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Know when to fold ’em

Written By: - Date published: 1:34 pm, August 26th, 2012 - 26 comments
Categories: privatisation, treaty settlements, water - Tags:

In policy terms, Key has three options on asset sales – plow ahead, cut a deal with iwi, or call it quits. The politics around each is very different.

Trying to cut a deal with iwi now would be a major change of tack for the Nats. There would be some loss of face in that but Key has shown the back-flip in the past and be awarded points for technique by the punditry.

The rednecks, though, would have a tougher time accepting any such deal – and they would feel betrayed by the PM who spent the last few weeks dog-whistling to them over Maori water rights. That would leave openings for NZF, the Conservatives, and maybe even Labour if they are deft enough to pin the blame for the recognition of water rights on to the Nats’ asset sales (several iwi have said that they are happy with the status quo around use of hydro water while the companies remain publicly-owned, so there’s some truth to that angle).

Calling it quits would be a massive loss prestige for the Government. They, and the Government’s many opponents, have made asset sales National’s flagship policy. It would leave the Budget in disarray with National in the short term either having to borrow more or cancel new capital spending (in the longer-term, of course, not selling the assets means less borrowing).

But how long would the damage last? Would it be better to take that hit now than suffering through court action, protests, a referendum…? Might it be the smart thing to cut their losses and invent some other flagship policy? I’m sure Steven Joyce can turn out some glossy booklets to give the impression of action.

And, let’s not forget, dropping the asset sales would be the fiscally and economically smart thing to do. Selling them incurs a $100m a year – every year, forever – loss to the government over and above the interest costs it could avoid by not having to borrow. It is not and never has been in the interests of the government or the New Zealand economy to sell our assets.

On the other hand, National’s purpose in government is to enrich the rich at the public’s cost. If it can’t succeed in handing over billions of dollars’ worth of public wealth to its backers at bargain prices – then what’s the point of being in government? Only keeping the Left out and National’s backers expect a bit more in return for their investment.

But I don’t think they’ll take up either of those options.

While they’ll probably hold some kind of sham consultation with Maori, they will stick with the playbook they’ve written so far: try to sell the assets and use the water issue to foment racial division to weaken the opposition and win back a few redneck anti-asset sales voters. It reads fine from National’s perspective but the Waitangi Tribunal has been very clear – attempting to proceed on this route with a deal with Maori would be a Treaty breach. The political strategy from National, and we’ve already seen this, would have to be to try to ‘other’ the claimants and portray Maori as greedy opportunists who are after “our” water.

National may think that’s not a big deal, even a good thing, in polling terms but that over-estimates New Zealand’s racism and ignores the changing ethnic make-up of New Zealand. Since Orewa in 2004, a whole generations of new young voters has replaced the older generation. The 1996 cohort – the 18 year olds in 2014 – is 28% Maori and 72% Pakeha (individuals in these stats can have more than one ethnicity so the summed total is over 100%) whereas only 10% of those who died last year were Maori and 84% were Pakeha. We are not as predominantly Pakeha as we were a decade ago and we are a socially more liberal country (look at the marriage equality debate) as the generations change and attitudes do to. National would find it much harder to use asset sales to whip up racial division than it did the foreshore and seabed.

And, no matter how much Key panders to latent racism, it doesn’t get the assets sold. National would lose court case after court case and face injunction after injunction if it tried to sell the assets without first having a deal with Maori. That would delay any sales not just into next year but until after the referendum is held in conjunction with the local body elections in late 2013. Pleasing a diminishing number of racists by ‘standing up to the Maoris’ is small reward for being a government whose flagship policy is getting dealt blow after blow.

National’s asset sales programme is in crisis. The smart thing to do, for the good of the country and for National’s own good, remains to drop the policy altogether. But they won’t. Instead, they’ll play the race card. But that old joker isn’t the trump it once was.

26 comments on “Know when to fold ’em”

  1. chris73 1

    Plow ahead would be my preferred option (surprise, surprise), problem being if National pull the pin who then do I vote for?

    Labour? Maybe if Shearer and Mallards latest comments are anything to go by

    Greens/WinstonFirst/Colin Craig? (combined due to same reaction) Noooooooo!

    Act? Only if they ditch the old hangers-on and embrace some the younger talent AND go back to sticking to economics and not faffing about with the sst

    Decisions. decisions

    • bbfloyd 1.1

      I have saucers in my cupboard with more depth than that offering…. and they hold more substance….

      One dimensional thinking applied to three dimensional issues will always lead us back to the national party, and it’s flock of supporters…..

      One has to admire their ability, or determination, to proceed with the asset stripping, and distribution of the proceeds to their sponsors against any, and all evidence, showing how irresponsible their actions have been towards the society they were elected to represent….

      And the evidence against the asset sales having any positive outcome for new zealand as a country, and a society that would function well has become a tsunami of fact…..

      It’s straight out theft, and to blindly cheer it on speaks volumes about the type of support this brazen larceny is attracting…..

      • Draco T Bastard 1.1.1

        We actually need an entrenched law requiring a referendum to remove that says that if the government does something that evidence shows is most likely to be detrimental to the country then that government gets jailed for treason. We need to stop these types of theft that governments since the 4th Labour government have forced upon us.

    • Lanthanide 1.2

      Emigrate to the US and vote Republican.

  2. Dr Terry 2

    chris73. What decisions? Obviously you have well and truly decided – in favour of the Right, that is (unfortunately for you, a bad decision indeed!)

    Key back down? One cannot imagine such a thing! It would have to mean his resignation, unthinkable! He will gamble, especially on the appeasement of Maori (which one can only hope will not come off this time).

  3. RedLogix 3

    Impressive read Eddie. I’ve no idea what Key will do, but his trader instincts are at their sharpest when faced with this kind of choice.

    Ploughing on is impossible; the arrogance of this will ensure the entire process will get utterly shut down in Court.

    Calling it quits is impossible too; because selling these assets is the sole reason for Key’s political career and he would have to resign if he took this path.

    Therefore he’ll try to cut a deal … preferably with a large dash of ‘divide and conquer’. But that of course will leave a major hole in the books and give too much away to the ‘wrong people’.

    Or he could introduce radical legislation to ensure the ToW claims are shut down; but then again he has the prior example of the S&F debacle to see how that worked out.

    Much will depend on Key’s willingness to tough the negotiations out and I’m not sure he still wants to do that. His resignation is not wholly improbable … although I’d rate it a very outside chance at this point.

    • Rodel 3.1

      Redlogix
      ” resignation improbable”?…Give him his precious f****n’. knighthood and he’d be off like a rocket.
      Give it now!

  4. BernyD 4

    If we could offer alternatives then a positive discussion might ensue.
    Problem is they (National) haven’t defined anything when it comes to the “Recession” itself,
    If we’re hemorrhaging money, we can’t respond until we can define “Why”
    The problem he faces is the actual value of those shares has diminished considerably, and they’re not going up any time soon.

  5. Dv 5

    What i find so difficult to understand is how the party of business has completely stuffed the float.

    • BernyD 5.1

      To many assumptions about the Companies themselves.

    • felix 5.2

      That’s the silver lining of having this useless pack of bastards in govt; there’s so much incompetence that evil hardly gets a look in.

    • Draco T Bastard 5.3

      They call themselves the party of business but what they really are is the party of dictatorship and legalised theft. Once you understand that then you’ll know why they stuffed the float. They really did think that they could just wave their hand and have the sales go through as they wanted them to.

  6. There is one further possibility which I am sure the Nats have not ruled out as yet, urgent legislation.

    This would be a constitutional abomination and would destroy the coalition with the Maori Party not to mention race relations but with this bunch you can never rule such action out. 

    • Anne 6.1

      There is one further possibility which I am sure the Nats have not ruled out as yet, urgent legislation.

      There is another possibility:

      pretend they are being forced to give in to the ‘mouries’… call a snap election on the pretext that they were given a mandate to sell the assets and now the country is being held to ransom by Hone Harawira, the Greens and Labour – in that order.

    • Eddie 6.2

      yeah. I somehow missed out mentioning that the likely scenario – ignore the tribunal, lose court cases – could result in legislation.

  7. blue leopard 7

    “The race card”

    It is of great concern to me when our politicians play into the baser elements of our characters.

    I would like to see a point when this tactic of divide and rule gets seen for what it is, an unnecessary creator of disharmony amongst us and it gets to be such an embarrassment to those caught playing it, that it becomes an obsolete approach.

    The bene-bashing fiasco comes under the same category.

    I am completely fed up with this bulls** way of “managing” our countries affairs, which creates more damage than anything that is trying to be repaired by peddling such rubbish. Ultimately politics appears to have become NOTHING about moving forward positively together and ALL about politicians saying whatever it takes so that they can get the salary of being in office.

    Ultimately intelligence is our strength and saving grace, we all need to start applying it.

  8. I guess key is finding out that nz is not such a push-over after all,it probably looked
    quite simple from his office in the US,all he had to do was become a member of
    national,become the leader,next PM and with the help of Goldman,he could do
    whatever he wanted,wrong,an overwhelming amount of nz’ers dont want their
    assets sold off in any shape manner or form,by keeping the maori party sweet
    everything should be easy,wrong,maoridom is more than the maori party,who
    lost seats in the last election and are not representative of all,so the battle begins.
    The only outcome for water ownership/rights is through the courts and not
    for GS or govt officials to collaborate on.

  9. foreign waka 9

    The pragmatic and honorable thing to do right now is to establish the legality of the sale. Be it by examining Maori claims or, as seems to be forgotten, asking the owners how they want to proceed – by casting a binding vote. Like a the real deal at a shareholders meeting.
    I do belief that this is politically acceptable, however the rich and famous already lined up for the “sale of the century” might get a bit of ruffled feathers. Not to worry too much, as there are plenty of other lucrative deals out there.

  10. AmaKiwi 10

    No American president before or since ever had such overwhelming public approval as JFK did when he went on national television and said, “I accept full responsibility for the Bay of Pigs fiasco.”

    I don’t think it is within Key’s constitution to do it, but if he told the country he made a mistake it would probably INCREASE his popularity, not diminish it.

    It might not last long. Within weeks JFK’s approval rating dropped back to where it had been before the Bay of Pigs “mea culpa” speech. But it cleared the air. The Republicans were never again able to embarrass him about this foreign policy fiasco.

  11. Tracey 11

    Ms Turia is unwell.

  12. ad 12

    If the asset sales agenda programme was delayed until after the 2014 election, would there be reason enough within the general public to vote Labour and not National?

    ie does Labour have sufficient policy gas in the tank to win the public if asset sales are taken off the media agenda for this electoral cycle?

    • Tracey 12.1

      I think many Labour people would vote Green, which might see National re-elected. Perhaps National people would feel more inclined to vote Green in these circs than Labour. I know that sounds odd, and a no-no 20 years ago but the times they have changed.

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