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New Zealand in political limbo as National considers shape of coalition

New Zealand could be stuck in political limbo for weeks as the newly elected National party waits to see if it can govern solely with its preferred coalition partner, Act, or whether the final vote tally will force it to work with populist party New Zealand First.

Saturday night’s election brutally ousted the governing Labour party, with preliminary results giving the centre-right National party 50 seats, and its traditional coalition party Act, 11 – just enough to reach the 61 seats needed to govern.

But two significant developments over the next six weeks could destabilise their position.

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Roughly 570,000 “special votes” – those cast from overseas, or outside a voter’s electorate – are still being counted, with the final results due on 3 November.

Should those votes, which tend to favour the left, chip down National or Act’s numbers, it would force the pair to cut a deal with NZ First leader Winston Peters – a maverick politician who could slam the brakes on some of National and Act’s core policies.

A strong showing for Te Pāti Māori could also influence the shape of the future government. The party won more electorate seats its party vote projected and under New Zealand’s mixed member proportional system, that could increase the size of the parliament – meaning National-Act will need to secure more seats to govern.

On Monday morning, incoming prime minister, National’s Christopher Luxon, confirmed to RNZ he would talk with NZ First before the special votes were counted, but declined to discuss what negotiations, if any, could look like.

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“We’re going to work with each individual party, we’re going to do that in a way that respects them and is done privately,” Luxon said.

If it comes to a choice, National will need to decide if it wants to stick with a fragile majority, or partner with a party that is sure to cause it headaches.

“Trying to govern with a one seat majority is going to be very, very difficult,” says Prof Andrew Geddis, an expert in electoral law from the University of Otago.

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“It’s one MP being outed for something terrible and having to leave parliament away from being a hung parliament.”

The last two elections have resulted in two seats flipping from National to Labour, Geddis said.

“Unless the special votes are very different to what they have been in the past, Luxon is not going to have enough seats to govern…at the moment Luxon has to figure that he will need New Zealand First.”

In past elections where Peters has been the kingmaker, he has demanded that his party be around the cabinet table, taking part in all the decisions and in some instances, holding off the other support partner, Geddis said.

“Whether Act will put up with that is another question,” he said.

Act party leader David Seymour.Act party leader David Seymour. Photograph: Shane Wenzlick/EPA

New Zealanders are unlikely to see how negotiations are progressing until those special votes are revealed, Geddis said.

“National and Act will be talking between each other about how they are going to handle Peters, but Peters has been around for a long time and he has got a particular set of demands as to how he is treated personally as well as how his party is dealt with,” Geddis said. “If he doesn’t get that, it will be interesting to see if he is prepared to deal at all.”

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Peters has slammed a number of National and Act’s policy promises as being unaffordable and at risk of driving inflation – in particular National’s plan to allow some foreign buyers back into the housing market, National’s tax cuts and both National and Act’s desire to slash funds and jobs from public services. Peters does not want to see superannuation age raised from 65 to 67, nor agricultural emissions priced in any form – both on National’s agenda.