Labour courts Kiwi kingmaker

Opposition chief seeks to form coalition govt with NZ First party

WELLINGTON: New Zealand’s opposition Labour leader Jacinda Ardern says she will seek to form a coalition government with the country’s small nationalist party after it was left holding the balance of power following Saturday’s indecisive election.

The ruling National Party won the most seats, but failed to secure enough to form government, leaving the nationalist New Zealand First Party leader Winston Peters kingmaker.

Prime Minister Bill English said it could take weeks to form a coalition government, with the uncertainty weighing on the New Zealand dollar, which posted its biggest daily drop in over four months.

Peters, a veteran maverick politician who served as a Cabinet minister in both previous National and Labour governments, also said talks would take “two to three weeks”.

While Labour trailed the National Party by around 10 points, under the country’s German-style proportional representation it could still form a government if it goes into coalition with the Green Party and the First Party.

“My expectation is over the next couple of days to reach out, but I haven’t done so yet,” Ardern told reporters in Wellington, referring to Peters.

“Our job now is to work with what voters delivered us – an expectation that, as a bloc that voted against the status quo, we form a stable coalition government.”

National secured 58 seats ahead of the 52 seats from the Green Party and Labour, which experienced a surge in popularity under new leader Ardern.

That left both needing NZ First’s nine seats to reach the 61 seats required to form a government.

While both National and Labour may adhere to fiscal prudence, they will likely differ on monetary policy, trade and immigration.

Some expect Labour’s plans to cut migration and renegotiate some trade policies will hurt two key sources of growth for New Zealand’s small, open economy.

There is also some concern about what NZ First will demand in return for supporting the winning party.

Peters has lobbied for more currency intervention by the central bank, which would weigh on the Kiwi, the world’s 11th most traded currency.

The New Zealand dollar fell 1.19% to NZ$0.7254 (RM2.22), posting its biggest daily loss since May amid uncertainty over the make-up of the country’s next government.

A final tally of the election results are due on Oct 7, when “special votes”, making up 15% of the total and which include overseas votes, are released. — Reuters

My expectation is over the next couple of days to reach to, but I haven’t done so yet.

Jacinda Ardern