At last, some common sense. The Cabinet has recognised that delay in the implementation of its flagship privatisation policy does not necessarily mean defeat, even though National's opponents will define it as such.

Government ministers have accepted that though beating one's chest and insisting sell-by timetables will be met might go down well with Pakeha voters, such muscle-flexing counts for little if you only get entangled in messy court action which ends up jeopardising meeting those deadlines.

Sure, National is going to have to eat some humble pie in pushing back the float of shares in Mighty River Power into the early part of next year. But not that much.

The party's partial privatisation programme was obviously in trouble in terms of time needed to sort out Maori claims to ownership of water before going to the market.


The news that Solid Energy, the state coal company, is in no condition for a float has only compounded things.

But Solid Energy's plight has underlined what is literally the bottom line when it comes to state asset sales. National will not suffer much damage from loss of face.

It does risk suffering serious damage if voters believe large chunks of state assets are being sold too cheaply, even if that's not necessarily the case.

Given the uncertainty that would have flowed from court action by the Maori Council, the so-called "Mum and Dad" investors National is courting might have been much less keen to part with their money.

If it hasn't done so already, the perception would have taken hold that the float had been wrongly timed.

As the Prime Minister said yesterday, it is better to get clarity and certainty for investors even if that means a small delay in the float.

The onus is now on the Maori Council to put up or shut up.

The council has indicated it will go to court to halt the sale of shares in Mighty River Power. Now there is time for that to happen.


If the council delays taking legal action until next year, it would simply be seen as vexatious.

The courts would have no excuse in not treating such behaviour accordingly.

Delay is also beneficial for the health of the relationship between National and the Maori Party, its support partner.

There are political downsides for National, however.

The final float of shares in the three state-owned electricity generators will now be pushed into election year, rather than being completed the year before.

The delay of the float of Mighty River Power is also a huge fillip for Opposition parties collecting signatures to force a citizens'-initiated referendum on partial asset sales.

There will now be more pressure on the Government to hold any such referendum before the float.

Delaying the referendum until after the float would look cynical and self-serving. As the result would be academic, such a ballot could end up becoming a referendum on the Government's overall performance.

Why has the Government delayed the Mighty River Power share float?

The Government has been advised by lawyers it has a better chance of winning any court challenge over the float if it has consulted with affected iwi.

Which iwi?

Eight iwi would be consulted including Waikato Tainui, Ngati Maniapoto, Ngati Raukawa, Te Arawa, Ngati Koroki Kahukura, and Ngati Tuwharetoa.

How good are the Government's lawyers?

It got its usual advice from Crown Law then road tested it with two QCs, David Goddard and Peter McKenzie.

How long is the delay?

The float was to have taken place by November but is now scheduled for between March and June next year.

Why so specific?

Share floats are highly legalistic and technical and must follow steps taken either after an annual result in June or a six monthly result in December.

What about the Maori Council case to the Waitangi Tribunal?

The Government will write to the council setting out its position but won't meet them and it won't entertain a "pan tribal" settlement across all iwi.

Could the council still stop the sale?

It could try. The council or the iwi could take a case to the High Court seeking an injunction to stop the sale on the basis that it would remove potential redress for Treaty claims.

Wouldn't the council be tempted to delay a challenge until next year?

The starter's flag on the float - and a challenge - goes up in October when Mighty River will be coming under the Public Finance Act. The Government's lawyers think waiting until March is more likely to be seen as vexatious.

Can the Waitangi Tribunal take any comfort from the decisions?

It got the delay it wanted but for the wrong reasons. Its "share plus" concept of special rights for Maori shareholders was roundly rejected by Government. But it still has part two of its inquiry where it could use its narrow powers for binding recommendations.