Although it takes some swallowing, the prime minister's
insistence there was no plan B had the Supreme Court blocked
the part-sale of Mighty River Power has to be taken at face
The reason? Had the unthinkable occurred and the court ruled
against the Government, it is hard to envisage how National
could have saved its flagship partial asset sales policy
without creating a great deal of strife for itself.
As things stand, National has emerged seemingly triumphant
from the Maori Council's last-gasp resort to the legal
process to try to halt the Government's privatisation plans.
Last Wednesday's unanimous rejection by the Supreme Court of
the Maori Council's arguments has if anything reinforced
National's mandate to float up to 49% of the Government's
100% shareholding in Mighty River Power and the two other
state-owned power generators, Meridian and Genesis.
For once, National had something to truly rejoice about. The
Government can now get on with finalising the details of the
first float, impeded only by the talk of an
Opposition-instigated referendum whose real purpose is to
destroy National's argument that the last election gave it a
mandate for privatisation rather than stopping the sales
The plebiscite will be held too late for the latter to
happen. National will anyway ignore what is almost certain to
be an adverse outcome.
Another matter lingers, however.
Crown assurances to the court that Maori rights and interests
in water have been acknowledged by the Government plus the
court's view that those assurances suggest the Government has
indeed accepted that there is a need for action may yet cause
National severe political grief further down the line.
National's absolute priority, however, was victory in the
Supreme Court. That was not just because defeat would have
been a massive psychological blow to National's morale and
therefore unthinkable. It is also the case that there was not
a lot National could have done by way of practical effect to
remedy a reversal in the Supreme Court.
Smart politicians always have a fall-back position in case of
defeat on some issue. And John Key, his advisers and the
senior ministers in his kitchen Cabinet are smart operators.
No doubt they mulled over some sort of contingency plan to
cope with the highest court in the land siding with the Maori
Council - and then just as quickly rejected having one.
The options would have been too unpalatable.
One of those would have been to legislate to overturn the
That might have gone down well in some quarters of the
National Party, but National is very much on the wrong side
of public opinion when it comes to privatisation.
Emergency legislation overturning a Supreme Court decision
would not only have raised constitutional questions, it would
have been viewed by the wider public as going right over the
top, utterly selfish and self-serving, and tantamount to
It would thus have considerably weakened National's strong
argument it has an electoral mandate to sell shares in the
three state-owned power generators.
It would have put intolerable and therefore probably fatal
strain on the Maori Party's relationship with National. It
would have placed United Future's Peter Dunne, who has been
lukewarm about asset sales, in an invidious position, and
more so if National then made the Bill's passage through
Parliament a confidence matter.
The governing party might have even failed to secure the
necessary numbers to rush a measure through the House.
That would have raised serious questions about whether
National had the confidence of Parliament to continue as a
By that stage the rumour mill would have been overheating
with ugly talk of an early election.
Less risky, but equally unsatisfactory and more humiliating
would have been National haggling with the Maori Council and
affected iwi over how much the latter should make from the
proceeds of the sales of shares in exchange for no longer
blocking those floats.
That would not have gone down well within the National Party,
along with a wider audience which would resent being captive
The remaining option would have been to simply do nothing.
That would have had Opposition parties dancing with delight
and claiming a substantial victory in their long-running
fight against asset sales.
Little wonder then Mr Key's usual sunny disposition was even
merrier following the Supreme Court's ruling. A lot more had
been at stake than might have appeared to be the case.
But a lot more remains at stake on what could easily become a
vexed issue for National - Maori control, manage-ment and
ownership of water rights.
There had not been much doubt the Supreme Court would rule in
National's favour, but nearly three decades of judicial
activism on Treaty of Waitangi matters was enough to keep
alive in Government minds the slim possibility they might
lose the case.
To lessen the chances even further of that happening, the
Cabinet adopted a belt-and-braces defence of the Crown's
position that transferring the power-generating companies
from the state-owned enterprises model to the
part-privatised, mixed-ownership model would not impair Maori
when it came to rights and interests in water and geothermal
Bill English, who as Deputy Prime Minister took charge of the
Government's handling of the case, told the court that
recognition of those rights might encompass Maori making the
decisions on the care of those resources and charges or
rentals for their use. He did not spell out whether iwi alone
would make those decisions, but that is the interpretation
Maori will take from the affidavits he and other ministers
filed with the court.
Maori might have been disappointed the court case did not
settle questions about access, management, ownership and
control of water to their advantage, but there is no question
the court has made it pretty clear such rights not only
exist, they will be formalised in Cabinet decisions once the
various ongoing reviews of water rights have been completed.
That may well come as a shock to many people. As water is a
fundamental of life, it would not take much to turn questions
of access and ownership into a red-hot issue. National has
accordingly deliberately kept the question of water rights as
far below the political radar as possible.
Labour's desire to win back the Maori seats makes it
impossible for that party to exploit the issue. Likewise the
Greens will not want to play in that kind of territory.
No surprises then that New Zealand First is not displaying
similar reticence. Winston Peters last year claimed the
Government's consultation with Maori over water rights had
left Mr Key ''with his hands in a wasp's nest of his own
making''. No doubt Mr Peters will do his best in the coming
months to make sure the prime minister gets badly stung.
- John Armstrong is the political correspondent for
The New Zealand Herald.