New Zealand's Ardern vows 'government of change'

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New Zealand's Ardern confident coalition won't fray

New Zealand's Ardern confident coalition won't fray

Wellington (AFP) - New Zealand's prime minister-elect Jacinda Ardern promised "a government of change" as she met with leaders of her centre-left Labour Party Friday to prepare to take power after a stunning election win.

The charismatic 37-year-old received a standing ovation from the Labour caucus after forging a coalition with minor parties on Thursday to clinch victory in the September 23 election.

"This will be a government of change, it will be a government we can be proud of," she said.

"We have been gifted by the people of New Zealand an opportunity, and it is for us to make the most of that."

Ardern expressed confidence her new government would see out its full term, despite long-standing tensions between junior coalition partners the Greens and New Zealand First (NZF).

NZF leader Winston Peters and the Greens have a rocky history, which descended into name-calling earlier this year when the environmentalists said the 72-year-old's anti-immigration rhetoric was racist.

Ardern insisted Friday that the three groups could work together and said she had faith in Peters, an outspoken maverick whose 40-year career has been punctuated by controversy.

She said Peters, whose declaration of support for Ardern on Thursday tipped the election her way, successfully joined a Labour-led coalition in 2005.

"Labour has been in an agreement with NZF before... Mr Peters and New Zealand First were a party of their word, that provided stability and we delivered," she told Radio New Zealand.

- 'Straight to the grindstone' -

Ardern, who took over the Labour leadership less than three months ago and is now set to become New Zealand's youngest leader since 1856, said she was still processing her meteoric rise.

"I probably need a bit of time for quiet reflection before it all sinks in, but for now it's straight to the grindstone," she told TV3.

The new leader said she had received congratulations from Australian Prime Minister Malcolm Turnbull, Britain's Theresa May and Canada's Justin Trudeau.

But she kept the celebrations low-key on Thursday night after ending Labour's nine years in the wilderness.

"I headed straight back to my studio apartment in Wellington and had a pot of noodles," she said.

Ardern denied her government was "a coalition of the losers" considering the outgoing National Party claimed 44.4 percent of the vote, well above Labour (36.9), NZF (7.2) and the Greens (6.3).

"Obviously I'd characterise that as unfair... We've formed a coalition government based on the majority of votes," she said.

Ardern expects to allocate ministerial portfolios and release detailed policies next week, as well as implement a 100-day plan of high-priority reforms.

These include slashing immigration numbers by up to 30,000 places a year, clamping down on property sales to foreigners and setting a goal of zero carbon emissions.

Coalition parties will also push their own pet reforms, including a Greens plan to hold a referendum by 2020 on legalising cannabis for personal use.

- 'Rocky road?' -

The markets reacted negatively to the centre-left coalition, with the benchmark NZX-50 index down 2.9 percent and the New Zealand dollar off 1.7 percent.

Capital Economics analyst Paul Dales said policies such as reducing migration and running tighter fiscal policy were "less growth friendly" than those of the outgoing National Party.

TD Securities strategist Annette Beacher said the new government could also increase taxes and spending, threatening to end a recent run of budget surpluses.

Ardern acknowledged that there were signs of an impending economic slowdown but said it would be attributable to international factors, not her government.

"We will potentially have a rocky road in front of us," she told Newshub.

"If you have an economic outlook that's affected by international markers then it's your job to manage them, but we can't always control what we face. No one blamed the National government for the GFC (Global Financial Crisis), for instance."

Ganesh Nana, chief economist at financial consultancy BERL, said market fears were overstated.

"We probably have to tell the finance markets to chill a little bit, take their morning medication and just realise that the sun still will rise in the east and set in the west," he said.