National is also facing a major political challenge trying to accommodate Maori claims over water.

Treaty Negotiations Minister Chris Finlayson yesterday accused Labour of opening a Pandora’s box with its decision to impose a levy on water because that raised the issue of ownership.

And the Maori Party warned Labour that “the issue of who owns the country’s water needs to be addressed before there is any talk of imposing a tax on the resource.”

At the same time, NZ First Leader, Winston Peters, accused National of selling out and writing race-based water ownership into law while accusing Labour’s proposed water tax of being the trigger to justify it.

At the heart of the row is a simple argument — Maori argue that water is a taonga and that under the Treaty of Waitangi they are entitled to participate in its management.

Currently, the Waitangi Tribunal is conducting an inquiry into whether current law in respect of fresh water and freshwater bodies is consistent with the principles of the Treaty of Waitangi?

The next hearings for this inquiry will start at the end of October –after the election.

So, the question of who owns the water, and therefore who has the right to manage and tax it, remains up in the air.

There is a hierarchy of issues that need to be resolved.


Putting a price on water requires that the issue of who owns it be resolved and who owns it will depend on what decisions are made about allocation and those decisions will need to accommodate Maori interests.

Speaking at the post-Cabinet press conference yesterday, the Prime Minister, Bill English, said the Government has not so far agreed to Maori claims to have a right to participate in the allocation and management of water.

“We’ve been discussing that with them for a number of years, and we have certainly not agreed to that,” he said.

English argued that a royalty on water  (such as is being proposed by Labour) implied ownership.

“And that ownership will certainly be contested by iwi.”

English refused to be drawn on how the Government might react to the eventual report of the Waitangi Tribunal which would be almost certain to sustain an argument in favour of Maori having specific rights to the allocation and management of water.

“That’s the question ahead of us,” he said.

“The point I’m making is that you can’t just bumble into it asserting ownership and hoping that Maori will take no notice.

“These issues are about dealing with uncertainty out ahead of us.

“Maori are asserting their rights and interest with water.

“We’ve been dealing with that pretty successfully, but it takes an awful lot of work.

“If you talk to Maori they will tell you the next big issue is allocation and that’s partly because they want access to water which they haven’t been able to get for commercial purposes and partly because some assert an ownership.

“So we are going through a process which treads very carefully but respectfully through that minefield. “

At the same time, the iwi Leaders’ Forum Freshwater Group has made it clear that any Government moves to impose a levy or to place further management controls on water must include a specific allocation for Maori.

Their concern centres on so-called “over allocated” catchments such as Canterbury or Otago where water allocation is based on a “grand fathered” approach which means that those who have the consents keep them.

The argument favoured within the Government to deal with this is tradable water rights.

But reconciling those rights with Maori claims to a specific allocation will be one of the big issues for whoever forms the next Government. 

The problems are that any system that is seen as preferring Maori provokes a backlash and it is that prospect that seems to be making the current Government so cautious.

National is already facing a reaction from some of its more conservative members over its decision to support the  Mana Whakahono a Rohe iwi participation clauses of the Resource Management Act.

The right wing blogger and former Auckland Councillor, Jo Holmes, has announced on her blog that she will now vote for New Zealand First because of what she calls the Government’s race based policies.

“National has gone much further than it ever needed to pander to the Maori Party,” she wrote.

“As well as trashing democracy, it has extended race based privilege wherever it could, advanced race based corporate elitism, and has allowed the Treaty of Waitangi gravy train to continue, something it said it was committed to ending.”

Though Ms Holmes is well to the right of the mainstream party officials are worried that she might be the tip of the iceberg of a large number of potential voters who are being influenced by Don Brash’s Hobson’s Pledge campaign.

Certainly Peters is ready to welcome them.

Last night he issued a press statement which seems to imagine National has already reached a decision water allocation.

“A morally weak National Party has agreed to a ‘market-based regime for resource allocation’ and to ‘establish a regime of tradeable rights or tradeable permits in water’ – all based on race,” the statement said.

While obviously no agreement has been reached the statement gives a good indication of how NZ First is campaigning on the issue. 

Labour’s David Parker, argues that Labour can solve any Waitangi claims with a solution similar to the Maori fishing settlement. But that settlement gave Maori no management rights.

That will be where water is different which may be the real challenge Labour faces with its proposal for a water levy.

But they won’t be alone — National too, will sooner or later have to say whether its prepared to give Maori management rights.