KEY POINTS:
National's new Cabinet lineup will have little time to reflect on their swearing in tomorrow before Prime Minister elect John Key gives them a stark warning on the state of the incoming government's books.
Mr Key's new ministerial lineup will be sworn in at 11am at Parliament.
But tomorrow's pomp could be overshadowed for some new ministers by their first meeting a few hours later where Mr Key will give them the directive that any new spending will have to be funded from savings.
"I'll be sitting down with the ministers to say to them 'look if you want to spend more money outside of the areas where there is $1.75 billion of new spend that's been committed' ... then those ministers will need to make savings in other areas to reallocate expenditure."
Mr Key has promised to stick to the $1.75 billion set aside by former finance minister Michael Cullen for new spending in each of the next three budgets, but most has already been committed to health and education.
He said he would underline that the government books and wider economy were in a parlous state.
Treasury's December economic and fiscal update was likely to show further deterioration, but not significantly worse than in the briefing released by Dr Cullen last week.
"So that is likely to look at numbers under 6 per cent for unemployment but not a long way away from that."
Mr Key said he would also warn them on their responsibilities in working with National's support partners.
"Obviously every member of Cabinet with a portfolio overlap, I expect them to have a good working relationship."
Mr Key today held out an olive branch to those who missed the Cabinet cut this time around, saying appointments in future reshuffles would be based on ability and performance.
He singled out party whips Nathan Guy and Chris Tremain as future "Cabinet material", but not demoted MP Maurice Williamson.
Mr Williamson lost his transport and communication roles yesterday, instead receiving the customs, statistics and building issues portfolios as a minister outside Cabinet.
Asked if he had told the gaffe-prone Mr Williamson he could earn his way back, he said: "No".
Mr Williamson refused to talk to media today, but one of the others to miss the cut, Tau Henare, said he was hopeful of future promotion.
Mr Henare compared himself to All Blacks halfback Piri Weepu who was dropped for the World Cup, but will this week captain the side against Munster.
Opposition leader Phil Goff today said he would announce his shadow lineup on either Thursday or Friday.
When he was elected leader he announced former prime minister Helen Clark would be Labour's new foreign affairs spokeswoman, former health minister David Cunliffe the finance spokesman and list MPs Darren Hughes and Steve Chadwick the senior and junior whips.
He said he had waited for Mr Key to reveal his ministerial line-up before reshuffling the rest of Labour's roles.
- NZPA
