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Home / Business / Companies

Liam Dann: Why business would welcome English

Liam Dann
By Liam Dann
Business Editor at Large·NZ Herald·
5 Dec, 2016 01:33 AM2 mins to read

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Finance Minister Bill English Photo / Mark Mitchell.

Finance Minister Bill English Photo / Mark Mitchell.

Bill English certainly doesn't have the populist charisma or the common touch 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 business friendly 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.

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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 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 Government on a roll that will take some stopping.

His weak spot will be social policy.

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And the opportunity remains with 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.

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The dollar did drop - just.

On Friday night's close at US70.92c a fall to US70.85c (as of 2.30pm) is insignificant - particularly against a backdrop of the global turbulence as the Italian PM resigned and the Euro plunged.

Similarly the NZX-50 dropped slightly as news out of Italy broke at around midday. By the time of the Key announcement at 12.45pm it was already stable.

It is possible business confidence could dip on fears that an opposition coalition win becomes more likely in 2017.

Any weakening of National's electoral stranglehold points to an unpalatable (from a business point of view) alliance with Winston Peters.

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