Another dead rat for Key

The Government has had to swallow another dead rat today, with its decision not to immediately take Mighty River Power out of the State Owned Enterprises Act.

After High Court Judge Ron Young made every attempt to get a substantive hearing as soon as possible - and settled on starting on November 26 - it would have been unnecessarily confrontational for the Government to press ahead with the Order in Council now.

And to give the Government its due, the threat of an Order in Council was a useful tactic to bring the Maori Council's legal challenge to a head, and in that regard it has achieved its purpose.

But the sale timetable, and hence a cornerstone of the Government's economic plan, is still under a cloud, 

The High Court case will take about a week, followed by the (presumably) swift-ish ruling on the judicial review, taking the matter into December.

But as John Key has warned this morning, this may only be the start of a protracted legal battle that could head to the Court of Appeal and ultimately the Supreme Court, adding months before a final resolution.

The Government's plan is to bring 49 per cent of MRP to market by March and no later than June next year. 

Any delays to that bump the next planned sale further down the track, ultimately undermining the longer-term plan for a return to surplus by 2014/15.

There is more at stake for the Government here, though, than a dent in its fiscal facade. 

A court ruling that gave Maori significant proprietary rights to water would have far greater ramifications - not least for National's relations with the Maori Party.

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