WELLINGTON, New Zealand: New Zealand Prime Minister Christopher Luxon is likely to remain in power after the weekend election, but his government could face a difficult path ahead.

His National Party is expected to lead a coalition with a narrow majority, while its right-wing partners may demand control of key government ministries.

The centre-right National Party and the main opposition Labour Party both received less than 30 per cent of the vote for the first time. Smaller parties on the left, right and centre gained support, reflecting a wider global trend of voters moving away from established political parties.

Preliminary figures from the New Zealand Electoral Commission show that Luxon's three-party coalition could secure a majority of just two seats. However, this could disappear when overseas and other special votes are counted. These votes account for about one-seventh of the total and have traditionally favoured left-wing parties. The final results are expected on November 27.

If the coalition loses its narrow majority, Luxon may need support from a fourth party, the centrist Opportunity Party, which is expected to enter parliament for the first time.

Kelly Eckhold, New Zealand chief economist at Westpac, said the next government would struggle to introduce policies because of its weak parliamentary position.

"Whatever government that's formed is going to rely on the goodwill of every individual member of parliament," he said.

Luxon will also have to deal with the loss of several senior National Party moderates who failed to win their seats. They include Finance Minister Nicola Willis and Transport Minister Chris Bishop, who played an important role in shaping the party's policies.

Their departure could force Luxon to give more important positions to members of his coalition partners. Both partners have been pushing for more conservative economic and social policies.

Election Reflects Global Trends

National and Labour's weak performance reflects a wider pattern across developed countries, where established centre-right and centre-left parties are losing support to smaller political groups.

In the United Kingdom, the left-wing Green Party and right-wing Reform UK have gained popularity. In Australia, the right-wing One Nation party has topped some opinion polls. Far-right parties have also increased their support in France, Germany and Austria.

Opportunity Party leader Qiulae Wong said on November 9 that declining public confidence in politics was a major concern.

"Trust in politics is generally at an all-time low," she said, adding that political leaders and parties needed to work to rebuild public confidence.

Wong has said her party will first negotiate with whichever party wins the most parliamentary seats. This makes an agreement with Labour unlikely.

Opportunity's possible entry into government could complicate coalition negotiations. The party wants major tax reforms, including an annual universal basic income of NZ$19,400 (US$10,800) for most New Zealand residents. It proposes funding the payment through an annual land tax of 1.75 percent.

Whatever coalition arrangement emerges, Luxon's position could remain uncertain. He survived two attempts by National Party lawmakers to remove him in the months before the election.