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National marches back to power in New Zealand

New Zealand's PM John Key smiles after the general election in Auckland
New Zealand's PM John Key smiles after the general election in Auckland

By Ed Davies

AUCKLAND (Reuters) - The ruling center-right National Party returned to power in a crushing win in New Zealand's general election on Saturday and secured the backing of minor parties to ensure a majority for asset sales and welfare reforms.

National, led by former foreign exchange dealer John Key, was sitting on 48 percent share of the vote on election night. That would give the party 60 seats in the 121-seat parliament from its current 58.

Key was guaranteed a second three-year term with the return of current coalition partners, free-market ACT and centrist United Future, each with one member.

"New Zealand has voted for a brighter future, and there will be a brighter future," Key, draped in blue and white streamers, told ecstatic supporters.

National campaigned on promises to build on policies of the past three years with an emphasis on sparking economic growth by cutting debt, curbing spending, selling state assets and returning to a budget surplus by 2014/15.

"The government will be focused on building a more competitive economy, with less debt, more jobs, and higher incomes," added Key, 52, flanked by his wife and son.

The opposition Labour Party's share of the vote was around 27 percent, which would give it 34 seats, a loss of nine.

"It wasn't our time this time," Labour leader Phil Goff told

supporters. "We're a bit bloodied, but we're not defeated."

Under New Zealand's proportional voting system, parties must secure either a local electorate seat, or 5 percent of the nationwide vote to get into parliament.

The final tally of seats could yet change when tens of thousands of absentee votes are counted over the next two weeks.

Opinion polls published in the last day of the campaign put the National Party up to 25 percentage points ahead of Labour.

CHAMPAGNE CORKS POP

The affable Key has been one of the most popular leaders in New Zealand history and has been seen as a safe pair of hands as he led the country through earthquakes, a coal mine disaster, and the global economic turmoil.

He has also benefited from linking himself with film maker Peter Jackson, who is making two movies based on the Hobbit books, and the country's All Black rugby team, which won the Rugby World Cup on home soil last month.

"Of all the politicians that New Zealand could have he's got the most experience and is best positioned I think to lead us into the future," said Denis MacNamara, a 63-year-old lawyer from Auckland, as champagne corks popped and supporters danced.

Key said the government, including ACT and United Future, would have 62 seats, allowing it to implement major policies, such as asset sales. But he would also look to renew a deal with the Maori Party representing the interests of indigenous Maori people.

"He understands proportional representation. He wants other people with him, including the Maori Party," said Canterbury University political scientist Therese Arsenau.

The surprise of the election was the near 7 percent showing for the nationalist New Zealand First Party, led by the mercurial veteran Winston Peters, ousted from parliament in 2008 amid a scandal over secret donations.

"Our aim is to be cooperative and constructive...we told people to hang on because help is on its way and tonight it's arrived," he said, adding the party would be independent and look to keep the government honest.

Of the other parties, the Greens were on track for 13 seats from their current nine, and the Maori Party retained three of the seven seats reserved for Maoris.

(Additional reporting by Mantik Kusjanto and Greg Stutchbury; Writing by Gyles Beckford; Editing by Ron Popeski)

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