Liam Dann: Bill English lacks Key’s populist charisma but earned kudos for his handling of the economy.
Business-friendly policies John Key ruled out could be back on the table if Finance Minister takes over the top job
Bill English doesn’t have the populist charisma of John Key but he has earned great kudos for his handling of the economy through the global financial crisis and a series of earthquakes.
In many respects he is also more ideologically aligned with a more traditional market-led, business perspective.
Many in the business community would therefore welcome English taking over as Prime Minister, as expected.
There are also some businessfriendly policies that Key had ruled out which may now be back on the table under English. These include further asset sales and the restructuring of NZ Superannuation.
Clearly he will already have a handle on the possible election promises for 2017, including the ability to cut taxes, spend on infrastructure and keep paying down debt.
Treasury’s 2016 Half Year Economic and Fiscal Update (HYEFU) and the Government’s 2017 Budget Policy Statement are due on Thursday.
Key has already hinted they will present an upbeat outlook, even despite last month’s quakes.
If dairy prices continue to rise and the housing market stays in a sweet spot — cooling but not crashing — then English will begin 2017 with the Government on a roll that will take some stopping. His weak spot will be social policy. And the opportunity remains for the opposition to turn that into an election issue.
So while Key’s resignation may be a shock, it is a testament to the strength of the economy he has presided over that his departure caused barely a ripple on financial markets.
The dollar was down during trading yesterday — just. But by 5.30pm, it was at US71.01c — up on Friday’s close of US70.92c. The movement in the kiwi was insignificant, particularly against a backdrop of the global turbulence as the Italian PM resigned and the euro plunged.
Similarly the S&P/NZX 50 Index dropped slightly on the news. It eventually closed down 0.7 per cent — but that was likely more to do with global uncertainty on the Italian referendum outcome and the turmoil that may create in Europe.
The ASX was down by a similar amount yesterday.
It is possible that business confidence could dip on fears that an opposition coalition win becomes more likely in 2017.
But it is more likely that any weakening of National’s electoral stranglehold points to an unpalatable — from a business point of view — alliance with Winston Peters.
Many in the business community would therefore welcome English taking over as Prime Minister