Should foreigners be allowed to invest in New Zealand? While there is majority opposition to the privatisation of public assets, in whole or part, one powerful line of attack on the policy, which National tried to mitigate, was the fear of assets ending up in foreign hands.

Quite simply, many New Zealanders still react strongly to the idea of non-New Zealanders owning businesses here, and there is now a focus on whether the Government is able to restrict sales of shares in our energy companies to foreigners. It seems that it's technically difficult to prevent foreign sales, as reported today in John Hartevelt and Kate Chapman's No law stopping foreign investors buying assets. The nationalistic battle amongst the politicians is also covered in Patrick Gower's Govt insists Kiwis will lap up shares in sold assets. The danger is that steps taken to limit ownership or give incentives for 'kiwi investors' to keep the shares will inevitably be at the cost to all taxpayers in the form of lower sale prices - a line of attack that Trevor Mallard is pushing in his Red Alert blog post Taxpayers and electricity users to subsidise the rich.

The actual cost of the whole privatisation process is also becoming politicised, with reports that the Govt expects $100m in asset sales fees. A good overview of the first likely asset sale is provided by Brian Fallow in the item, Jitters unlikely to stall Mighty River sale.

National needs the first sale to be a success. The entire privatisation programme is likely to run right through to election year and if public opposition grows then National face the possibility of either a major U-turn or spending the whole campaign on the back foot. With a one-seat majority for the policy there is a lot that could go wrong for the government and boost the opposition - as outlined in Asset sales a gift for opposition parties.


Labour is shaping up to take a new position on asset sales - if Shane Jones gets his way. Essentially the Maori MP wants his party to adopt the position of the Maori Party - which is to 'support any iwi which wants to buy shares' - see Claire Trevett's Jones backs investment by iwi in state assets. After making opposition to asset sales the defining feature of its election campaign, will Labour now take a very pragmatic position and let the government off the hook or has Jones managed to blot his copy book before even making it to the front bench? Trevett is picking high rankings on Labour's new front bench for Jones, along with Nanaia Mahuta.

It's the new Labour rankings that are the first test of the David Shearer leadership. Already it looks as if he faces a huge problem with what to do with his rival David Cunliffe, who is expected to be stripped of his finance portfolio and dropped down the rankings below MPs like Clayton Cosgrove. If this happens, then Cunliffe would understandably look to depart Parliament, a possibility reported in today's very informative Dominion Post article, Cunliffe not so supportive after all.

Dr Bryce Edwards is a lecturer in Politics at the University of Otago. He writes a blog at: