The O'Brien Column: Melbourne Cup and US election will bring NZ to a standstill too

Friday 27th October 2000

Tuesday, November 7 - the first Tuesday in November - has significance for various sectors of the New Zealand economy.

The first Tuesday marks the running of Australia's Melbourne Cup for thoroughbred racehorses and every fourth year the cup coincides with a US presidential election.

Some might think that is comparing the ridiculous with the sublime, or the other way round, depending on the viewpoint, but both events can affect this country.

The Melbourne Cup is the southern hemisphere's racing showpiece, although some purists would argue tomorrow's W S Cox Plate, a weight-for-age race at Melbourne's Moonee Valley course, is a better test of horse quality.

Whatever the outcome of that debate, the Melbourne spring racing carnival culminates in the cup, which has two countries at a standstill for a while (all day in Victoria, where there is a public holiday) and significant proportions of the well-heeled and not so well-off in other countries, and thoroughbred breeders, owners and potential owners everywhere, analysing the result.

The analysis can affect New Zealand. Horsebreeding and its sales offshoot is a worldwide business and this country has a significant place, for its size, in the global industry.

Notable performances from New Zealand-breds in
Melbourne will give the thoroughbred breeding industry another boost and not just for the headline-catching top sires and their offspring same prices.

New Zealand horses find their way to many countries on all continents. Not all are priced high, nor are they all champions.

Buyers hope the horses will pay their way, or more, and provide a decent return on investment.

That is an optimistic hope, because most countries have more horses than races to be won in a year. Take out the well-performed that win two or more (perhaps six or even in a year) and the race pool for the rest drops.

Logic says many owners will never get ahead of their costs but logic has little place when people get emotional. The breeders are probably the least emotional of the lot but there are plenty of breeders doing only moderately well for every Sir Patrick Hogan.

Irrespective of those matters, Melbourne in October and November can be an important time for a sizable New Zealand industry.

A US presidential election coincides with the regular biennial election of the whole house of representatives and a third of their clutch of state governorships.

The president attracts worldwide attention but the US constitutional system gives considerable weight to the outcome of the house and senate elections.

Control of the house and/or senate is important in the US political decision-making process. It does not always follow that a house and senate with majorities from the same party as the president will smooth the path for the latter's policies.

Organising a majority for a bill in the US congress' two chambers compared to a similar exercise in New Zealand could (with exaggeration) be like writing a treatise on the economy as against counting a moneybox's contents.

A US president obviously has sufficient clout for, say, his (sorry, the gender bias is legitimate and will be for some time) trade policies to affect New Zealand.

It is less obvious that some obscure (to us) representative from an apparently small but agricultural-based state can collect the clout to undermine our trading interests.

New Zealanders are used to US government departments and statutory bodies imposing conditions on the entry of our goods.

The activities of members of congress are also part of the mixture of political, administrative and economic activity that has worldwide repercussions.

It would be foolish to attempt to downgrade the outcome of the contest between Vice-President Al Gore and Governor George Bush in favour of election results in minor house of representatives districts but the latter can eventually affect New Zealand's interests, subject to the results of diplomatic and trade negotiation.

The effect of the presidential election result on investment markets is another matter of interest to people here.

Interviews with US investment gurus broadcast on international TV newscasts last week suggested a rising or overall stable market favoured the candidate of the party already in the White House.

That apparently leads to more market gains. History was sited in support of the proposition, which is probably a valid approach, given that history will repeat itself if enough people think it will: the self-fulfilling prophecy.

We will know the result of both November 7 events soon. There is some relief for people who are both avid horse-followers and intense watchers of internationally important elections. Tuesday in Australia is Tuesday in New Zealand, but Tuesday in the US is Wednesday here.

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