Housing Minister Nick Smith looks out across land at Massey East earmarked for a housing development.

The Government is ready to defend in court its decision not to offer iwi Crown land before it is sold to developers.



A legal skirmish has broken out after Ngāti Whātua thought it would be given first right of refusal to Crown land up for grabs in Auckland. The Government announced as part of the Budget that 500 hectares of public land would be sold.



The issue has drawn the ire of Government support partner the Maori Party, which said Ngāti Whātua had sought legal advice after learning the Government had no intention of dealing with them over the sale of Government-owned land in Auckland.

READ MORE: Crown land makes way for Auckland housing developments



But Prime Minister John Key and Housing Minister Nick Smith have staunchly insisted the law was on their side.

"What the Government's trying to do is expand the amount of land that is available for housing.

ANDY JACKSON/FAIRFAX NZ Prime Minister John Key.

"It's quite legitimate for us to do that," Key said.

He rejected claims the Government was trying to "circumvent" the iwi's right of refusal.

Smith said yesterday, that the Tamaki Redress Act, which gave effect to the first right of refusal collective, had a specific clause excluding land for housing purposes.

He thought there had been a misunderstanding with Ngāti Whātua around what the rights of first refusal were, and he was not concerned about the project being derailed.

Section 136 of the Tamaki Makaurau Collective Redress Act said a right of first refusal landowner may dispose of land held for state housing purposes if the disposal was to achieve the Crown's social objectives in relation to housing or services related to housing.

Key said the Government had sought legal advice before making its Budget announcement. The advice said provided there was a social purpose to the housing, that met the requirement of the law.

But it was the iwi's right to challenge that advice.

"...What I can tell you is people always have a legal right to test their rights but the Government's advice is that we're acting lawfully and acting correctly," Key said.

"We have an offer-back process, but that offer-back process only applies when the Government has exhausted all the options it wants to potentially deploy when it comes to those assets.

"We don't have to offer things back, we have to go through a process of asking other Government departments or looking if there are other uses."

Asked if the Government was prepared to defend the issue in court, Key said: "I would have thought so, yeah".

It did not matter that the land was being offered to developers, rather than having Government-owned houses built on it, Key said.

"Sometimes it ends up ultimately being offered back to the original owners, or being under first right of refusal to iwi. But that doesn't mean that's where the starting point should be, that's when the Government's exhausted all of its options it wants to consider.

"And actually if it wants to consider the use of that land for housing, the legal advice we have is that's quite appropriate."

Labour housing spokesman Phil Twyford said the situation was a "rort".

"Nick Smith's Auckland land rort is designed to free up the land for private development and is not planned to include any state housing. The Government won't even guarantee any proportion of affordable housing.

"Nick Smith should just admit his latest fiasco has provoked the threat of legal action by iwi and has put at risk thousands of houses that Aucklanders desperately need," he said.