By: Felix Marwick | Monday, August 27, 2012 6:00 AM

Something that seemed so simple nine months ago has all of a sudden got very complicated for the National Party.

Fresh from the election and a 47 percent share of the vote, the party was confident it had the mandate it needed to proceed with its partial asset sale plans. Sure the opposition parties would kick up a fuss, but with the votes of United Future and ACT in the bag the policy seemed to be set for smooth sailing.

That was until the Maori Council made its water rights application to the Waitangi Tribunal. Now matters are very complicated indeed.

With the Tribunal indicating Maori have residual property rights in water, and calling for the Government to halt its asset sales programme until the nature of those rights are determined, the Government now faces a number of choices and none of them are easy.

If it's not seen to pay due heed to the Tribunal's decision, it runs the risk of  Maori taking the water rights issues to the courts. If it pushes ahead with asset sales at the same time, the legal action could harm share prices and reduce the return the Government is seeking to get from the sales.

Alternatively, if the Government delays the sales and consults with Maori on water rights, the consequence is revenue from the partial floats will be delayed and the value of the assets could still be devalued. That applies particularly if the Waitangi Tribunal's idea of Maori receiving royalty payments was to be adopted. If Mighty River Power, Genesis, and Meridian had to pay out millions every year in royalties to Maori it would have a bearing on their value to investors.

In turn this all has the potential to affect the Government's fiscal plans given revenue from the sales are tied into its future Budget forecasts. The chances of achieving a Budget surplus in 2014 could go from slim to non-existent.

National's staked a lot of political capital on its mixed ownership model, and given the language used by the Prime Minister and his senior colleagues it seems unlikely the policy will be shelved or delayed.

Delay works against National's interests as it significantly narrows the window for the number of floats that can take place before the next election. After all if the partial sales are the panacea to our debt woes, as National claims, then sales will happen sooner rather than later.

And then there's the political dynamic - with Labour not committing to buy back the affected shareholdings National knows the sales it can push through are unlikely to be reversed. On that basis alone, it's in its own interest to move quicker rather than slower, particularly as the 2014 election looms ever closer.

Photo: NZ Herald