Chief Justice floats 25% limitation on partial privatisations
By Pattrick Smellie
Jan. 31 (BusinessDesk) - Chief Justice Sian Elias has floated the prospect of the Supreme Court restraining the government to selling no more than 25 percent of state-owned power companies while it sorts out a long term solution to Maori claims to freshwater rights under the Treaty of Waitangi.
Her comments came at the end of the first morning of two days' scheduled hearings on the New Zealand Maori Council's challenge to the government's partial assets sales policy.
It followed lengthy questioning of the council's lawyer, Colin Carruthers QC, about the responsibility for finding a means of redress for Maori grievances lies with the government rather than Maori claimants.
"A protective mechanism could be that the Crown will only divest 25 percent until there's some resolution," said Elias.
While comments in the course of a hearing cannot be claimed as evidence of the court's eventual decision, such an outcome would put a serious dent in the government's plans to raise as much as $4.85 billion from the sale of up to 49 percent of MightyRiverPower and Meridian Energy, valued at $3.3 billion and $6.5 billion respectively, before the end of this year.
For a sale of just 25 percent of the two, the government might reap only around $2.4 billion. It intends committing capital raised by the sales to public infrastructure and facilities instead of increasing government borrowing.
Carruthers had argued earlier that even with majority control of 51 percent, the government would be weakened in its ability to force Treaty settlement terms on partially privatised companies, leaving Maori capacity to seek redress "significantly impaired."
The Maori Council is appealing a High Court decision not to allow the Cabinet's decision to proceed with asset sales to be judicially reviewed.
Carruthers expects to complete his submissions early this afternoon, with David Goddard QC to open the Crown's submissions before the end of the day. The hearing is set down for two days.