2 Feb 2012

Warning debate over Treaty clause could hurt investor sentiment

1:45 pm on 2 February 2012

A business analyst says if debate about including Treaty of Waitangi provisions in a new law paving the way for partial asset sales continues in the long term, it could be bad for investor sentiment.

In order for the partial sales of four state owned energy companies to proceed, they must first be removed from the State Owned Enterprises Act and included in new legislation.

The Government has released three options for transferring treaty clauses into the new law, with one option removing treaty obligations entirely.

The Maori Party wants the full provisions to be left in, and it says the matter is a deal-breaker that could see it walk away from its confidence and supply agreement with the National-led government.

Business analyst Brian Gaynor says if this kind of debate carries on, it may have an affect on investor sentiment.

"The more debate that there is, the more uncertainty there is about it and any lack of resolution is going to mean ... some, if not a big majority of investors will say 'I'm going to leave this alone it's too awkward'," he says.