John Armstrong is the Herald's chief political commentator

John Armstrong: Speed bumps give Govt a few jitters


It would be easy to dismiss the campaign being spearheaded by Grey Power and the Council of Trade Unions for a referendum to halt National's partial state asset sales programme as the politics of gesture which will achieve nothing.

For starters, it is going to be a Herculean task collecting the 307,000 or so valid signatures of registered voters - plus their correct names and addresses - which are required to force such a plebiscite.

The time taken up with amassing those signatures, and the comparatively lengthy periods allowed by statute for submissions on the wording of the referendum question and the subsequent checking of the validity of signatures, means any ballot would likely be at least 16 to 18 months away.

By then the float of up to 49 per cent of Mighty River Power, the first state-owned enterprise to go on the block, will be well and truly over.

Work should be well in hand by then on the second float of a similar amount of shares in either Meridian or Genesis, the remaining publicly owned electricity generators.

The horses - or at least a couple of them - will have bolted. It goes without saying that the results of citizens-initiated referendums are not binding on governments anyway.

Moreover, it is highly improbable that National would feel morally obliged to respect an overwhelming "no" to partial asset sales.

This programme is the signature policy of National's second term in Government. Abandoning or suspending the privatisation process would be a backdown of monumental proportions.

It is unthinkable - at least from the current vantage point. But the number of "speed bumps" - to use Bill English's terminology - the Government is already striking early in its second term has National somewhat spooked.

It is finding it difficult to understand why the public's love of John Key and its respect for his Administration seems to be so suddenly and so rapidly on the wane.

Whatever the reasons - a more engaged and effective Opposition, a more feral media plus unpopular policies - the base dislike of privatisation makes the issue a lightning rod for dissatisfaction elsewhere.

While it was never going to please everyone, the model was supposed to take the sting out of privatisation through the retention of majority state ownership while bringing the benefit of commercial disciplines to operations.

The shares would provide a safe haven for small investors, while large holdings by the New Zealand Superannuation Fund and KiwiSaver providers would ensure the shares remained predominantly in New Zealand hands.

The proceeds from the share sales would effectively cut debt by providing capital for the construction of new schools and hospitals.

The debate has instead been skewed in other directions. The model is portrayed by opponents as a first step to full privatisation, while the Crafar farms sale has raised the temperature around foreign investment.

All this makes the push for a referendum far more relevant.

There is significant advantage for the political parties backing the initiative move - principally Labour, the Greens and NZ First - that the hard graft is being done by Grey Power and Council of Trade Unions.

If the latter fail to get sufficient backing from the public - some 30 out of 34 referendum initiatives have lapsed or been withdrawn in the nearly two decades since the device was introduced - then those parties can distance themselves.

However, the chances of success are heightened in this case by virtue of the two lobby groups enjoying mass memberships which should give an impetus both to the actual number of signatures collected and having a network up and down the country to sustain the campaign.

The obvious reply to the bolting horses is that a huge vote against asset sales could save at least one of the three state electricity generators plus Solid Energy, the state coal company, from partial privatisation.

To some degree the time it takes to force a referendum - the sponsors have 12 months to collect signatures while another four to five months is taken up with submissions on the wording of the referendum and checking the validity of the signatures - is an advantage to National's political opponents.

It is no accident National has chosen Mighty River Power as first up for partial sale. It has been a relative success story as a state-owned enterprise and demand for shares is likely to exceed supply.

As long as small investors are not shut out of the float - and John Key this week gave a commitment that will not happen - then some of the steam may go out of the debate.

Or so National hopes.

However, the prospect of a referendum - probably some time next year - will keep the issue alive.

There is a bigger danger to National lurking in the background.

Every citizens-initiated referendum has so far been on comparative side issues - be it smacking, backing firefighters, demand for tougher sentencing of violent offenders or the size of Parliament. Public emotion may have run deep in such cases but it lacked a clear target.

Take the referendum on the anti-smacking law: Helen Clark was long gone by the time the ballot was held. John Key's popularity was sufficiently high to allow him the political leeway to rule out any law change.

A referendum on asset sales is another matter. The referendum question goes to the very heart of Government policy. Any such ballot is thus likely to turn into a referendum on the Government.

The timing of what will likely be a postal ballot will effectively be in National's hands. It would be unconscionable to delay it to coincide with the 2014 election.

But the last thing National will want is a nationwide vote on its performance occurring just a year out from a general election.

- NZ Herald

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John Armstrong is the Herald's chief political commentator

Herald political correspondent John Armstrong has been covering politics at a national level for nearly 30 years. Based in the Press Gallery at Parliament in Wellington, John has worked for the Herald since 1987. John was named Best Columnist at the 2013 Canon Media Awards and was a previous winner of Qantas media awards as best political columnist. Prior to joining the Herald, John worked at Parliament for the New Zealand Press Association. A graduate of Canterbury University's journalism school, John began his career in journalism in 1981 on the Christchurch Star. John has a Masters of Arts degree in political science from Canterbury.

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