Bollard's secret night job revealed

Alan Bollard
Alan Bollard

Alan Bollard had a secret night job when he was Reserve Bank governor – writing a World War II-era thriller.

His moonlighting as an author dates back even further to when he was treasury secretary.

In the same month as his new book The Rough Mechanical finally made it into print, Bollard picked up a New Year honour for services to the state today.

And tomorrow he starts his new job leading the secretariat of the Asia-Pacific Economic Co-operation in Singapore.

Bollard, 61, has been made a Companion of the New Zealand Order of Merit. The CNZM reflects a long career in government agencies, as head of the business competition watchdog Commerce Commission from 1994 to 1998, then treasury secretary till 2002, and for the past decade as Reserve Bank governor.

He led the central bank during the most tumultuous period in recent times, as New Zealand was buffeted during the global finance crisis in 2008. But the New Zealand economy, like Australia's, came through relatively unscathed compared with many Western economies.

What most Reserve Bank watchers didn't know was that when he got home at night during the GFC, Bollard turned his hand to his novel, loosely inspired by the life of Kiwi genius and economist Bill Phillips.

"I like writing – it is a relaxation really and I like that sort of literature. I wrote it for myself – I'm the perfect reader for a book like that," he said. He said it would never break best-seller records, but he was pleased to see it in print.

A fan of John Le Carre cold war spy novels, he said that the 1950s, post-World War II era was a "most unusual period – a complicated and confusing period".

The title derives from the Shakespearean phrase "the rude mechanical" but Bollard says he soon realised that title would get his book into the "erotic" section of the Amazon books website.

"While that might have helped sales a lot, it probably would have left some dissatisfied readers," Bollard said.

The "rough mechanical" is a reference to Phillips' knack at building things.

Bollard's next book would be a biography of Bill Phillips, but that would not be finished till 2014, because of the demands of his job in Singapore.

Meanwhile, Bollard said he was delighted with the honour, but it reflected what had been going on more broadly in the Reserve Bank and big events internationally, including the GFC. The hardest part of his time as governor was the extreme shocks in the banking sector overseas.

"It was quite a scary time for us in 2008 and 2009. And the slowness of the recovery was frustrating," he said, made worse by the Canterbury earthquake.

But now, New Zealand was in "reasonable shape" even though growth remained sticky, in a slow recovery. "We are in a good position in a difficult world," he said. The prospects for New Zealand were pretty good, but the engine of international growth was shifting from the Western powers to the East.

"We are well positioned, but New Zealand does need to integrate much more with that part of the world, and it will have its challenges," he said. Asked how he found the role of governor at the central bank, Bollard said: "You have to have the right balance of self-confidence and support and be able to take advice."

"You get a huge amount of advice, from the media, the man and woman in the street – so it is sometimes more in the public eye than it should be," he said. During the GFC people had a great expectation that the Reserve Bank could do more than it actually could achieve.

It was "definitely overstating things" to say the central bank governor was the most powerful man in the economy as the single final decision-maker on interest rates. "You wouldn't want that to be [so]," he said.

"It is a technocratic position, it is not an elected position, so it should not be that powerful."

The central bank could not take over from New Zealanders "the responsibility for achieving growth – both in how they invest and how they consume or save". The best part of the job of governor was being able to have an impact, helped by the people at the bank.

"It was actually having your finger on the pulse of the economy in an acute way, that I found insightful," he said. Apec is perhaps best known for the brightly coloured or flowered shirts and jackets worn by leaders at the meetings, but Bollard will not have to worry about that when he takes up his new role.

In the past, the shirts were chosen by the host country and were dropped a few years ago. The real attraction of the role was being involved with 21 large and complex countries around the Pacific Rim that had been responsible for most of the world's economic growth in the past 15 years.

"They [Apec] have been responsible for the biggest growth and the biggest improvement in living standards the world has ever seen – why would an economist not want to be part of that?" he said. Apec has been a rallying point to improve trade and cross-border investment and help business development, flows of skilled workers, as well as education.

"It has been the place where the big ideas have come out – sometimes in the margins of the Apec meetings when the leaders get together," he said, for example the idea for the Trans Pacific Partnership trade group.

Bollard admitted there were plenty of disagreements outside the economic issues between member economies, so it was a "soft power" job, not a hard power job. "You can't go and command things," he said.

Fairfax Media