New Zealand’s PM needs maverick Peters to govern

Mr Luxon declined to comment on how long it will take to agree a governing arrangement with ACT leader David Seymour and Mr Peters, who have a history of animosity toward each other. He could not guarantee talks would be concluded in time for him to attend the APEC leaders’ summit in mid-November in San Francisco.

It remains unclear what concessions Mr Luxon will need to make in return for the support of the two smaller parties.

Mr Seymour is a libertarian who has proposed deep cuts to government spending, sales of state assets, and doing away with moves to guarantee the involvement of indigenous Maori in decision-making.

Mr Peters, an anti-immigration populist and champion of the elderly, can be expected to oppose any moves to raise the age of eligibility for the state pension. He has also expressed reservations about National’s planned tax cuts, which would be partially funded by allowing sales of expensive homes to foreigners and applying a levy to the transactions.

The final vote count could slow down or stop Mr Luxon’s new government from implementing some of its plans, as it will need support from a broader range of lawmakers to pass bills. It will also give Mr Peters more influence to get his own bills and plans considered.

The Labour Party won 34 seats, official results showed on Friday, unchanged from election night last month and marking a heavy defeat for the party that led the country through the COVID-19 pandemic.

Labour’s share of the vote slumped to 26.9 per cent from 50 per cent at the 2020 election, when former prime minister Jacinda Ardern stormed to the first outright majority ever achieved under the proportional representation system New Zealand adopted in 1996.

Outgoing prime minister Chris Hipkins held the top job for just nine months. He took over from Ms Ardern, who unexpectedly stepped down in January, saying she no longer had “enough in the tank” to do the job justice. Ms Ardern’s popularity had been waning as people tired of COVID-19 restrictions and inflation threatened the economy.

Special votes — those cast overseas or by people outside their home electorates — traditionally favour left-leaning parties because they include cohorts such as university students.

Under law, New Zealand’s parliament must sit within six weeks of the official election results, but there is no date for when a government must be formed.

Bloomberg