New Zealand set for asset sales after poll win

Last Updated: Sunday, November 27, 2011 - 11:13

Wellington: New Zealand`s re-elected centre-right government claimed a mandate on Sunday to push on with up to USD 5 billion worth of asset sales and welfare reforms and said it would quickly get down to forming a new administration.

The National Party, led by former foreign exchange dealer John Key, scored 48 percent of the vote, increased its number of seats to 60 from 58 and gained the support of two small parties to guarantee a majority in the 121-seat Parliament.

"It`s a pretty strong endorsement of where the Government sits, and we`re confident we`ll be able to build the relationships needed to go ahead with the programme," National`s campaign manager Steven Joyce told TVNZ.

National campaigned on promises to consolidate policies of the past three years and work toward economic growth by cutting debt, curbing spending, selling state assets and returning to a budget surplus by 2014/15.

Ray Miller of Auckland University said National had effectively neutralised its biggest weakness -- the unpopular asset sales, slated to raise NZ$5 billion to NZ$7 billion.

"They got the policy out early, they sold it in positive terms and in the end, while it was still a negative, it was one policy among many and not an overriding one," he said.

National plans to sell minority stakes in state-owned power energy companies and further reduce the stake in Air New Zealand. Key has promised local small investors will have preference in share sales, with a 10 percent cap likely on how much any single investor can hold.

Welfare reform, slow carbon trade

It also plans to reform welfare by getting people off benefits and back to work, and will slow down the expansion of its carbon trading system to lessen the cost on businesses and households.

Key`s strong personal rating, his easy going, affable, unifying style was also a factor behind National`s showing, despite continuing worries over the economy.

"I`ve got a PhD in geology and I still can`t get a full-time job," said Sami Alshidi, 52, who has been working as a taxi driver and voted National because he felt it would steer the economy better.

Financial markets had already priced in no change of government and a broad continuation of policies.

"The National Party has a clear mandate to proceed with asset sales to lower fiscal deficits and government debt," said TD Securities head of research Annette Beacher.

"But this election was not on the global radar screens...(and) will likely be completely ignored."

The final tally of seats could yet change when tens of thousands of absentee votes are counted over the next two weeks, although the initial turnout of nearly 74 percent was one of the lowest in more than a century, election officials said.

The main opposition centre-left Labour Party slumped to 27 percent, the lowest share of the vote in its 95-year history, and lost nine seats. The environmentalist Greens upped their share to more than 10 percent and gained four seats.

The re-emergence of the nationalist New Zealand First Party, led by the maverick veteran Winston Peters, from three years in the political wilderness, is expected to add fireworks but not impede National.

"We will make sure of a huge amount of sunlight on New Zealand politics," Peters said.

Bureau Report



First Published: Sunday, November 27, 2011 - 11:13

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