PM Key still hopes for Mighty River Power float before Christmas; Says govt getting legal advice on Waitangi Tribunal warning, will respond early next week

Prime Minister John Key says he still hopes the government can partially privatise Mighty River Power by the end of the year following a recommendation from the Waitangi Tribunal last week that the sale should be delayed.

Speaking on TVNZ's Breakfast programme on Monday morning, Key said the government was receiving legal advice on the Tribunal's recommendation that a sale of shares in the company to private interests would affect Maori rights in the natural resources used by Mighty River.

The government would be in a position early next week to respond to the Tribunal's report, Key said.

However, he said the government did not believe a change in ownership of Mighty River, of which the government wants to sell up to 49% along with Genesis, Meridian and Solid Energy, would alter the ability for it to recognise Maori rights and interests in the natural resources used by the companies, as it did not alter the ability of Maori to register those rights and interests.

Asked whether he thought the partial float of Mighty River could go ahead before Christmas, Key said, “I hope so.”

“The reason for that is that when we release that capital from those assets then we can go on and use that to buy other assets, and we’ve got a billion dollars worth of schools, and hospitals, and lots of other things we want to invest in," he said.

“And as the Minister of Finance said in the paper this morning, we are a country that has a modest amount of government debt, but we don’t want to push that above our self-imposed ceiling of 30% of the economy."

The government believes it can raise NZ$5-7 billion from the sales of up to 49% of the three power companies and coal miner Solid Energy, and by selling its three-quarter stake in Air New Zealand down to no less than 51%. The money raised would be put toward new capital spending over the next five budgets. 

It has already earmarked NZ$1 billion for school upgrades, NZ$400 million for infrastructure investments, NZ$250 million for KiwiRail's rail network upgrade and NZ$80 million for Auckland's Advanced Technology institute.

Other potential uses of the proceeds include a capital injection for Kiwibank, earthquake strengthening of Crown-owned buildings, departmental capital injections, and spending on the Crown's overseas properties, according to Budget 2012.

'Maori have rights and interests'

The government’s view had always been Maori had rights and interests in water, Key said on Breakfast.

“Our government, and previous governments, have negotiated with Iwi about those rights and interests. But we don’t believe a change in ownership in any way alters the capacity to recognise rights and interests," Key said.

“If you take the extreme, Contact Energy was floated back in the late 1990s, it’s 100% private sector-owned, and yet if there were rights and interests that were recognised against the water used by Contact Energy, that’s not going to stop anybody going and trying to register those rights and interests,” he said.

Key noted comments from the head of the freshwater iwi leaders' group, Tuwharetoa paramount chief Sir Tumu te Heuheu, that the group would prefer discussion on freshwater rights to continue between it and the government, and not be done through the courts. See more here at NZHerald.

“Right back to 1987, successive New Zealand governments have negotiated rights and interests. What some in the Maori Council are talking about could be a very different interpretation, but my responsibility legally and morally now is to get full legal and official advice on that report," Key said.

“As soon as I have that, which I expect to be early next week, we’ll be in a position to say what we’re doing.”