Wafer thin majority puts right bloc coalition on knife edge

Kiwis have voted in a new centre right Prime Minister but with his majority on a knife-edge, Christopher Luxon may have to ask Winston Peters to reprise his role as kingmaker.

New Zealanders woke up on Sunday to a new prime minister but without any clear idea of what shape his new government will take.

The country’s desire for change swept away the two-term Labour government and brought in National leader Christopher Luxon as the country’s 42nd prime minister, presiding over a coalition with the libertarian ACT party.

However, with a wafer-thin majority it will be two weeks before Mr Luxon – and the country – know whether he can rule with a two-party coalition or will have to pick up the phone to the populist Winston Peters, leader of NZ First, and ask him to reprise his role of kingmaker.

National and ACT, under leader David Seymour, gained 61 seats between them; enough for a majority in the 120-seat parliament.

But thanks to the peculiarities of New Zealand’s mixed-member proportional voting system, a surge in support for the radical Te Pati Maori has given parliament an extra seat, taking it to 121. It means National and ACT’s majority is on a knife edge and Mr Luxon will almost certainly need Mr Peters, to bring his party’s eight seats into the coalition.

NZ First leader Winston Peters is likely to be part of the next government. Picture: NZ Herald.

Labour’s devastating defeat, which saw its numbers crash from 65 MPs to just 34, came not just from a blue wave of National wins but from a swell of support for the Green Party, which cannibalised its coalition partner in the capital, Wellington; and for Te Pati Maori, whose youngest candidate – just 21 – took foreign minister Nanaia Mahuta’s seat.

The bloodbath suffered by Labour makes it unlikely outgoing prime minister Chris Hipkins will remain as leader, with speculation already beginning over his future.

The rise of the minor parties also cut into National’s victory, and with another 500,000 special votes still to be counted, it will be November 3 before a coalition can be finalised.

National campaign chair Chris Bishop admitted that as the special votes were counted, his party’s vote “may diminish” by at least one seat and the decision to call Mr Peters would be Mr Luxon’s.

Christopher Luxon is mobbed as he arrives at the National party election celebration in Auckland on Saturday night. Picture: Getty Images

If NZ First becomes part of government, it will tie Mr Luxon, a first-term MP who will be NZ’s most inexperienced prime minister, to the veteran Mr Peters, a wily politician of more than 40 years who knows how to hold coalition governments to ransom.

In the middle is Mr Seymour, who, while an experienced and astute politician, has never served in a government.

Mr Luxon, former CEO of Air New Zealand, entered politics with the aim of becoming prime minister and has been single-minded in his drive to that end.

He took over a dysfunctional National Party in 2021 after it ran through three leaders in as many years. Despite having entered parliament only the previous year, he managed to unite the party, stop the squabbling and restore discipline and focus. Mr Luxon, married with two children in their 20s, has also reassured the public his strong religious faith – and strict anti-abortion views – would have no impact on his policymaking.

“He could be a remarkable prime minister,” Jordan Williams, founder and CEO of the Taxpayers Union, told The Australian, pointing out that Mr Luxon took the party from the back of the field to the front in just two years.

Christopher Luxon declares victory on Saturday night. Picture: Getty Images

The business community is not so certain, with senior business leaders describing him as economically naive and in need of Mr Seymour’s financial acuity.

To most he remains a political unknown, although he has drawn criticism that he is better at slogans than policy, and will behave more like a chief executive than a prime minister. Former National PM John Key, however, gave Mr Luxon his vote of confidence, saying: “We are a remarkable little country but only when we believe in ourselves. The one thing Christopher can bring to the party is the belief that we can do it.”

Throughout a focused election campaign, Mr Luxon sold his management experience as a plus for New Zealand, promising to apply skills he’d used to turn around struggling companies to fix a struggling country.

Chris Hipkins concedes in Wellington on Thursday night. Picture: Getty Images

National and ACT share broadly similar policies over tax relief, public sector cuts, a tougher approach to law and order and raising the pension age to 67.

However, Mr Peters believes NZ cannot afford tax relief and told reporters on Sunday: “Some of the promises you heard in this campaign won’t be worth confetti”, suggesting that in government he would apply his famous handbrake to legislation.

But Mr Peters told The Australian he would make every effort to make a coalition work. “The level of crisis in this country demands politicians put aside their differences. We’ve got no chance if we squabble like children,” he said.