Key Re-Election Would Minimize N.Z. Disruption, Hisco SaysNarayanan Somasundaram
New Zealand Prime Minister John Key’s government has a good economic record and re-electing his National Party would minimize disruption to businesses, the head of the nation’s biggest lender said.
National, which has been in office since November 2008, has guided the economy through the global financial crisis and earthquakes in Christchurch, while putting the budget on track for surplus next year, David Hisco, the chief executive officer of Australia & New Zealand Banking Group Ltd.’s New Zealand unit, said in an interview in Sydney yesterday.
“Any change of government always sees a pause in activity by businesses,” Hisco said. “If National gets re-elected that would minimize any pause in business activity. That’s probably the way to move forward with least interruption and certainly they’ve got an economic track record.”
Key is campaigning for a third term in office in the Sept. 20 election with a message of sound financial management as growth gathers pace in the economy. He takes on the main opposition Labour Party, which is proposing tax increases for the highest income earners and new tools to control inflation.
The National Party had 47.6 percent support in a Fairfax poll of 1,011 people this month compared with 29.5 percent for Labour. Labour could still oust National if it forms an alliance with other opposition parties such as the Greens and New Zealand First.
The government projected the first surplus in seven years for the year through June 2015 and raised the possibility of future tax cuts in its final budget before the elections. It said an improving fiscal outlook will allow the government to raise the limit for new spending without stoking inflation and pushing up interest rates.
Key’s government has got a “record during their term of getting back to surplus with some pretty difficult natural disasters to manage and of getting through the global financial crisis,” Hisco said.
ANZ New Zealand’s cash profit, which excludes one-time items, climbed 38 percent to A$546 million in the six months to March as the unit added mortgage market share in New Zealand, according to a filing earlier this month.
Hisco said gradual increases in interest rates shouldn’t affect demand for mortgages. Reserve Bank of New Zealand Governor Graeme Wheeler has raised the benchmark rate twice this year after it was kept at a record-low 2.5 percent for three years to help fuel the economic recovery.
“Gradual rate increases providing it doesn’t end up putting borrowers in distress, we can manage that,” said Hisco.
Continued reconstruction of the South Island city of Christchurch, which was devastated by earthquakes, home construction in Auckland and overseas demand for the nation’s milk, should contribute to economic growth, he said.
“There’s plenty of drivers of activity,” said Hisco.
ANZ shares climbed 0.7 percent to A$33.26 at 10:44 a.m. in Sydney. The benchmark S&P/ASX 200 index was up 0.5 percent.