WELLINGTON (Reuters) - New Zealand’s small nationalist party which holds the balance of power after an inconclusive election held talks on Sunday with Prime Minister Bill English and separately with the opposition Labour leader as both try to form a coalition government.
New Zealand First leader Winston Peters has said he would only make a decision on which party to back after the results of the Sept. 23 election become official next Thursday.
Peters remained tight-lipped after talks with the prime minister, saying the meeting was “fine”, and later met Labour Party leader Jacinda Ardern.
“I can say that we’ve had an excellent, productive meeting,” Ardern told reporters after coming out of the two-hour meeting.
“Negotiations will continue for Labour with the parties that we are looking to form a stable, durable, coalition government with.”
Ardern has brought Labour within reach of forming government since becoming party leader in August, with a Labour-Green bloc winning 54 seats, two seats short of the ruling National’s 56.
New Zealand First holds the nine seats needed to meet the 61 seat majority in parliament.
A final vote count on Saturday showed National lost some ground to the Labour-Green bloc from a preliminary tally, even though it still held the largest number of seats in parliament.
“It did pay to wait, didn’t it?,” Peters said, referring to the final vote count. Peters has previously served in both National and Labour governments.
English said on Saturday that negotiations would now likely focus on the economy.
Both Labour and New Zealand First have said they want to curb immigration, renegotiate certain trade deals and adjust the role of the central bank albeit in different ways.
Analysts expected the political uncertainty to have little impact on financial markets and the New Zealand dollar.
“I think on Monday the market is going to be a little bit subdued because basically nothing has changed,” said Stuart Ive, private client manager at OM Financial.
“You could say that the policies are probably more aligned to a Labour-Green-NZ First partnership but a three-way coalition is a lot harder to manage than a two-way coalition.”
Reporting by Ana Nicolaci da Costa; Editing by Michael Perry