WELLINGTON (BLOOMBERG) - New Zealand's election ended in a stalemate on Saturday (Sept 23), with Prime Minister Bill English and the main opposition leader Jacinda Ardern vying for the support of a small, anti-immigration party to reach a majority.
English said he would talk with New Zealand First Party leader Winston Peters in coming days and that his National Party, which won 46 per cent of the vote, was in the strongest position to deliver a stable government. New Zealand First Party has 7.5 per cent of votes.
Ardern refused to concede, saying she too will speak with Peters and her ally the Green Party to try to secure a majority. Labour won 35.8 per cent of the vote.
"On tonight's provisional results, National has won more seats than Labour and the Greens combined," English told supporters in Auckland late Saturday. "We have the responsibility of working to give New Zealand strong and stable government."
Seeking a rare fourth term in office for National, English, 55, has pledged tax cuts and a continuation of steady economic management if he is returned to power. He has also promised to address some of New Zealand's most pressing social issues such as child poverty and a housing shortage.
Ardern, 37, has vowed to close the gap between rich and poor and would spend more than National on welfare, health and education.
Peters, who has backed National and Labour governments in the past, refused to say which way he'll go. The 72-year-old maverick will try to extract policy concessions and ministerial positions in return for his support in talks that could take a couple of weeks.
Even though National remains the biggest party in parliament, there is no obligation for Peters to choose it over Labour. Making the task harder for English, the tiny Maori Party, whose two lawmakers helped National reach a majority in the last parliament, has failed to secure any seats.
"We do have the main cards, we're not going to squander that," Peters told supporters. "We'll make a decision in the interest of all New Zealand" and "that will take some time."
National won 58 of the 120 seats in parliament, while Labour got 45. New Zealand First's 7.5 per cent of the vote gives it nine seats, and the Green Party, with 5.8 per cent, has 7.
The numbers could change after other votes, including overseas ballots, are counted.
Labour would need both the Greens and NewZealand First to oust the government, and its two potential partners have a frosty relationship.
"I know that our parties don't agree on everything, but now is the time to put those differences aside and to work together to create the government of change that New Zealanders want," Greens leader James Shaw told supporters.
Peters, whose populist appeal has seen him compared to Donald Trump, advocates slashing immigration to just 10,000 a year from about 73,000 currently. He also proposes adopting a Singapore-style monetary policy so that the central bank can directly control, and devalue, the New Zealand dollar.
However, he has proven to be more moderate in his previous stints in government than his rhetoric while in opposition suggests.
"This party is a realistic, common-sense party, we don't like extremism," Peters said on Saturday. "We believe in laws and policies that support the mass majority of New Zealanders and not just a small elite."
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.
Only two months ago, National had looked assured of victory as Labour languished in the polls. The elevation of Ardern to the leadership changed all that - she electrified the campaign and created a wave of excitement that saw her party jump to level pegging with National.
However, Labour started to fade in the final days under relentless attack from National over its economic credentials and a lack of clarity on tax policy.
Emerging from her Auckland home last night, Ardern told reporters she was disappointed with the results but refused to throw in the towel.
"There's still a lot in play at the moment," she said. "I don't expect there will be any conversations for a little while yet."