Bryce Edwards: Political round-up: July 11

Prime Minister John Key. Photo / File

The controversy over water ownership and rights is not a distraction or a minor scandal that will eventually blow over. This is because the partial privatisation policy is at the core of this Government's programme (whether National likes it or not). The stakes are high and, given the Government's recent woeful political management, it was, as today's Herald editorial says, a Bad time for PM to shoot from the lip.

The Government does have options in dealing with a successful Waitangi Tribunal claim - but there is real risk in all of them. Simply ignoring any unfavourable Tribunal recommendation and hoping to fight off any legal challenge might work but would be a huge gamble, and one that previous governments have lost badly on. National would also be gambling on the relationship with the Maori Party, and Audrey Young thinks John Key should be worried, especially by the Maori party's comments yesterday: 'We will not tolerate any suggestion that the mana of the tribunal can be undermined.... It is of utmost concern in so far as it threatens the very heart of the treaty relationship'. Tariana Turia was keeping up the pressure today, 'refusing to confirm that the support arrangement with the minority National government is safe' - see Audrey Young's Turia won't confirm govt support.

However there seems little danger of the coalition falling apart at the moment (see Kim Choe's Maori Party refusing to walk away over Tribunal) with Pita Sharples sticking to the 'better to be at the table' line, even though Turia admitted the PM's office 'hadn't returned her calls' about meeting over the issue. Morgan Godfrey says previous tough talking rhetoric from Turia and Sharples came to nothing: 'The Maori Party will not walk - unless the situation escalates. The Maori Party has too much to lose. If they walk, there is no guarantee Maori will follow them. They would, I predict, be attacked for walking four years too late' - see: Maori Party takes it to National.

Proceeding with the sales with no resolution to the water rights question could be the worst outcome of all, however. Mana Leader Hone Harawira says that share buyers need to beware: 'It is like trying to buy a car without the ownership papers'. His view is backed by the likes of Gareth Morgan: 'It's a dog's breakfast really isn't it?' - see Patrick Gower's Double setbacks for asset sales programme.

Investment and energy experts say that uncertainty would probably have a bigger impact on the sale price than achieving a settlement beforehand - see TV3's Key's stand on water insult to us all - Maori Party. The economics of the whole policy are already marginal at best and a further chunk out of proceeds through either uncertainty or a preferential settlement would make the sales very difficult for Bill English to defend as Finance Minister.

A deal with individual iwi or with the Maori Council may repair the relationship with the Maori Party but would come at a heavy political cost for National. Linking asset sales and special privileges for Maori would provide Winston Peters with the target synergy he was recently trying to create with superannuation and immigration. Averting that scenario was the motivation behind Key's comments on the Waitangi Tribunal, says Tracy Watkins, and they were not careless at all: 'Mr Key deliberately inflamed the dispute over water rights because the alternative - allowing the perception that water is a Treaty right - risks a backlash from heartland National voters equal to the fury over the foreshore and seabed' - see: Prime minister knows exactly what's at stake.

It is a minefield and National will only make it through with deft political management and quite a bit of luck. Both have been in short supply this year.

Other important or interesting political items today include:

* If New Zealanders were deciding who the next US president should be, Barack Obama would easily achieve re-election according to an excellent comparative analysis by Stephen Mills of UMR Research - see: Romney's simple strength. Apparently, 66% of New Zealanders would vote Obama, with his Republican rival, Mitt Romney winning only 7% support. Meanwhile, in the US some polls have them on even support.

* Ordinary Labour Party members are likely to have a substantial say in electing future party leaders, as well as a majority on local selection panels - see: Labour looks to give members greater voice in leader vote. Meanwhile, there are reports of A 'fashion atrocity' in the Labour caucus. In response, caption contests are being run by Chris Trotter and David Farrar.

* Is KiwiRail being readied for sale? The financial state of the SOE makes Labour's claim unlikely in the near future but the Greens and the Council of Trade Unions think the Government should be considering employment and the environment as well as the bottom line - see: Greens, NZCTU slam KiwiRail job losses.

* Tim Hunter is unimpressed with the 'bogus reasoning' behind ACC's finances - see: Govt should make its ACC intentions clear.

* Would the pokies for convention centre deal be a windfall for criminals? Private investigator Danny Toresen says the casino is perfect for money laundering and an attraction for criminals: 'A lot of cases we deal with, the driver is a gambling addiction and the biggest source of entertainment for the workplace thief is the casino' - see: Casino deal feeds 'an engine of crime' - Greens.

* Finally, Christchurch novelist and poet Fiona Farrell questions why we are Anchored to empty shells.