Scoop Election 08: edited by Gordon Campbell

On the Citizens Initiated Referendum on asset sales

March 7th, 2012

The launching of a Citizens Initiated Referendum on the question of the partial asset sales is a useful shot across the bows of the government’s intentions – although even if the required amount of valid signatures are gathered, it will be mid 2013 before these are checked and validated. Quite some after the stake in the first state energy company is floated, which is due to happen in the third quarter of this year.

There is no doubt that a clear majority of New Zealanders oppose the selling off of their assets. Prime Minister John Key may claim to have gained a mandate for his wider policy agenda at the last election, but – all along – the government has been aware of the degree of public opposition to this particular policy. It was re-elected last November despite, not because of, its asset sales intentions. The truly relevant date for this Citizens Initiated Referendum is Election Day 2014, when the result will be a useful campaigning tool for the Opposition.

Despite the tidal wave of public opposition to the sales, the work involved in carrying out a successful exercise of this sort is still pretty daunting. Given the current size of the electoral roll – which was 3,070,847 eligible voters at the last election – and the need to get 10 per cent of them on board, this boils down to a requirement to gather 307,085 valid signatures, or 841 valid signatures each day, every day, for an entire year. No wonder very few CIR ever manage to make the signature target. The resources of the CTU and Grey Power will be stretched to carry out the task of getting the paperwork out in front of the public in every conceivable location, collecting them and sending them to the central organisational office to be collated.

Volunteers will be needed, and they will need clear instructions – to ensure they get all the data required to render the signature valid. When taken together with the high 5% threshold for MMP, it is another example why politicians should never be trusted to write the checks (or cheques) and balances on how democracy should operate. Compare the New Zealand situation with Switzerland, which gives campaigners 18 months to gather 100,000 signatures – or just 1.75% of registered voters, at a rate of only 182 a day.

The other grassroots democracy movement worthy of support is the Ohariu Peoples Power initiative to place pressure on local MP, Peter Dunne, who holds the casting vote on the asset sales legislation in a Parliament all but deadlocked on the issue. (So much for sweeping mandates.) The Peoples Power group has been holding “Citizens’ Select Committee” meetings in the Ohariu electorate to receive submissions from local people on the proposed sale of their assets for forwarding to Dunne, to keep him informed about the hostile mood of his electorate. The Citizens Select Committee will also be a forum for discussing the Trans Pacific Partnership trade agreement – the vehicle meant to facilitate further foreign investment in this country, and which is being negotiated behind closer doors.

As Maori Party Leader Tariana Turia has made clear, this week’s outcome whereby Treaty obligations will be recognised by the 51% Crown majority stakeholder will not change the Maori Party opposition in Parliament to the asset sales:

Mrs Tariana Turia said “We are strongly opposed to the sale of assets, and our vote will not change on this issue. We will however, continue to monitor the progress of the legislation throughout the parliamentary process to ensure we mitigate the risk of the proposed sell down of assets on tangata whenua.”

“This process has raised a number of issues which need to be properly addressed in relation to our rights as tangata whenua and our connection and relationship with our waterways and other natural resources,” said Mrs Turia “Water will be a large focus for the Māori Party over this term of government.”

The focus on water is an interesting one, given that pre-election, Peter Dunne also voiced his concerns about the privatising of water – though at the time, this probably had more to do with domestic water supplies than with the ownership of our waterways and dams. More recently however, Dunne has put himself out of step with the government over any plans by the new owners to asset strip the wind farms and dams that are currently owned by the companies being put on the auction block:

Peter Dunne reportedly said yesterday that he may not support partial privatisation if there were no safeguards to stop the subsequent sale of individual electricity generating assets. John Key has said there will be no restrictions….

“Without those protections, [said Greens Co-Leader Russel Norman] Peter Dunne is right to back away from the Government’s proposal to partially privatise state-owned energy companies. Strategic energy assets are simply not secure under Key’s plans.

“Key will however be reluctant to include such clauses as they will push down the value of the companies being sold. He’s likely to fudge this issue in order to retain the confidence of Peter Dunne and the last remaining shreds of public support he has for his privatisation agenda.”

Dunne is a reliable political weather vane, when it comes to public opinion. It’s the main reason he has survived for so long. In this case, can Peoples Power win over Peter Power? Anyone wishing to become part of the Citizens Select Committee process can contact the organisers by email here.

As for the asset sales legislation… it remains somewhat unclear how a Treaty obligation on a 51% stakeholder will affect the group of minority stakeholders, none of whom will be able to amass more than a 10% stake in their own right. ( Nothing can stop them however, from agreeing on a common policy position, and acting in unison.) The “safeguard” of the Crown’s majority stake may also be illusory, since – as the Greens have already pointed out – the mixed ownership model legislation will impose no social obligations on the companies and will actually require them to be guided only by the “best commercial practice” profit maximisation criteria set out in the Companies Act.

Thus, the ability to oppose the likes of asset stripping and price gouging would appear to be zero – since optimising the commercial potential of the situation will be the only factor that can be deemed,by law, to be relevant. We’d like to intervene, one can imagine that nice Mr Key saying in future, but our hands are tied.

In which case, the Treaty obligation on the Crown is just about all we have as a restraining device. So far though, when it comes to protecting consumers from price hikes and other rapacious actions by SOEs, the existing Section 9 Treaty obligation hasn’t been much of a defence. Still, it may be up to Maori to use it in court in future, in defence of everyone else.


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    1. 8 Responses to “On the Citizens Initiated Referendum on asset sales”

    2. By T.J. Hearn on Mar 7, 2012 | Reply

      Well argued. Is it not remarkable that the often-derided Treaty of Waitangi might end up protecting us all from an inept government? And if that is so, what of the wider constitutional implications of that? I hope the Constitutional Committee or whatever it is called is listening carefully.

    3. By Jeff B on Mar 7, 2012 | Reply

      Forget the petition , a mass protest (ongoing) outside Dunnes house or electorate office should secure his vote . Much quicker way of obtaining a result than risking the time and outcome or govt likely inaction to the result of the petition.

    4. By Chris on Mar 8, 2012 | Reply

      So what’s changed, Gordon?

    5. By nznative on Mar 8, 2012 | Reply

      nothings changed chris ….. apples are apples and oranges are oranges.

      Or in other words the wish to continue hitting children has nothing to do with the national government selling our assets ….

    6. By Joe Blow on Mar 8, 2012 | Reply

      Sorry to be the pessimist on this one Gordon, but after seeing how little power a 100% shareholder like the Auckland City Council has over a limited liability company like the Ports of Auckland, I see very little potential protection from the s 9 provision being included under the new legislation.

      As the s 9 provision will only apply to actions of the Crown under the new Act governing the partially privatised SOEs, I suspect that there will be a minimisation of actions requiring shareholder approval under the new legislation.

      It will be interesting to see what the new legislation looks like…

    7. By Joe Blow on Mar 9, 2012 | Reply

      Here’s the Mixed Ownership Model Bill:

      The provisions of the SOE Act that remain in force appear to largely relate to land transfer and Maori land claims. Gone are the social responsibility provision under s 4(c) or even the responsibility of Ministers (shareholders) to Parliament for their performance under s 6! Why? Because the partially privatised companies will be responsible to the NZX from here on in… so much for Crown control.

    8. By Chris on Mar 9, 2012 | Reply

      So nznative – Referendums are cool, but only when you support them?

    9. By pclarebu on Mar 11, 2012 | Reply

      The interesting point in this proposed referendum is: we have a party who campaigned quite clearly and with a long lead time on the part privatisation of certain SOE’s; We had in the election very clear opposing views giving people a clear choice on that one issue. People obviously have a range of issues that they work through when casting their votes (or not casting their votes); because they collectively didn’t seem to vote based on this single issue in enough numbers to get the result they all er um – wanted.

      So now we have potentially a referendum so that people can have the government of their choice, but adopt the policy of the parties that they didn’t want;

      So that is I guess quite logical, (e.g. I love eating lots of nice food and I don’t want to exercise and I don’t want to get fat) but raises some interesting questions on what we want/expect from a democracy.

      (a) the value of single issue polls, what do they tell us about how people resolve multi issue complex choices.

      (b) what is our democracy and do we expect the representatives we elect to solve complex interplaying issues on our behalf or do we want to tell them what to do in every case or just some of the cases.

      It really is all quite interesting. I will follow the proceedings with interest.

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