New Zealanders will face days if not weeks of uncertainty after Saturday’s election failed to deliver a clear winner and left a small, anti-immigration party holding the balance of power. Both Prime Minister Bill English and main opposition leader Jacinda Ardern must woo the populist New Zealand First Party -- whose chief, Winston Peters, is in no rush to make a decision. With the most seats and largest share of the vote, English should be in pole position to form a government. But Peters is an unpredictable maverick, and anything could happen in closed-door talks over the next couple of weeks.
1. Does this mean political chaos?
Kiwis are actually taking it all in their stride and are used to such horse-trading. The nation uses a German-style voting system called Mixed Member Proportional, designed to end the dominance of the two main parties and make parliament more representative. The system has worked. Since MMP was introduced in 1996, neither National nor Labour has won an outright majority -- allowing smaller players such as the Green Party, the Maori Party and New Zealand First a stronger voice. Peters has been kingmaker before, backing a National government in 1996 and Labour in 2005. There’s no obligation for Peters to give English first crack at forming a government.
2. Why not?
The key is achieving a majority, and it doesn’t matter how you get there. In theory, English is in the strongest position, with National winning 58 seats -- just 3 short of the 61 needed in the 120-member parliament to form a government in his own right. But if Ardern can stitch together a coalition with Labour’s traditional allies the Greens and with New Zealand First, that would get her across the line. It all hinges now on what National or Labour can offer Peters, and hard-headed political experience will be all important. English, 55, who has been in parliament since 1990 and was finance minister for eight years before taking over as prime minister last year, may have the edge over Ardern. The 37-year-old was elected in 2008 and only became Labour leader last month when her predecessor quit amid dismal opinion poll ratings.
3. Why is it so hard to predict what Peters will do?
The wily 72-year-old has backed both sides of politics during his four-decade career and has served as deputy prime minister, treasurer and foreign affairs minister under previous governments. Of Maori and Scottish ancestry, Peters formed New Zealand First in 1993. He’s since endeared himself to the elderly by defending their entitlement to state-funded pensions and campaigned against surging immigration. Central to his campaign was a pledge to slash the migrant inflow to 10,000 a year from around 72,000 currently. While he’s likely to extract concessions, history has shown he’s a pragmatist and more moderate when in government than in opposition.
4. What’s at stake?
New Zealand is one of the developed world’s best-performing economies, with eight years of uninterrupted growth under National. But it’s not without problems. Record immigration is putting public services under pressure and contributing to a housing affordability crisis, while intensive dairy farming is polluting the environment and endangering the nation’s clean, green image. Ardern has pledged to build more homes, repeal National’s planned tax cuts, increase welfare spending and make the first year of tertiary education free. Labour has also said it would close tax loopholes in an effort to curb property speculation if it won a second term in office in 2020. For his part, English is promising record infrastructure investment and steady leadership.
The Reference Shelf
- A story on the election stalemate.
- Win or lose, Ardern has electrified New Zealand politics.
- Bloomberg reports how the tight race is spooking financial markets.
- How the central bank might fare under Labour.
- A profile of the maverick kingmaker: Winston Peters.
- How crazy property prices are influencing New Zealand voters.