September 19, 2005

NZ’s Clark starts talking with potential allies

WELLINGTON (Reuters) - New Zealand's ruling Labor party
began talks on Monday with potential allies to lay the
foundations for a new center-left government, after it pipped
the National opposition by one seat in a nail-biting election.

Prime Minister Helen Clark, seeking to become the first
Labor leader to win three straight terms, met the leaders of
some minor parties after clawing back an early deficit to
finish ahead of the National Party, led by former central bank
governor Don Brash.

On the election night count, Labor has 50 seats in a
122-seat parliament, down one from the previous parliament,
compared with National's 49, up from 27. Results will be
declared official on October 1.

The close result, with both parties short of an outright
majority, means at least two weeks of political horse-trading
with some of the six minor parties who won seats, in a bid to
create a workable coalition government.

Clark said the election result had put Labor into a
position where it has an opportunity to negotiate a government.

"There are five cabs on the rank and we are talking to all
of them," she told reporters.

Clark said she wanted to form a durable government and
there were many options.

"They run across the spectrum from coalition, to guarantee
of confidence and supply, to working relationships, to the
abstention option."

Labor can probably count on at least another seven seats
from the Green and Progressive parties.

United Future and the nationalist New Zealand First, which
have 10 seats between them, have said they would support
whoever has won the most seats on key issues of confidence and
finance, although both have expressed reservations about the

United Future's leader, Peter Dunne, said after meeting
Clark that he was open to a range of possibilities.

"I'm not ruling anything in or anything out and it would be
inappropriate to do so," he said.

Clark said that, assuming there were no appeals or delays
in the final election count, then progress to forming a
government would quicken in the first week in October.


National was keeping a low profile, with Brash refusing to
concede defeat ahead of the final result, which will depend on
218,000 absentee and overseas special votes.

Brash, a 64-year-old political novice, fought hard and his
promises of NZ$9 billion worth of income tax cuts over three
years almost pushed him across the line.

"The special votes will be important, they will decide in
particular which of the two major parties is the larger, and
also decide whether the Greens are in parliament or not," he
told Television New Zealand.

The Greens are sitting just above the threshold of 5
percent of the nationwide vote needed to guarantee
representation. In previous elections the Greens have increased
their share of the vote after special votes.

A change of government appeared possible on Saturday when
National took an early lead in the vote count, but Labor clawed
its way back when returns came in from the major urban centers
of Auckland, New Zealand's biggest city, and the capital,

National almost doubled the vote it won in 2002 but it took
votes away from minor center-right parties with which it could
form coalitions.