New Zealand’s Prime Minister Bill English presses claim to form government

Bill English waves to supporters onstage at an election event at SkyCity Convention Centre in Auckland, on Sept 23, 2017. PHOTO: AFP

WELLINGTON (BLOOMBERG) - New Zealand Prime Minister Bill English has claimed a mandate to form the next government after winning the biggest slice of the vote in Saturday's (Sept 23) election , even as opposition leader Jacinda Ardern refuses to concede defeat.

While English's ruling National Party fell short of a majority and will need the support of the nationalist New Zealand First Party to govern, it got 46 per cent of the vote compared to 35.8 per cent for Ardern's Labour Party. She would need to engineer a three-way coalition also involving the Green Party to oust English from office.

"With a 10-point lead over the Labour Party, we're in a pretty strong position," English told media in Auckland on Sunday. "We want to set about forming a strong and stable government with a reasonable majority in the house."

The final outcome now rests with New Zealand First leader Winston Peters, a 72-year-old maverick who could support either side and can be expected to extract a high price for his backing. Negotiations could last several weeks, extending the period of uncertainty around the election that has unsettled financial markets, though analysts said any fears of radical change had been allayed by National's strong performance.

"There's still an element of uncertainty overhanging the market, and markets never like uncertainty," said Jason Wong, a currency strategist at Bank of New Zealand in Wellington. "National and New Zealand First is probably the most market-friendly of any of the main permutations."

The New Zealand dollar fell on Monday, dropping S$0.7259 US cents at 5pm in Wellington from US$0.7330 cents on Friday. The nation's benchmark stock index rose 0.7 percent.

English, 55, is seeking a rare fourth term for his party, which has delivered eight consecutive years of economic growth and returned the budget to surplus during nine years in power. But a strong challenge from Labour under 37-year-old Ardern has highlighted growing concerns about poverty, homelessness and the environment which the new government will need to address.

Ardern, who expressed disappointment with Labour's result on election night, insisted Sunday she is not throwing in the towel.

"The majority of people have voted against the status quo," Ardern told reporters outside her Auckland home. "There are conversations to be had over the coming days, and I intend to have them."

National won 58 of the 120 seats in parliament while Labour got 45. New Zealand First has 9 seats and the Greens 7, with ACT New Zealand winning 1.

About 380,000 special votes, including overseas ballots, are yet to be counted. There is a possibility that one or two seats could switch to the centre-left when those results are published on Oct 7.


"English has a greater chance of forming a coalition with Winston Peters, but there's absolutely no reason that there won't be a Labour-New Zealand First-Greens coalition," said political analyst Bryce Edwards. "The numbers add up either way."

Even though National remains the biggest party in parliament, Peters is not obliged to choose it over Labour. The wily political veteran can be expected to anoint whoever gives him the best deal in terms of policy concessions and ministerial posts.

In return for backing a National government in 1996, Peters was appointed deputy prime minister and treasurer. When he supported Labour in 2005, he was rewarded with the foreign affairs portfolio.

"We do have the main cards, we're not going to squander that," Peters told supporters on election night. "We'll make a decision in the interest of all New Zealand" and "that will take some time."


His key policy planks include slashing immigration and foreign investment and shaking up monetary policy. However, he has proven to be more moderate in his previous stints in government than his rhetoric in opposition suggests.

The problem for English is he has no-one else to turn to after the Maori Party, which supported National in the previous parliament, failed to win any seats. On the other hand, Labour needs both the Greens and New Zealand First to reach a majority and those two parties have a frosty relationship.

English said that three-way grouping would be "quite complex" and "it's pretty clear-cut that a two-party coalition would be more stable." "The voters have given us the task of forming a government with New Zealand First and that's what we'll proceed to do," he said.

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