Contractor

The Contractor: Forty years ago today…

pg-22-Contractor-celebrates-40-years-300x300Forty years ago this month, the first issue of The Contractor magazine was published. It’s unusual for a single title to have remained with a single publisher for that long, so to celebrate we’re taking a look back at Volume 1, Issue 1.

WE START BY LOOKING AT the political and social climate of the day, to put the launch into perspective.

In 1976 Mr (later Sir) Rob Muldoon was Prime Minister; the population had just gone over 3.1 million; the economy was in recession, unemployment was rising and the average weekly wage was just $95 per week.

Our showing at the Montreal Olympics in July was deemed a success, despite 26 African nations boycotting because of New Zealand’s sporting ties with South Africa. For the record, we won two golds (men’s hockey, and John Walker in the 1500m), a silver (Dick Quax, 5000m) and a bronze (rowing, men’s eights).

Rugby’s NPC began, and McDonald’s opened its first store in Porirua. The metric system became official, and the recently-launched TV2 became South Pacific Television. Jimmy Carter was the US president, and there were riots in Soweto, South Africa.

Music? Album of the Year was the NZ Symphony Orchestra with Symphony #2.

Protests against nuclear-powered US ships grew, and dawn raids on Pacific over-stayers intensified. And it would be another year before God Defend New Zealand would be recognised as a national anthem; before the Queen would celebrate her Silver Jubilee; before The Beehive in Wellington would open, and before protesters occupied Bastion Point.

Cost of Living – Premium grade petrol retailed for $1.23 per gallon (or around 30c a litre), 42.5 cents of which was tax (18.1c to the National Roads Board; 3.0c to local bodies and 21.4c to the government’s Consolidated Revenue account).

Economic turmoil – Just three years after the 1973 oil shock and the UK’s entry into the EEC (forerunner of the European Union), New Zealand was in economic ‘shock’, prompting Minister of Finance Rob Muldoon to instigate his Think Big strategies. In the lead-up, however, increasing taxes and protecting the government’s terms of trade were paramount.

The Ministry of Works & Development (MWD) got 70 percent of all civil engineering projects (by value).

Against this background the Contractors’ Federation (now CCNZ), Aggregates Association (AQA), Power Crane Association, Ready Mixed Concrete Association and the Heavy Haulage Association created Contrafed Publishing, and contracted Agricultural Promotion Associates to create and publish “The Contractor”. Contrafed’s first directors were Tom Draper, Max Whiley, Jack Calloway and Ian Blincoe.

The publishing team was made up of editor Trevor Walton, associate editor Greg Newton, journalists Robyn Hunn and David Yerex, and advertising sales manager Alyson Mackey.

Many of the first issue’s features centred around the fight with MWD for contractors to get a greater share of the work, spearheaded by the Federation’s “Construct by Contract” campaign, and the editorial team had no compunction taking on Wellington’s grip on the country.

Here’s a sample of stories (both verbatim and summarised) and extracts from Issue 1, The Contractor, October 1976.

THE BIG TAX GRAB

By Greg Newton, Associate Editor

The New Zealand civil engineering contracting industry, faced with a declining workload, soaring costs and plummeting profits, took a further serious blow with the Budget announcement that machinery, spare parts and tyres would become more expensive with a new range of sales taxes.

…………………………….

The taxes – 10 percent on new machinery, 20 percent on spare parts and 40 percent on crane carriers – have been introduced with the aim of stemming the tide of imported goods arriving in the country, and of generating revenue; the internal deficit before borrowing in this year’s Budget was expected to top $800 million.

…………………………….

The tax, on top of inflation, will achieve its aim of cutting machinery imports, at the cost of depriving the country of improved technology. But if the industry is to remain viable and have its future workload borne by aging machines, a ready and constant supply of economically-priced spare parts must be available.


Contractors’ bankroll forces government hand

Government has finally given the go-ahead for work to proceed on the Maniototo Irrigation scheme – but only after the New Zealand Contractors’ Federation had proposed a privately-financed scheme as a productive method of employing machines and staff soon to become redundant at Twizel.

…………………………….

Announcing that public funds would be available this year, the minister of works and development, Mr Bill Young, said that spending in the second and third years of the 10-year scheme would total $1 million. The total cost of the scheme will be more than $6 million.


Minister misses the point…

The ongoing struggle to persuade the government to phase itself out of competing with the private sector (Construct by Contract) wasn’t going well in 1976. From a meeting between a Federation deputation comprised of Messrs T.J. Draper, J.H. Dowell, J.S. Callaway, A.D. Swainson and C.I. Blincoe with MWD Minister Mr Bill Young, Dowell reported to the Federation Council “that it had been pointed out that the contracting industry was based on private enterprise and was looking forward to a larger share of the cake now that a ‘private enterprise’ government was in office.

“The minister said what terrible trouble the country was in and how the government could not afford to spend more on construction. He would not address himself to the point; that we want the ministry out of our business.

“Generally, the minister and his officers sat and listened, but that’s about all we could say about their reaction. Some of us thought that we got nowhere, but at least we were able to make our point in no uncertain terms, although we got little immediate response.”

In 1970-71, 40 percent of Ministry of Works and Development expenditure on civil engineering projects went to contract; by 1974-75 that figure had dropped to 28.5 percent; that is the dramatic story told by figures recently released by the ministry after pressure from the Contractors’ Federation.

The contractors’ share of work increased slightly to 30.2 percent in 1975-76. The figures showed that during the 1970s total expenditure increased from $104 million in 1971-72 to $188.9 million in 1975-75. The only decline in that period came between 72-73 and 73-74 when the private sector absorbed all but $1 million of a $10.4 million cut in expenditure.


Aggregates Association conference in Wellington

“Years of submissions, arguments and deliberations have paid off with the government decision to exempt dump trucks permanently adapted for quarry use from sales tax.

…………………………….

One of the most significant developments during the last 12 months was council’s decision to promote the establishment of branches within the association, and it has endorsed the formation of a branch in Auckland.


TOM DRAPER… not all suits and comfy chairs

“A Draper is a dealer in cloth. But there’s no smell of musty bolts of material lying on gloomy shop shelves when the name Draper is raised in contracting circles.”

Tom Draper had just followed in his father’s footsteps to become chair of the Contractors’ Federation, having already taken over 20 years prior as managing director of V A Draper Ltd. The company was started during the Depression by Tom’s father, who specialised in building tennis courts using horse-drawn scoops. By 1976 the company “is one of the biggest firms in Wellington, employing 60 men to operate plant worth over $1 million”.

“Tom sees the federation’s major problem as ensuring that its members have enough work – ‘We have to realise that the country is facing economic restraints, but we are still developing and a lot of the work has to be done at some time or other. Rather than shelve it all, it would be better to provide a steady work load, even at a reduced level, to maintain us through the recession’.”


Project: Upper Waitaki Power Project – One of the last big hydro jobs

The Upper Waitaki Power project is immense. As one of the last big hydro power schemes likely to be undertaken in New Zealand – certainly the last project with massive earthworks – its completion will mark the end of an era in New Zealand’s power development.

In terms of both cost and generating capacity, the Upper Waitaki project is the largest hydro scheme ever undertaken in New Zealand. It will not be surpassed until the Clutha project gets underway.

…………………………….

To date, much of the earthmoving work on the project has been undertaken by private contractors tendering for work on an hourly basis. For the contracting firms it’s a risky way of doing business with the ever-present doubt that the Ministry of Works and Development (MWD) might not accept the next tender, or might decide for reasons of its own to reduce the work schedule.

…………………………….

Manpower for the project largely comes from Twizel, a MWD-created town some 40 miles from Mt Cook. However, some of the private contractors have camps of their own on the fringes of the town.

Home for some 6000 people, including most of the 1800-odd men working on the project, Twizel is expected to have reached its peak this year and will see a slow erosion of its population over the next few years.

…………………………….

For the contractors working on the project, the relationship they have with the ministry is a mercurial one. For while it’s the ministry which provides the contracts they need, it’s also the ministry which they see wasting money, operating new machines when theirs are lying idle and so on.

Because the ministry is both employer and competitor for work, there are likely to be conflicts between the two as long as the construction work continues.

………..

The hourly tendering system has been the cause of some conflicts. In practice, the ministry accepts a few low tenders and then negotiates with those contractors whose tendering prices are unacceptably high. In general, because of high machinery maintenance costs, tender rates are higher than in most other places in New Zealand. 


Lasers find place on worksite

Laser beams are still associated with “death rays” and other science fiction-type gobbledegook. But laser technology is playing an increasingly important part in the contracting industry.

Spectra-Physics Ltd have introduced a laser blade control system to control the hydraulics of any digging or levelling equipment which now uses manual control methods for maintaining levels and grades.

…………………………….

Setting up the system is very simple. If the laser level transmitter is two metres above the ground, and we want to dig a trench one metre deep, then the receiver is set to maintain a depth of three metres from the transmitted laser beam, and automatically operates the machines hydraulics to control the trencher’s boom.


Editorial philosophy

The editor’s letter is an opportunity to set the scene and context for what follows each month. We thought the first editorial did this very well.  

Letter to the Editor

Dear Sir

Congratulations on the first issue of The Contractor; I haven’t seen it yet, obviously, but the industry has been ripe for a “new view”. In my opinion, we have been poorly served by the former magazine and the carping comments in the editorial of a recent issue of the rag served only to sour my opinion of it even further.

Another thing that I don’t want to see is the magazine becoming the sort of publication that only prints the views of its publishers – in this case the federation and the other associations. If members, or even people outside the industry, have fair criticisms of the industry then they should be voiced and investigated without fear or favour.

Pro Bono Publico,

Auckland


 

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Looking Back

by Trevor Walton, first editor of Contractor magazine.

THE FIRST EDITORS of The Contractor were Greg Newton and Trevor Walton. We had been head-hunted to launch the magazine by Ian Blincoe, the then chief executive of the Contractors’ Federation.

Through his previous career in the then Department of Agriculture, Blincoe knew I was an aspiring agricultural publisher. For my part, I signed on a younger journalist, Greg Newton, as a magazine writer.

Because I had the connection with Ian, I ‘fronted’ with Ian and the Contractors’ Federation presidents Tom Draper and John Feast, but early on it became very clear that Greg didn’t need me to make Contractor a success.

Footnote

In 1984 Greg resigned as editor of Contractor and moved to North America where he replicated his success, but on a much bigger stage. By 1988 he was president of Metal Bulletin Holdings Corp, New York, a London Stock Exchange-listed publishing and information services company.

In 1994 he launched MAR/Hedge, the first independent newsletter covering the global hedge fund market. In this role he won fame as the author of blogs that foresaw the downfall of Bernie Madoff and the Global Financial Crisis.

In 2004 Greg resigned to pursue other interests, including his own investment blog Naked Shorts. In 2009 he passed away after suffering a heart attack while driving to meet his fiancee in Florida.

The Contractor was originally launched out of frustration among members of the Contractors’ Federation with the privately-owned magazines servicing the sector.

There was a sense that the magazines concerned were making very good money out of advertising, but not investing any of this into real journalism. By hiring us, they got the editorial coverage and content they were seeking.

Greg was an exceptionally talented journalist and became deeply committed to the contracting industry. His journalistic skills made the magazine a great read, as well as making it attractive to advertisers.

With strong sales support from our first advertising manager Alyson Mackey, the magazine grew and grew. So much so that it became a full-time occupation for Greg and we eventually parted ways.

For the early issues of the magazine, Greg and I travelled widely, doing major features projects like the Clyde dam and the Sydney Tower.

The Clyde dam project was run like a principality by the Ministry of Works which held life and death power over the contractors working on the site. Words like ‘corruption’ and ‘abuse of power’ spring readily to mind, but for us as journalists it was a treasure trove of stories.

As for the Sydney Tower, we went up by lift 300 metres to the top. Then we had to take a large stride out over the edge of the tower to get into the observation platform that was still being built. We were journalists, not riggers, but to keep face we had to pretend it was all in a day’s work. We were shit-scared.

In our time with the magazine, we also advised the Contractors’ Federation on a lobbying campaign designed to break the back of the Ministry of Works.

The Ministry not only managed large engineering works for the government, it also delivered them to a greater or lesser extent using its own workforce and gear. Contractors got the crumbs off the table and were held to account for any cost overruns. The ministry’s own operations were not accountable to anyone.

We went and had a talk with Bill Birch at parliament to see what needed to be done. He was highly sympathetic to contractors’ concerns, but to get change he told us we had to make things uncomfortable for his colleagues, especially the then prime minister, Rob Muldoon.

So we did that. We bumper-stickered, we lobbied, we issued media releases. What effect it all had, I don’t know.

But the contractors got what they wanted anyway. Little did we know it at the time, but the third Labour Government and the Roger Douglas revolution were just around the corner. That spelt the end for the Ministry of Works.


 

THE ADVERTISERS

With any magazine, it’s the advertising support which makes it 
all possible – and some of the original supporters of 
“The Contractor” are Contractor magazine’s best customers even today.
That first issue was over 50 percent paid advertising (today we aim for 30 percent), including Cable-Price Corporation 
(Fiat-Allis 745H-B), Gough, Gough & Hamer (Roger Taylor Ltd and his fleet of Caterpillar machines), Clyde Engineering (Terex 82-20, 82-30B and the 82-50), seven (!) pages from Motor Specialties (Bearings, Transport, and Industrial Divisions), and full page 
advertisements from Trackweld, Shell, J Mercer & Sons, 
Contracting Industry Training Council, C B Norwood (Massey 
Ferguson and Ditch Witch), Todd Motors (Mitsubishi Fuso and 
Fleet Advisory Service), Atlas Copco (compressors), Industrial Steel & Plant (Cummins, ERF, Wabco, Liebherr, Davis, Poclain and Clark 
Equipment), Humes (Humespun), Air Hire Centre, TMC Trailer 
Manufacturing Co, The Australian Trade Commissioner (Fieldays), Brown Brothers Engineers (Briggs & Stratton), Titan Plant Services, S Hindin & Sons (compressors), Cory-Wright & Salmon (Meiwa), Leyland (Chieftain), 
Nissan (CM90), and Caltex.

Advertising was sold by Alyson Mackey, who stayed with the magazine for around five years. Alyson has now retired, and is living in Hamilton.

Those were the days… when spot colour and coupons were regarded as ‘special’ additions.

 

You can read the entire first issue online at www.issuu.com/contrafed.

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