The BGA New Zealand team, led by Senior Adviser Penny Tucker, wrote an update to clients on New Zealand’s election.

Context

  • New Zealand’s general election concluded October 14 with the ouster of the center-left Labour Party and the election of a conservative government led by the center-right National Party and libertarian ACT Party. The results follow nearly two weeks of voting, but around half a million “special” votes still need to be counted, including ballots from the many New Zealanders who live overseas.
  • Polling indicates that a center-right National Party-ACT coalition will form the next government; however, the ruling coalition may be fragile regardless of which party wins.

Significance

  • National and ACT won the most seats in the election, sending Labour a strong message that the country wants change. National has campaigned on fiscal conservatism and lower taxes to get the country and economy back on track.
  • Key issues in the election included high taxes, rising crime and co–governance with the indigenous Maori people. Co-governance, which mandates power-sharing with the Maori Party, has in recent years become one of the most divisive in New Zealand’s politics. National, ACT and New Zealand First have criticized the practice as undemocratic and racially divisive.

Implications

  • New Zealand’s conservative government may be more business friendly than the previous Labour government. National leader and Prime Minister-designate Christopher Luxon will likely be more sympathetic to business interests given his background in the private sector, but he will need to overcome perceptions that he is a passive leader.
  • Uncounted special votes could tip the balance of power, forcing the conservative coalition to work with right­-wing New Zealand First, led by Winston Peters. The small party has often been a kingmaker in past elections given New Zealand’s mixed-member-proportional system, in which a small party can play an outsize role.

We will continue to keep you updated on developments in New Zealand as they occur. If you have any comments or questions, please contact BGA Senior Adviser Penny Tucker, who is based in Auckland, New Zealand. If you have a specific question about elements of policy or need clarification on how a particular issue has fared during detailed coalition negotiations after the election, please reach out to Penny.

Best regards,

BGA New Zealand Team

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