Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Supreme Court decision opens way for privatisations

Supreme Court decision opens way for privatisations

By Pattrick Smellie

Feb. 27 (BusinessDesk) - The government will be racing the clock to try and sell up to 49 percent of state-owned electricity company MightyRiverPower now that the Supreme Court has dismissed attempts by Maori claimants to settle Treaty of Waitangi claims to freshwater rights first.

The unanimous decision of the five judge full bench of the Supreme Court clears the last legal hurdle to the MRP sale, which the government had hoped would be concluded before last Christmas.

However, whether it can meet its own timetable and get the MRP share float done ahead of the May 16 Budget remains to be seen. If delayed until after that date, MRP would have to restate its most recent six monthly accounts as they must be no older than 135 days to meet US securities regulations.

The involvement of US-based investment houses in the float is seen as important to ensuring it is well-supported, although no private shareholder will be allowed to hold more than 10 percent of MRP, while the government will retain a 51 percent controlling stake.

The sale may raise in the order of $1.5 billion and is a lynchpin of the government's economic strategy, despite attracting strong public disapproval. A petition to force a non-binding citizens' referendum is close to being lodged at Parliament, although there is no obligation to hold such a poll before the sale has occurred.

The Supreme Court gave Maori claimants a small bone by rejecting findings last year in the High Court that the Cabinet decision to sell a stake in MRP could not be judicially reviewed.

The High Court did have that power, Chief Justice Dame Sian Elias told a packed courtroom across the street from the parliamentary complex, where politicians of all stripes were waiting to hear the decision.

However, the court unanimously dismissed the appeal's fundamental premise that partially privatising a power company using water for hydro and geothermal power generation would "materially impair" the government's capacity to offer redress for Treaty breaches relating to freshwater rights.

"We are prepared to accept that privatisation may limit the scope to provide some forms of redress which are currently at least theoretically possible," said Elias. "But whether that amounts to 'material impairment', regard must be had to a) the assurances given by the Crown, b) the extent to which such options are substantially in prospect, c) the capacity of the Crown to provide equivalent and meaningful redress, and d) the proven willingness and ability of the Crown to provide such redress."

The court also found the urgent round of consultation undertaken by the government in the latter part of last year was adequate.

New Zealand Maori Council lawyer Donna Hall conceded outside the court the decision would allow asset sales to proceed, but important principles relating to appropriate consultation and redress had been confirmed.

Labour Party leader David Shearer said the government should cancel the sales anyway, given the depth of public opposition.

“Regardless of the Supreme Court decision, there is still a great deal of uncertainty around this plan," he said in a statement. "Compensation may have to be paid to iwi, the concern around Tiwai Point hangs over the electricity sector, Solid Energy has collapsed, electricity demand is predicted to remain flat so selling our energy companies at the bottom of the market is just foolish."

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Statistics: Business Research And Development Up 29 Percent

Computer services and machinery manufacturing firms led the way in an almost 30 percent lift in business spending on research and development (R&D) in 2016, Stats NZ said today. Businesses spent $1.6 billion on R&D in 2016, up $356 million (29 percent) from 2014. More>>

ALSO:

China Shopping: NZ-China FTA Upgrade Agreed Among Slew Of New Deals

New Zealand Prime Minister Bill English and China Premier Li Keqiang signed off a series of cooperation deals spanning trade, customs, travel and climate change and confirmed commencement of official talks on an upgrade to the nine-year old free-trade agreement between the two countries. More>>

ALSO:

Media: TVNZ Flags Job Cuts To Arrest Profit Decline

Chief executive Kevin Kenrick said the changes were aimed at creating "a sustainable future video content business for TVNZ in an ever-changing media market." More>>

ALSO:

Reserve Bank: Wheeler Keeps OCR At 1.75%

Reserve Bank governor Graeme Wheeler kept the official cash rate unchanged at 1.75 percent, as expected, and reiterated his view that the benchmark rate doesn't need shifting for the foreseeable future. More>>

ALSO:

Trade Plans: Prime Minister's Speech To International Business Forum

"The work to improve public services, build infrastructure, and solve social problems is possible only because we have enjoyed sustained, solid economic growth. A big reason for that is the Government’s consistent agenda of economic reform, and our determination to open up more opportunities for trade with the world." More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news