How Jacindamania shook up New Zealand's election

National Party Leader Bill English and Labour Party Leader Jacinda Ardern are neck and neck as New Zealand voters head to the polls this Saturday after Labour elected a new leader just weeks out from the election and 'Jacindamania' swept the nation.
Jacinda Ardern said that more needs to be done to close the gap between rich and poor.
Jacinda Ardern said that more needs to be done to close the gap between rich and poor.PHOTO: AFP

WELLINGTON (Bloomberg) - New Zealanders vote in a general election on Sept 23 that polls show is too close to call. Prime Minister Bill English is seeking a rare fourth term for his centre-right National Party, which has overseen eight years of economic growth and returned the budget to surplus.

He's up against a rejuvenated Labour Party under 37-year-old Jacinda Ardern. She argues too many citizens have been left behind in the country of 4.7 million people and more needs to be done to close the gap between rich and poor.

The election had seemed like a slam-dunk for National until Ms Ardern became Labour leader on Aug 1.

How big a difference has Labour Party's Ardern made?

Since she took the top job, Labour's support has surged from 24 per cent to 42 per cent, putting the two major parties neck-and-neck.

Mr English, a 55-year-old social conservative with a reputation as a details man, now finds himself in a scrap with a vibrant young politician promising generational change.

The buzz around Ms Ardern - dubbed Jacinda-Mania - has manifested in hordes of adoring supporters at campaign events. If Labour wins, she would become New Zealand's third female prime minister - and its youngest leader since 1856.

But Ms Ardern has only ever been in opposition.

What's at stake?

Record immigration that's fuelling New Zealand's economic expansion is also stressing infrastructure and contributing to a housing crisis.

Intensive dairy farming is polluting the country's pristine environment and putting its clean, green image at risk.

The next government will need to address those issues without undermining one of the developed world's best-performing economies.

Labour, for example, wants to reduce immigration and renegotiate trade deals so that it can ban sales of homes to non-resident foreigners.

National says such policies risk hampering economic growth.

Where has Ms Ardern gained traction?

She has zeroed in on housing and the plight of low-income families, pledging to build more homes, repeal National's planned tax cuts, increase assistance payments to families and lift student allowances.

Still, Labour has been vulnerable on taxation, drawing criticism over a plan to examine whether to introduce capital gains or land taxes and riling farmers with a proposed levy on water.

Tourists would need extra cash, too: They face a NZ$25 (S$24.73) tax.

What is Prime Minister English's strategy?

The former finance minister is banking on his track record as a safe pair of hands on the economy, arguing New Zealand needs to stay its current course.

As well as no new taxes, he pledges a tax relief package worth NZ$1,000 a year to an average earner and spending NZ$32 billion on roads, rail and other infrastructure in the next 10 years.

How have markets reacted?

The kiwi dollar has dropped whenever polls show Labour is ahead, while the currency jumped a full US cent after one recent survey put National in the lead.

The question is whether investors, including those offshore who hold 61 per cent of New Zealand government bonds, simply dislike uncertainty or really think Labour's policies would deliver poorer economic outcomes.

When will the winner be declared?

Polls close at 7pm local time on Sept 23, and the results should be in by 11.30pm.

But with a complex voting system that lends itself to coalition government, the final outcome may not be clear that night.

Smaller parties such as the Greens, New Zealand First and the Maori Party could play a crucial role in the formation of a new government, and talks may drag on for weeks.

Which way will the minor parties lean?

The Greens already have an agreement to work with Labour. The Maori Party supported National the past three years. New Zealand First - led by the maverick Winston Peters - backed National in 1996 and Labour in 2005.

Will New Zealand First's Peters be kingmaker again?

It looks that way. With a populist appeal that has drawn comparisons to Mr Donald Trump, Mr Peters says he is the "insurance" voters need to keep the major parties honest and stop them from selling out the economy to foreign interests.

Most polls suggest Mr English and Ms Ardern would both need Mr Peters to form a government, putting the 72-year-old in a strong bargaining position to extract policy concessions and ministerial posts.