New Zealand’s Ardern will pursue more centrist agenda

Significance

Unlike in Labour’s first term, the party now no longer needs the support of minor parties to govern. Its 49% win is extraordinary given the mixed-member proportional electoral system and enables Ardern to implement her policies without seeking wider political consensus.

Impacts

• Ardern’s win was widely anticipated, so it will have minimal effect on financial markets and business confidence.
• There is some agricultural and business-sector concern that the Greens will wield too much power if they are involved in government.
• New Zealand’s borders will remain closed for now: eliminating COVID-19 from the community is Ardern’s strategy.
• Ardern will invest in trades training and infrastructure, but aggressive monetary policy will still be key to economic recovery.
• The weakness of the centre-right National Party is letting the libertarian ACT New Zealand rise in popularity.