Whoops-a-daisy! Key walks into Labour trap

Last updated 17:20 05/03/2008

Whoops! Labour set a trap for National's leader over the sale of Auckland Airport and John Key walked straight into it.

Twenty-four hours after Finance Minister Michael Cullen announced what is, to all intents and purposes, a blocking clause to prevent a significant stake in Auckland Airport being sold to a foreign investor, National's policy on the sale is all over the shop.

First Key said he would have to take advice on National's position. Then he said National would oppose majority foreign shareholding but not a minority stake. Then he wouldn't clarify whether the Canadian Pension Plan's proposed 40% stake counted as foreign control of the airport.

We spent some ten minutes trying to get a straight answer out of him on Tuesday, without much success.

Today journalists have been a little more successful. Key has stated that National does not agree with the clause Labour has inserted in the Overseas Investment Act requiring ministers to consider New Zealand control factors when deciding on investment applications above $100 million, or 25%.

In other words, National supports the status quo, and would allow the Auckland Airport sale to proceed as long as it met the previous OIA guidelines.

The reason Key has been so reluctant to answer this question is because it requires him to ignore his political instincts, which tell him that the public by and large hates asset sales and in particular hates the idea of the country's largest airport being sold to the United Arab Emirates or, even worse, Canadians.

The free marketeer in Key, however, argues that foreign investment should be welcome in this country, and that it's crazy to try to argue foreigners can't have a slice of our airport but they're welcome to buy shares in any other company listed on the stock exchange.

He's also well aware that National, as the party of business and free enterprise, can hardly be seen to be supporting the intervention in the Auckland Airport sale for blatantly political reasons.

The wonder, then, is that he did not say this loudly and clearly on Tuesday. There were certainly grounds for attacking Labour. The Government has intervened late in the piece, effectively shifting the goalposts. It has all but admitted it has done so for populist reasons. Allowing foreign investment in our companies has never bothered it in the past - indeed, Labour used to welcome it.

Labour remains responsible for selling some of New Zealand's most strategic assets of all, such as Telecom, the railways, and more recently, the national electricity grid.

Nevertheless, Labour has snookered National over this one and both parties know it. I'd hate to think that Labour announced the new provisions purely to trap Key, because that would not only be the height of cynicism but terrible government. I'm sure it didn't. But it would surely have crossed Labour's mind.

I understand Labour has a series of other traps for Key this year, and it'll be interesting to see whether National's leader is a little more careful where he stands.

Inter alia, it hasn't been a good 24 hours for Key, whose chief media minder Kevin Taylor is on holiday. He stuck his foot in it this morning on Breakfast telly, claiming National had no deadline for the settlement of Treaty claims. He's just issued a press release admitting he got it wrong, and the deadline is 2014.

Small beer, you might say, but it's all grist to Labour's mill as it tries to paint him as "Slippery John'' and "Shonky JohnKey'', two epithets heard in the House today.

Will it make any difference to the polls? The short answer is I don't believe it will. Not in the short term anyway. The average punter doesn't watch Parliament with a clipboard keeping score of the exchanges (at least I hope they don't or they're as sad as the press gallery).

But it might hurt National during an election campaign.

41 comments
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Alan Wilkinson   #1   05:41 pm Mar 05 2008

Colin, I'm stunned. I thought every political journalist realised it is impossible to be too cynical about politicians. The truth is invariably worse than you can possibly imagine.

Adolf Fiinkensein   #2   05:55 pm Mar 05 2008

Fair comment Colin, however I think the 'average punter' as you put it, is more interested in the inherent dishonesty and corruption exhibited via the DHB outrage than the minor stumblings of a 'good bloke' type fellow who is far less inexperienced in the art of political gob speak than are his oponents.

People are really just 'over' Labour.

GPT   #3   06:13 pm Mar 05 2008

Yeah, one back for Labour. Not sure how much of a victory it is given the disasters they face but might be a morale booster. It should also be a reminder to National that it needs to draw some lines in the sand and actually be prepared to argue issues on the merits. Sure, National had to swallow a dead rat or two (student loans for eg) but at the end of the day National is a centre right party and it's loyal supporters want to hear centre-right policies. A strong statement condemning Labour for shifting the goal posts and spurning foreign investment might have got the Greens excited but it would have been consistent and, frankly, expected by most National supporters.

Peter Wilson   #4   06:25 pm Mar 05 2008

Minor correction there Colin - the railways were sold by National in 1993, not Labour

Tim   #5   06:57 pm Mar 05 2008

How would you like it if you were driving down the road at 100Km per hour and a cop pulls you over and starts writing you a speeding ticket. You weren't going over the posted sign but the cop informs you what was written was written, but he has just changed the rules right now and you fall foul of that. It creates unnecessary grief/mistrust among other things. Both current shareholders and the Canadian pension plan people must be a bit annoyed.

If JK starts to offer an answer before he knows what it should be, then that is an issue (see I can admit faults in the party I prefer) however perhaps a politician that chooses to say something like "I don't know I'll get back to you when I do know" is a real stumble. Colin you would know the kind of stuff ups you love to hear. What answer/lack of is more of a gaffe? Not all of us are media trained.

A semi xenophobic tone has come from some supporters about "big companies" from overseas. What do they think about the so called Cullen fund being invested outside New Zealand. Is it wrong for others to invest here, should we not invest in other countries as well to be consistent? Should KiwiSaver not go through foreign companies to be managed?

Btw I don't think John is slippery, if he gets anywhere as slippery as Helen I'll be worried.

My last thought, there is a difference between a controlling stake (51% or more of a company) and just owning some shares) I think the government is more worried about having outsiders having a say in performance of things. I do not know if Auckland Airport is owned at all by the govt/local, but in public companies the shareholders get a say in things like income vs expenditure. This govt has shown it has taken 9 years to loosen its income (apart from Peter Dunne getting business tax cuts) and in terms of expenditure it tells us lots about the billions it spends but never the quality of the spending (such as the Salvation Army report) saying despite all that spending people are just worse off. They don't like critics who can have a binding say in changing their plans.

rodc   #6   07:12 pm Mar 05 2008

Whats the fuss all about, is any NZ asset worth keeping?

Dave T   #7   08:09 pm Mar 05 2008

Well the government does not care that they wiped off a Billion dollars of Telecom and now 300 Million off Auckland Airport shares. Who cares if the rich prick investors lose money, the more the better especially those retired ones.

No wonder no one invests in NZ shares and all spare cash goes into property.

It’s amazing that this is the government who voted against twenty odd amendments to the Overseas Investment Act put forwards by Ron Donald three years ago. All these amendments were based around protection of strategic assets and protection of infrastructure and land. I quote Dr Cullen “I want to say quite clearly that it is critical for the future of this country, and for our social and cultural development, that we have a welcoming and open attitude towards inwards foreign investment” he continues “ if this country relied on its own capital resources alone, we would not just not grow; this economy would shrink, because our investment levels would be insufficient to maintain our current level of economic activity”.

Now that is a turn around isn’t it, looks very much like the main motivation is the 20 points in the polls. Although I do say National has not helped itself on this one.

I just hope this rather cynical act by the government does not do to much harm to the country. What next are they willing to do? Anything for power, they just have to go and the sooner the better for the country as a whole.

Joy Farrell   #8   09:23 pm Mar 05 2008

Interesting events. Yes, I watched the JK/Paul Henry interview on Breakfast & yes, JK gave every appearance of being uncomfortable.

Ak Airport. Strategic asset? Because it is the gateway to Ak? Or in these troubled times is it prudent for NZers to maintain control over our border security etc?

Asset sales are a bit tricky, in the public's mind. This one is not just a , say, manufacturing company or an hotel, it is the main airport. And surely 40% can fairly easily be added to by casually buying out 'Mums & Dads' from time to time.

I am glad there is an Overseas Investment Act (or whatever it is), so that some care can be taken.

John McCall   #9   11:12 pm Mar 05 2008

Oh Tut Tut! This is plain pathetic left-wing journalism attempting to beat up a story on nothing to try and paint Labour as smart. Intelligent people in the electorate will see through this and realise that there is nothing sinister in JK's comments but they will see through Labour's weak & irresponsible attempts to curry favour with the electorate in the quest for power no matter the cost. I would rather a politician had a cup of tea before mouthing off about the vote-chasing legislation Labour cobbled together in 5 minutes. You lefties don't understand consequences of hastily-made comments that you try to get politicians to make so as you can create a beat up story. These are simply to attempt to get politicians to make slip-ups for a story. We are not all gullible.....

Jeremy   #10   11:26 pm Mar 05 2008

I have no idea how you can try to deflect blame from Labour for a hypocritical about turn on policy and investment on Mr Key?

Let's think about this for a bit.

A) Is the policy good? It depends on what your political beliefs are, it's not good for NZ international investment reputation, it's not good for existing shareholders, and some would argue it's good as its in the 'National Interest' (obviously stable investment regulation and laws are not of interest). B) Was the policy implemented transparently? Hell no, it's backdated (never a good look), reactionary, most of the market had no idea ($300 million gone...), and a bit more of our international investment reputation gone.

I must admit it would have been better for National to come out and slam this shonky decision making process, but I have to assume that he didn't know it was coming (like most others). But debate over the policy itself is far more important than discussing National's slow response to this.

And I don't even want to think about the possibility that the timing of this may have been some sort of $300 million political stunt.


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