NZ POLITICS DAILY: Crafar farms decision echoes foreshore bombshell dropped on Labour

Is the High Court’s overturn of the government’s decision on the Crafar farm sale National’s equivalent of the 2003 Court of Appeal's foreshore and seabed ruling for Labour?

Politically there are many similarities. Both judicial rulings were ‘bombshells’ and appeared to have ‘come out of nowhere’.

Like the 2003 foreshore decision, this ruling could have significant ongoing political ramifications, produce a no-win situation for the government, and give political opponents huge opportunities to either ‘stand up for principles’ or simply to ‘grandstand’. That’s certainly the sense you get from reading Tim Watkin’s excellent blog post on the politics of the issue (see: No more garage sale NZ: the politics), as well as in the comments following the blog post (where this question of parallels with the foreshore issue is raised).

Certainly, National is in a bind, and will be tempted to give into public opinion by now rejecting the Shanghai bid. Although Watkin thinks this is unlikely, it’s still possible and would ‘close off a very wide avenue of attack for opposition parties in the 2014 campaign’ – just like the 2004 Seabed and Foreshore legislation did for Labour. National is particularly vulnerable, Watkin says, because the public may end up conflating the unpopular foreign investment decision with the equally unpopular asset sales programme, leading to a very strong narrative of ‘all National does in government is hock off things that matter to us, like our farms and state assets’.

The complexity of the whole OIO decision and its overturn is considerable, and elements can easily be overlooked. In understanding Justice Miller’s ruling, the best metaphor seems to be the one of the ‘level playing field’, with the idea that previously the Overseas Investment Act was interpreted as giving foreign investors a level playing field on which to invest, while the judge has proclaimed that, no, the playing field should be tilted against the foreigners with them needing to prove that their investment would produce an even better outcome than a local purchaser. This is all outlined in another must-read post by Tim Watkin on the issue – see: How the Crafar Farms 'set aside' ups the ante.

The question now, is which political party will launch the 2012 equivalent of Don Brash’s Orewa speech, picking up on the economic nationalism and xenophobia building amongst voters? This would normally be Winston Peters’ meat and drink but the Green Party may actually be best placed to benefit from National’s problems with foreign investment and privatisation.’ The Greens are currently leading the campaign on these issues, and they are doing very well at now painting a picture of the Government yielding to pressure from the Chinese Government. Greens’ leader Russel Norman points to a meeting by Chinese political consul Cheng Lei and the Overseas Investment Office – see: Andrea Vance’s Greens: Crafar approval politically motivated. This is one area where John Key could be seen to be vulnerable, particularly with his government’s apparent willingness to cut commercial deals with Warner Brothers studio, Mediaworks, and SkyCity casinos. The perception that the Government is willing to change or bend the rules to suit large commercial interests is not an endearing one to voters.

Meanwhile, the ruling to set aside the Crafar farms decision has seen Michael Fay raise the stakes by promising to match or better the Chinese bid on a number of promises (except, of course, the purchase price) – see: Tracy Watkins’ Fay group would meet Chinese undertakings.

Treasury released its growth forecast yesterday, which unsurprisingly, is deteriorating. In the House, Bill English made the surprising statement that the $5-7 billion estimate for asset sale proceeds was ‘just a guess. It’s just some numbers’ – see: Duncan Garner’s Government admits to guessing asset sale profits. John Armstrong says this was an ‘astonishingly naive admission by the Finance Minister’, although he points out it may signal an unwillingness to set price expectations to potential buyers – see: Asset sell-off ‘guesswork’ keeps the buyers guessing. However, with a clearly unpopular policy that relies on a one-vote majority in Parliament, such statements won’t help with the political management. Even more so as the forecast also revealed that the loss of profits and dividends from the sale will be greater than the savings and interest from the reduction in debt.

Trevor Mallard’s foray into ticket scalping continues to make headlines, and the saga could turn out to be the final nail in his political coffin.

Mallard has gained a reputation inside of the party for creating more harm than good for Labour, and the latest embarrassment might prove to be decisive.

Certainly Gordon Campbell has launched a must-read scathing attack on ‘the saga of Trevor and the Traded Tickets’ – see: On asset sales and the Mallard ticket saga. Campbell says that Mallard’s maneuvering ‘should be taught in classrooms, as a textbook example of why politicians are held in such contempt’ and he likens Mallard’s actions to that of disgraced former MP Pansy Wong who resigned over what were arguably similar actions. Campbell says that the lesson that young voters can take from the episode is that ‘Labour are a party who’ll screw you over ticket prices for any music gig, any chance they get’, and he equally blames leader David Shearer for the poor handling of the mini-scandal. Similarly, David Farrar makes the good point that although ‘the amount of profit made at $276 is fairly trifling’, as Tuku Morgan found out with his $89 underpants, the public can often relate better to a small amount, than to issues with amounts in the millions.’ Farrar says it’s a bad look and showed a lack of judgement, particularly from such an experienced MP – see: Mallard's tickets: it's not a good look.

Finally, here are a few additional important items for today: Jane Clifton’s Maori Party Cinderella-ises itself, Amelia Romanos’ Radio NZ chair puts up little fight for funds, TVNZ’s 'Broken promise' claim as frontline Defence jobs slashed, Matthew Dearnaley’s Next wharf strike could last 14 days, John Drinnan’s Where does TVNZ stand on Holmes tirade?, and Chris Trotter’s Holmes' attack on Waitangi Day unjustified.

Bryce Edwards, NZPD Editor (bryce.edwards@nzpoliticsdaily.co.nz)