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Belief alone won’t beat All Blacks

Pass test ... the Wallabies captain's run at ANZ Stadium yesterday.THE Wallabies are buoyant after repeatedly peaking at the right time during the Wales Test series, but know they are still well short of what is required to be confident of beating the All Blacks at ANZ Stadium tonight.
Nanjing Night Net

Wallabies captain David Pocock yesterday called on his teammates to lift their game and make full use of home-ground advantage.

The Australian Rugby Union has certainly applied the pressure on the Wallabies by focusing its marketing campaign around how it has been a barren decade since they last won the Bledisloe Cup, and that the task may be easier as they are playing two of the three Tests at home.

No wonder Wallabies coach Robbie Deans was provoked into commenting over whether it had been too long since the team had shown off the cup. ''Clearly it's time,'' Deans said.

At least the Wallabies head into the series with some of the attributes needed for trans-Tasman success. After the blip against Scotland in Newcastle, the Wallabies rebounded brilliantly against Wales, one of the best northern hemisphere teams to tour Australia in decades, winning the series 3-0. What was most encouraging was the team's ability to play at their best near the end of each Test and withstand pressure, showing the squad's level of conditioning had improved markedly.

The sign of a good side is that they consistently win the tight ones, and several close victories had the desired effect of boosting the Wallabies' spirits.

''We took confidence out of that series,'' Pocock said. ''As a team you want to win those arm-wrestles right at the end. In these Tests, we stayed in the contest and found a way to win.

''But the Rugby Championship is going to be a totally different beast, and we know those performances against Wales won't be anywhere near good enough.

''We just have to do everything better, and in particular we know we have to start better against the All Blacks. Our general intensity has to go up, because New Zealand tend to take their opportunities. Wales, in the first and second Tests, created a lot of opportunities and didn't take them. But the All Blacks do.''

As importantly, Pocock knows he will play a critical role in the outcome of this Test. The breakdown battle will be decisive, and with the All Blacks showing during the Ireland Test series that their intensity at the tackle is of the highest standard, Pocock's openside breakaway work will be important in providing a handbrake. As important will be how new Wallabies blindside breakaway Dave Dennis, and No.8 Scott Higginbotham, combine with Pocock.

But Deans also argued it is imperative Pocock gets a fair deal. The coach was irritated during the Wales series that Pocock was often held back by opponents after the breakdown so that he had no involvement in the next few phases. Deans called on the touch judges to properly adjudicate that area, as he believes the All Blacks, knowing how pivotal Pocock is to the Wallabies' plans, will try similar tactics.

''It's not so much at the breakdown, but what's happening long after the breakdown is over,'' Deans said. ''The ball is gone, the game is carrying on and players are being denied the ability to participate. It's the touch judges' responsibility because the referee, invariably, is watching the game, which is somewhere else.''

But one area where Deans is forever evasive revolves around his new opposing coach Steve Hansen. As expected, Hansen, in his first Bledisloe Cup battle as head All Blacks coach, has tried to provoke his old Canterbury playing and coaching partner with old-fashioned sledging.

The All Blacks coach this week had a dig at the Wallabies forward pack, and also suggested Deans made a succession of selection bungles during last year's World Cup. The inference was Deans no longer had confidence in World Cup five-eighth Quade Cooper, who has not been picked for this Test.

Asked about the comments yesterday, Deans laughed and said: ''Steve is a very good fisherman. He loves fishing.''

Hansen will keep tossing the burley in Deans's direction during the season. But the ever cautious Australian coach will keep spitting out those smelly bite-sized pieces of pilchard. He has been around too long to attack low-grade bait.

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Sitting pretty for the run home

Illustration: Jim PavlidisFINAL WORD
Nanjing Night Net

THE Tigers, in my observation, have more supporters who go to the footy dressed up and in costume than any other club.

Last Sunday, as the Olympics were closing and the Brits were preparing to put on a show to dazzle the world, Richmond was playing the Bulldogs at the MCG.

The Tiger Army, full of ribald chants, was about a dozen rows behind us. Around us were middle-aged women in black and yellow outfits that made them look like semi-inflated wasps and the odd young man in a head-to-toe Tiger suit. In front of us were two demure young Asian women, both dressed in black, one wearing a head scarf which suggested she was a Muslim.

At half-time, unable to contain my curiosity, I leant forward and asked the young women where they were from. They were international students from Malaysia. Someone had given them free tickets to the match. They had cardboard sheets with autographed photos of all the Richmond players.

''The game,'' I told them, ''is crazy, but beautiful.''

They nodded and smiled as if to say that was as they had found it. The Tigers gave the Dogs a thumping. The Dogs played some pretty football but lacked the big, capable players who hold a football team together the way buttons hold a cardigan. It's hard for me to look at the Tigers and think they shouldn't have done better in 2012 but I think about Carlton, too. It's a bias I have towards teams with recognisably individual talent as opposed to teams like Sydney and North Melbourne that have a near-uniform identity.

In the case of the Tigers, I like watching Dustin Martin play.

He's the football equivalent of a four-wheel-drive with a tray full of work equipment and red dust on its sides.

He's quick, strong, reads the play and kicks the ball long. He slaughtered the Dogs. And I like watching Trent Cotchin play. A lot of people do - he's young and good-looking, a one-touch player with a quicksilver mind who is deceptively slow in his movements so that it constantly seems like he is performing tricks or acts of football magic.

A Brownlow for Cotchin would be like an Olympic gold for Tigerland and be received by the Tiger Army with that degree of reverence.

Another team I like watching is West Coast. Mick Malthouse was a mighty coach but I would argue that John Worsfold's Eagles teams have been better to watch than Malthouse's Eagles even though Malthouse's sides had more talent. The Eagles teams of the early 1990s were strewn with great names - Matera, Jakovich, Kemp, Lewis, Mainwaring, McKenna - but the captain of that formidable unit was John ''Woosha'' Worsfold.

A pharmacist by trade, he played with a lot of nous and had a small boy's smile when interviewed after games. On the field, if he got the chance, he'd hit you like a semi-trailer and leave you in a trance. Malthouse's teams were solid as cement. Woosha's teams, for one reason or another, have been more fragile but, again this year, the Eagles are in the finals mix.

The big controversy in Perth this week concerned Geelong coach Chris Scott saying the West Coast crowd was the worst in Australia. This followed Geelong's Tom Hawkins being booed by a small section of the Perth crowd last weekend as he was being carried off senseless.

Seeking to further plumb the West Coast psyche, I found a website for West Coast supporters.

The post I read alleged the Eagles were cheated of the 2005 premiership through the systematic intimidation of the umpires during the course of that season by Sydney coach Paul Roos. It included this view of Worsfold: ''One of the things I most like and respect about Worsfold is that he keeps his trap shut when things don't go our way - he simply has far too much class and fortitude to go all crying to the media when things go wrong.''

It made me realise something I had either forgotten or not properly processed: Woosha is a hero in the West. These are the passions beginning to stir as we close on September and the finals.

Sydney and Adelaide, sitting one and two on the ladder, are looking at home finals, but Malthouse said this week they aren't the two best teams in the competition which, if true, is a serious indictment of the AFL roster. Beneath Sydney and Adelaide sit Hawthorn, Collingwood and Geelong.

Collingwood was built during the terrible depression of the 1890s on the principle that no individual is bigger than the club. As the suspension of Dane Swan showed, Collingwood is still Collingwood. The Pies are a tough, attractive team but Hawthorn played the best footy I've seen this year when it defeated Collingwood in round 17.

Geelong, meanwhile, is defiant, like Nellie Melba being told the time has come to leave the stage when she can see further great performances ahead for herself.

I have no idea who will win. I don't know anyone who does - it's that sort of year. All I know is that on the last Saturday in September, the season will have a crazy but beautiful climax. People around Australia, and around the world, some in costumes and some with painted faces, will be gathered in groups, shouting at televisions.

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Old boys in awe of classy North

GREG Miller was one of the key architects of North Melbourne's dominance through the 1990s. As chief recruiter and later general manager, he helped build a side that featured in seven preliminary finals and claimed two premierships.
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Those North teams, led by the likes of Wayne Carey, Glenn Archer and Anthony Stevens, boasted skill and muscle, something the Kangaroos have not been able to replicate since those heady days - until now.

Miller has watched the Kangaroos intently in recent months and has marvelled at the development of a team that has won eight of its past nine matches heading into tonight's blockbuster against Collingwood at Etihad Stadium.

''This current group are playing the best football since the late '90s - the style of footy and the precision,'' Miller said.

''It is the best assembled group and skill level that I have seen. Their skill level is fantastic. I have seen their sides that have made finals [in 2007 and 2008] - this side is better. Their football is better.

''I have seen the Kangaroos play all their games recently and I can't believe they are playing unbelievably good footy.

''They were just miles ahead of Essendon in their movement of the footy [last Sunday]. Everything they did was first class. They have come a long way.

''They are very fit, obviously. They are leading and moving at one end and moving at the other end. They put Essendon to shame in that regard.''

The victory over the Bombers was pivotal, for the Kangaroos dislodged a team that earlier this year was considered a premiership favourite, prompting Carey to declare his former team had now taken the ''next step''.

Now comes an even mightier step, against a Collingwood side that has embarrassed the Kangaroos by an average of 80.5 points in their past four meetings. The Magpies have won all 16 quarters.

''I think they [North] are one of the form sides of the competition,'' Carey said.

''Obviously, they have got their troubles now with injury, which they haven't had, but the way they played on the weekend, they have certainly proved they have improved as a side and winning games that are important to them.

''It feels like they have taken that next step, but once again it's another challenge this week against arguably the best side in the comp.''

Good management and luck had allowed the Kangaroos to avoid soft-tissue injuries until last weekend, but they have been forced to make three changes with Daniel Wells (calf), Leigh Adams (shoulder) and Nathan Grima (hamstring) out.

Carey said the move to three marking forwards - the developing Robbie Tarrant and Lachie Hansen working alongside veteran Drew Petrie - was working well.

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Oroton puts shine on its split from Ralph Lauren

Oroton: Contingency plans in place.WHILE Oroton Group had been hopeful of retaining the licence to exclusively distribute Ralph Lauren in Australasia, it could not have been too surprised this week when the global apparel brand decided to take back the business as of June 30 next year.
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While the news shocked the markets enough to send Oroton's share price down as much as 20 per cent yesterday, the signs were already there in 2010 when the two parties extended a relationship two decades old.

At the time, Ralph Lauren took back the licence from Dickson Poon to distribute the brand in China, Hong Kong and a number of other Asian countries. The US-based company had earlier taken control of its brand in Japan and Europe.

It did not go unnoticed at Oroton.

Chief executive Sally Macdonald told BusinessDay: ''While we're disappointed, we had contingency plans in place.''

Oroton, one of the few star performers among Australia's listed retail stocks, said Ralph Lauren currently accounted for 45 per cent of group sales and 35 per cent of net profits.

''This is clearly a disappointing announcement,'' said Goldman Sachs analyst George Batsakis.

The broker dropped its price target on the stock from $9.90 to $6.95 and slashed earnings estimates by as much as 35 per cent over the next two years but retained a buy recommendation on the stock.

''Despite [the] announcement, we believe Oroton will be in a strong position to grow earnings from the 2014 financial year,'' he said.

Ms Macdonald stressed the opportunities in Asia the company could pursue with the freed-up capital, and ''the opportunity to consider complementary acquisitions of owned and licensed brands that under the [Lauren] contract we were precluded from pursuing''.

But she said the company was not preparing to ramp up its Asian expansion plans from its target of opening about four new stores a year. ''To successfully build brands in new markets you need to do that in a measured way,'' Ms Macdonald said.

The company is expected to open new stores in Hong Kong and Shanghai next year.

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Meritocracy takes a nose-dive as Japan Airlines soars again

JAPAN Airlines owes me something as it plans an $US8.5 billion initial public offering: a thank-you. Not because I'm a frequent flyer, but because I'm a Japan taxpayer.
Nanjing Night Net

In the euphoria over the carrier emerging from bankruptcy, aren't we forgetting the jumbo-sized role of the state? A $US4.5 billion government-orchestrated bailout and even bigger subsidies that let it avoid billions of dollars in future tax payments.

So, next month, when JAL tries the most ambitious IPO since Facebook, it should do so with humility and full knowledge of how its trajectory is another blow to Japan's status as a meritocratic economy. The goodies JAL is using to resurface as a public company are weighing on rival All Nippon Airways, an outfit that actually tries to run itself as a for-profit enterprise.

The airline's IPO is being held up as a good-news story of rebirth, reformation and fresh opportunities - when it's anything but.

You can understand the desire for a promising turn-around tale. The past year has been a dismal one for Japan Inc. From Tokyo Electric Power Co's incompetence, to scandals at Olympus, not to mention Daio Paper, Nomura Holdings and AIJ Investment Advisors, examples of weak corporate governance abound. It's only in contrast to this wreckage that JAL can look like a success story.

In reality, the public coddling JAL enjoys as it returns to the stockmarket is emblematic of so much of what ails Japan. All Nippon rebounded to profit in the first quarter as air traffic recovered from disruptions caused by the Japanese tsunami and nuclear crisis of March last year. The airline succeeded on its own in a turbulent global environment, not because of a government lifeline.

Now, All Nippon's outlook is in jeopardy. JAL's unfair, taxpayer-supported leg-up on All Nippon will inhibit competition and further delay the creation of a viable budget-airline industry.

JAL hasn't come up with a low-cost carrier strategy, and its advantage will slow All Nippon's full embracement of a trend that has long benefited consumers in Europe, America and other parts of Asia. Japan's ''budget'' carriers are cheap in name only.

The unseen costs of publicly financed corporate favouritism riddle Japan's economy. Investors forget that when Japan grows 3 per cent a year it's only because of an endless cycle of fiscal stimulus, deficit spending and zero interest rates, which have distorted the nation's credit system. If Japan Airlines' IPO is a roaring success, few will pause to consider the artificial stimulants that make it so.

Such cosseting of national champions doesn't get the attention it deserves.

The post-tsunami nuclear crisis that almost caused the evacuation of Tokyo was a direct result of Tepco's incompetence and the company's government enablers. Decades of lax safety policies were ignored by bureaucrats looking for cushy post-retirement gigs in the power industry. Tepco's pervasive influence explains the decision of Prime Minister Yoshihiko Noda to allow the restart of reactors after the disaster, defying the public backlash against nuclear power.

Some day Japan will have a finance minister with the courage to tell companies to stop bellyaching about the strong currency and learn to adapt the way the Germans did. The present occupant of that position, Jun Azumi, isn't that man. He should spend less time threatening to intervene in markets and more working to make the Japanese economy more competitive. He has done nothing to increase female participation in the shrinking, male-dominated labour force.

To its credit, JAL has done some heavy lifting since its 2010 bankruptcy. It slashed thousands of jobs, cut debt and retired older, less fuel-efficient aircraft. But at what price? Its bankruptcy wiped out shareholders. And even if the airline repays the government-backed Enterprise Initiative Turnaround Corp of Japan, which financed the company's bailout, Japan will still be giving away untold billions of dollars in tax breaks.

Nor is it clear that JAL has learned the right lessons after at least four bailouts in the past decade. Knowledge that the government is always at the ready as a back-up removes the urgency to make the wrenching, but needed, reforms. Thanks to the latest rescue, consumers and businesses will continue overpaying for flights and have fewer scheduling options.

The other question is whether the market will give JAL the Facebook treatment. The social-networking company and JAL share something in common in the hype department. Facebook's buyers bought into the mania and have regretted it ever since as the shares slide. JAL's supporters, rather than trying to ride the next big thing, will be domestic retail investors desperate for a feel-good business story.

If JAL really is a happy tale, it will probably end once its executives hit up taxpayers for another handout.

BLOOMBERG

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Ignore the propaganda: cutting wages will not fix productivity

Managers are to blame.''The most brilliant propagandist technique will yield no success unless one fundamental principle is borne in mind constantly - it must confine itself to a few points and repeat them over and over.''
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SO SAID Joseph Goebbels, master manipulator of the truth in Adolf Hitler's evil Third Reich. Although not as well-known as his more famous ''if you tell a big enough lie and keep repeating it, people will eventually come to believe it'', it more succinctly encapsulates the spin and hyperbole that is the hallmark of the debate over our economy.

For the past few years, we've been bombarded by a constant theme from the business lobby groups: Australian productivity is slipping and unless we have a more flexible labour market and governments reduce regulation, we'll all be ruined.

There's a sliver of truth to the argument. Productivity indeed has plunged. And labour productivity has slipped in recent years. But the real culprit in the great Australian productivity decline is capital, not labour. It is our managers who have let us down, rather than our workforce. And in any case, all the statistics have been thrown completely out of whack by the massive investment boom in our resources sector.

Those are some of the findings of a report this week by global management consultancy McKinsey & Co, which goes a long way to clearing some of the smoke around an issue that has become a lightning rod for the business community and is shaping as a serious election issue. Unfortunately, most who argue so passionately on the topic seem blissfully ignorant of even the fundamental meaning of the term.

For when they raise labour market inflexibility as a problem, they really mean wages or the price of labour, which has very little to do with productivity. Most business people figure, if you reduce the cost of labour, the firm will make a bigger profit and that must be a lift in productivity.

Sorry to disappoint. But cutting wages is more likely to reduce labour productivity, which, simply put, is the amount of goods or services a worker produces. If a worker produces more, his or her productivity has risen. If the same worker's output falls, productivity is down. Nothing to do with cost.

Apart from appearing to be a diversionary tactic from where the blame truly lies for our productivity slump, the unending campaign to drastically reshape our industrial relations system could come back to bite the business sector. It overlooks the potential damage of such action on the long-term profitability of our corporations, particularly those with a domestic focus.

What is often ignored in this heated debate is that, outside of work hours, labour usually is referred to as consumers. Your workers are also your customers.

Reduce their income and eliminate their job security and you may well end up selling less product. On the other side of the ledger, productivity is also likely to suffer. Let's face it, cutting wages and conditions is hardly an incentive to work harder.

In survey after survey, we are told of the dire state of consumer confidence and the impact this is having on sales and company profits. It may be indefinite if a radical industrial relations shake-up is thrown into the mix.

During the past 20 years, our industrial relations system has been constantly evolving and an increasing proportion of our workforce has become part time, casual or short-term contract workers. That has increased labour market flexibility, allowing companies to adjust employee numbers as conditions dictate.

But those workers, most of them younger new entrants into the labour force, are a greater credit risk for banks simply because their income is less secure. They are less likely to buy real estate as they are less willing to commit to long-term finance.

Those that do take the plunge often do so with financial assistance from their baby boomer parents, the ones who had a steady income and a secure job.

That aside, the evidence is now clear. Labour market productivity is nowhere near as dire as our business leaders suggest.

According to McKinsey's Beyond the Boom: Australia's Productivity Imperative labour productivity rose at an annual 0.3 per cent during the past six years. That's a snail's pace when compared with the experiences of the 1990s when productivity grew at an annual 3.1 per cent. At least it is positive. Capital productivity on the other hand, has turned negative, wiping $43 billion from national income. Why? Well, a couple of reasons. One is that much of the enormous recent investment in new machines and building new mines has yet to generate an income. And so as that new plant and equipment starts churning out exports, a great deal of our productivity ''problem'' - both for labour and capital - will be solved.

But the report also highlights what must be an uncomfortable truth for Australian managers, particularly in our resources sector. It reckons a large portion of the cost increases in our mining sector is down to poor management. With a resources boom of unprecedented proportions, the scale and magnitude of the projects under construction has stretched management capabilities, many of whom have little experience with these mega projects.

The McKinsey criticism was not confined to the resources sector. It seems management in our manufacturing industries underperforms most advanced economies. We're ninth on the list after America, Japan and European nations such as Germany, Sweden, Britain, France and Italy with Canada in fifth place.

America's productivity has soared in recent years, although there is evidence it has begun to taper off. In part, that is because of its high unemployment. The most productive workers were the ones more likely to keep their jobs when the recession hit. But there is more to it than that.

Innovative management techniques - working out how to produce more with the same inputs including workers - has been a driving force behind the resurgence of US manufacturing, along with a weak dollar that has boosted exports.

Our productivity ''problem'' will best be solved through investment - in new and more efficient machines and in education to produce more skilled workers and better managers - not with a slash-and-burn approach to wages and conditions. That's something you're unlikely to hear in the coming propaganda war.

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Bargain sites face endgame

Online sales plus geographic convenience could add up for traditional retailers.MYER chief Bernie Brookes says online bargain sites, such as Catch of the Day, GraysOnline and DealsDirect, have ''had their moment in the sun''.
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And he says Australia's traditional retailers will start to dominate online as they get ''fair dinkum'' about the web and integrate it with their stores as an omnichannel offering.

Mr Brookes said these ''flash sites'' all faced the same problem in terms of consistent availability of product and attempt to establish the brand trust of traditional retailers.

''They've been there when there has been no effective competition,'' Mr Brookes said. ''If we produce a list in three years' time of the top internet sellers in Australia, it will be dominated by the Myers, the David Joneses, the Kmarts, the existing bricks-and-mortar retailers. That's exactly what's happened in the US and UK.''

One critical advantage for traditional retailers was the geographic coverage of their stores. Once this was integrated with their digital service as an omnichannel offering, it would be hard for pure online players to compete with the convenience and service, Mr Brookes said.

But he admitted that global price harmonisation - to ensure local prices were competitive with what overseas sellers can offer - was one of the last pieces of the puzzle needed to make all this work.

He said surveys of in-store customers indicated that they rate convenience, fashion/style, service and price, in that order, but it was a different story for online.

''When we survey our customers online, price is No. 1,'' he said.

Mr Brookes said 20 per cent of the company's range was house brands and these were unaffected by price harmonisation. Another 40 to 45 per cent of Myer sales were globally price competitive.

''However, we've probably got 20 to 30 per cent of the range which is not competitive on a world scale,'' he said, naming cosmetic companies and men's apparel as two of the main culprits.

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Power and the passion play across the boards

An elite web of influence connects some of the fiercest corporate rivals.
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LINDSAY Maxsted may be the most influential person in corporate Australia.

An analysis of public company directorships shows that Mr Maxsted, a director with BHP Billiton, Transurban and Westpac, is capable of exercising a more powerful influence over the most common measure of Australia's corporate performance than any other person - and that by a fair whack.

Mr Maxsted's positions give him board-level influence over companies valued at more than $182 billion. He takes part in decisions that change the course of more than 16 per cent of the total weight of the S&P/ASX 200 Index, the most-watched index of Australian shares.

The next-most-influential person, fellow BHP board member Carolyn Hewson, holds sway over nearly 10 per cent of the index. She is also a board member at developer Stockland.

The findings are part of a project carried out over months by The Age to chart the networks and influences that direct - quite literally - our largest, most important companies.

CLICK HERE TO GO TO OUR INTERACTIVE MAP OF BOARDROOM CONNECTIONS

The primary outcome of the project is a map of board-level connections that tie the companies that comprise the 200 to one another. The map includes biographical information collated by Who's Who Australia and can be viewed at www.theage南京夜网.au/opinion/blog/the-crunch.

Companies tend to be spoken of as if they were distinct identities, engaged in bitter rivalry and constant battle for a share of consumers' wallets.

Incongruously, company boards tend to be spoken of as clubs, membership to which is reserved for an elite few who spend their careers flipping from one boardroom to the next.

Of the 1539 directors on our list, 205 hold positions on multiple boards. Qantas director Garry Hounsell alone holds five - Nufarm, Orica, PanAust and DuluxGroup are the others - making him the person with the greatest number of board seats.

And if Mr Hounsell is a hub through which many companies are tied, his influence extends further by the connections on his boards - particularly Qantas. Seven of the 15 directors at the notional ''national carrier'' hold additional seats within the top 200 companies.

Mr Maxsted says it is easier than might be imagined for directors to compartmentalise their responsibilities from company to company. ''In each of those three roles there are very clear mandates for what I need to do,'' he says.

However, he says it was invaluable to take lessons learnt in particular contexts and apply them elsewhere.

For example, he says he did not go to BHP to learn about China, but the knowledge is invaluable in his role at Westpac.

All the connections depicted in our project are public, but that does not make them obvious.

Many of the most interesting connections are at one or two degrees of separation from any particular company.

For example, BHP Billiton and Rio Tinto are the first- and second-largest companies listed on the ASX if measured by the total value of their shares. They are also, perhaps, the exchange's most prominent rivals. Yet, they are connected at a single degree of separation. Our map shows Rio director Richard Goodmanson is on the Qantas board with John Schubert, a BHP director.

As the benchmark index of Australian shares, the S&P/ASX200 Index, more than any other financial instrument, influences and describes the way the Australian corporate universe is perceived.

''Power,'' according to shareholders' rights advocate Dean Paatsch, ''is the ability to mobilise capital.'' It is that assertion that leads us to conclude that Mr Maxsted may be the most powerful in Australia's pool of public company directors.

Mr Maxsted connects BHP to Westpac, where he also sits as a director.

Companies are ''weighted'' within the S&P/ASX200 Index, and their shares influence the performance of the index depending on that weighting. BHP and Westpac are the first- and third-most influential companies on the list, carrying more than 15 per cent of the weight of the index between them.

Until very recently, BHP and Westpac shared an even greater bond, as Ms Hewson stepped down from the Westpac board just last June. During that period she would have sat comfortably atop our measures of influence as the nation's most influential corporate director.

A comparable nexus of power can be found surrounding the boardroom table at a much smaller corporate player, punting group Tabcorp.

That board boasts a prodigious financial pedigree, as it hosts one director from Commonwealth Bank (Jane Hemstritch) and another from ANZ (Paula Dwyer). Tabcorp director Elmer Funke Kupper also sits on the board of ASX Ltd, the company that operates the exchange itself, as that company's chief executive.

Tabcorp's board makes it possible to tie all four of the nation's largest banks within three degrees of separation.

■Westpac director Elizabeth Bryan sits on the Caltex board with National Australia Bank's John Thorn.

■NAB's Jillian Segal sits on the board of ASX Ltd with Tabcorp's Elmer Funke Kupper.

■Tabcorp links ANZ and Commonwealth Bank by hosting CBA's Jane Hemstritch and ANZ's Paula Dwyer, both on the one board.

The supermarket industry is similarly cosy. Coles and Woolworths are separated by a single company; infrastructure giant Lend Lease.

Colin Carter, a director of Coles' owner Wesfarmers, shares the Lend Lease board with Woolworths director Michael Ullmer.

The network can be extended from Coles to Metcash, owner of supermarket chain IGA, in one step: building materials company Boral. Both Wesfarmers' Bob Every and Metcash's Richard Longes sit on that board.

And to avoid suggestions of bias, it must be said that the board of media company Fairfax, the owner of this newspaper, is directly connected to Ten Network Holdings, with which we compete for online traffic.

Hungry Jack's founder Jack Cowin has been a director of Ten since 1998. He was appointed to Fairfax last month.

Through Mr Cowin, the media industry becomes very cosy indeed. He shares the Ten board with Lachlan Murdoch.

That association links, via one degree of separation, the company that owns this newspaper, to News Corporation, publisher and owner of The Australian and the Herald Sun, two of this paper's most direct rivals in every media platform in which we operate.

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Unravelling the ties that connect and direct

Positions endow Lindsay Maxstead, above, with board-level influence over companies valued at more than$182 billion.MEET the man who may be the most influential person in corporate Australia.
Nanjing Night Net

An analysis of public company directorships shows that Lindsay Maxsted, a director with BHP Billiton, Transurban and Westpac, is capable of exercising a more powerful influence over the most common measure of Australia's corporate performance than any other person - and that by a fair whack.

Maxsted's positions give him board-level influence over companies valued at more than $182 billion. He takes part in decisions that change the course of more than 16 per cent of the total weight of the S&P/ASX200, the most-watched index of Australian shares.

The next most-influential person, fellow BHP board member Carolyn Hewson, holds sway over nearly 10 per cent of the index. She is also a board member at the building company Stockland.

The findings are part of a project carried out by the Herald to chart the networks and influences that direct - quite literally - our largest, most important companies. The primary outcome of the project is a map of board-level connections that tie the companies that comprise the 200 to one another. The map includes biographical information collated by Who's Who Australia and can be viewed at http://www.smh南京夜网.au/opinion/blog/the-crunch.

Companies tend to be spoken of as if they were distinct identities, engaged in bitter rivalry and constant battle for a share of consumers' wallets. Our project makes plain that, in the effort to obtain the services of those with enough smarts and experience to engender trust, companies end up sharing personnel to a significant degree.

Of the 1539 directors on our list, 205 hold positions on multiple boards. Qantas director Garry Hounsell alone holds five - Nufarm, Orica, PanAust and DuluxGroup are the others - making him the person with the greatest number of board seats.

And if Hounsell is a hub through which many companies are tied, his influence is extended even further by the connections on his boards - particularly Qantas. Seven of the 15 directors at the notional ''national carrier'' hold additional seats within the top 200 companies.

Maxsted says it is easier than might be imagined for directors to compartmentalise their responsibilities from company to company. ''In each of those three roles there are very clear mandates for what I need to do,'' he said.

All of the connections depicted in our project are public, but that does not make them obvious or easy to track. Many of the most interesting connections that become plain are at one or two degrees of separation from any particular company, and these are connections that would not be explicit from company disclosures unless a reader were to pursue a particular director's associations from company to company, as we have done.

For example, BHP Billiton and Rio Tinto are the largest and second-largest companies listed on the ASX if measured by the total value of their shares. They are also, perhaps, the exchange's most prominent rivals.

Yet, they are connected at a single degree of separation - Rio director Richard Goodmanson shares the Qantas board with John Schubert, a BHP director.

As the benchmark index of Australian shares, the ASX 200, more than any other financial instrument, influences and describes the way the corporate universe is perceived. In the world's most powerful circles, the index is in effect a proxy for the country itself.

''Power'', according to the shareholders' rights advocate Dean Paatsch, ''is the ability to mobilise capital''. It is that assertion that leads us to conclude that Maxsted may be the most powerful person in Australia's pool of public company directors. He connects BHP to Westpac, where he also sits as a director.

A nexus of power can also be found surrounding the boardroom table at a much smaller corporate player: Tabcorp.

That board boasts a prodigious financial pedigree as it hosts one director from Commonwealth Bank (Jane Hemstritch) and another from ANZ (Paula Dwyer). Tabcorp director Elmer Funke Kupper also sits on the board of ASX Ltd, the company that operates the exchange itself, as that company's chief executive.

Tabcorp's board makes it possible to tie all four of the nation's largest banks within three degrees of separation. Westpac director Elizabeth Bryan sits on the Caltex board with National Australia Bank's John Thorn. NAB's Jillian Segal sits on the board of ASX Ltd with Tabcorp's Mr Kupper. Tabcorp links ANZ and Commonwealth Bank by hosting CBA's Hemstritch and ANZ's Dwyer, both on the one board.

The supermarket industry is similarly cosy. Coles and Woolworths are separated by a single company; infrastructure giant Lend Lease. Colin Carter, a director of Coles's owner, Wesfarmers, shares the Lend Lease board with the Woolworths director Michael Ullmer.

The network can be extended from Coles to Metcash, owner of the supermarket chain IGA, in one step: building materials company Boral. Both Wesfarmers' Bob Every and Metcash's Richard Longes sit on that board.

And to avoid suggestions of bias, it must be said that the board of media company Fairfax, the owner of this newspaper, is directly connected to Ten Network Holdings, with which we compete for online traffic.

Hungry Jack's founder Jack Cowin has been a director of Ten since 1998. He was appointed to Fairfax last month.

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When ‘big law’ turns to bullying

It took a government to bring down Big Tobacco but there's no bringing down Big Law.
Nanjing Night Net

On the same day the High Court delivered its astounding judgment, tossing out the challenge to plain packaging laws this week, there was another intellectual property stoush afoot.

This one was far smaller; a "David and Goliath" tale and a salutary warning for aspiring business people.

Sara Park, a single mother from Sydney's northern beaches, had set up her company Centurion Deals Pty Ltd last year, and registered the domain name centuriondeals.

com.au. Her business was styled along "Groupon" lines. She offered health and beauty products, special deals and getaways to as large a client list as she could muster. Her hopes and dreams were high, her revenue as yet minuscule.

Out of the blue, American Express bobbed along last week with a menacing legal letter. It claimed she had infringed its intellectual property rights. She was guilty of "passing off" an Amex product.

Amex has a credit card called Centurion, you see. This is its most exclusive credit card: invitation only, $5000 upfront and $2500 in annual fees.

No matter that Sara Park's brand was not Centurion but Centurion Deals. No matter that her font, logo and colours bore no resemblance to the Amex marque. No matter that she was offering another product altogether, the letter wailed on with high indignation about her false, misleading and deceptive conduct.

By the tone of it you could be forgiven for thinking that Amex had just been denuded of its entire suite of brands and forced to sell credit cards in plain brown colours with a logo of a nicotine-stained mouth and a mangled lung.

If she didn't recall all her promotional material, delete the word "Centurion" from her website and "transfer to our client the brand name www.centuriondeals南京夜网.au" by Wednesday 5pm, Sara Park would be dragged through the courts.

The global juggernaut also demanded a cut of her "profits", which was tricky as her entire income would hardly have covered the billings for Minter Ellison's staples and Post-It notes.

We were keen to lend American Express the benefit of the doubt, that it was not merely bullying a tiny start-up, and so inquired as how it was faring with other unscrupulous predators who had been meddling with the Centurion marque.

Had American Express taken action against Centurion Rugby, the supplier of tackle bags and goal-post protectors from Dewsbury?

The Amex spokesperson kindly replied with the good old, "the matter you are referring to is currently subject to legal proceedings and we are unable to provide a comment".

Ahem … the matter was not before a court, it was just subject to an intimidating letter whose origin might well have been a quick-witted paralegal scouring the trademarks register to drum up a bit of business.

What about Centurion Brands, we asked, the supplier of the superlative Winged Weeder? Surely this interloper from South Dakota must be infringing upon Amex's sacred and venerable intellectual property. After all, Centurion Brands' Winged Weeder 800 (with Telescoping Handle) was the Rolls-Royce of gardening instruments, priding itself on high-end deployment.

This was the weeder for the investment bankers of Wall Street. No more kneeling! Just the optimal tool for cultivating, hoeing, seed planting, edging and, of course, raking and circular-tilling.

But no, there was no response from American Express. Sadly the head of country, Lisa Vehrenkamp, was unavailable for an interview either.

That was a pity, for we may never know whether Lisa's legal eagles had brought proceedings against the dastardly Centurion Cage & Aviaries either. Here was another Centurion blithely touting bird cages and boasting of "Centurion Quality".

"Caged Birds can be Happy Birds if they're in a Centurion Cage", said the mission statement, clearly and despicably infringing upon the hallowed IP of American Express.

As its lawyers Minter Ellison had pointed out in their letter of demand to the young businesswoman, Centurion was a highly-valued and exclusive brand, a fact that was soon borne out when we discovered that Centurion had also been the brand name for a range of catheters.

Alas, these cutting-edge Centurion bodily insertion devices, which had been supplied to leading urologists, had also been the subject of a "recall" notice from the US Food & Drug Administration in 1999. It was a "Class 1" recall notice too, which was "the most serious type of recall and involve situations in which there is a reasonable probability that use of these products will cause serious injury or death".

In the course of our probe we also, rather incidentally, found that it was the ancient Syrians who had invented the catheter - from river reeds nonetheless! Had the ancient Syrians been availed of the pleasure of Minter Ellison's services, they might have charged those pesky ancient Greeks for usurping their intellectual property rights.

In any case, the moral of the story for business people is check the trademarks register before you do anything. Even then you're not safe. And the message for everybody else is, transaction levels are down, watch out, pettifogging is on the rise.

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Splashing cash in new areas

Smart spending … smartphones and other personal accessories remain a hot item for consumers.WESTFIELD and the independently listed Westfield Retail Trust have indicated that consumers are still spending, but habits are changing significantly as to where the cash is spent.
Nanjing Night Net

Both groups reported solid earnings for the first half thanks to new developments, fixed rental charges and having the flexibility to offer shoppers what they want to buy.

This has come in the form of having the space to open flagship stores for the launch of overseas labels such as the fashion group Zara and the niche products of Smiggle.

They have also changed their jointly owned centres to provide an array of food from upmarket to food-court fare.

Although some groups have faltered, such as the highly publicised Becasse group at Westfield Sydney, the landlords have the weight in the market to revamp the space and relet it, almost overnight.

At Westfield Sydney, it is launching a new French patisserie, Laduree, known as the ''King of Macarons'', from Paris, while Moochi's frozen yoghurt from Strathfield has opened at the centre's basement level.

Having the chance to respond quickly to the changing demand of fickle shoppers gives landlords the edge over smaller tenants.

Westfield Retail Trust has displayed resilient earnings in a tough operating environment, a property trust analyst at Commonwealth Bank, David Lloyd, said.

That resilience is shown in a breakdown of where sales are being generated by the centre owners. Consumers don't want as much fashion, but they will pay to see a new movie or buy a smartphone. The landlords are responding by giving more space to those tenants.

The latest retail data for June showed the biggest sales gains in the quarter were for footwear, gym memberships and personal accessories such as smartphones. Sales were up 8.7 per cent, with spending on pharmaceutical cosmetics and toiletries up by 6.8 per cent.

Some spending was due to the cut in interest rates and other tax cuts introduced this new financial year. The chief economist at CommSec, Craig James, said the one-off federal government assistance payments allowed consumers to accelerate planned purchases, with department stores and clothing and footwear retailers the lucky recipients.

''In effect, the one-off payments have provided a short-term leg-up for businesses in a period of tough trading conditions,'' he said.

Westfield Group's results showed that overall sales were up 0.8 per cent in the six months to June.

Across the categories, fashion's moving annual turnover (MAT) was down 1.4 per cent, food retail growth moderated slightly and general retail growth deceleration was more pronounced.

Homewares were down 1.4 per cent in the generally poor housing sector, while leisure, such as smartphones and movies, were up for the six months.

The decline of department store sales revenue has continued to slow, although it was still down by 3.6 per cent. The same went for discount department stores, which were down 5.2 per cent for the half-year.

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The great tax bind: how to get it and not lose investors

As the world's centre of economic gravity shifts towards Asia, the process of globalisation - the breaking down of barriers between countries - is speeding up. This means there's no shortage of challenges looming for our political leaders.
Nanjing Night Net

They'll pop up in many areas, but in a speech earlier this month the boss of Treasury's revenue group, Rob Heferen, outlined those affecting taxation. He says our present tax system, which relies heavily on taxing income - whether of individuals (48 per cent of total federal tax revenue) or companies (22 per cent) - will come under increasing pressure.

Since the introduction of full dividend imputation in the late 1980s - under which Australian shareholders get a tax credit for the company tax already paid on their dividends - the main purpose of company tax has been to tax profits earned by foreign shareholders.

But globalisation is increasing the ''mobility'' of capital (and to a lesser extent, labour), making it easier to shift to countries where tax rates are lower. Heferen says this is particularly true for multinational companies (including Australian multinationals), which now account for about a quarter of global production.

Multinationals have considerable latitude in choosing where to locate their production, making them more sensitive than other businesses to the tax rates that apply to them. Of course, many other factors will also influence such decisions: the quality of the labour force, the adequacy of the infrastructure, the rule of law, access to raw materials and access to markets for their products.

Multinationals also have some latitude in deciding in which country they'll declare their profits, notwithstanding rules that attempt to limit profit-shifting. In the case of profits, tax is likely to be a primary driver, maybe the primary factor.

''So setting tax policy to deal with multinational enterprises is an increasingly difficult task,'' Heferen says. ''Policy should support innovation and attract investment, but also help uphold the integrity of the corporate tax system.''

Because of the greater competition for foreign investment, policy makers must take into account how other countries tax multinationals, as well as the wide range of successful tax planning strategies available for companies to use.

You can see these difficulties in rules about ''transfer pricing''. ''When a firm 'trades' with itself across borders, we want to ensure it is using the prices an independent party would have paid, rather than manipulating prices to gain a tax advantage,'' he says. ''But this principle can be very difficult to enforce in practice. There are many goods which are either proprietary [in house] or rarely traded, so there may be no market price for the asset.''

Then there's the effect of financial innovation. It's now easier than ever to move funds between countries at little cost and to re-characterise financial assets from debt to equity or vice versa. These options place further pressure on the system and help firms seeking to minimise their worldwide tax.

This matters because Australia, like many countries, treats debt and equity differently for tax purposes. The problem is compounded by countries using different definitions of debt and equity.

Another problem arises from the increasing role of intangible assets - such as brands, copyright and other intellectual property, customer lists and internal processes - which are often the result of much spending on research and development or marketing.

Investment in intangible assets is growing faster than investment in tangible assets such as machines and buildings. Since intangibles have no fixed, physical form, it's much easier to relocate them to low-tax countries. Pfizer and Microsoft have moved much of their research and development to Ireland.

Going the other way is the taxation of natural resources. Unlike other resources, these are immobile. You can either develop the site or leave the stuff in the ground. And the profitability of their exploitation often depends on natural factors: the quality of the ore, or how easily it can be got at.

Because world prices are still so high, our largely foreign-owned miners are making profits far in excess of those needed to make these projects a worthwhile investment.

Taxing the gap between profit and the level needed to induce investment won't discourage investment and this is part of the rationale behind the Minerals Resource Rent Tax.

Research suggests other small, open economies like us have configured their tax systems to rely less on income taxes and more on taxes levied on less internationally mobile bases, such as resource rents, land and consumption.

''However, raising taxes on some immobile bases, most notably consumption, may also have implications for the fairness of the system, its social acceptability and the ability of the government to redistribute income,'' Heferen says. On the other hand: ''In the longer term, if we opt to keep relying on mobile bases for a high proportion of revenue, we may see increased risks for tax-base erosion and stronger disincentives for capital investment and for individuals to acquire productivity-enhancing skills.''

So, is there any way around this unpalatable choice? Heferen says one answer may be finding a different base for company tax.

The standard choice is between a ''residence'' base (you tax Australian companies on their world-wide income, but don't tax foreign companies operating in Australia) and a ''source'' base (you tax all companies just on their income from production in Australia, but don't tax Australian companies on their income from foreign production).

Like most countries, we've chosen the source base (though, strangely, not for capital gains). But some leading academics have suggested we move to a ''destination'' base, where we'd tax companies' profits on sales they made to Australian final consumers, regardless of where production occurred.

In practice, this would be a source-based tax, but with adjustments made for exports and imports. It would eliminate the incentive for companies to shift their location or their earnings to other countries.

This seems a strange approach for a country like ours, with our mineral exports being so profitable, but maybe this could be fixed with adequate resource rent taxes.

And Heferen says we shouldn't ''underestimate the power of structural change in the global economy to shape policy in new and unexpected ways''.

Twitter: @1RossGittins

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The Beat goes on

Sam Riley as Sal Paradise in On The Road. Kristen Stewart as Marylou in Walter Salles' film version.
Nanjing Night Net

"THE only ones for me are the mad ones," runs Jack Kerouac's most famous sentence. "The ones who are mad to live, mad to talk, mad to be saved, desirous of everything at the same time, the ones who never yawn or say a commonplace thing, but burn, burn, burn like fabulous yellow roman candles exploding like spiders across the stars . . ."

If Jack Kerouac had never written On the Road, Ray Manzarek of the Doors wrote in his autobiography, "the Doors would never have existed". Perhaps a lot of other things wouldn't have existed, either, at least not quite as they subsequently did: new journalism, the counterculture, sex and drugs and rock'n'roll. No Charles Bukowski writing about his low-life high jinks, no Tom Wolfe hanging out with Ken Kesey and the Merry Pranksters, no Bruce Springsteen whooping that he was born to run. "It changed my life," Bob Dylan wrote, "like it changed everyone else's."

On the Road is an account of five road trips between New York and San Francisco, up to Chicago and Denver and down to Mexico, taken by Kerouac — renamed Sal Paradise for fictional purposes — alone and with various friends in the late '40s, going to bars and pool halls and living in humpies with seasonal workers. He wrote the first version in three weeks in 1951 on a continuous scroll of drawing paper, glued together and trimmed to fit the typewriter so he need never stop; Kerouac called his method "spontaneous writing". No publisher would have a bar of it. It took six more years, many rewrites and some intrusive editing by unknown hands at Viking before it came out in 1957.

The New York Times gave it a rave review. The long delay, moreover, ensured its appearance was impeccably timed; literary rebels were in the news. Two weeks earlier, the poem Howl by Kerouac's friend and mentor Allen Ginsberg had been the subject of a celebrated obscenity trial that was, at that moment, yet to be decided. In the tight atmosphere of Cold War America, these people were like an explosion of defiance. Kerouac, by nature a silent observer — "the great rememberer", Ginsberg called him — found himself the spokesman for what he had dubbed the Beat Generation.

"BEAT" meant poor, beaten down, scrabbling with the dregs; as so often with Kerouac, it was an expression he had absorbed in conversation, this time from a street hustler, junkie and sometime writer called Herbert Huncke, who told him one day, "I'm beat to my socks."

For Kerouac, it took on an additional meaning derived from "beatific"; the road was part of a quest that was religious, his characters fiery angels. For everyone else, it summoned images of the bebop jazz that infuses his writing. Influential as they were, however, the Beats were less of a movement than a coterie of literary romantics, all of them disaffected or marginalised in some way: gay Allen Ginsberg, drug-addicted William Burroughs, Buddhist poet Gary Snyder and, above all, the thrillingly delinquent Neal Cassady, whose manic personality as the barely fictionalised Dean Moriarty propels On the Road in a rush of speed and words.

Part of the book's power was that, despite the pseudonyms Viking insisted Kerouac use, people knew it was mythologised truth: the drugs, the frenzied sexual adventures, the gleeful poverty, crazy all-night driving and all that passionate reading and writing really were taking place somewhere in what Kerouac called "the holy American night". What ignited it, however, was the fire of language. Nobody else had ever written with such exuberance; the sentences raced across the page, despite being jammed with poetically babbling turns of phrase that often made no ostensible sense. The literary establishment hated it: its lack of discipline, its excess, its cast of "sideshow freaks" with their appalling "outlaw" values. These academicians had no idea how much young readers, recoiling as Kerouac himself had done from the postwar promise of a prosperous life of respectable lawn-mowing, longed for the freakish and the outlawed. On the Road, opined The Village Voice, was "a rallying cry for the elusive spirit of rebellion of these times".

YOU would imagine a film would have soon followed. In fact Kerouac was offered $US20,000 for the rights, a tidy sum in the early '60s, but he refused it; there were about 10 attempts to bring it to the screen, including one by Francis Ford Coppola. But they all collapsed, one way or another; Walter Salles, the Brazilian director best known for The Motorcycle Diaries, is the first to have managed it. His On the Road, to be released in Australia next month, was unveiled at the Cannes Film Festival in May. Sam Riley, who played Ian Curtis in Control, plays Jack/Sal; Kristen Stewart of Twilight fame plays Marylou (her real name was Lu Anne Henderson), who was 15 when she married Dean; Kirsten Dunst plays Camille/Carolyn, Cassady's second wife and the author in real life of a memoir called Off the Road.

Cassady, the "hero of the Western night" who turns into Dean Moriarty, is played by a little-known actor called Garrett Hedlund, who took a bus for three days from Minnesota to audition, wrote about the trip and read what he wrote to Salles.

"It seemed like Neal Cassady was writing to us," Salles says. Salles was 18 when he read the book and fell in love with it. "It was the opposite of what we were living in Brazil in 1977. We had a dictatorship. Everything was forbidden. Even inside families, life was very conservative and in this book it was the opposite. I read it many times after that."

I was 17 when I read On the Road, just a couple of years before Salles found it. Did it change my life? It certainly gave voice to things I wanted, given I had thus far spent most of my time in school uniform staring at a square of sky above Elwood between bouts of homework. I can't remember how I knew about the Beat writers, but in those days, the mid-'70s, even fashion mags ran features on cool writers and artists. Lawrence Ferlinghetti, the poet who ran City Lights bookshop in San Francisco and published Howl, certainly came to me that way; I also recall an interview with Ginsberg and his lover Peter Orlovsky, talking about being gay. That sounds ordinary now, but we still snickered about our lesbian teachers in the '70s. There was the sudden sense of a cultural world that existed outside ours, but was there for the taking.

Young people always feel like that, of course, which is why On the Road is still a reading rite of passage. Kristen Stewart is 22; she read On the Road only eight years ago. Same thing: "I was like, 'Wow, I've got to meet people like this; otherwise, I'm not going to be as cool as I could be, as smart as I could be, as challenged as I could be, you know what I mean? I kind of identified with Sal's character: I've never been one to lead the way, but I wanted to surround myself with people I want to run after, people who kind of shock me.'' It became her first ''favourite book''. ''I didn't enjoy reading before that but I ripped through it, it … opened so many doors.''

THE funny thing here is that On the Road is often assumed to be a primer for boys. That's certainly what its literary haters say - that it is ''mainly read by young men'', as if it were a book about cars for petrolheads. (Kerouac confesses he hated driving; Dean calls Sal ''fearful of the wheel''.) It is true, admittedly, that a teenage girl reading On the Road in the 1970s had to imagine herself a boy, like one of those brave, disreputable women pirates of an earlier era.

Women were, in fact, central to these men's lives - Kerouac lived with his mother, along with a succession of wives, until he died, at 47, of a massive internal haemorrhage caused by alcoholism - but they were peripheral to the myth they were making of themselves. Worse, they were the brakes in a world where acceleration was everything. At one point, Sal is thinking of marrying a virtually invisible character called Lucille. ''I want to marry a girl,'' he tells Dean and Marylou, ''so I can rest my soul with her till we both get old.'' A few pages later, however, he is reflecting morosely the hopelessness of it. ''She would never understand me because I like too many things and get all confused and hung-up running from one falling star to another till I drop. This is the night, what it does to you.''

For a woman to hit the road alone would have been unthinkable. There must be a fair number of girl readers who grew up to become feminists not in order to be prime minister but because they wanted to do this, the crazy stuff.

In fact, the original scroll version of On the Road, which was finally published in 2007, included more about the female characters; Kerouac had stripped them out, at the publisher's instruction, to give the story focus. In his new film, Salles says, he lets Sal and Dean drive off and stays with Camille as she struggles to support Dean's children. ''It shows that loneliness is painful and that she has a job; she is probably going to leave the baby with a neighbour and off she goes to work in a hospital,'' he says. ''Yes, this quest is memorable, to amplify all forms of freedom is memorable, but there are consequences.''

Not that these women were all doormats. Stewart met Lu Anne Henderson as preparation for playing Marylou. Unlike the men of her youth, she was thriving in her 80s. ''The difference between the two is that in the book she does seem quite used,'' Stewart says. ''But she is a bottomless pit, you can't waste her and she expects just as much in return; she is so f---ing generous.''

Salles saw Marylou as a real, if unacknowledged, adventurer. ''She makes the decisions to go or to stay and she doesn't have that Catholic sense of sin that is ingrained in Kerouac. She is an explorer just like Dean is an explorer.''

BY THE time On the Road was published, Kerouac was barely recognisable as Sal Paradise. At 35, drink and dysfunction had turned him into a filthy old bigot. He detested the hippies and yippies who claimed On the Road as inspiration and was loud in his support for the Vietnam War and Senator McCarthy's communist witch hunt. McCarthy, he told an interviewer, had ''all the dope on the Jews and the fairies'' who apparently lived at the bottom of his brain's addled garden. Ginsberg, who was pretty much the poster boy for both these categories, was beatifically forgiving; asked in the interview I read whether Jack himself was ''a fairy'', he let his lover and fellow poet Orlovsky answer. ''In a tiny sense of the word,'' Orlovsky said. ''Perfect,'' Ginsberg said.

But for the wider world, it didn't matter how crackers Kerouac had become. He died in 1969; the mercurial Cassady had died of a combination of drink and drugs, aged 41, in the Mexican desert the previous year. Like the readers who had pulled on torn Levis and headed out along the highway for themselves, On the Road had its own life by then. It had left home, hitchhiked across the world via millions of bookshelves and was part of the lives of all the would-be writers and rebels who aspired to join the social movements Kerouac had so vituperatively disowned.

It is 55 years since the book was published. ''Nobody knows what's going to happen to anyone beyond the forlorn rags of growing old,'' Kerouac writes on the last page, as he watches the sun go down in ''the long, long skies over New Jersey'' and contemplates the vast bulk of land between the coasts. As it turns out, the book that was about the man he loved, this ''most fantastic parking-lot attendant in the world'' full of ''a yea-saying overburst of American joy'' is a requiem. ''I think of Dean Moriarty, I even think of old Dean Moriarty the father we never found, I think of Dean Moriarty,'' he says finally.

As I write this, I touch the book on the desk and think of him, too.

■On The Road opens on September 27.

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