Bolger clings to the wreckage: New Zealand faces hung parliament and political turmoil

NEW ZEALAND voters turned the country's political scene on its ear yesterday, choosing a hung parliament with slim prospects of survival and a new voting system that paves the way for coalition governments.

In yesterday's general election, they wiped out the conservative National Party's record majority but failed to give the main opposition Labour Party a mandate. The only certainty last night appeared to be another early election, though the Prime Minister, Jim Bolger, was insisting he would try to govern for the full three-year term.

It was by any count a huge defeat for the government which throughout the campaign stood accused of dismantling the country's welfare system. With two minor parties holding the balance of power on election-night figures, and thousands of absentee votes to be counted, it may be at least 10 days before it is clear who will form the next administration.

In a simultaneous referendum yesterday, voters chose to ditch the Westminster system of voting that New Zealand has followed for 140 years in favour of a form of proportional representation.

This will give minority parties more members in parliament and every prospect of participating in coalitions. It must be a gratifying outcome for the two main minor parties, the New Zealand Alliance, led by a former Labour MP Jim Anderton, and New Zealand First, headed by a rebel former cabinet minister, Winston Peters. They won only two seats each in the 99-seat parliament despite taking 27 per cent of the vote.

National remains the biggest single party with 49 seats - down 20 on a massive nationwide swing away from the government - while Labour has 46 - a 17-seat gain. Neither the Prime Minister nor Labour leader Mike Moore would concede defeat. Mr Bolger insisted that he would continue to govern while Mr Moore said National had lost its moral authority to do so and called for four-party talks on the constitutional issues at stake.

But the National Party's leader denied the result posed a constitutional crisis, though he acknowledged there was 'a difficult political situation' and conceded that National could govern only with the co-operation of other parties. 'I am prepared to work with whoever will work in the best interests of New Zealand,' he said.

Noting that the country was pulling out of recession, Mr Bolger said: 'What New Zealand very much needs now is stability, so that investors do not take fright.'

Although the Alliance and New Zealand First won only four seats, their strong showing in the polls spoilt Labour's chances of victory.

Mr Anderton more than doubled his personal majority and, having seen the Alliance capture more than 18 per cent of the nationwide vote, said: 'We are now a real force to be reckoned with.'

Mr Peters, who formed his party last July only to see his personal rating - he was for a long time the country's most popular politician - fade during the campaign, said he always felt NZ First would play a pivotal role in the election.,

Political commentators said feelings were so strong during the campaign it was hard to see the Alliance or New Zealand First joining a coalition with either National or Labour. Equally, Labour's Mr Moore, who has accused National of being captured by rightwing extremists bent on demolishing the last vestiges of the welfare state, made it clear he was in no mood to reach any agreement with Mr Bolger.

'We are not going to concede to that lot,' he said. Having accused National of secretly planning to 'Americanise' the once-free health system and privatise education, he added: 'They won't be able to start implementing their secret agenda on Monday.'

(Photograph omitted)