Govt delays Mighty River Power float

Prime Minister John Key says the government will go ahead with the sale of Mighty River Power shares – but not until early next year.

Mr Key announced, in advance of his press conference yesterday afternoon, that this would be followed by a share float of up to 49% in either Meridian Energy or Genesis. 
 
The prime minister has previously said the partial privatisation of Mighty River Power would go ahead this month.
 
Last week the Waitangi Tribunal recommended delaying the sale of up to 49% of the state owned company as part of the government's mixed ownership model policy, and also some sort of preferential share deal –  a "share plus" option –  for the local iwi.
 
Delay for iwi talks
Mr Key says the a "share plus" option will be discussed with local iwi, although the government is against the idea for the following reasons:
 
  • It is not in the national interest for any group within Mighty River Power's potential 49% minority shareholding to be given such rights
  • Almost every form of redress to Maori that could be covered by the shares plus scheme can be achieved in other ways.
  • The remaining elements of shares plus in relation to decision rights over management or strategic decisions would not be able to work in practice.
  • If the shares plus concept existed it was likely to make the company less attractive to investors, which could be reflected in a lower sale price and therefore be to the detriment of taxpayers
  • Following consultation with iwi earlier this year, a careful and deliberate decision was made to ensure the crown's obligations under the treaty continue to rest with the crown, not the companies.
"Ministers have today decided that taking some time to talk about 'shares plus' with relevant iwi is the prudent thing to do. That means preparation for the share offer will continue to proceed, but in March to June next year, rather than in 2012."
 
He says the decision to delay has been costly 'not more than $10 million, but more than $5 million.' But he is confident it will lead to greater clarity and certainty for investors.
 
However, he says there could have been a highly devalued float if the sale had gone ahead this year and he cannot see how that would be responsible government.
 
Mr Key says the government is being cautious and prudent "but prudence is needed".
 
He will let the Maori Council know the decision and plans for the next five weeks.
 
He is not planning a national hui or a national settlement and accepts the likelihood of court action is high but is confident the Government is in "a very strong position".
 

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68 Comments & Questions

Commenter icon key: Subscriber Verified

Excellent! This means in effect it will never go ahead as market falls in the next 6 months will stymie the whole plan. Time to cut elsewhere Mr Key.

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In a nutshell ,preference shares for Maori,plus the right to veto,anything they dont like .WTF.

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Stand by for a mortgage increase.Must help the Maori increase the Thirty Six Billion they already hold in Assets.

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Well they will just have to learn to cut spending more in things like Working for Families, Interest free student loan, Etc.

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Pity. Stiill, better late than never.

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This government has no backbone. Time to just start saying no.

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Where does "white gult" stop, and Maori p!ss taking start...?

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Agree - talk about apartheid in this country - unbelievable!!!

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I have absolutely no guilt and the p!ss is being well taken. New Zealanders owe nothing to these gravy train riding Maori's. Its high time they started paying there way like everyone else. End the Treaty.

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The govt outlines five reasons why "shares plus" for iwi is bad ... so why delay for six months to discuss them? Will they be less bad in April next year?

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Time to fold in the ACC's nest egg and zero that rort.

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We have been sold down the river. Govt has effectively acceded sovereignty to a minority Maori group.

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Well played Pita Sharples. Key's a smart political operator, but he's underestimated the Maori Party co-leader's ability for brinksmanship, and to exploit MMP

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It's madness though - a very small elite minority holdings a democratically elected government to ransom, over stone age beliefs. Although I note cash seems to resolve such issues.

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This is not down to the Maori action alone, it's about the money and the polling, you guys going crazy over the Maori water claim are reacting to a dog whistle, it was always a dumb idea to sell the power stations so it's a great day, for New Zealand!!!!! go suck Rodney.

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That is not the point. The Govt had a mandate by the people to govern, but it has now acceeded that authority to a minority, racist group. Extraordinary.

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A mandate... are you insane brother?

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I maybe mistaken, but to the best of my knowledge, National won the last election. One of their key election policy's was the sale of state assets. Correct me if I'm wrong..

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Mandate in my mind is an overwhelming thumbs up not a waifer thin hanging by plaque just above the margin of error majority of two weidos

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If you think about it for a minute you have to laugh at the deep irony here. If you asked the average National voter what he/she would LEAST like to see happen in NZ under a National administration I am pretty sure high up the list would be more disimbursements/asset allocations/free gifts to the Maori. Yet precisely because Key and his cohorts failed to think the asset sales programme through (the law of unintended consequences anyone? You mean they DIDNT forsee a Maori challenge?) that is PRECISELY what Key is going to have to do to try and get this abject policy through the starting gate. Wake up National supporters - your government is going to be forced to stuff Maori mouths with gold (that would be your tax revenue and your assets) in order to try and sell YOU assets YOU already own. And all because they were too cowardly to take an axe to sacred lambs such as superan and WFF. The Maori would never have got the slice of the pie they will have to be offered had Key never embarked on this.

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Key doesn't want to sell the assets, but needs to give he impression to foreign banks they are financially prudent otherwise your personal home loan interest rate will go up and how does that help NZ. He is betting he can keep cutting Govt spending and get tax growth and show deficit decline and foreign lenders will stay off his back and that of NZ mortgage borrowers. If he wanted to roll the Maori party all he needed to do was call a snap election on water ownership and would have one with a landslide majority but he is putting that in his pocket for another day. He doesn't play his cards until after the game is finished and he knows what everyone else has.

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You are very gifted comedian. Key is making up policy on the hoof. There is not one scintilla of evidence of any long term strategy.

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You don't think home mortgage rates are linked to the fiscal prudence of the government and that he doesn't understand that, hello look at the EU countries, Key is making NZ a low risk place to lend money at low interest rates and that benefits all NZers NZ, high interest rates don't.

His long term strategy is to fix the problems caused by the socialists that took annual government spending from $29b in 2009 to $65b when they finally got kicked out, its great to be a socialist until you run out of other peoples money to spend.

I watched Cullen on TV1 one day with those inept interviewers where he justified increasing government expenditure at the same rate as the increase in GDP. Never thought to wonder if we can be more efficient and when growth stopped the tax payer and people on fixed incomes got clobbered.

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The people I really feel sorry for are all those sharebrokers who were counting on the massive IPO brokerage from the MRP sale to salvage their year end bonuses. It's tragic.

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More Blackmail, but then the electorate voted for MMP, twice!!.
Since nearly everthing that takes place in governing NZ requires the consent of the Maori tRibunal governmetn of NZ, I as a taxpayer, in a democracy, would have expected to be able to vote for the membership of this over-riding authority.
Seems that my voting papers were never delivered to me, as I have yet to vote; and the Tribunal is already dictating the way backwards for NZ. They will soon outclass the GREENS.

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Ken Mair and the waitangi team must be laughing their heads off that anyone takes notice of them. What a play on semantics and creative interpretation.

What a disaster for NZ. Please could we get a leader who would put a stop to this never ending nonscence.

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You cannit govern like this. A snap election please.

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Yep. let the Maoris carry on for a while longer, then call a snap election. That will put National in their strongest position to date.

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When is a journalist going ask one of the Maori Council why they did not make the water right claim back when the power companies were first made into SOEs ? The proposed sale of up to 49% of the shares would not make any difference if their claim was legitimate.
In fact the average Maori "in the street" should be asking the Maori Council why Maori have missed out on years of "rent" or compensation IF the claim has any validity.

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Precisely! If Key had not embarked on this idiotic privatisation programme this whole issue would have never emerged. But he has let the cat out of the bag now, and the Maori will have to be given their pound of flesh for it to proceed! Great politics Mr Key!

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People Power 1
National Party 0

and it wasn an own-goal!

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More like Maoris 1, National and Democracy 0. Pathetic.

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Instead of the tribes getting the shares, hows about you do a DNA test on so called Maori's and give them shares personally? 1/64 you get 1,000 shares, 1/32 you get 2,000 share and so on...
The idea that Sir Tipene and the Maori elite get these shares is an absolute joke, but I guess he needs another farm in Colorado...

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Better get used to that idea then my man! Because if the asset sales are to go through that is PRECISELY what Key will have to do.

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Very disappointing. This means the Maori Party is the ruling party in NZ. National just lost our vote.

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what else can maori hold the rest of the country to ransom over

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Air. Then they can have a crack at Meridian Energy's wind farms.

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The Maori will not be happy until they have driven all the pakeha to Australia.
None of the money filters down to the grass roots Maori, they are still poverty stricken according to recent reports!

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They have already had 36 Billion! How much more proof do you need to see they are not just stealing off everyday Kiwis, they are stealing from there own people. I was poverty stricken once upon a time then I looked for a job and worked. Crazy solution but it might just work.

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Hows about the Maori's pay for the cost of building the dams? They are getting an asset for nothing, sure you believe its your water but the dams (white man magic) makes the power...

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Key lost an opportunity today to send powerful message to all those riding the Maori gravy train, that NZ’rs have had enough of this inanity. Instead, he has now opened the door for every Maori and their mad dogs, to climb aboard.

Regardless of today's decision , this matter is headed for Court and it is going to have a very ugly ending. Mr. Finlayson must be rubbing his hands with glee.

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It's obvious John Key is not representing his electorate.His sympathies lie quite clearly with a minority group and is not concerned about you or I.
New Zealand now looks more and more like some funny second world country with an odd governing system where 10%( a minority) get preference over everyone else.Of course it's ridiculous and we're the only country in the OECD that is being managed in such a strange manner.
Look it's time now that we NewZealanders draw a line in the sand and say no more to the Maoris.We have the power of the people as a voting block to do something about it,so let's do it!

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Key has just delivered a sucker punch to the Bro's .In my humble opinion ,this month is not a good one for a share float and he may as well wait and make the bro's make good use of the legal aid,and show Joe Public how greedy and broken arse their continual claims are becoming . Good call John.

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Good call John?... sycophant. Who are the real greedy ones eh Bruno? try those 'take, fleece, borrow and hope' traitors who would flog our very foundation of wealth and standard of living to who? that's right, themselves and their white trash mates... there's your real answer pal. And tell me this Einstein Johnny lover how is 49% of a power company with assets costing over 9 billion to replace be worth 1.5 billion? yes a convenient fire sale price indeed.

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I am not your friend so don't call me Pal.You are a prime example of Mr Bollards call for teaching financial literacy in schools.

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Could Mr Key please tell us taxpayers, what are the legal costs (advice/disbursements and including all of the TOW costs/expenses etc) of this matter, to date? Thanks

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Ever feel like your taxes are just going straight to some lazy, scheming Maoris somewhere?

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How about, we all do a blood-curdling haka?

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At least John Key confirmed the partial privatsiation will go ahead, even it it is delayed. Just a pity it is not 100% privatisation. Unfortunately, Helen Clark's relentless and dishonest criticism of Roger Douglas's economic reforms during her nine year's in power, has poisoned people's minds on the benefits of private enterprise, while she did her best to turn New Zelanders' into a nation of beneficiaries. So, we now have the situation where NZ is effectively going to be governed by the tribal elites of 15% of the population at the expense of the other 85%. They called it apartheid in South Africa. No wonder so many bright young New Zealanders seeking a future of hope and equal opportunity are going to Australia, where their vote counts equally with everyone else's.

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You are a deluded old bitter dinosaur... young people are leaving this country because there is nothing going on... living overheads too high, no call to export, no reigning in of out of control pseudo government businesses, immature ineffectual management class, selfish baby boomers, sleep walking do nothing politicians, ineffectual girlie middle management men everywhere you look, embarrassing social statistics... no New Zealanders need to grow the f#@k up and pull finger before it's too late. Isn't the definition of insanity doing the same thing over again and expecting a different result? You seem to fit the bill mate, your winging about the Maoris is BS, that's small beer compared to everything else that's wrong.

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