Opinion: Water rights case gives Key no easy way out

Thursday 12 July 2012, 11:33AM
By Massey University

Will middle New Zealand’s suspicion of the Treaty of Waitangi outweigh its suspicion of the government’s asset-sales? That’s the political question that John Key has to address as the controversy over Maori customary rights to water-usage unfolds.

The questions of anyone’s rights – and indigenous people’s rights in particular – to ownership of river- and lake-beds and to the uses of the waters they contain are complex legal matters that ultimately may be determined in the courts, unless, of course, Parliament legislates to over-rule the claimants.

While the matter is before the Waitangi Tribunal, Mr Key is technically correct to say that his government is not obliged to implement the Tribunal’s recommendations. It was unwise of him, though, to say that the Tribunal could be ‘ignored’ and that he disagreed with the Maori claimants. That sounded like he was pre-judging the matter, and his later comments back-pedalled by asserting that his government was acting ‘in good faith’.

Given a widespread public opposition to the government’s ‘mixed-ownership model’ for power-generators, Maori claims to water rights may well gather support from many non-Maori New Zealanders who will view the litigation as a brake on the government’s sales process.

On the other hand, anti-Treaty sentiment is also well entrenched among middle-class non-Maori, and a tough stance by Mr Key against the water-rights claim is bound to win some support from that quarter. National can’t afford to see its support among middle-class New Zealanders erode any further, but, if their hand is forced, it’s likely that the conservative anti-Treaty sentiment is the one that Mr Key will pander to.

So long as the water-rights question remains unresolved, though, prospective investors in the assets may be frightened off. Uncertainty is bound to affect demand for the shares, and could reduce the price they fetch in the market.

The government cannot afford to see the asset-sales delayed, nor to find itself short-changed. The political risks of indecision and delay, especially if the debate is still raging as the next election approaches, are potentially catastrophic for National. A fire-sale of shares, and hence a smaller capital injection to the government’s coffers, on the other hand, will cast a bad light on a policy which was a major point of differentiation between National and its opponents in the 2011 election.

Up until now, most of our dams have been owned by the State on behalf of the public, and the rights to use the waters that power them were taken for granted. By allowing private investors to take possession of shares in those power-generation assets, the government has unintentionally opened up a debate about the rights to the water resources. Those New Zealanders who are not in a position to purchase shares in the dams may welcome any efforts to challenge the rights of those who can invest in them.

This time, Treaty politics may cut across the usual race-relations boundaries and into the class-politics of wealth and property, and so under-cut the ability of the Key government to claim the ‘balanced’ middle-ground in this particular debate.

Much will depend on the findings of the Tribunal, and possibly the courts. Once upon a time, we would have said that no-one owns the foreshore and seabed, just as Mr Key is now asserting confidently that no-one owns water – but it would be rash to jump to conclusions.

Dr Grant Duncan is an Associate Professor, Politics and Public Policy, at Massey University’s Albany campus.