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Chief Justice suggests 25 percent cap on asset sales

Thursday 31 Jan 2013 4:45 p.m.

The idea was mooted at the Supreme Court today

The idea was mooted at the Supreme Court today

Chief Justice Sian Elias has floated the prospect of 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 ownership claims to freshwater.

Her comments came at the end of the first morning of two days' scheduled hearings in the Supreme Court on the 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," says Dame Sian.

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 Mighty River Power and Meridian Energy, valued at $3.3 billion and $6.5b respectively, before the end of this year.

For a sale of just 25 percent of the two, the Government might reap only around $2.4b.

It intends committing capital raised by the sales to public infrastructure and facilities instead of increasing Government borrowing.

Mr 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.

NZN

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