New Zealand’s next prime minister will be Jacinda Ardern, whose Labour party won the support of a small nationalist party to form the government, spelling big changes for a small but open economy, whose currency hit a 4-1/2-month low on the news.
Labour indicated it would pursue plans to change the central bank’s mandate, seek to renegotiate the Trans-Pacific Partnership trade deal and prioritize an effort to ban foreign ownership of certain types of housing.
“It is an absolute honor and a privilege to have the ability to form a government for all New Zealanders,” said Ardern, who will be the youngest prime minister in more than 150 years, ending the conservative National Party’s decade in power.
“These negotiations have been robust, but there has been more that has united the parties than has divided.”
The New Zealand dollar fell more than one percent on the news that Labour would lead a government with backing from New Zealand First, as markets worried it would usher in more protectionist policies.
Ardern, a political ingenue whose victory marks the emergence of another youthful global leader promising to shake up the status quo, said she had offered the position of her deputy to Winston Peters, the leader of New Zealand First, who was considering it.
“Far too many New Zealanders have come to view today’s capitalism, not as their friend, but as their foe,” Peters told a news conference.
“We’ve had to make a choice for a modified status quo, or for change,” he said. “We choose a coalition government of New Zealand First with Labour.”
Peters said new policy announcements would be up to Ardern, but gave a foretaste of what may come by saying he expected fewer immigrants to be allowed into New Zealand.
He had agreed with Labour to build tens of thousands of affordable homes, he added.