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Trump-like politician to decide New Zealand's next government

  • New Zealand's general election resulted in a hung parliament, leaving a small opposition party with the final say
  • Winston Peters, leader of the anti-immigration New Zealand First party, must now start a coalition with the ruling National Party or with Labour

The future of New Zealand's next government lies in the hands of an opposition leader who has been likened to President Donald Trump.

New Zealand First leader Winston Peters
Hagen Hopkins / Stringer / Getty Images
New Zealand First leader Winston Peters

An inconclusive general election on Saturday saw neither of the two leading parties win an outright majority, which means the South Pacific nation is headed for a coalition government.

The final vote tally is expected on October 7, but preliminary results showed Prime Minister Bill English's ruling National Party, which has been in power since 2008, securing 58 of 120 parliamentary seats. Labour, the country's main opposition vehicle, led by Jacinda Ardern, secured 45 seats, while smaller factions New Zealand First and the Green Party obtained 9 and 7, respectively.

The center-right New Zealand First must now form a coalition with either National or Labour, placing the spotlight firmly on New Zealand First leader Winston Peters.

It's the third time 72-year-old Peters has held the balance of power in an election — a position that's earned him the title of 'kingmaker.' Straight-talking Peters, who is considered a populist, has been likened to Trump for his anti-immigration and protectionist policies.

Having previously backed both sides during his four-decade career, it's not certain which way Peters will swing this time. Over the weekend, the outspoken figure said he intends to take his time in making a decision.

Former Prime Minister John Key told CNBC that he expects Peters to eventually side with English. "I suspect in the end, he'll look at the vote and see National really won very comprehensively."

It's hard to argue Peters would prop up Labor because "the only argument you could only really use for that is the country wants change, when it clearly showed through the ballot box that it doesn't want change," Key continued.

With no clear deadline for Peters to make up his mind, the country remains mired in uncertainty. English, who remains prime minister in the interim, said on Monday that the process "could take weeks."

"Peters wants to draw this out for as long as he can," Robert Ayson, professor of strategic studies at Victoria University of Wellington, told CNBC's "Squawk Box' on Monday.

"He knows that once he signs a deal, his power declines to some degree," Ayson said. "We could be in for ten days, two weeks or maybe even slightly more to get a real sense of what this coalition is going to look like."

Like Key, Ayson expects Peters to eventually give the nod to National.

It would be "quite difficult" for him to pick Ardern over English as that would mean partnering with the Green Party, which have pledged to work with Labour, Ayson explained. "The Greens and New Zealand Firsts don't get on terribly well...New Zealand would also be a bit uncertain about the long-term prospects of a Labour-led coalition."

Others, meanwhile, aren't so confident on English's prospects.

"Winston has a number of reasons not to support National," former South Australian premier Mike Rann said in a note published on the Lowy Institute. "He feels slighted by attacks it has made on him over the years, including recently about his eligibility for pension while still drawing a parliamentary salary."

But unlike Ardern, Peters is a social conservative, which "might temper his thinking, especially if this is his last term in parliament," Rann continued.