By Alasdair Pal and Lucy Craymer
WELLINGTON, Nov 9 (Reuters) - New Zealand Prime Minister Christopher Luxon is on course to hang on to power as the head of a coalition government with a razor-thin majority following Saturday's election, but his National Party could lose control of key government ministries to right-wing coalition partners.
Centre-right National and the main opposition Labour Party both polled below 30% for the first time ever, losing votes to minor parties on the left, right and centre
– a trend that analysts said mirrored a global shift away from the political establishment.
Preliminary New Zealand Electoral Commission data shows Luxon’s three-party coalition could govern with a majority of just two seats. But that margin may disappear once overseas and other special votes – which make up a seventh of the total and typically skew left – are included during the final count on November 27.
That could mean Luxon will require the support of a fourth party to govern – the centrist Opportunity, which looks set to enter parliament for the first time.
Kelly Eckhold, New Zealand chief economist at Westpac, said any government would find it difficult to introduce policy and would lack a strong mandate to rule.
“Whatever government that's formed is going to rely on the goodwill of every individual member of parliament," he said.
MINOR PARTIES GROW IN POWER
Luxon will also have to govern without key National Party moderates who lost their seats, including Finance Minister Nicola Willis and Transport Minister Chris Bishop, one of his main policy architects.
In their place, he is likely to have to elevate key members within his coalition partners, who have been angling for more conservative economic and social policy positions.
New Zealand First wants stricter controls on net migration and has said it is “imperative” it takes control of the country’s immigration ministry in any new government.
Meanwhile David Seymour, leader of the libertarian ACT Party, said on Monday that National holding the finance ministry is “no longer tenable”. ACT wants to lower government debt with steep cuts to public spending.
“With ACT and New Zealand First growing their vote share, they're going to be dragging them further towards the right,” said political commentator Gareth Hughes.
ELECTION MIRRORS GLOBAL TRENDS
The poor showing by National and Labour mirrors elections across the developed world, where centre-right and centre-left governments have lost ground to minor parties.
In Britain, the left-wing Greens and right-wing Reform UK have both swelled their support. In Australia, the hard-right One Nation has topped some opinion polls, while in Europe, far-right parties in France, Germany and Austria have all been gaining ground.
“Trust in politics is generally at an all-time low, and we all, as political leaders and parties, need to be doing everything we can to restore that trust,” Opportunity Party leader Qiulae Wong said on Monday.
Wong has said she will negotiate first with whoever secures the most seats in parliament, making a tie-up with Labour unlikely.
The addition of Opportunity, which wants an overhaul of tax policy including an annual NZ$19,400 ($10,800) universal basic income for most New Zealand residents funded by a 1.75% annual land tax, would provide an additional wrinkle for National.
Whatever form the coalition takes, Luxon, who survived two attempts to unseat him by National Party lawmakers in the months leading up to the election, will be vulnerable, Hughes said.
“I believe he's secure as the National Party leader in the short term,” he said.
“Will he be National Party leader at the time of the next election? Who knows.”
(Reporting by Alasdair Pal and Lucy Craymer in Wellington; editing by Lincoln Feast.)
