Kim Dotcom's substantial shadow may be cast over the water claim and asset sales issues. With a police decision imminent on whether to prosecute John Banks for non-disclosure of donations from the Megaupload entrepreneur the government's majority could be under threat, at least for a few months, if Banks is convicted or resigns. None other than ex-National and ex-Act leader Don Brash raised the scenario on TVNZ's Q+A (read the transcript here or watch the panel discussion here), along with Greg Presland (How this Government may end) and Matt McCarten (John Key's mandate on asset sales leaking water).

National would probably win a by-election in Epsom but the process could leave them dependent on the Maori Party for a majority for up to three months. That would be a knee-trembling prospect for National at the moment, prompting Brash to suggest that Key could call an early election, which he would win by taking a strong line against the water claim.

While that scenario includes a lot of 'ifs', so do all of the other possible outcomes for the Government - good and bad. Audrey Young thinks it is inconceivable that National would negotiate a settlement without being forced to do so by an adverse court ruling, which could delay the sales until next year - see: Tide of water issue uncomfortably high. If the courts went against the Government Tracy Watkins says 'no one should be in any doubt that they would legislate' (see In deep on the water debate), which would likely end the coalition relationship with the Maori Party.

Watkins could make some money off that prediction with Mana leader Hone Harawira betting $100 on Q+A that Turia and Sharples won't walk - watch the interview here or read a transcript of the interview here. An unflattering Secret Diary Of Tariana Turia from Steve Braunias reveals that Harawira's money is safe, although pressure on them continues to mount with Maori Council spokesman Maanu Paul saying today it was 'crunch time' for the party: '"You either have mana or you have money." The Maori Party seemed more interested in money, he said....They're virtually useless at that table' - see: Turia and Sharples urged to ditch Key.


Just as the Mana leader is applying the blowtorch to his old party, ex-Act MP and ex-National candidate Stephen Franks similarly attacks National for conceding too much ground to Maori on the issue: 'I knew the Crown would probably pull its punches. I tried to encourage some of those with vital interests in the outcome (like generators) to pay for a world expert to come and give evidence. I'd have liked to help indigenise such evidence. It seems there is too much fear of being seen on the wrong side of fashion in these matters. So they could all be just watching another seabed and foreshore train wreck develop' - see: Maori claims to own water - the detail not mentioned.

Another ex-Act MP, Gerrard Eckhoff also puts the case for a rejection of all Maori claims in Watershed moment on ownership for Key, a viewpoint that Scott Yorke parodies in Uncle Ernie: They'll Never Get My Water. Key's notion that no one owns water is actually quite a radical idea writes Tapu Misa who says it's 'a socialist notion. If no one owns water, how could anyone profit from it? This is akin to Karl Marx's exhortation that "individuals must abolish private property' - see: Water claim really about Maori's role as caretakers.

Even if legal delays are avoided, there seems to be a consensus emerging that the issue will have an impact on the returns from the partial privatisations (see Claire Trevett's Maori claims threaten SOE value - Treasury) and this would be the Worst case scenario for National according to Danyl Mclauchlan.

Given the high stakes and risks, some sort of negotiated outcome still has to be the most likely outcome. Former Deputy Prime Minister Michael Cullen, now a Treaty negotiator for Ngati Tuwharetoa, thinks 'from my perspective, the sooner the negotiation process is under way the better'. Tribunal or even court decisions would be of some assistance, 'but it's got to come down to discussion and negotiation one way or the other' - see: Adam Bennett's John Key: Waking the taniwha.

Making a deal that has approval across all Maori institutions will be a challenge. Morgan Godfrey continues his look at Maori power players, including the Federation of Maori Authorities - see: The rise of the Iwi Leaders Group. He wonders if the increasingly dominant Iwi leader's Group will act in the interests of all Maori into the future.

Maori also need to be culturally sensitive to the Prime Minister's heritage says Dave Armstrong: 'The futures trading floor is Mr Key's turangawaewae and he won't tolerate anything that gets in the way of his privatising kaupapa' - see: Why we are all talking about water.

Other important or interesting political items today include:
* Housing affordability, especially in Auckland, is getting worse and government housing expenditure doesn't seem to be helping (see: TVNZ's Govt, councils told to do more on housing affordability). Labour says the huge taxpayer funding of private rents has become a subsidy for landlords - see John Hartevelt's Housing payment system needs overhaul - Labour.

* The growing rich-poor divide is of increasing concern to kiwis - see: Max Rashbrooke's Survey shows wealth gap on our minds more than ever.

* The fuzzy and opportunistic differentiation between Labour and National on many issues is a real problem for David Shearer, particularly in comparison to the Greens writes Fran O'Sullivan in Shearer lacks focus out of danger zone.

* Selling assets to prop up our capital markets and the Kiwisaver scheme in particular is mad says the How daft blog - see: Kiwisaver Con.

* Big families mean big welfare dollars but loan sharks and other poverty traps often mean even recipients of $1,000 plus weekly payments struggle to survive.

* NZ First's support is in the bag for National after the next election writes Matthew Hooton but National will still be looking to ease the way for Colin Craig's Conservative party - see: Nats and Labour likely to switch places on 5% MMP threshold. Meanwhile National continues its gentle, but consistent, downwards slide: Poll shows National support slipping.

* There are frequent claims that the education system overall is being 'dumbed down' but Marika Hill finds that individuals, particularly Maori and Pacifica students, are being directly affected to boost school ratings: Struggling students pushed to take soft subjects. Hill also reports on a ranking of Auckland schools which has been criticised: Metro magazine school rankings 'crude'.

* There is an admission that our public gambling regulators are not coping (see David Fisher's Watchdog: Pokie checks not up to mark, which makes a call for casinos to account for stolen money put through their businesses very timely - see: Greens seek clampdown on illicit casino proceeds.

* Finally Rodney Hide would have had to have one eye on the weather during his recent labouring stint and thinks the lack of more water vapour means the Trading scheme is a scam.