Fran O'Sullivan on business

Business analysis and comment from Herald columnist Fran O'Sullivan

Fran O'Sullivan: Key gives foes the ammo then stays out of range

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Several incidents have left the PM vulnerable, but Labour will have to try much harder to stop his roll

John Key has brushed off criticism, and his party is riding high in the polls. Photo / Brett Phibbs
John Key has brushed off criticism, and his party is riding high in the polls. Photo / Brett Phibbs

John Key has had a great time telling journalists how he won the office bet on the outcome of the Supreme Court's hearing into the Maori Council water rights claim.

The Prime Minister has been rather mischievous.

Behind the scenes there had been nerves aplenty in top Cabinet circles as to whether Chief Justice Sian Elias - who had acted for the council eons ago and had led questioning during the hearing down a path that was interpreted (erroneously as it turned out) as suggesting she favoured tucking some Mighty River Power shares away to use in settlement of any proven water rights claim as an indication the Crown would lose the case - would ultimately favour the Crown's argument.

Key had calculated that Elias would not be the odd person out when it came to such an important judgment. He reckoned all five justices would sing in unison. So they did. And on Monday, Key will make public the planned date for the Mighty River Power float.

It's unlikely that Elias and her fellow judges will cite the Prime Minister for contempt of court for taking bets on the outcome of their high deliberations.

But the fact that Key is enjoying repetitively retailing this anecdote is a sign his confidence is back in spades.

The Opposition has not really been able to land any decisive blows on Key this year. And it's not as if they haven't had ammunition aplenty.

The Deputy Auditor-General's report into the dealings on the SkyCity convention centre raises serious probity questions. Key's own response has been facile and dismissive. But slicker news management out of the Beehive has ensured that as soon as one political mini-drama looks like extending to a whole-of-season performance, another is launched to take its place.

Key brushed off the intriguing dealings with Warner Bros over The Hobbit - which the Government was directed to make public by the Ombudsman - as irrelevant because of the movie's subsequent success.

The shouting by unionist Helen Kelly and Labour politicians that The Hobbit documents prove that Cabinet ministers told porkies over who said what and when has not gained any real purchase with the public.

The Prime Minister has also been rather cavalier when it comes to why state-owned Solid Energy is in the fiscal doldrums and sailing perilously close to insolvency if you believe the Government's own mantra.

Key and other ministers have slammed the previous board and management for investigating major projects to use Southland's lignite reserves and even turn the SOE into a major company to manage New Zealand's oil and gas energy reserves. The fact is Key and other ministers strongly promoted the lignite option until late 2011.

Having a 21st century Petrocorp-style company makes sense when it comes ensuring the New Zealand taxpayer gets to keep more of the earnings from successful oil and gas exploration. But neither former Solid Energy chairman John Palmer nor former CEO Don Elder can give their side of the story - Palmer because he is still chairman of Air New Zealand, which reported a stellar profit this week, and Elder because he has been paid out and gagged by the current Solid Energy chairman, Mark Ford.

This is rather barbarous treatment of the former Solid Energy bosses. Labour's Clayton Cosgrove is endeavouring to have Elder appear in front of a parliamentary select committee to answer questions on how the SOE fell into such a sorry state. The Government members will oppose this. But given the publicly owned nature of Solid Energy, Elder should be questioned.

All three issues - SkyCity, The Hobbit and Solid Energy - demand more serious treatment. But they are not affecting the Government in the popularity stakes. National has over 50 per cent support in both the One News Colmar Brunton poll and the 3News poll. The populace is also feeling good, according to Nielsen's Quality of Life survey, and sharemarket appetite for the state IPOs is strong judging by the bounce to the NZX once the Supreme Court ruling was announced.

Finance Minister Bill English has promised Kiwis will be in the front of the queue for shares. Labour failed to shoot holes in that promise by pointing to an Australian Financial Review story which said the power generator's shares would also be listed in Australia.

My pick is that the Mighty River Power IPO will go ahead before English's May 16 Budget and that it will be wildly successful.

This will give English confidence in his Budget numbers.

As for Key, he will be out of the parliamentary limelight for a couple of weeks leading a New Zealand push into Latin America. There will be plenty of favourable news coverage.

It's a combination of good news management and good luck that Labour and its allies are going to have to try a lot harder to puncture in order to slow Key's roll.

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