, well, some of them are related. I mean, I was Minister of ... took in the South Pole activities. Anyway, the research and, industry and research, I think, anyway was a portfolio that took me to the South Island, and in fact I flew down there the night of the Air New Zealand crash [into Mt Erebus, 28 November 1979]. I was scheduled to go down that night. Right. And I actually went down I just didn't go with, people that were going to come with me, but I did decide to go on down, and I flew over the crash site, and it was a terribly sad affair at that time. Anyway, being on those sorts of portfolios, you're pretty active, and you did a lot of things and covered a lot of territory. I read also that you, I don't know whether this is a rarity, but read all of the papers that you were given, which probably put you in a position where you could pick up many ministerial portfolios because you would have had a broad grounding of all the issues for the day. Yeah, well, I never would go into a discussion on policy or anything else unless I'd read the background papers. Right. Well, you sent me 17 pages of questions that I could consider, and I can tell you I've read every one of them. I've made a little response to it. I also read in the introduction that it wasn't uncommon for you to work from 8:00 a.m. till 1:00 a.m. Yeah, well, I often used to work quite late into the night, yeah. Wow. This is, when I was younger I at one point thought being a politician could be quite a nice career, and then, since I've met a few politicians in my time and realised just how long the hours are, and how hard you work, I don't think that's really for me. Well, I think one of the first fundamentals of being an administrator, whether it's a politician or a member of a board, is to actually be well informed and to do your homework. I think that's number one fundamental. You shouldn't go into any discussion where a decision is required without being fully informed. And, you know, Shakespeare said that reading makes a ready man.["Reading maketh a full man; conference a ready man; and writing an exact man", actually Sir Francis Bacon.] Yes. You retired from politics in 1999, and since then have had a number of governance roles in the corporate and not-for-profit sectors. Can you tell us about your life after politics? Yeah, well, the one that I enjoyed the most, I guess, was the, Freightways appointed me to their board, and so I was on the board of Freightways for a number of years. And during that time I was involved in discussions as to whether they should expand their activity to Australia. And I became a very firm believer that that was a good business decision, provided an opportunity for them to expand and grow their business. And interestingly enough, just recently, in the last six months, I've received an email from the CEO at the time, who said,"Look, we enjoyed your time as a director and your advice on a number of big decisions"we made, but particularly your insistence that we should expand into Australia." And it has turned out to be a major factor in their growth." I mean, they've done so well over the last few years as a leading New Zealand company. Right. I think at this stage, I think we've got enough for an episode, just in the conversation that we've had about your history. So, I think if I can say thank you very much, Sir Bill, for your time today and for sharing your background. I've been reading this book since you gave me the copy, was it a week or a week and a half ago, when I was introduced to you? I thought you might like it, yeah. And it's been a fantastic read. So, thank you very much, and I highly recommend it. I see you're not through it yet. You must be a fairly slow reader. [Yes.] Not quite, not quite. I'm about 100 pages shy. I'm at chapter 18. It's been a very interesting read, because I was born during the Muldoon period, and went through high school through the Labour government, 1984, 1987. University through the period when National returned, and the Employment Contracts Act [1991] that you were heavily involved in. So it's actually been a really interesting political history to read for me because it was really my political timeline. It's been great. So thank you very much for your time. Well, I was really motivated to help produce that book. I didn't, it's not an autobiography;- Yes. - it's written by Brad Brad Tattersfield, who was my PA [Personal Assistant] and press officer, and he made a very good job he did a very good research job. He certainly did! But I was motivated more by giving some information to people thinking about becoming an MP [Minister of Parliament]. What's it going to be like? And that sort of says, well, that's my journey as an MP, and I thoroughly enjoyed it. It's a great privilege to represent people, it really is. And you get a great thrill out of helping people. Yes, that would be an amazing side of the role. One of the things that surprised me almost the most out of reading the book was the number of footnotes that said"from the personal papers of Sir William Birch", and I thought, "Does this man throw anything out?" Well, my wife, who's now passed away, would agree with that. And I'm living with my daughter-in-law, who is the wife of my son Kevin, and she's been going through some of my papers, and I said, "I'm sure you don't need this any longer." But the fact that you had them would have made the content for this so much richer. And including not only your journals but also ministerial papers and things that were involved at the time. The richness of that informationwould have led to the quality of what was in the book. Yeah, well, I kept diaries for every year. All my diaries I gave to Brad to read, so I've still got all those diaries. They are very personal because the rules around party politics is that you don't actually reveal what goes on in your caucus. It's always - Confidential. - so you can't publish anything that you've said in caucus, but you can publish notes that you got in your diary about what caucus has decided. Ah, okay. Right. Well, again, Sir Bill, thank you very much for your time. I really appreciate it. I look forward to the next conversation that we have, and to seeing you next episode. Thank you for watching this episode of Governance Bites. We have more episodes on YouTube and your favourite podcast channel where I interview directors and experts on various topics relating to boards of directors and governance. We'd love to see you back, and please like, subscribe, and share the videos and podcasts.