Supreme Court clears way for partial asset sale

John Key's Government cleared the final hurdle for its flagship asset sales policy with a crucial Supreme Court victory over the Maori Council yesterday and is to press the go button on the sale of Mighty River shares on Monday.

The court's five judges unanimously ruled against the Maori Council's case that the sale of shares in Mighty River was a breach of the Treaty of Waitangi because it would affect the Government's ability to make redress for Maori rights and interests in water.

"The partial privatisation of Mighty River Power will not impair to a material extent the Crown's ability to remedy any Treaty breach in respect of Maori interests," Chief Justice Dame Sian Elias, and Justices John McGrath, Susan Glazebrook, William Young and Robert Chambers said in their unanimous ruling.

Prime Minister John Key said he was "always confident that we had argued the right case" and his Government was "looking to act as quickly as we can" on its flagship asset sales or "mixed ownership model" policy.

Cabinet would discuss the matter on Monday and is likely to pass the Order in Council which enacts the necessary legislation. Details on the timetable for the Mighty River sale process which the Government hopes to complete by mid-year would follow shortly after that.

The Herald understands New Zealanders may be able to "pre-register" or indicate they are interested in buying shares in Mighty River by the end of next week.

Mr Key yesterday underlined how high the stakes were for his Government in the court case, where defeat would have been "quite a setback". His Government hopes to raise as much as $7 billion from the partial sale of Mighty River, Genesis, and Meridian along with stakes in Air New Zealand and possibly Solid Energy.

"We didn't have a plan B in terms of funding our capital budget. We want to use the money we're going to get out of these companies to buy other assets without putting debt on the balance sheet."

Labour Leader David Shearer said yesterday's ruling "changes nothing".

"Yesterday 80 per cent of New Zealanders were against asset sales and today 80 per cent of New Zealanders are against asset sales."

He and Greens Co-Leader Russel Norman said the Government should halt the sales process until New Zealanders had the opportunity to vote on the matter via a referendum they are pushing for via a petition.

"Kiwis want to have their say on privatisation and the Government must listen", said Dr Norman.

But Mr Key, whose Government has the power to delay any referendum until after Mighty River and other power companies are partially privatised, dismissed that call, once again saying the 2011 election had been fought on the asset sales issue.

Meanwhile, the Maori Council, which has been battling to delay the Mighty River float for a year, was yesterday claiming a partial victory.

Maori Council lawyer Donna Hall said the court had helped future Treaty of Waitangi water claims by "noting the extensive promises and undertakings that have been made by the Crown through the course of these proceedings to the effect that it will take real steps to address the various Maori water claims".

Mr Key said his Government's decision last year to delay the Mighty River sale until this year and consult on the "shares plus" proposal raised by the Waitangi Tribunal in an urgent hearing, proved to be a good one.

- Adam Bennett of the NZ Herald