On 19 October Winston Peters, the leader of New Zealand First, told a press conference that he had decided to form a coalition government with Jacinda Ardern and the Labour Party. This announcement surprised most political observers. It had been widely assumed that, since polling took place on 23 September, negotiations had been moving towards a coalition agreement between the centre-right National Party led by Bill English, which secured a significant lead in the elections and Peter’s New Zealand First (See 11 October Post – Can the National Party Secure a Fourth Parliamentary Term?) Neither Jacinda Ardern or Bill English were informed by Winston Peters as to which coalition option he had chosen prior to his press conference announcement. The details of the coalition arrangement between the Labour Party and New Zealand First show Winston Peters to have driven a hard bargain. In return for the support of New Zealand First’s 9 MPs Winston Peters will be appointed to be Deputy Prime Minster and the party will have 3 other cabinet positions. The Green Party led by James Shaw with 8 MPs will also support the coalition government on a confidence and supply basis. They will have 3 non-cabinet ministerial positions within the government. The coalition agreement was formally confirmed on 23 October. Since the announcement of the new coalition government both Jacinda Ardern and Winston Peters have sought to emphasise their common opposition to the free-market policies of their National Party predecessors. In the longer term, however, the coalition government may suffer from internal tensions due to the widely differing personalities, policies and identities of the parties involved. This is particularly the case of the Green Party, with its environmentalist identity, and New Zealand First with its strong links to farming and the fishing industries.
Bill English has stated that, as the largest parliamentary group, the National Party will constitute a powerful opposition to the newly formed coalition government. Bill English has given no indication that he intends to step down following the election and appears to retain the confidence of National Party MPs. Other senior National Party figures including Paula Bennett, deputy leader of the National Party, and Steven Joyce, former Finance Minister, have also indicated that they intend to remain in leadership positions. Alongside disappointment at no longer being in government there is also a significant element of relief within the National Party that they will not have to form a government with the personally and politically erratic Winston Peters. There had been a belief amongst a section of the National Party membership that working with Winston Peters, with his anti-immigration and economic nationalist agenda, had the potential to taint their political brand. The coalition between Labour, New Zealand First, and the Green, with its political contradictions, may by contrast open up opportunities for the National Party. Some within the National Party are known to favour an early challenge to the cohesion of the coalition over the issue of the Kermadec Ocean Sanctuary. This major conservation project was announced by John Key, the former Prime Minister and National Party leader, in September 2015. It is supported by the Green Party, but opposed by New Zealand First. An attempt by the National Party to move this project forward through parliament might open up rifts within the government.