The controversy over water ownership and rights is not a distraction or a minor scandal that will eventually blow over. This is because the partial privatisation policy is at the core of this Government's programme (whether National likes it or not). The stakes are high and, given the Government's recent woeful political management, it was, as today's Herald editorial says, a Bad time for PM to shoot from the lip.
The Government does have options in dealing with a successful Waitangi Tribunal claim - but there is real risk in all of them. Simply ignoring any unfavourable Tribunal recommendation and hoping to fight off any legal challenge might work but would be a huge gamble, and one that previous governments have lost badly on. National would also be gambling on the relationship with the Maori Party, and Audrey Young thinks John Key should be worried, especially by the Maori party's comments yesterday: 'We will not tolerate any suggestion that the mana of the tribunal can be undermined.... It is of utmost concern in so far as it threatens the very heart of the treaty relationship'. Tariana Turia was keeping up the pressure today, 'refusing to confirm that the support arrangement with the minority National government is safe' - see Audrey Young's Turia won't confirm govt support.
However there seems little danger of the coalition falling apart at the moment (see Kim Choe's Maori Party refusing to walk away over Tribunal) with Pita Sharples sticking to the 'better to be at the table' line, even though Turia admitted the PM's office 'hadn't returned her calls' about meeting over the issue. Morgan Godfrey says previous tough talking rhetoric from Turia and Sharples came to nothing: 'The Maori Party will not walk - unless the situation escalates. The Maori Party has too much to lose. If they walk, there is no guarantee Maori will follow them. They would, I predict, be attacked for walking four years too late' - see: Maori Party takes it to National.
Proceeding with the sales with no resolution to the water rights question could be the worst outcome of all, however. Mana Leader Hone Harawira says that share buyers need to beware: 'It is like trying to buy a car without the ownership papers'. His view is backed by the likes of Gareth Morgan: 'It's a dog's breakfast really isn't it?' - see Patrick Gower's Double setbacks for asset sales programme.
Investment and energy experts say that uncertainty would probably have a bigger impact on the sale price than achieving a settlement beforehand - see TV3's Key's stand on water insult to us all - Maori Party. The economics of the whole policy are already marginal at best and a further chunk out of proceeds through either uncertainty or a preferential settlement would make the sales very difficult for Bill English to defend as Finance Minister.
