Bloomberg News

Key’s Election Chances Buoyed by N.Z. Economic Optimism

November 07, 2011

(Updates with Key comment in ninth paragraph.)

Nov. 7 (Bloomberg) -- New Zealand Prime Minister John Key heads into the second week of campaigning for the Nov. 26 election backed by fresh voter support for his economic management, according to an opinion poll.

Forty-seven percent of 1,000 voters surveyed from Oct. 29 to Nov. 2 said the economy will improve in the next 12 months, up from 45 percent in late September, according to a Colmar Brunton poll for Television New Zealand released yesterday. The proportion of pessimists fell to 31 percent from 35 percent.

Key’s National Party, seeking a second term, had 56 percent support according to Colmar poll data released last week, leading the main opposition Labour Party on 30 percent. Rising consumer confidence adds to signs that domestic demand will pick up, while growth will also be spurred by rebuilding the earthquake-damaged city of Christchurch.

“Those figures show remarkable resilience,” Finance Minister Bill English told TVNZ’s Q+A program yesterday. “There’s going to be all sorts of buffeting, but this economy is now on a track to, by developed country standards, reasonable growth.”

New Zealand’s growth rate is forecast to more than double to 3.3 percent in the year ending June 30, 2012, from 1.5 percent a year earlier, according to Treasury Department forecasts published Oct. 25.

Rebuilding in the South Island city of Christchurch, where the central business district remains closed more than eight months after an earthquake killed 181 people, may spur growth, while exports and tourism may slow as Europe’s debt crisis curbs global demand.

Right Direction

“New Zealanders have been through global recession and the earthquakes had a big impact,” English said. “They’ve got a sense of the direction. It’s vital we keep pushing in the right direction.”

The National Party plans to maintain low taxes and wants to curb costs on companies to encourage them to hire more workers, he said. Last week it announced plans to lower the number of people receiving welfare payments by about 46,000 from 328,000 currently by linking certain benefit categories with a requirement to work or get training.

“The argument has to be to move people out of welfare and into work,” Key told TVNZ’s Breakfast today.

National is also seeking a mandate to sell as much as 49 percent of four government-owned energy companies to private investors, raising funds for capital projects and offering New Zealand savers new investment options.

Asset Sales

Just 26 percent of those surveyed approved of the sales plan, with 68 percent opposed, the Colmar poll showed, according to TVNZ.

“New Zealanders don’t want the assets sold,” Labour finance spokesman David Cunliffe told TVNZ yesterday.

“We don’t save enough, we’ve got a damning external deficit and we’ve got a long-term fiscal crunch because of our aging population,” he said. “Labour’s got policies that sort all three things out.”

Labour’s policies include increased spending and tax breaks for low-income families, and a new capital gains tax. Fifty-one percent opposed the tax and 41 percent were in favor, according to the Colmar poll.

--Editors: Paul Tighe, Brendan Murray

To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net

To contact the editor responsible for this story: Paul Tighe at ptighe@bloomberg.net


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