Election 2017 Live: NZ First chooses to go into coalition Government with Labour

Updated

Jacinda Ardern, who will soon be Prime Minister, with coalition partner Winston Peters. Montage by Lynn Grieveson.

For the first time since MMP was introduced in 1996, a Government will be formed with the second largest party in charge of a coalition that includes both Green and New Zealand First ministers. Bernard Hickey picks out the key details on an historic night.

The things we learned on October 20, 26 days after the election were:

  • New Zealand will have a Labour-New Zealand First coalition Government that is supported by the Green Party on votes of supply and confidence.

  • New Zealand First will have four ministers in the new cabinet and one under-secretary.

  • The Greens will have three ministers outside cabinet and one parliamentary under-secretary.

  • Labour and the New Zealand First have yet to agree the exact text of their policy agreements or the exact identity of the new ministries and ministers. That will be announced in coming days. A formal formation of the Government and the swearing in of ministers is expected next week.

  • The Green Party's delegates voted almost unanimously in favour of supporting the Labour-New Zealand First coalition Government. Only three of the 150 delegates dissented.

  • The Green Party also said they had yet to agree on the final details on policies and ministries.

  • Bill English wished Ardern all the best as the next Prime Minister and said he had not made a decision about whether to continue as National leader. A National caucus meeting will be held next week..

  • National will have 56 seats in Opposition, the largest by any one party in the history of MMP.

How it played out

Kingmaker Winston Peters and his New Zealand First party of nine MPs chose to form a coalition Government with the Labour Party's 46 MPs and a Green Party with eight MPs that will support it with a supply and confidence agreement.

That combination of 63 MPs on key votes was enough to beat National's 56 MPs and one ACT MP. Previous MMP Governments have been led by the largest party and Winston Peters baulked at forming a Government in 1996 that included Green MPs. He also refused to allow Green MPs to be ministers in the 2008 Government he formed with Labour.

This time around Peters chose to change the Government and opted to allow the Government to include Green ministers. He said had never had a bad word for Greens leader James Shaw.

Jacinda Ardern, 37, learned she would be Prime Minister while watching a television broadcast of Peters announcing his decision. As recently as August 1, she was the deputy leader of a party destined to lose the election with just 24 percent support. Ardern lifted Labour to 36.9 percent by September 23.

Peters gets (some of) his policies and some ministries

Winston Peters announced in the Beehive Theatrette shortly before 7 pm that New Zealand First has chosen to go into a coalition Government with the Labour Party.

He said he expected the Green Party would support the Government with a supply and confidence agreement. The Green Party is due to hold a wider vote of its 150 delegates later this evening. It needs 75 percent support to ensure the deal is approved.

Peters said the policy and ministerial details had yet to be hammered out. Ardern also said those details would be finalised and announced in coming days.

Ardern later confirmed that New Zealand First would have four ministries inside cabinet and one under-secretary role outside cabinet. Green Leader James Shaw said he expected the Green Party would have three ministries outside cabinet and one under-secretary role. He confirmed the Greens expected to support the Government on supply and confidence.

"Early next week we'll be in a position to sign and release the agreements with both NZ First and the Greens," she told a news conference.

Reserve Bank Act changes coming

Peters he said he expected the Reserve Bank Act would be changed and that the New Zealand dollar had been overvalued. It immediately fell almost one cent to 70.6 USc on the announcement. He said he had not secured his preferred policy of moving to a Singaporean model for monetary policy, which targets a currency level rather than an interest rate level.

Ardern and her likely Finance Minister Grant Robertson later confirmed there would be reforms to the Reserve Bank Act. She said she expected Labour's migration policy of reducing net migration by 20,000 to 30,000 would be implemented. That would suggest New Zealand First was unable to get its preferred cuts of closer to 60,000 net migrants per year than Labour's 30,000 maximum.

Peters said Labour and New Zealand First had agreed to implement its platform of restricting foreign buying of property, but did not give details. He also said migration would be restricted, but gave no detail about about the size or nature of those restrictions.

Ardern later said she had agreed to implement Labour's policy of banning foreign buyers of existing residential properties, which fell short of Peters' proposal for a full ban on foreign buying of both houses and freehold land across the country.

English gracious in defeat

National Leader Bill English said at a news conference in the foyer of the Beehive that he wished Ardern the best and hoped New Zealanders including the 44 percent who had voted for National would wish the new government the best to pursue the opportunities the country had.

He said he had not made a decision about his own future and expected the National caucus to have a meeting next week.

He said he was naturally disappointed with the decision and complimented Ardern on her performance.

"It was a fairly remarkable performance given 12 weeks ago she was the deputy leader of a failing party." he said.

Ardern's first comments as PM elect

Jacinda Ardern said in a statement shortly before an evening news conference in Labour's Caucus room in Parliament that Labour was pleased to have "successfully concluded negotiations with New Zealand First as a critical step to forming a Labour-led progressive Government."

“I thank the New Zealand First Party and Leader Winston Peters for agreeing in principle to a coalition arrangement with Labour," she said.

“The negotiations have been courteous, constructive and robust. Throughout, we have focused on our shared values and the policies that can take New Zealand forward," she said.

“We are both committed to forming a strong and durable government that can deal with the many challenges this country faces.

“The Green Party is now undertaking its internal approval process before we confirm final arrangements to form a Labour-led progressive Government. This too has been an excellent process, which I thank James Shaw and his team for.

“This is an exciting day. We aspire to be a government for all New Zealanders and one that will seize the opportunity to build a fairer, better New Zealand.

“We will work hard to ensure New Zealand is once again a world leader, a country we can all be proud of. We said we could do this, we will do this.

“I thank Bill English and acknowledge the service he has given to this country as Prime Minister, and for a hard fought campaign. We both share a commitment to making New Zealand a better place and Bill has left his mark.”

From before the announcement

New Zealand First leader Winston Peters says it will be hours before his party reaches a decision on which way it will go, although potential deals are largely finalised with National and Labour having wrapped up internal discussions.

Emerging from a New Zealand First caucus meeting at 1pm, Peters told media no decision had yet been reached and there were a few hours to go, according to the NZ Herald.

Peters still hoped the announcement would be made on Thursday, and the deals were "seriously substantially final", the NZ Herald reported him as saying.

"We are not very far away from finality and we are just going to have a bite to eat and put it all on the table and make a decision," he said.

Asked whether the decision could be delayed beyond today, Peters said he hoped not, but could not give an ironclad commitment.

"The reason why I don't rule out things is you never know what might blow in the next couple hours.

"That is the nature and shape of politics. It always has been. Things change by the hour."

Peters would not comment on whether he would notify the National and Labour leaders of his decision before making it public, according to the NZ Herald.

"Our total focus has been on the decision.

"Other matters are extraneous and will sort themselves out once we have made the decision."

On Wednesday, Peters said his party would announce the result of its coalition negotiations on Thursday afternoon, following days of talks.

Both National and Labour held caucus meetings on Thursday morning to update their MPs on the status of negotiations - National in person, and Labour via teleconference.

Addressing the media before the National meeting, Bill English said he would be updating his caucus on the "broad parameters of an agreement" and then would then do the same for the party's Board.

"We've had a period of intensive negotiation and I'm satisfied the agreement we've reached with New Zealand First would be able to form the basis of a strong and cohesive government."

He would not comment on any details of the agreement but said Cabinet positions had been discussed.

English said he hadn't given any thought to whether he would resign if New Zealand First chose Labour. There would be ongoing discussions throughout the day about how the afternoon announcement would be made, he said.

"Like everybody else we look forward to hearing what it is."

In a statement issued at 5.25pm yesterday afternoon, Peters said: "New Zealand First will be in a position tomorrow afternoon to make an announcement on the result of negotiations following the 2017 General Election."

Peters said he had spoken to both Bill English and Jacinda Ardern to advise them of that, "amongst other matters".

In a statement, a spokeswoman for English said National's caucus meeting this morning would provide its MPs with an update on coalition talks, before a separate teleconference with the party's board.

"We stress that we have had no indication of what decision New Zealand First will make. We have no further comment at this stage," the statement said.

(Updated: 1.35pm).