New Zealand Leader Wins 2nd Term, Pledges Fiscal Discipline

WELLINGTON, New Zealand— Prime Minister John Key convincingly won a second term as New Zealand’s leader in elections Saturday that open the door for the sales of billions of dollars worth of government assets as part of a plan to reduce the country’s debt.

Associated Press reported that Key’s centre-right National Party has promised to get the nation’s books in order and begin paying down foreign debt within the next three years. That message has taken on a new resonance after the country’s credit rating was downgraded this year and the situation in Europe has shown how debt can quickly become toxic.

The National Party dominated the election, coming up just short of getting enough votes to govern alone. With most of the votes counted, the party was projected to win 60 of the 121 seats in Parliament, an increase of two. Key will look to some of the minor parties for support in forming a stable government.

“Tonight New Zealanders voted for a better future, and there will be a better future,” Key said in his victory speech.

The center-left Labour party, which had opposed asset sales, won just 27 percent of the vote, meaning it will lose about nine of its 43 seats. Like National, it also promised to get the books in order — but Labour planned to do it by introducing a capital gains tax and raising the age of retirement by two years, to 67.

Phil Goff, Labour’s leader, said the party was “bloodied, but not defeated.”

“It wasn’t our time this time,” he told supporters. The poor showing makes it likely Goff will soon step aside.

Key plans to sell minority stakes in four government-owned energy companies and in Air New Zealand in order to raise an estimated 7 billion New Zealand dollars ($5.2 billion).

The National Party’s win could also open the door for more mineral exploration and offshore oil drilling. Labour had proposed a moratorium on deep-sea drilling after a cargo ship ran aground last month near the North Island port of Tauranga, spilling about 400 tons of fuel into the ocean and onto local beaches.