Maori could protect SOEs from foreigners - Morgan

A Maori leader says iwi could use treaty settlement cash to invest in state-owned enterprises (SOEs), ensuring they don't fall into foreign hands.

Waikato-Tainui chairman Tukoroirangi Morgan last night welcomed Prime Minister John Key's proposal for partial sales of state assets and said it gave Maori the opportunity to become cornerstone shareholders.

Mr Key announced on Wednesday that power companies Mighty River Power, Meridian and Genesis, and coal company Solid Energy, were being considered for partial sale -- up to 49 percent -- and advice was also being sought on reducing Crown shares in Air New Zealand from 75 percent to 51 percent.

He said yesterday he would not be swayed by negative opinions and the Government was keeping its promise of no asset sales in its first term.

Mr Key said he expected Treasury to support the proposal, and its popularity or otherwise with voters would not be the driving factor behind final decisions.

Mr Morgan said Waikato-Tainui would be very keen to invest in Mighty River Power, and already had an agreement which gave it first right of refusal over the Huntly power station.

"The real benefit of iwi becoming cornerstone shareholders in these companies is that we are not going anywhere -- we have nowhere to go, our investment strategy incorporates the principle of kaitiaki, guardianship of assets for future generations," he said.

"There is no way we would support a move to lift electricity prices ... extracting higher returns for shareholders when we would be hurting our own people who struggle to pay their power bills as it is."

Mr Morgan said that was a powerful argument in favour of partial iwi ownership of state assets.

Labour is continuing to attack the proposal, accusing the Government of selling the family silver and saying companies would fall into foreign ownership while consumers faced higher charges.

"Does anyone really believe there is a competitive market in electricity which will hold prices down?" Labour's economic development spokesman David Parker said.

Dividends would go to shareholders and a lot of the money would go offshore.

Progressive Party leader Jim Anderton said the sales would not reduce debt and the Government had not learnt the lessons of the 1980s and 1990s.

"When assets are sold the revenue stream they contribute to the Government is lost," he said.