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NZ First leader says foreign ownership to be part of coalition wrangling

[WELLINGTON] The party holding the balance of power in New Zealand's election said on Monday foreign ownership restrictions would be part of its coalition talks, after a final tally showing greater support for the centre-left bloc drove the local dollar to a four-month low.

A final vote count published over the weekend - two weeks after the Sept 23 poll - showed the centre-left Labour-Green bloc picking up two extra seats, bringing it nearer to the centre-right governing National Party's tally.

With Labour-Green on 54 seats and National on 56 seats, both will need NZ First's nine seats to meet the 61 seats needed for a majority in parliament in New Zealand's proportional representation system.

When pressed by reporters on whether foreign ownership would be a large part of negotiations with both National and Labour, NZ First leader Winston Peters said he doubted whether anyone in the press expected otherwise.

"So have you got that? It's a yes," he said.

National, which has sought to focus discussions on its careful management of the small, open trading economy, has repeatedly expressed support for open investment.

In contrast, Labour has suggested there is room for some restrictions. It wants to ban overseas buyers from purchasing existing homes as it tries to tackle what it has described as a housing crisis in New Zealand.

Labour and New Zealand First are thought to have more policies in common, with both looking to curb immigration, renegotiate certain trade deals and adjust the role of the central bank.

The New Zealand dollar fell as far as US$0.7052 on Monday from US$0.7090 on Friday evening, its lowest since late May, as uncertainty over the election outcome prevailed.

The currency traded at US$0.7071 in the afternoon.

"The market's been anticipating more of a centre-right government and the unknown from the centre-left is weighing," ANZ Economist Con Williams said.

Mr Peters, a colourful 40-year political veteran who has in the past has taken senior roles in both Labour and National governments, has set a self-imposed deadline of Oct 12 to announce which party he will support.

When asked how this week's talks compared to previous election negotiations, Mr Peters said, according to local media: "They are similar in some ways because of circumstances. More like 1996 than 2005." In 1996 Mr Peters formed a coalition government with National after two months of negotiation, while in 2005 he entered a confidence and supply agreement with Labour, which allowed the centre-left party to govern. The 1996 election was much tighter than 2005 in which Labour won a wide lead.

"But we have a few days to go yet before we will know the outcome," the New Zealand Herald quoted Peters as saying.


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