Round two of this year's biggest policy debate has just been launched. The public will take a strong interest in the just-announced decision by the Government to allow Chinese-based Shanghai Pengxin to purchase the Crafar farms. But with most people's positions already decided on the debate, and a sense of it being a fait accompli, the Government will be hoping that the economic nationalist and xenophobic responses will be more muted than when the original decision and judicial setbacks were announced.

Yet John Hartevelt says the Crafar decision, along with the SkyCity deal, show the Government is almost 'agnostic' about the source of investments, and that this will produce conditions for plenty more political flak for National. In his opinion piece, The China Strategy is clear, Hartevelt has picked up a new justification in the official decision: that approving the deal will be useful for, what the report says is: 'Giving effect to or advancement of the NZ Inc China Strategy (a significant Government strategy), one of the aims of which is to increase bilateral investment to levels that reflect New Zealand's growing commercial relationship with China'. This means Hartevelt says, that 'formal consideration was this time given to the broader diplomatic/trade angle with China'. To read the full detail, the Overseas Investment Office's new recommendation is here and a copy of the OIO's decision summary is here.

TV3's Patrick Gower says that the debate over the Crafar farms can be likened to what sort of food our political leaders prefer: 'David Shearer, Russel Norman, Winston Peters and their mate Michael Fay have good old 'meat-and-three-veg', while John Key prefers nasi goreng. Gower is trying to say that 'New Zealand has to be more outward-looking' if the economy is going to prosper, and he condemns that various 'small minded and condescending' elements in the debate over foreign investment, saying that 'A more informed and engaged public is the route to a more mature Kiwi attitude to Asian trade, ownership and investment'.

Like many other sagas the Government has had to endure over the last few months, the sale has dragged out far longer than expected, allowing political opponents such as Winston Peters repeated opportunities to criticise the Government over an unpopular decision - see: Winston: Govt will sell Crafar Farms to China. While Peters, the Greens and Labour oppose the sales, Federated Farmers has given the deal lukewarm support saying the sale 'wasn't necessarily a bad thing'. President Bruce Wills' argument that rural New Zealand's $47 billion worth of debt means overseas sales of land are a 'reality' will do little to allay public opposition - see: Farmers expect Crafar bid to succeed.


There is still a possibility of legal action from the rival consortium led by Michael Fay, but there is speculation that Shanghai Pengxin has agreed to sell two of the sixteen farms to iwi groups, which would also take the sting out of today's announcement.

In contrast the Government cannot expect that the furore over the SkyCity casino-convention centre deal to melt away anytime soon. So far, the Government has been very poor at putting forward its case. But today, the National-aligned blogger David Farrar makes the most compelling case yet for the Government's position - see: Deals that are good for NZ.

But the public's mind is probably already made up - thanks to the much more skilful campaigning by National's opponents. TV3 has released a poll showing 72% of New Zealanders are opposed to the deal (Kiwis against Key's Sky City deal - poll). And Labour has released documents which they claim show John Key directly interfering in the tender process to build the proposed convention centre. The briefing paper shows Key, as Minister of Tourism, ordered officials to stop work developing a business case until the proposal from SkyCity came through. Labour leader David Shearer says this proves the tender process was 'just a smokescreen to cover up the fact that a deal has already been done' - see: Isaac Davision's Key stopped other bids once SkyCity interested. This is the real problem for National - this issue, especially coming after the ACC scandal - reinforces growing concerns about inappropriate policy making processes. To satirise such processes and connections, Scott Yorke channels the Prime Minister justifying the pokie deal in an amusing piece that should be sponsored by SkyCity (but won't be) - see: Key Explains Sky City Deal: A guest post by John Key.

With this growing discontent, it's not surprising therefore that Auckland Mayor Len Brown appears to be changing his tune on the deal and is now supporting a social and economic impact report which he had previously opposed - see Bernard Orsman's Brown having second thoughts on centre deal. Orsman also reports there is strong opposition from a large number of Auckland councillors, with only two expressing outright support.

Brian Rudman says critics of the deal need to come up with a positive alternative and does just that himself in his column, Casino centre? We can find a better option. He proposes an expansion of the Aotea Centre to make use of the existing ASB and St James theatres. He makes the point that the SkyCity proposal could have a disastrous effect on the Council-owned Aotea Centre's existing convention business.

Meanwhile, out in the provinces, David Shearer is continuing his earnest re-branding of Labour, yesterday advocating a voluntary 'Living Wage' policy as implemented in London in recent years. The sentiment that workers should be paid enough to live on will certainly resonate well with centre-left voters but the actual impact of the voluntary would probably be quite limited. Newstalk ZB's Susan Wood talked to Professor Jane Wills, who has studied the impact of the London's 'living wage' and found that, while the benefits Shearer identifies are real, take-up is mostly limited to public bodies and large corporations which have a low proportion of low-wage workers and contractors. Listen here. Convincing employers with mostly low-wage workers to voluntarily increase pay will be much harder, but the voluntary nature of the policy leaves plenty of wriggle room for Labour to seek small business support. As No Right Turn points out, it could leave Labour accepting that the legal minimum wage should be less than what a worker can actually live on - see: Shearer on inequality and the living wage.

The speech certainly hasn't lessened dissatisfaction within Labour about Shearer's strategy and performance. Vernon Small described the speech as 'ordinary' and 'dull' and warns Labour that only three reporters took the trip to Nelson with Shearer - see: David Shearer works on low-key brand and also Labour gets behind 'living wage' movement. At the Labour-oriented The Standard blog, there is speculation that Shearer will soon be asked to step aside and that Grant Robertson is the likely successor - see: Reading the tea-leaves. In response, Labour activist Robert Winter says such a move now would, with National on the backfoot on a number of fronts, be stupid, and that Robertson does not have enough support from rank and file members Robert Winter - see: A Robertson Coup?: Settle Down. Meanwhile, a new leftwing blog, Twistedhive. evaluates some of the contenders for Labour's new chief of staff - see: Who will Shearer choose?.

Other important or interesting political items today include:
* Chris Trotter explains How the Rich lock in their great wealth, using a Gramscian analysis about the ability of the ruling elite to protect its wealth by making us all believe that inequality of wealth is legitimate.

* Corin Dann gets the top political reporting job at the state broadcaster (TVNZ announces new Political Editor).

* Morgan Godfery looks at the disaster that has befallen Ngati Tama in Taranaki and asks Should the government guarantee settlements? ( while John Anthony reports that some of the iwi are still waiting for 'I'm sorry' (Call for apology over iwi failure).

* Richard Boock awards the government prizes for being so open with their dishonesty ('Our government is brazenly deceitful').

* Guyon Espiner has a lengthy interview with Greens co-leader Russell Norman who explains his shift from his background on the political left, to his middle-class orientated party that just wants to make capitalism more Green (Interview: Green Party co-leader Russel Norman).

* Finally Jane Clifton bemoans the fashion cycle of state sector re-shuffling and asks what the State Sector Commission actually does (The non sequitur of state sector restructuring).