Key aware sale could define career

Prime Minister John Key. Photo / Mark Mitchell

Prime Minister John Key has acknowledged that he is putting his political career on the line with state asset sales.

In his first big speech of the election year, Mr Key said power companies Mighty River Power, Meridian, Genesis and coal company Solid Energy were being considered for partial sale - up to 49 per cent - and advice was being sought on reducing the Crown's share of Air New Zealand from 75 per cent to 51 per cent.

"It's of course our political future, in the sense that every three years politicians go to the people and test their views," Mr Key said yesterday.

"We said that we would get a mandate before we changed our policy in this area and that's what we're seeking to get, subject to the advice from Treasury."

The Maori Party and at least one iwi have given a cautious blessing to the National Party's plans to sell minority stakes in state owned enterprises - but say the assets must remain in New Zealand hands.

Maori Party co-leader Tariana Turia said yesterday that iwi had long been interested in investing in infrastructure, given they had a vested interest in it.

However, she would oppose any move that led to significant stakes going into foreign hands.

"I definitely wouldn't like to see foreign ownership of those assets. We have to retain our sovereignty over those resources. So once [the Government] divests itself of those assets, it has to give an assurance they will be retained in the hands of New Zealanders."

She said iwi, as well as mum and dad investors, were the ideal shareholders.

Yesterday Waikato Tainui chairman Tukoroirangi Morgan called for iwi to be considered for significant stakes in the companies, saying iwi investment would be long-term, prevent the shares being sold into foreign ownership and help prevent price rises for easy profits.

Mr Key has promised New Zealand investors will have first dibs on shares in the assets sold. He included iwi when listing potential buyers of shares in the three power companies. He said those iwi who had strong capital bases from their Treaty settlements such as Tainui and Ngai Tahu were well placed to invest strongly.

Mr Morgan said his iwi would be interested in a stake in Mighty River Power and its Treaty settlement already 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. And dividends would stay in this country - not be repatriated overseas to be enjoyed by foreigners."

Iwi were also less likely to demand large profits at the expense of the consumer, because their own people would suffer from it.

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

"Our view would almost certainly be that we would rather forgo additional short-term profits in return for slightly lower, stable returns and the knowledge that we were not gouging our own people."

He said he was not suggesting Maori be offered shareholdings at discounted rates or preferential terms.

- ADDITIONAL REPORTING: NZPA