New Zealand coalition talks start in earnest as deadline looms

Bloomberg

Talks to form New Zealand’s next government have begun in earnest after final election results showed both main parties could form viable coalitions.
The ruling National Party and Labour opposition started separate negotiations on Sunday in Wellington with the nationalist New Zealand First Party, whose support both require to reach a majority in
parliament. New Zealand First leader Winston Peters has set a deadline of
October 12 to make a decision.
While National won the biggest share of the vote, the chances of it failing to secure a fourth term in office increased yesterday when official election results handed Labour and its ally the Greens two additional seats. They now represent a more stable option for Peters because the three parties between them can muster a three-seat majority instead of just one.
“It’s game on,” said political analyst Bryce Edwards. “There are only two seats separating the center-left and the center-right now, so the idea of a moral mandate for National is going to have much less sway.”
National won 56 of the 120 seats in parliament, down from 58 on election night, official results from the Electoral Commission showed.
Labour won 46 seats, one more than the preliminary count after the September 23 vote, and the Greens lifted their tally to eight from seven. New Zealand First was unchanged on nine seats, while the ACT Party has one.
Prime Minister Bill English and a team of senior ministers met with Peters and his advisers for several hours today, saying little to waiting media when they emerged. Peters also held talks with Labour leader Jacinda Ardern and her team later on Sunday.

Policy Concessions
The negotiations will centre on what policy concessions and ministerial posts National and Labour are willing to offer Peters in return for his support.
The 72-year-old populist campaigned on a platform of slashing immigration, reducing foreign ownership of New Zealand assets and reforming the central bank. He also wants to move Auckland’s port to the impoverished regional economy of Northland.
National 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.
“Now it’s really a matter of negotiating the policies and structure that are going to deliver a continuing strong economy and dealing with all the other issues that were raised during the election by New Zealand First,” English, 55, told.

Mandate to Govern
National and Labour both claim a mandate to govern after the final election results, with English saying National remains the largest party and Ardern arguing a majority of voters want change.
National got 44.4 percent of the vote to Labour’s 36.9 percent. When combined with the Greens’ 6.3 percent, the center-left bloc won 43.2 percent.
New Zealand’s German-style electoral system is conducive to coalitions and allows any grouping that can attain a majority to govern.
Still, if Peters decides to anoint a Labour-led administration, it would be the first time since proportional representation was introduced in 1996 that the party with the largest share of the vote is excluded from government.
A third option for Peters would be to sit on the cross benches and support a minority National government on confidence and supply.
Former Prime Minister Jim Bolger said that by setting an October 12 deadline, Peters has left very little time for a coalition deal to be struck.
“It’s almost impossible to see a detailed coalition agreement hammered out in that time,” he told Radio New Zealand last week. “That suggests very strongly that he and New Zealand First are leaning towards sitting on the cross benches.”