Election Commentary 2014 – Steady as she goes – stability for business community

Kiwi SignDespite all of the pre-election revelatory build up and distraction, the voting public has spoken and decided to hold the course by asking John Key to form a third term National lead government.

As a result we expect to see the business community breath a collective sigh of relief that will be borne out by a slight rise in the share market today and quite possibly a minor strengthening of the NZ dollar. The markets like stability and the voters have delivered just that! We talk more specifics below.

John Key’s view that the vast majority of New Zealanders want a centrist government appears to have been vindicated; although we’re pretty sure that at times he must have wondered if some of the mud-slinging was going to stick.

The left does appear to be in disarray. There is a growing disconnect between the Labour party membership and its dwindling MPs. The left leaning union led membership block had significant influence over the choice of leader, policy and campaign strategy. Clearly the vast majority of Kiwis didn’t feel the country needed such radical change and/or were terrified of the prospects of seeing a government sporting some very colourful coalition partners. The decision to go with a presidential style campaign didn’t appear to work either. Ironically where there was more of a localised campaign focus, in the Maori seats in particular, they had spectacular success including, quite possibly, spelling the end of the Mana party.

Labour received its lowest share of the vote since 1922 (long before the first Labour Government in 1935 when Labour was growing after its formation in 1916, and was replacing the Liberals as a major political party in NZ). A broad centrist approach would seem to be the recipe for electoral success especially under MMP. The challenge for Labour will be to replicate this and broaden their base of support to be able to claim Government in 2017.

John Key is indicating he will in all likelihood invite the Maori Party, Act and United Future to be part of his government despite not actually needing them. In his view this will “improve the government”. This would indicate he is thinking longer term towards 2017, when National once again may need coalition partners. Despite a tumultuous campaign, the 2014 Election result is very much a case of status quo.

Expect some reshuffling of the cabinet benches, but this is unlikely to include a recall for Judith Collins anytime soon. Main areas of policy reform signalled by Key are changes to the RMA and labour law reforms. He is staying true to his centrist roots by ruling out any significant lurches to the right and meddling with things like the Working for Families tax credit system.

This has been at times a torrid campaign with a disappointingly small amount of time spent debating the real issues. Despite all of this, the voting public appears to have strongly endorsed the incumbents and perhaps, more tellingly, sent a message about what it doesn’t want.

So what might it mean specifically?

  • Continuation of the same policy in regards to fiscal consolidation, deregulation of the labour market, the Resource Management Act, infrastructure development – roads and fast broadband, a proactive approach to oil, minerals and irrigation, education and public service reforms, and trade deals.
  • Sectors likely to particularly benefit – electricity generators, building and construction.
Serious about your success?