Editorial: 'Too clever' risk in Govt shares plan

5:30 AM Wednesday Sep 5, 2012

What game is the Government playing with its decision to postpone the float of Mighty River Power so it can consult Maori on a proposal it finds unacceptable? Announcing the delay, the Prime Minister described the idea of a special class of shares for Maori as unworkable and contrary to national interest. Yet it seems to be the only topic of consultation envisaged before the float now scheduled for next year.

If this is a ruse to satisfy legal requirements of "good faith" in Treaty dealings, the Government's legal advisers have an odd notion of good faith. John Key does not pretend the Government is going to be diverted from its asset sales programme. "Sometimes the shortest way home is not the fastest way home," he said.

The Maori Council would certainly have gone to court if the Cabinet had decided on Monday to press ahead with the share float despite the interim ruling the council had obtained from the Waitangi Tribunal.

It had every chance of obtaining an injunction which could have delayed the share sale well into next year, so the Cabinet must have calculated it had nothing to lose by postponing, and something to gain by having talks in the interim with groups that have a Treaty interest in sources of hydro and geothermal power.

But if the "shares plus" solution is out of the question - and it should be - how does the Government plan to demonstrate good faith? The idea that certain shares would carry more weight than others in the company's governance is neither practical nor fair. It would negate the purpose of partial privatisation, which is to impose sharemarket discipline on the companies and keep them focused on financial performance.

The Prime Minister said almost every form of redress for Maori that could be provided through "shares plus" could be achieved in other ways. Possibly, the discussions will go in that direction. The tribunal's report has canvassed several other options for satisfying successful claims. Among them are royalties that might be charged for use of rivers and geothermal water. Or, if water quality and environmental concerns are of more concern to iwi than financial gain, there would be room to enhance their say in resource management decisions and permits to use the water.

Less divides the Crown and Maori than might appear. While the Government adheres to the idea that "nobody owns water", as John Key put it, Crown lawyers have acknowledged that pre-colonial iwi and hapu had customary control of rivers and streams in their area and those rights were preserved by the Treaty. The only issue of disagreement is whether it would still be possible to satisfy those rights once the state-owned power companies are partially privatised.

The Crown has maintained throughout that the sale of up to 49 per cent of the power companies will make no difference to its ability to resolve Maori rights. The claimants and the tribunal argue that it would be more difficult once a large number of voters become shareholders in power companies.

But in reaching this view the tribunal was stepping beyond its specialist expertise and applying its sense of what is politically possible. The Government could claim superior expertise in that field.

At the behest of the Maori Party it has already copied the Treaty clause in the State-owned Enterprise Act into the legislation that will govern the partially privatised companies. That concession did not seem to alarm potential investors. "Shares-plus" would alarm them, if the possibility was really on the table. Let us hope the Government is not being too clever by half.

Debate on this article has now closed.