Fresh from a comfortable six-seat election win, New Zealand's centre left began to sculpt a new coalition yesterday with a tax rise at the top of the agenda.
The Labour Party prime minister-elect, Ms Helen Clark, her finance minister-in-waiting, Mr Michael Cullen, and the Alliance party leader and probable deputy prime minister, Mr Jim Anderton, met for two hours in Auckland.
They later revealed plans to legislate Labour's promised tax increase by Christmas - an additional four cents in the dollar on earnings over NZ$60,000 (about £20,000) - and implement it later.
A higher minimum wage and lower student loan interest rates were also being considered.
The parties agreed that formal coalition negotiations would begin tomorrow aiming for a deal within a week and a new government by December 10th.
"I would like to go into the summer break knowing that a government is installed, a formal meeting of parliament has been held and we can get on with it," Ms Clark said after the meeting.
Labour will be the dominant partner. Of the two parties' 63 seats in the 120-seat single chamber parliament, Labour holds 52 and the Alliance 11.
Ms Clark said the Alliance would get the deputy PM spot in government but national media speculated that the minor partner would emerge with only four out of 20 cabinet seats.
While this would be in line with its level of votes, Ms Clark would not be drawn on the allocation, telling reporters to "get out the pocket calculators".
With 98.5 per cent of results counted from Saturday's poll, the Electoral Office said the outgoing Prime Minister, Ms Jenny Shipley's National Party held 41 seats, National's ally ACT nine, the non-aligned NZ First six and United one.
The Greens could upset the coalition balance. They were a tantalising 115 votes short of representation and have refused to concede before final results on December 7th.
If they enter parliament on a recount the resulting reshuffle would slash the Labour/Alliance majority to nil. However the Greens are allies of Labour and Ms Clark said they would be welcome in the coalition.
Deutsche Bank forecast a slight firming when markets re-open today, with investors comfortable with Labour's dominance of the coalition.