A stunning election outcome has given New Zealand a new government with the potential to transform the country’s economy and society. Risen star and youngest ever New Zealand woman Prime Minister Jacinda Ardern, aged 37, leads a coalition that ends the nine-year reign of the conservative, centre-Right National Party under former money dealer John Key and farmer Bill English. Ardern and her partners represent a fresh multi-hued approach.
Her young and relatively inexperienced team will face difficulties. Economic headwinds are predicted, there are potential problems holding her coalition together, but above all, she faces a large, powerful and experienced Opposition. The outgoing National Government was the largest polling party in the election with 44.4 percent of the votes and 56 seats in the 120 seat Parliament. They will be a formidable Opposition.
Founder and leader of the minor party New Zealand First Winston Peters announced which side he would support just before 7pm on Thursday. He chose to make Labour the Government of New Zealand for the next three years.
By any standards it is a remarkable decision. It consigns to the Opposition benches the biggest polling party the ruling National Party. It makes Jacinda Ardern the youngest woman ever to lead New Zealand’s government.
Less than three months ago she was Deputy Leader of the Opposition. On August 1 Labour leader Andrew Little conceded he was making no headway in the polls and made way for Ardern.
She produced a massive bounce in the polls in a phenomenon the media called Jacindamania.
It didn’t last. National ran a ruthless attacking campaign which some called dirty and election day produced what appeared to be a win, but not a majority, for the ruling National Party.
New Zealand First with nine MPs and willing to support either of the two main parties held the balance of power.
Just over two and a half months after getting her party’s top job, Ardern is Prime Minister.
Labour campaigned on a scheme to provide free tertiary education, cut immigration, lift living standards especially for poorer children, greater support for the health and education sectors, build more houses and create a fairer tax system. A Labour led coalition would take a larger role in the economy, including initiatives to build 100,000 houses in ten years.
In her acceptance speech Ardern said the Government would work alongside New Zealanders to get the support they need and to build an economy that isn’t dependent on a housing market and simple population growth. Foreign ownership of property will be curbed. Efforts will be made to save New Zealand’s dying rivers.
In making his announcement Winston Peters said his party’s decision represents the majority that voted for change, the Labour-NZ First-Greens block that could muster more votes between them than National the largest single party.
He warned that an economic slow-down or correction is looming. He said the first signs can be seen in the housing market slow-down, Reserve Bank and trading bank nervousness, in receding consumer optimism and ebbing retailer confidence.
He said that when the looming economic problems arrive, false and unjustifiable attempts will be made to blame New Zealand First and the Government.
He said Capitalism must regain its human face. He said far too many New Zealanders have come to view Capitalism not as their friend but as their foe “and they are not all wrong.” He said this was an important factor in New Zealand First’s decision to choose a government that represents change.
One commentator described it as a pledge to roll back the tide of neo-liberal economics. Peters, who is considering an offer to be Deputy Prime Minister, and Ardern appear to be in agreement that the neo-liberal experiment has failed and fundamental economic reforms are needed.
It might seem odd that the largest polling party became the Opposition, but the answer lies in the Mixed Member Proportional electoral process employed in New Zealand.
MMP is intended to be more democratic than the old First Past the Post system, but the process of finding a new government can be painful, arduous and at least appear to be undemocratic.
The government that results from the process represents more voters than the opposition, unlike FPP elections which can produce a government that represents fewer voters than the opposition. This is the reason why New Zealand chose the MMP system.
On election night on September 23 the ruling National Party won 46 percent of the vote, Labour 36 percent, with the New Zealand First party 7.5 percent. The Greens, in a loose arrangement with Labour, won 6 percent (numbers rounded slightly).
This made National the leader by a narrow margin and Prime Minister Bill English prepared to discuss a coalition with New Zealand First. A Labour-Greens-New Zealand First deal would produce only 61 seats a bare majority with no margin for error. One by-election would disrupt the government.
That changed on Saturday October 7, when the impact of special votes on the election night results were announced.
As expected the special votes pushed the final result towards the Left and towards Green. National lost two seats, Labour and Greens gained one more each. The Labour-Greens block looked a more credible option. With support from New Zealand First they would be able to muster 63 seats. National and New Zealand First could produce 65. Both would be narrow but workable majorities that could be stable and perhaps strong.
In the weeks that have passed since the final results were announced there have been secret negotiations between New Zealand First and the main parties. There has been a cacophony of speculation about what issues would sway the New Zealand First leader Winston Peters. Would he lean to the Right or to the Left?
Advocates for a change of government argued that more voters supported change than voted for the old National-ACT-Maori Party-Alliance Party block which has formed the government in recent years. They pointed out that National’s support dropped over the past three years and their support parties were rejected: The Maori Party and United Future sank out of sight, and ACT struggled to get one seat.
There has been disquiet, even anger about the process that brought New Zealand to this point. Winston Peters has been accused of arrogance, of holding the country to ransom, of keeping the country waiting.
Peters made the point that Germany which held an election on September 24, the day after New Zealand voted, might have to wait until December to know the details of its government.
Winston promised to make a decision in the best interests of the country. He was bound to think of the best interests of New Zealand First as well.
If Jacinda Ardern’s elevation has been meteoric, her success has provided a similarly extraordinary advancement for the Greens. Their campaign was almost derailed by the confession by their co-leader that she had cheated on a welfare benefit, and they ended with just 6.3 percent of the votes and 8 MPs. Their support for Labour was critical to producing the majority needed to govern.
From a struggling minor party they have their first taste of government with three ministers outside Cabinet in a Confidence and Supply Agreement with Labour. This means the Greens can vote against the Government on issues except those covered by their ministers (who are likely to be responsible for environmental issues), and in critical votes on Confidence and Supply.
Their main campaign issues were policies on climate change, saving the forests, rivers and birds, and a pledge to end child poverty.
The final tally including support by the Greens gives the coalition 63 MPs in the 120 member Parliament. Ardern has expressed confidence she can hold it together for three years.
Peters with 7.2 percent of the vote and nine seats out of 120 has been running the whole process. On the face of it this seemed wrong.
Concerns about the process of forming a government under MMP have attracted some suggested solutions.
One suggests that in the case of a hung Parliament, the Governor General could ask the largest parties one by one to attempt to form a government. This would take some of the power from the small “kingmaker” party.
This solution might take longer and be more laborious than the current habit of delegating the job to the old campaigner Winston Peters. He said it couldn’t have been achieved more quickly, at 12 days since the final result including Special Votes were announced. In typical Peters fractious fashion he says it was eleven days. He will be one of Jacinda Ardern’s biggest problems.
Another might be her relationship with Australia. Foreign Minister Julie Bishop complained that a New Zealand Labour Party MP had conspired to destabilise the Australian Government by stoking the Barnaby Joyce citizenship crisis. Bishop said she would find it very difficult to build trust with Ardern’s party. Now Ardern is Prime Minister, both sides are showing signs of calming the troubled waters that divide them.
Another problem will be the anti-Labour, misogynistic element in New Zealand politics. National’s former support party ACT’s leader David Seymour is an example. He says the coalition is beholden to a “madman on the loose (Winston Peters).” He said “New Zealanders face a big spending, tax everything-that-moves, 1970s protectionist red-tape-loving government.”
One of New Zealand’s most popular talk-back hosts called Ardern a “chicky babe”, and the Television New Zealand current affairs host Mike Hosking said “If last night (the night of the announcement) was day One of the government, then we’re all in trouble.”
Outgoing Prime Minister Bill English has been generous and dignified in his comments. He wished the new Government well.
Jacinda Ardern is intelligent, articulate and thinks quickly on her feet. She will need every resource available to her.
Max Hayton is a retired NZ journalist with parliamentary and international experience.