“We had a choice to make… for a modified status quo or for change,” New Zealand First leader Winston Peters told reporters in Wellington, in announcing his party’s support for Labour.
“That’s why in the end we chose a coalition government of New Zealand First with the New Zealand Labour Party,” said Peters, ending nearly a month of political uncertainty.
New Zealand First holds the balance of power with nine seats, a Labour-Green bloc controls 54 seats, and the National Party 56 seats.
The New Zealand dollar has fallen around 3.8 percent against the U.S. dollar since the vote and following the announcement was last quoted at 1.31 percent lower at $0.7060.
While Peters said new policy announcements would be up to Labour leader Ardern, he gave a sense of what was to come by saying he would look to redraft the Reserve Bank of New Zealand’s central bank mandate and expected fewer immigrants to be allowed into New Zealand. Peters also said he had agreed with Labour to build tens of thousands of affordable homes.
Labour and New Zealand First favor greater restrictions on migration and trade – both of which have been key sources of New Zealand’s robust growth of recent years.