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New Zealand opposition wins election

New Zealand opposition leader Christopher Luxon says he is ready to form a new government of the centre-right after defeating Prime Minister Chris Hipkins’ Labour Party in Saturday’s election.

Luxon’s National Party “will be in a position to lead the next government”, he told party faithful in Auckland. “My pledge to you is that our government will deliver for every New Zealander.”

With 97% of the votes tallied, National had 39% while Labour trailed with 27%. As the result stands, National can form a government with the support of its ally the libertarian ACT Party, which won 9% of the votes However, they may yet need the backing of the nationalist New Zealand First Party, with 6%, to reach a majority in parliament.

Labour and its partners on the left, the Green Party and Te Pāti Māori, have no path to power.

Labour’s support has collapsed from 50% at the 2020 election, when Jacinda Ardern led the party to the first outright majority since New Zealand switched to a proportional representation system in 1996.

Hipkins, who took over when Ardern suddenly stepped down in January this year, has struggled to convince New Zealanders that Labour deserves a third term as the economy stutters amid a cost-of-living crisis.

“I did know when I took on this job that it was going to be an uphill battle,” Hipkins told supporters. “No government has replaced a prime minister in an election year and carried on to win. I gave it my all to turn the tide of history, but alas, that was not enough.”

National’s win means Luxon, the former chief executive of Air New Zealand who only entered politics three years ago, will become New Zealand’s next prime minister. He will now enter talks with ACT leader David Seymour and, if required, New Zealand First leader Winston Peters to agree on a governing arrangement.

The electoral system lends itself to coalition governments, and talks between the winning parties can take several weeks.

‘Lazarus’ Peters rises again

The election sees the return of Peters, the 78-year-old Lazarus of New Zealand politics, who has made the third political comeback of his 44-year career after his party was ousted from parliament at the last election. If his support is needed for a government to be formed, he can be expected to extract policy concessions and ministerial posts in return.

The cost of living dominated the election campaign, with both National and Labour promising measures to ease pressure on household budgets. But neither of the two major party leaders electrified voters the way Ardern did at the last two elections.

The new government faces a challenging economic outlook, with the central bank forecasting a recession as it keeps interest rates high to bring inflation under control.

National has promised tax cuts partially funded by removing a ban on the sale of expensive homes to foreigners and collecting a levy on each transaction. It also plans to strip the Reserve Bank of its dual mandate and return it to a sole focus on fighting inflation.

Luxon said his government “will rebuild the economy and deliver tax relief.”

“We will bring down the cost of living, we will restore law and order,” he said. “We will deliver better healthcare and we will educate our children so that they can grow up and live the lives that they dream of.”

Another feature of the provisional results is increased support for Te Pāti Māori — the party that stands for the rights of the indigenous Māori people — which is on track to win four of seven seats reserved for voters on the Māori roll. Those seats have traditionally been held by Labour.

If Te Pāti Māori wins more seats than its 2.6% share of the party vote implies, it would create a so-called overhang and increase the size of parliament from 120 seats. That would raise the number of seats required for a majority and may see Peters’ support needed for a government to be formed.

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