NZ PM-elect Ardern to focus on settling coalition issues

Ms Jacinda Ardern, 37, New Zealand's youngest leader in recent times, with Labour's deputy leader, Mr Kelvin Davis, at a news conference yesterday.
Ms Jacinda Ardern, 37, New Zealand's youngest leader in recent times, with Labour's deputy leader, Mr Kelvin Davis, at a news conference yesterday.PHOTO: BLOOMBERG

Fears of more protectionist stance send stock market down; kiwi dollar hits 5-month lows

WELLINGTON • New Zealand Prime Minister-elect Jacinda Ardern said yesterday she would focus on ironing out issues and ministerial posts with coalition partner New Zealand First, a day after becoming the Pacific nation's youngest leader in recent times.

The previous night's highly anticipated announcement by New Zealand First leader Winston Peters that he would support 37-year-old Ms Ardern's Labour Party had ended a decade of centre-right National rule and spelt big changes for the country's economy.

The New Zealand dollar - the world's 11th most-traded currency - fell to five-month lows as investors grappled with heightened uncertainty and a more protectionist agenda.

"When you are a hands-off government, when you simply allow markets to decide the fate of your people, then that does not serve a country or its people well," Ms Ardern told reporters in Wellington. "You will see a proactive government by Labour."

Labour has released the names of the people who would be in the Cabinet, saying it would announce their portfolios next week.

They include Mr Grant Robertson, Labour's spokesman for finance, and Mr David Parker, spokesman for trade.

Ms Ardern said on Thursday she had offered the role of deputy prime minister to Mr Peters, who on Thursday gave his backing to Labour after inconclusive Sept 23 elections, and he was considering it.

On Thursday evening, Labour said it would also stick to its promises to change the central bank's mandate and seek to renegotiate the Trans-Pacific Partnership trade deals.

Concerns about a more protectionist agenda weighed on the currency and stock markets yesterday.

The New Zealand dollar fell to five-month lows of US$0.6971, after posting its biggest daily fall in more than a year on Thursday.

"The sentiment has now shifted towards more protectionist measures," said Ms Christina Leung, economist at New Zealand Institute of Economic Research.

"Generally, financial markets don't like change; there is uncertainty over what this all means... In the meantime, that is reducing demand for New Zealand assets, and that's why we are seeing the decline in the New Zealand dollar."

The stock market was down 1.1 per cent at yesterday's open, but later recouped losses to stand in positive territory.

Ms Ardern told radio earlier that most of the party's flagship policies, including a ban on some foreign ownership of housing, had survived the negotiations with Mr Peters.

She said the parties would release their agreements early next week and an announcement on ministerial posts would come later in the week.

REUTERS

A version of this article appeared in the print edition of The Straits Times on October 21, 2017, with the headline 'NZ PM-elect Ardern to focus on settling coalition issues'. Print Edition | Subscribe