The much-anticipated decision by the Supreme Court regarding the sale of shares in state-owned Mighty River Power went the way most people anticipated.
The court unanimously ruled the Government can proceed to sell up to 49% of shares in the electricity generator in the second quarter of this year, in line with legislation passed by Parliament last year.
As was hoped and expected, the court addressed the complex issue of Maori claims to the waterways feeding the state-owned energy generators.
Without diminishing Maori claims to the water, the court concluded those claims would not be damaged by a change in the ownership of assets that generate electricity.
The court noted there are already two substantial power-generating companies in private ownership, Contact Energy and TrustPower. Tellingly, Prime Minister John Key openly admitted there was no Plan B if the court had ruled in favour of the Maori Council, which seemed to have read well the thinking of the courts at every level in believing the Government would win its argument.
Mr Key led his party to power in 2011 on a main policy of partially selling five state-owned assets. They are Mighty River Power, Genesis, Meridian Energy, Solid Energy and Air New Zealand.
The debt problems surrounding Solid Energy has seen that company taken off the list of possible sales in the meantime. But with the way cleared for the partial sale of the assets, Mr Key will be keen to push on quickly with the sell-down of Mighty River likely to happen before the May 16 Budget. The sales process is already likely in place.
The Government is still expecting to raise between $5 billion and $7 billion from the partial sales and given the strength of the sharemarket in New Zealand, anything around $1.5 billion for 49% of Mighty River is possible. The proceeds from the sales are to be used for things like infrastructure, schools and hospitals, without resorting to borrowing.
Indications are that IPO (initial public offering) advisers have received strong interest from large institutional investors, foreign investors and the local market. The strength in owning shares in utility companies, like the energy companies, lies in their ability to generate income for investors - year after year.
Superannuation funds, in particular, like to invest in utilities because the funds, like the assets, have a long-term view. Hence, the interest from KiwiSaver funds, the New Zealand Superannuation Fund and iwi, in New Zealand, will be paramount to success of the partial float.
The decision by the court provided a dose of realism for the Labour and Green parties in Parliament. Labour leader David Shearer said National must listen to the people on asset sales, claiming 80% of New Zealanders are against them.
Green co-leader Russel Norman said the court's decision that asset sales will not materially impair water claims under the Treaty of Waitangi does not change the fact asset sales are economically reckless and are opposed by the vast majority of New Zealand.
Both Labour and Green MPs claim the Government has no ''moral right'' to sell the assets before Kiwis have their say in a referendum. But, there has already been a referendum, called the 2011 general election. Mr Key campaigned strongly on the partial sale of the assets.
There was no secret agenda. He went to the polls on that issue - a make or break policy decision - for the very reason that people would know what they were voting for. Well, they did. National received overwhelming support to form the government and Labour suffered one of its worst electoral defeats. A referendum has been held.
The decision was made and it is now time to move past the time and money-wasting tactics which have been employed in the past year. The partial sale of the assets will provide a boost to New Zealand's already strong NZX which reached a five-year high this week. New Zealand's older investors, looking for a place to earn some income as their term deposits come due will welcome the opportunity to invest in what will be blue chip companies.
New Zealanders will get first opportunity at these investments, Mr Key has promised. For them to stay in New Zealand hands, investors only need not to sell them on to overseas interests. It is that simple.
