John Key tells his first press conference as Prime Minister-elect that he has been warned the country's books have deteriorated. Photo / Dean Purcell

John Key tells his first press conference as Prime Minister-elect that he has been warned the country's books have deteriorated. Photo / Dean Purcell

The New Zealand financial markets may see a brief "relief rally" this morning after the National Party's convincing sweep into power, but the global financial crisis is still the only story in town, say commentators.

"There's so much happening internationally that our own election's a little bit of a sideshow," said fund manager Paul Glass, of Brook Asset Management. "I'd be very surprised if you saw any kind of bounce on the back of it."

Sharebroker Grant Williamson, of Hamilton Hindin Greene, said Saturday's win was likely to bolster investor and business confidence with a National Government being seen as more business friendly.

"But really a change in Government doesn't change what's happening in the economy at the moment."

Sue Trinh, senior currency strategist at RBC Capital Markets, said the same was true for the dollar.

"Politics have become less relevant than they may have been in the past in terms of the economy or the markets. The New Zealand dollar will underperform across the board. Not only have the domestic fundamentals underlying the currency evaporated, but our bearish view is as much a global story as it is domestic."

All up, the fledgling Key Administration is looking out over an unappealing economic scene.

In his first press conference as Prime Minister-elect yesterday, John Key admitted the Treasury Secretary had warned him the country's books had "deteriorated" since the Pre-Election Fiscal and Economic Update (Prefu) last month.

The new Government will get its first update on the nation's financial position in a midweek briefing from Treasury and the Reserve Bank.

The worst of the global credit crisis hit after Prefu was prepared, and former National leader and Reserve Bank governor Don Brash said he had long held the view that the numbers were going to be bad. Key did not have the option of doing nothing.

There was some expectation that things would have to be done to respond to the financial crisis, and possibly this side of Christmas.

"This is not the time to drastically cut the budget deficit. I think running a budget deficit is an entirely appropriate thing to do in the current circumstances."

Specific commitments to stimulating the economy, such as tax cuts and support for people who lose their jobs, had already been made. But measures needed to be put in place so that, as the economy recovered, the books could be balanced.