Hive News Monday: English to be sworn in as PM; Bennett wins Deputy PM spot; Auckland, Wellington house sales slide

Bill English. Copyright Lynn Grieveson / Hive News

Bill English is set to be sworn in as Prime Minister more than 14 years after leading National to its worst electoral defeat, and after eight years of being John Key's right hand man without the ambition to be number one.

Today he will be elected National Party leader by the caucus of 59 MPs shortly before midday, and then will be sworn in this afternoon as Prime Minister at Government House. Then the job of selecting a cabinet will begin, although two of the biggest jobs have already been filled. Steven Joyce will be finance minister and Paula Bennett will be the Deputy Prime Minister after the other contestant, Simon Bridges, pulled out on Saturday when it became clear Bennett would have the majority in today's caucus vote.

It's not clear when English will name his cabinet, but some big decisions await, including who will inherit MBIE from its creator Steven Joyce, whether Murray McCully will keep Foreign Affairs, whether Jonathan Coleman will keep Health and whether the retiring Hekia Parata will keep Education.

The new Prime Minister has a tightrope of sorts to walk between his avowed instincts to maintain stability and continuity with the Key Government, and to address calls from a now clearly antsy backbench for "generational change." So far, English has stuck to the stability mantra with the selection of Joyce as Finance Minister and Bennett's move to Deputy Prime Minister. Both are seen as members of Key's unofficial "Kitchen Cabinet" that included McCully, Joyce, English and Gerry Brownlee. So far, little has shifted.

Joyce hinted over the weekend that there might be changes after the departure of Key, which he agreed in an interview with Corin Dann was an electoral "game-changer" for next year's election.

"There’s lots of opportunities out of this – freshening the story, freshening the team – great new leadership team, less of the—you know, the risk for us before was same old, same old," Joyce said.

He also hinted at some policy changes under an English-led Government, without specifying what they might be.

"I think, you know, he’s very authentic; he’s very straight-forward, and he’s not going to sort of dive off in different directions, but there will be a freshness of some new policy positions. I mean, it is quite an opportunity for a stocktake for us," Joyce said.

A few areas are expected to be on the table for debate, and were signalled as points of contention in the brief flowering of debate within the National caucus last week. Those areas include whether to go ahead with tax cuts across the board or pursue more education, health and Police spending, how far to go with a mass state house building programme, and how much to apply to Auckland infrastructure building. Another areas of focus that has yet to get much attention is whether Steven Joyce might take a different approach on the Reserve Bank's hopes to include a Debt to Income Multiple in its Macro-Prudential tool kit.

One thing that is certain is the usual machinery of cabinet decision making and legislative change is now grinding to an effective halt while ministries work out who their ministers will be, send them incoming briefings, and then adjust to whatever changes Bill English and his new cabinet might have in store.

We will send out a Hive News alert if we get more information on the make-up of the cabinet or any policy changes.

Auckland, Wellington house sales slide

The slowdown in the Auckland housing market through September and October in the wake of the new LVR controls has extended into November, with the added headwind of a slight rise in long-term mortgage rates. REINZ figures published this morning also showed a sharp fall in sales volumes in Wellington in seasonally adjusted terms, no doubt caused by November 14 earthquake hiatus.

REINZ reported Auckland's median price fell to NZ$851,944 in November from NZ$868,000 in October, while the seasonally adjusted median fell 0.2%. Seasonally adjusted volumes fell 2.9% in November from October, according to REINZ's figures.

Seasonally adjusted volumes fell 19.2% in Wellington in November from October and were down 19.5% in absolute terms from November a year ago.

"First home buyers are becoming more active in the market, although the number of investors has fallen away with the introduction of the new LVR rules," REINZ's Mark Coffey said of the Wellington market.

"The big question for the market is the impact of the Kaikoura earthquake and the flow on effect for insurance. The market may be a little subdued over the next few months as insurance and other post-quake issues are worked through," he said.

Have a great week. Look out below for my weekend column.

cheers

Bernard

12 December 2016