Investors beginning to consider Kiwi election

Consumer price inflation hasn't been a powerful force for a while and ANZ questions whether a formal change to the ...
KIRK HARGREAVES/STUFF

Consumer price inflation hasn't been a powerful force for a while and ANZ questions whether a formal change to the Reserve Bank's objectives would mean much in practice.

Investors are finally beginning to put the September election on their radar, broking firm Forsyth Barr says.

The election has threatened to be dwarfed by political developments in the United States and Europe.

But Forsyth Barr's head of institutional broking David Price said Kiwi politics was just now becoming a topic for discussion.

"If you look at the polls, National continue to go up, but they can't govern on their own. On the other side it would be quite a large collection of varying interests.

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"People are just starting to give a bit more focus to it. At the moment it is in its infancy, but as we get closer and more detail of policies gets released, that will increase."

BusinessNZ boss Kirk Hope fears Labour's plan to work with businesses and unions to implement fair pay agreements in ...
CAMERON BURNELL/STUFF

BusinessNZ boss Kirk Hope fears Labour's plan to work with businesses and unions to implement fair pay agreements in each industry would return the country to the 1980s.

Labour finance spokesman Grant Robertson has said he would require the Reserve Bank to set monetary policies that maximised employment and "not just controlled inflation".

But he also said Labour and the Greens would carefully manage the country's debt and "run genuinely sustainable surpluses".

ANZ's chief economist Cameron Bagrie doubted there would be a "massive sea change" regardless of the outcome of the election.

"The economy is in a pretty good space and we are used to dealing with change, and generally speaking life tends to go on."

A lot of the political statements that were being made ahead of the election seemed reasonable, he said.

He did not envisage any major structural changes to the broader macro-economic policy environment.

Labour finance spokesperson Grant Robertson has said Labour would lower unemployment to 4 per cent, but ANZ economist ...
ANDY JACKSON/STUFF

Labour finance spokesperson Grant Robertson has said Labour would lower unemployment to 4 per cent, but ANZ economist Cameron Bagrie says the question is 'how'.

"We might see some tweeking but if we make a slight change to how the Reserve Bank operates, is it going to mean much in practice? The answer is 'no'."

Bagrie said that in 2000 and 2001 "the business community did get a little bit worried about a change in government and business confidence collapsed".

But it didn't affect firms' assessment of their own prospects and they just got on with things, he said.

One of Labour's bigger commitments is to provide an entitlement to three years' free tertiary education or training over people's lifetime, which young people could exchange for a $20,000 business start-up grant.  

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"Quite often when you get into power there is a bit of a reality check," Bagrie said. "You have got to find the money to write out the cheques."

Business lobby group BusinessNZ is about to step up its lobbying on political parties with the release of a "manifesto".

Chief executive Kirk Hope has his sights set firmly on Labour's industrial relations policies, which he said could "take New Zealand back to the 1980s".

Labour plans to help facilitate "fair pay agreements" between businesses and unions that would set basic pay and conditions in each industry.

"Whatever the terminology is, it is a move back towards a centralised wage-bargaining environment," Hope said.

Nor did BusinessNZ think a skills levy on businesses proposed by Labour to pay for training was "much chop".

But he said fiscal responsibility was important and budget responsibility rules Labour had agreed with the Greens were positive.

BusinessNZ wanted to see a cross-party approach to reforming the Resource Management Act, Hope said.

"You want it of course to reflect the maintenance of environmental values" but a better balance was needed to encourage efficient investment in urban infrastructure, including housing, he said.   

 - Stuff

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