NZ election kingmaker Winston Peters joins with Labour

One month after national elections left New Zealand without a governing majority for any single party, Winston Peters announced that his nationalist party New Zealand First would team up with the center-left Labour Party in a coalition, thereby throwing its support behind Jacinda Ardern as the Pacific island nation's next prime minister. The choice of this alliance over one with the National Party could foreshadow a move towards more protectionist economic policies.   

During his speech, Peters said his party's first priority was to prevent an economic slowdown against a backdrop of changing global economic situations. He said many people viewed capitalism unfavorably and that they were not always wrong in that respect. 

"Capitalism must regain its responsible, its human face," he said, saying this position had deeply influenced the party's negotiation stance. "The country voted for change."

Because the Labour Party is part of a political bloc with the Green Party, analysts had voiced fears that the three-way coalition could be unwieldy.

Yet because Peters led his party's campaign on a platform of change, many were skeptical that NZ First would partner with the National Party that had held power over the past eight years.

In his opening statement, Peters also drew a comparison between Germany and New Zealand, praising the ability of New Zealand to create a government within 11 days of finding out the final election result. Germans, he said, will not know their government until December following its elections in late September.

Before forming the NZ First Party in 1993, Peters had been a member of the National party. The nationalist and populist NZ First has previously been a coalition partner with both Labour in the early 2000s and the National party in the 1990s.

A drawn-out decision

The decision seemed to come down to the last moment, with radio stations and reporters highlighting the ongoing uncertainty into the early evening hours of Thursday. Even Labour politicians were held in suspense until the final moments before Peters spoke.

As kingmaker, Peters had lobbied his potential political partners for an ample number of ministerial posts. He pointed out that the negotiations reflected agreement but also concessions on his party's part.

Peters had previously described the decision as "seriously difficult." Some of his party's eclectic policies matched up with those of Labour, such as the desire to curtail immigration and foreign ownership of farms, and tweak trade deals such as the Trans-Pacific Partnership (TTP). However, NZ First opposed the elements of the liberal party's tax plan. 

Read more: Elections: Why New Zealand's left is making gains and Germany's is failing

The NZ First Party was thrust into the role of kingmaker after elections on September 23 left both the Labour Party and the National Party short of a governing majority in the 120-seat parliament. The inconclusive result shook markets and left both Labour, with 46 seats plus another eight from their Green allies, and the National Party, with 56 seats, courting NZ First for its decisive nine seats.

cmb/msh (AP, Reuters)