New Zealand's National Party set to cling on to power

Rightwing bloc projected to win enough seats to form a government

New Zealand's rightwing government is on course to retain power despite high-profile ministers losing their seats in a knife-edge election result.

Christopher Luxon's National Party has been fighting to avoid becoming the first one-term government since 1975 as the country grapples with a cost of living crisis at the same time that voters in eastern Europe, Brazil and the US have turned against rightwing candidates.

"We have a pathway to form the next government but right now it's too close to call," Luxon said late on Saturday night with votes still being counted. "Voyagers don't turn back when the seas get rough," he said of a collapse in its core support.

Luxon's rightwing bloc was projected to win 67 seats -- just enough to form a government -- with 90 per cent of the vote counted. The leftwing bloc, comprising Labour, the Greens and the Maori party, had 56 seats with the centrist Opportunity party on seven. The final result will not be known till November 27.

New Zealanders braved thunderstorms and lightning strikes to vote on tax reforms, capital gains tax and a break-up of the concentrated supermarket sector.

Chris Hipkins, Luxon's counterpart at the centre-left Labour Party, said it could be "a little while yet" for the exact make-up of the new government to be clear.

"Tonight New Zealand has spoken. It may take us a little bit longer to figure out what exactly it is that you've said," he said.

A number of prominent MPs from Luxon's party -- including his deputy and finance minister Nicola Willis -- look set to lose their seats.

"Kids, if you're watching, might be time to tidy your rooms because mum's going to be spending more time at home," Willis told her constituents.

The National Party's share of the vote dropped from 38 per cent in 2023 to 29 per cent. Labour also garnered less than 30 per cent as support for smaller parties such as the Greens and Opportunity, which could hold the balance of power, grew

"I'm just trying really hard not to swear, to be honest," said Qiulae Wong, leader of Opportunity as it became clear that the small party had breached the 5 per cent threshold to get its MPs into parliament for the first time.

National formed the last government with the nationalist New Zealand First party, which increased its vote in this election, and the libertarian ACT party and will rely on their support again. Shane Jones, deputy leader of NZ First, said voters had served up "electoral spaghetti".