Success for the Centre Left means a waiting game for markets
It's the Anderton factor. Just how much pull the Alliance leader has in the Coalition Government is one of the key things financial markets are watching for to determine the effects on the economy and interest rates.
Sunday, November 28th 1999, 12:00AM
by Paul McBeth
It's the Anderton factor: just how much pull he has in the Coalition Government is one of the key things financial markets are watching for to determine the effects on the economy and interest rates.
In the aftermath of Saturday's General Election, Deutsche Bank is saying that the "policy slippage' in the Labour/Alliance programme carrys the risk that it will be negative for New Zealand's economic performance.
"However, any slippage will not be dramatic enough to offset the positive cyclical influences expected to impact on the economy over the next few years."
Deutsche Bank says that of immediate interest to the market will be Alliance leader Jim Anderton's exact role and also the review of the operation of monetary policy scheduled for early next year.
"As Treasurer designate Michael Cullen has stated, neither the Reserve Bank's sole focus on price stability nor the zero to three per cent target range will be up for change.
"However, there is the risk that Alliance leader Anderton will not easily make those concessions, given that a significant tightening in monetary policy next year - which looks increasingly likely given latest inflation indicators - constitutes a key risk to his ambitions in the business development portfolio."
Interviewed on TV One last night, Prime Minister designate Helen Clark said the Coalition Government hoped to tackle a number of issues before Christmas including anti-defection legislation, tax legislation and the freezing of interest on student loans. Anderton named economic development, jobs and industry development "along with the major social services areas of health and welfare" as his priorities.