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Water claim unlikely to succeed – PM

Anyone can claim a water ownership right in the courts, Prime Minister John Key says. 

Mr Key made his peace with the Maori Party – whom he had offended with his earlier comment that the government could ignore the Maori Council's Treaty claim on water, seen in some quarters as a potential roadblock to the partial privatisation of Crown-owned power companies.

Mr Key said he respected the right of Maori, or any party, to make a claim through the courts. But he said on yesterday's TV One's Q+A programme that any legal claim would be "complex and covoluted and unlikely to succeed".

Asked what is a Maori water right, Mr Key replied:

"Well, we’ve already negotiated and legislated for some of those, so I think the way they’ll look at this issue is, when it comes to ownership, the Crown’s very firm position and view, and long-standing view, is that no one owns water.

"The Crown has also recognised for a very long time – for the better part of over 20 years – that Maori have rights and interests when it comes to water, and those rights and interests are negotiated iwi by iwi, river by river.

"So if you take the Waikato River as a bit of an example, my government has negotiated a co-management agreement with Waikato Tainui. They are involved in decisions around the river. They’re certainly involved in the programme to improve the water quality.

So rights and interests are recognised by this government as they were with the previous governments. We deal with them generally through the Treaty’s settlement process, but ownership, in our view, is owned by no one."

The prime minister added: "I don’t think people should be fearful of negotiation of rights and interests when it comes to Maori and water."

Mr Key said the Land and Water Forum, which includes Fonterra, iwi and power companies and has been discussing tradeable water rights, was a great example of parties coming together to discuss water and its role in economic growth.

Economic difficulties not stop partial SOE sales
Economic difficulties do not mean it is not a good time to take SOE sales to market, Mr Key says.

"Economic conditions around the world haven’t been that flash over the last four years, and this government’s had to contend with those very difficult issues, and I think for the most part have done a pretty good job of navigating New Zealand through that and building competitiveness in our economy," he told Q+A.

"But I wouldn’t want to say just because we’ve got a global financial crisis that’s still washing through Europe and some challenges that you can’t take something to market.

"Well, Fairfax did that exactly over this period in the last few, sort of, six months or so with Trade Me, doing exactly the same model – keeping 51%, selling 49%. The stockmarket has actually, globally, for the most part has been quite robust in the last four years."

'Not uncomfortable' with cost of super
The goverment remains firm to superannuation remaining at 65 due to the "bond of trust" built up between prime minster and the electorate, Mr Key said.

He was "not uncomfortable" with the current cost of superannuation relative to GDP.

"Our current level of cost of New Zealand superannuation is 4.5% of GDP. Many of the people that Fran [O'Sullivan] or Bernard Hickey or others actually refer to, many of those countries are already well above the peak of the cost of New Zealand super, even at the height of the baby boomers in New Zealand today," Mr Key said.

"So take Germany – their superannuation costs are 10.1% of GDP today. We’re 4.5%. At the very most, we’ll rise to about between 7% and 8%.

"Secondly, if you want to have a serious debate about the cost of super and if your only objective was to keep it at broadly the levels of cost today – about 5% – then raising the age won’t do much for you, because raising the age from 65 to 67 between 2020 and 2033 reduces that cost by 0.7% of GDP. In other words, from, say, 7.7% to 7%."

House affordability
"We don’t have a housing crisis in Auckland or in New Zealand, but there are clearly challenges," Mr Key said.

"You say it’s difficult for young people to buy a house. Well, I think if you go back to pretty much any person who’s bought a house in New Zealand, whatever their vintage, they’ll pretty much tell you that was a big struggle.

"They’ll mostly tell you they had to save hard to get a deposit and they had to borrow money.

Host Shane Taurima responded, "But when we compare the prices, though, prime minister, the average price – house price – back in in the 1970s, 80s, as an example, was three times the average wage. It’s now eight."

Mr Key replied" "Okay, but if you go again and have a look at interest rates in New Zealand, they’re on about a 40- or 50-year low at the moment. The capacity to borrow money against a house is much higher today than it was back then, so the loan-to-value ratio is often at 80, 90, 95, even 100%."

Asked if that resulted in massive debt, the prime minister said: "Well, again, people’s capacity to pay that debt is arguably much higher because, again, if you go back and have a look, I’m 50 years of age, look at my generation.

"When I went to university, it was a very small group of people – less than 1%, I think – that went to university.

"Today the numbers that go to universities and their earning capacity is very very high, as it is in terms of tertiary qualification.

"So no one’s arguing there aren’t lots of things we can address, and personally I happen to agree with a lot of what Murray Sherwin and the Productivity Commission have said around potential land issues, around speeding up the building process, around development contributions.

"There’s a lot of things we need to address."

Mr Key said he hoped there would be a government response to the Productivity Commission's land issues report by the end of this year, but added: "There will be things we can do.

"But mark my words, when we do it, the very same political opponents, like Russel Norman and the Greens, who this week was raising that matter of housing affordability in question time, will be the very same person on your nightly news telling New Zealanders, ‘Don’t reform the RMA.

"That’s bad. We don’t want to do that.’ "

He added: "We have reformed the RMA, we’ve reformed building practices, we’ve been reducing the bureaucracy in the local-government sector, we’ve been streamlining the activities.

"So, in my view, we are making great strides towards ensuring better affordability for New Zealanders, compared to the bubble we saw in the mid-2000s that saw the then Labour government go and commission yet another report on it."

RAW DATA: Watch John Key's Q+A interview here.

Comments and questions
6

He added, "We have reformed the RMA, we’ve reformed building practices."

Rubbish. Nothing has been done yet that will make any noticeable dent in the gratuitous regulatory costs and obstructions imposed on housing construction.

As is plain from the moves to exempt the Chch rebuild.

its not a shortest of land the prob; its the cost of developing it, hence most land developer's have gone bust; the only way forward is to remove council charges - growth will then follow

The Prime Minister is correct about the historical cost of mortgages.When I bought my first house in 1981 the cost of my mortgage from a trading bank was 19%.I needed an additional loan to reach the purchase price,the cost of this loan was 23%.
I was a schoolteacher in south Auckland and forty three years of age,so you accept the situation,and discipline yourself to find additional work and get on with the task of paying off the loans.

That was all because of Muldoon's socialist (communist??) control of borrowing like so many of the left are still expounding today. Despite paying your trading bank 19% (which reflected government policies - or dictats - on interest rates for housing) you had to take out a second mortgage because Muldoon limited the amount your trading bank could lend you. Compare your mortgage interest rate to your then salary (and the top tax rate of 66% at $33k) and you were much worse off than most of today's home buyers.

Quote" ,,,,,mortgage from a trading bank was 19%.I needed an additional loan to reach the purchase price,the cost of this loan was 23%".UnQuote

That is true, in my case it was a farm.

And today I get 4% on my savings!

Today's first home/business/farm buyers are far better off.

Ah, but you were guaranteed double digit inflation in Muldoon's days in power.

So house prices were guaranteed to keep going up and savers were worse off after inflation.

Muldoon was a peasant economist who was in way over his head. The poor fool.