Editorial: PM has generated more than hot air

22:22, Jul 12 2012

Technically, Prime Minister John Key was right.

The Government can ignore recommendations from the Waitangi Tribunal, even if to do so would unleash a political firestorm. However, the apparently casual way in which he made his comments, the spin being put on them by his opponents and the timing – the same day the tribunal was to begin an urgent hearing related to the partial sale of state assets – add up to a considerable and potentially damaging miscalculation.

Fortunately for Mr Key, the stability of his Government has not been undermined by the issue – yet. The Maori Party continues to make conciliatory noises, maintaining the line that the best way for it to make progress for Maori is to remain in partnership with the National-led Government.

That is probably true, although the mana of the party – particularly among Maoridom's more radical – has been damaged by the perception that it is more than a little too cosy with National and, by association, others from the political Right. The relationship has already been the catalyst for the formation and early success of Hone Harawira's Mana Party – and this rival for Maori political hearts and minds will be boosted by the current fallout over National's position on the tribunal and the Maori Council case before it, based on water rights and "ownership".

With Mr Key's comments being tagged insulting and amid growing calls for the Maori Party to renege on its support agreement with National, the PM's unwise words may yet come back to haunt him. Should the tribunal find in favour of the Maori Council's case and the Government ignore its recommendations as signalled, the Maori Party would be forced to reconsider its relationship with the ruling administration. If it did walk, that would leave Mr Key with an assured majority of just one.

His comments, and the attendant publicity, might also harm the asset sales process. Already an unpopular move going by many public opinion polls, the partial sale of the state-owned power companies could now be affected. Investors hate uncertainty, and Mr Key's statement on Monday could trigger sufficient nervousness to dampen demand.

His gung-ho initial response to the tribunal in regards to the council's case will surely boost the likelihood of a High Court challenge to the Government's asset sale process. It's a big issue, given that ownership of the water that flows through the power company turbines is being challenged. As the Crown has never explicitly asserted ownership of the nation's waterways on behalf of all, the case does offer interesting legal implications. This alone brings uncertainty to the sales process, and Mr Key's injudicious comments muddy the waters further.

Regardless of whether Maori have a legitimate claim to all or part-ownership of the nation's lakes and rivers, the issue of whether hydro schemes should enjoy free access to the resource from which their profits are generated is also worth exploring. In a world in which fresh water is increasingly seen as a precious asset, should this country attempt to make more from a resource in which it is naturally blessed, especially from those generating companies which no longer will be owned by all New Zealanders?