Election 2011: National soars as Labour sinks

John Key's asset sales plan failed to turn off the voters. Photo / Greg Bowker

John Key. Triumphant. And promising to never, ever take the trust of New Zealanders for granted.

The prime minister took the stage above a sea of blue in Auckland last night, taking the result as a mandate for his bold plans to seek reelection on a platform of selling off some of the power companies and Air NZ.

It had never been a better time to be leader of the National Party said Key, looking tired, relieved, just a little euphoric.

"New Zealand voted for a brighter future and there will be a brighter future," he said. "I'm proud to be Prime Minister of this great country.

"We have been given a tremendous gift tonight, the trust and goodwill of New Zealanders and I won't take this trust for granted."

He had spoken to Act and United Future and agreed to form a coalition government with them, he said. The Maori Party, too, were invited to join his grand new project to reshape the New Zealand public service. The Government would focus on building a competitive economy, less debt, more jobs and higher income.

And, as Labour leader Phil Goff signalled his plans to announce his resignation on Tuesday, Key said he had spoken to Goff - a "generous" hard-working Parliamentarian who always had New Zealand's best interest at heart.

And Key concluded: "I'm about to head off for something a little bit stronger than a cup of tea."

It was an extraordinary result in many ways.

* Labour leader Phil Goff fought a reinvigorated campaign with policies like raising the retirement age that will define the party into the foreseeable future - but his party was simply routed. He is expected to announce to the caucus on Tuesday that he will step down, but in a managed leadership handover that will probably not take effect till the MPs return from their summer holidays.

* Winston Peters and NZ First - shamed and ousted just three years ago - were returned in greater numbers than before. And all it took them was a cup of tea.

* Act's John Banks, too, was returned to Parliament on the strength of that same cup of English Breakfast tea - but he returned alone. The smell of that cuppa was anathema to the rest of the country. Last night, the party's leader Don Brash announced he would resign - now the failed leader of two parties in succession, announced he would tender his resignation to the Act Board.

* The Greens won 13 seats - their best-ever result - yet still remain the cursed party of New Zealand politics, never in Government, never in Cabinet.

* United Kingdom prime minister David Cameron made a bizarre entry into the New Zealand election campaign by telling The Guardian that is he had a stag party, he'd invite his friends Bill Clinton, Barack Obama, Nicolas Sarkozy - and John Key.

Today, John Key need not care about the minutiae around the fringes. He need not spare a thought for his old nemesis, Winston Peters. He needn't worry about the poor showing by his governance partners, Act and the Maori Party. He has got all the seats he needs to lead the nation for another three years.

Instead of wasting the coming days negotiating to form a government, he can kick straight into action. Less hui, more do-ey.

The first move: to transcend many of the divisions over asset sales by opening the door for iwi to buy into the power companies. Maori Party co-leader Pita Sharples had signalled during the campaign that while the Maori Party was opposed to the asset sales, it would be interesting in negotiating a preferential arrangement for iwi to buy shares.

National ruled out any special treatment _ but last night, the other Maori Party co-leader, Tariana Turia, told the Herald on Sunday that iwi had indicated to her that they would be very interested in buying into the critical NZ assets.

That would be welcomed by iwi who are looking to invest in New Zealand infrastructure, and potentially by those who wish to see the power companies and Air NZ remain in New Zealand hands. Economic development minister Gerry Brownlee said early today that National planned to sell the assets, in the first instance, in small parcels to "all New Zealanders".

Ngai Tahu chairman Mark Solomon said Ngai Tahu or an iwi consortium would be interested in doing due diligence on buying a big tranche of the $5 billion plus in shares.

"If National decide to go ahead with it we would have a look at it and we would go through a full due diligence to make sure it's the investment we want," he said.

Sale of big parcels of shares to iwi - potentially enabling them to cut power prices for iwi organisations and whanau - could be a clincher for the Maori Party. Turia had already told the Herald on Sunday that the Party would like to continue working with National, and _ in a surprise attack _ that she doubted the honesty of the Green Party.

National Cabinet minister Judith Collins _ touted by some to take charge of the defence ministry and armed forces _ said last night: "I think the Prime Minister's plans have been given the tick of approval by New Zealanders."

United Future's Peter Dunne and Act leader-in-waiting John Banks have already vowed their allegiance to Key.

Defeated Act leader Don Brash told supporters he would do everything he could to support the rebuilding of the Act Party, "but clearly the primary responsibility will fall to John Banks and to the board and for that reason when I meet with the board tomorrow I will be tendering my resignation as leader. But I wish you the very best and I will be doing my darndest to make sure the party goes from strength to strength."

Early this morning, Herald on Sunday has confirmed that Phil Goff, too, will set out a timeline for his departure when he meets with his sadly-depleted caucus on Tuesday.

"I've made my own decision about that but I'm not talking to the media about that until I've met with my caucus," he said.

Asked what his family wanted him to do, he said that was obvious: "A wife would like to see more of her husband and kids would like to see more of their father. They would have given me that advice a decade ago."

Already, the lines are being drawn. Finance spokesman David Cunliffe refused to pledge support to Goff last night, and is likely to run a leadership ticket with Lianne Dalziel as his deputy.

David Parker, too, is expected to seek the leadership, alongside Wellington Central MP Grant Robertson. Robertson was this weekend endorsed by ormer long-serving Labour Party general secretary as being at the vanguard of "generational renewal" for the party.

On the North Shore, a triumphal Winston Peters renewed his attacks on National, Act and the media - as if he had never taken a three-year break from politics. He brought back seven other MPs, including the impressive Tracey Martin, a north Auckland local politician, and the controversial former mayor of North Shore City, Andrew Williams.

Peters sold supporters: "Some parties spent more than four thousand times what New Zealand First spent on this campaign."

"We'll never forget the nature of this campaign. For much of it New Zealand First was marginalised, stigmatised and even demonised in a substantial black-out from my friends in front of me in the media."

At the Green Party function in central Auckland, Outrageous Fortune actor Robyn Malcolm said she hoped the Green party would be a "strong moral" opposition.

"It's going to be a very interesting three years," she said. "It will not be easy. The Green Party's values, which are also my values, don't line up with National. I really believe the Greens can move New Zealand forward. They are a very impressive bunch and I have faith in them. Keeping our environment clean is vital to our economy."