New Zealand awakes to new centre-right government

November 9th, 2008 - 5:36 am ICT by IANS  

Wellington, Nov 9 (DPA) New Zealand awoke Sunday to the prospect of a new centre-right government to steer the country out of its worst recession for years after a general election dumped the Labour-led coalition that had ruled since 1999.Saturday’s election produced a sharp jump to the right, leaving prime minister-elect John Key, 47, leader of the conservative National Party, and his free market allies in the ACT party, to govern for the next three years.

Veteran Prime Minister Helen Clark, 58, stunned her colleagues by immediately announcing her resignation as leader of the Labour Party but will stay in parliament after retaining her Auckland seat.

The Nationals won 59 seats in the 122-member parliament and will govern with the support of five ACT members and the United Future leader Peter Dunne, who has defected from Clark’s previous government.

Labour lost six seats as electors voted for change to finish with 43 members, while its prospective partners, the Greens, increased two to eight.

The indigenous Maori Party took five seats and although Key does not need them to govern, he announced that he will meet them to discuss working together.

Key is expected to introduce a range of major and controversial reforms, including income tax cuts and a road-building and public works programme to create jobs and counter the current recession in his first 100 days in office.

He is also tipped to order a line-by-line review of all state departments’ spending under a new cabinet expenditure control committee.

The ACT leader Rodney Hide - who attacked the Nationals as closet socialists during the campaign, claiming Key had diluted their traditional conservative values to woo votes - is certain to have a cabinet post.

There is huge interest in the return to parliament of former Labour finance minister Roger Douglas, 70, who founded ACT and has come out of retirement bent on reviving his radical free market policies.

Key ruled out a cabinet portfolio for Douglas during the campaign, saying he was too extreme but Hide said on Sunday that he would be seeking a role for him in the new government.

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