Winston Peters

If Winston Peters really wants to get back into politics, now would be a good time.

Halfway through its first full year in office, the Government has issues in front of it which are tailor-made for New Zealand First -- the foreshore and seabed, and bank interest rates.

Both are capable of being inflamed in ways the old campaigner has so often used before when he has rallied support for his party.

With or without him, public anger may make itself felt.

Ministers are being cautious in their approach to the foreshore and seabed report and its politically difficult recommendations, and they have cause to be nervous.

They only have to recall how easy it was for Don Brash to ignite a surge of support for National by arguing against preferential treatment for Maori to realise the reverse could happen if a foreshore and seabed solution is perceived to be unfair to the majority of voters.

Peters quickly picked up the potential for this to happen when he said the review had been "stacked" to get an outcome that would see some Maori claim ownership of coastal areas.

The issue for some Maori was "money not mana" said Peters, who probably isn't alone in thinking that.

He described Prime Minister John Key as being naive in his handling of the review report, which drew a response that a consensus might be found which did not involve compensation.

"It's not about freehold title ... it is about mana being restored," said Key.

The problem is going to be restoring mana in a way that is acceptable to National voters, because the Government can't afford to alienate a significant section of its core support over this issue.

The Maori Party's joyous reaction to the review report was an indication that it anticipates an outcome far better suited to Maori than the original legislation, and the party is going to be an integral part of the negotiations for a replacement act.

United Future leader Peter Dunne said he thought New Zealanders would be willing to accept customary title, but they would be unlikely to accept another round of compensation.

He could be right, but would customary title in name only be enough to satisfy Maori Party aspirations?

The second issue, bank interest rates, has all the ingredients Peters would need to fire up an angry reaction.

Australian-owned banks ripping people off, billions of dollars in profits going offshore, the very name of his party could be invoked if he chose to become the champion of the nation's mortgage holders.

The Government has talked a lot but achieved virtually nothing as interest rates charged by the banks remain much higher than the drastically reduced Official Cash Rate.

Key and Finance Minister Bill English keep saying they should be lower than they are, so does Reserve Bank governor Alan Bollard.

The impression is that the banks don't care what the Government or the Reserve Bank says, and there seems to be a reluctance for ministers to go any further.

Key usually makes the point, when he talks about interest rates, that the banks in New Zealand, unlike those in many other countries, are still open for business and are lending money.

When Parliament's finance and expenditure committee voted on whether there should be an inquiry, it was blocked by National, ACT and Maori Party members.

The Government obviously didn't want it to go ahead. When he was questioned in Parliament, English replied that if an inquiry by backbench MPs would change the direction of the economy, "we would have already done it".

That missed the point, and it was a somewhat disrespectful dismissal of Parliament's most important select committee on which senior members sit.

It would have been able to call in bank chief executives and make them explain precisely why interest rates are much higher than the Reserve Bank's settings.

The majority decision against holding an inquiry played straight into Labour's hands.

Its finance spokesman, David Cunliffe, said New Zealanders were looking to Parliament for answers.

"Thousands of New Zealand homeowners, businesses, farmers and exporters have every reason to ask why Parliament's watchdog on the economy is, by a majority vote, choosing to stay muzzled," said Cunliffe.

"They are paying too much for their mortgages and business loans and they've now been denied the opportunity to find out why in a parliamentary forum."

Cunliffe was playing it up, but he knew popular opinion was on his side.

There has been no explanation from the committee's chairman, National MP Craig Foss, as to why the inquiry was voted down. The impression is left that government MPs didn't want to put bank bosses in the hot seat.

Making the decision not to hold an inquiry even more puzzling was the release a week later of the committee's report on the Reserve Bank's June monetary policy statement.

The committee lashed the banks for failing to reduce short-term interest rates and for protecting their profits.

It said it was worried by the triple threat farmers faced through the strong dollar, falling commodity prices and high interest rates.

It urged the Reserve Bank to put pressure on the retail banks, and the report noted that when Dr Bollard appeared at the hearing Cunliffe had asked him if he thought an inquiry by the committee would be useful.

"I think it would be very helpful if the select committee were to hear from the banks on this," Dr Bollard replied.

Despite this the committee decided, on a majority vote by National and its support parties, not to hold an inquiry.