AUCKLAND -- Voters in New Zealand will hold their first national election in three years on Saturday, with inflation and cost of living top of mind as an emerging minor party looks set to play kingmaker, analysts say.

Since winning the last election in October 2023, the ruling center-right National Party, led by Prime Minister Christopher Luxon, has governed with the right-wing New Zealand First party, headed by Foreign Minister Winston Peters, and the libertarian ACT Party.

The center-left Labour Party, led by former Prime Minister Chris Hipkins, who succeeded Jacinda Ardern after her shock resignation in January 2023, along with the Green Party and Te Pati Maori, which advocates for indigenous rights, forms the opposition.

"As things stand at the moment, the race is really a coin flip as to which coalition, which bloc, will win the election," said Anna Fifield, adjunct fellow with the Australia Chair at the Center for Strategic and International Studies (CSIS).

With both major parties polling poorly, "minor parties are playing a much more major role in this election and will have a lot more sway," Fifield said at a CSIS webinar last week, with the Opportunity Party, a small centrist group that had not won any parliamentary seats in previous elections it had contested, potentially emerging as a kingmaker.

Led by former KPMG consultant Qiulae Wong, Opportunity proposes reforms to the tax system, including the introduction of a universal basic income of up to 370 New Zealand dollars ($208) a week for adults and an annual land-value tax, which the party said could make "housing affordable by shifting the tax load off working people and onto land." Since August, opinion polls have shown support for Opportunity rising above 5%, the threshold for a party to enter the national parliament. It reached a peak of 9.5% that month, according to a Roy Morgan poll.

Surveys by Radio New Zealand-Reid Research showed support for Opportunity rising from 5.3% in August to 7.2% in October, while 1News Verian polls indicated support for Opportunity reaching 8% in August, before dipping to 6% last week. "For the last three months, the Opportunity Party has held the balance of power between what we'd consider the traditional left and right blocs," pollster David Talbot said at a foreign correspondents' briefing last week.

Under the mixed-member proportional (MMP) representation system, New Zealanders get two votes: one to elect a member for their district and another stating their party preference nationally.

The party vote determines the number of parliamentary seats a party receives, while a party qualifies for seats by receiving at least 5% of the party vote, or by winning a district seat. Oliver Hartwich, executive director of the New Zealand Initiative, said according to current polls, Opportunity "could cross that threshold, or it could narrowly fall below it on election night."

"The formation of the next government hinges on that question. If the party gets in, it might take four parties to form a coalition, whether on the left or the right. If it misses out, we'll probably see a coalition made up of three parties," Hartwich said at the correspondents' briefing. While Wong said she is open to a coalition with either Labour or National, Luxon has ruled out working with Opportunity, saying in July, "This is a party that wants extreme policy on taxes. We're a party of low taxes.

It's not a surprise we don't want to work with them." "I think all parties should actually be open to working with each other. That is the point of MMP -- that we should be flexible around what parties can work together on different issues.

So ultimately, we'll see where the votes fall on election night. The more votes we have, the more leverage we will have around the negotiating table, whether that is Labour or National," Wong told reporters on Tuesday.

National, running on promises of no new taxes and reaching a budget surplus by the 2028-2029 fiscal year, is beseeching voters to "stick with the plan that's working. We need three more years to get the job done," according to a recent Facebook post by Luxon, who is seeking to avoid being the first head of government since 1975 to be voted out after just one term. He won two leadership confidence votes this year within his caucus.

An Ipsos poll in September found that 63% of New Zealanders are most concerned about inflation and the cost of living, while 44% cite healthcare and 34% the state of the economy as major issues. Labour is perceived as being the most capable of managing all five of New Zealanders' top concerns: inflation, healthcare, the economy, unemployment and the price of housing, according to the Ipsos poll.

Labour's election pledges include delivering free doctor's visits and prescriptions, introducing a targeted 28% capital gains tax, capping transport fares and cutting student debt.

"Like a lot of elections around the world at the moment, this is an election that's primarily being fought around cost of living, affordability questions," with foreign or defense policy not being a main focus for voters, David Capie, director of the Center for Strategic Studies at Victoria University of Wellington, said at the CSIS webinar.

But there will be a "great deal of interest" in Australia in who forms government, and whether they would sustain previously established joint defense commitments, including the development of "integrated, combat-capable defense forces with greater interoperability," said Anna Powles, associate professor at Massey University's Center for Defense and Security Studies, at the webinar.