New Zealand’s right-leaning coalition, led by the National party, hopes to cling on to power based on Saturday’s cliffhanger general election. But the shape of the next government will not become clear until 27 November.

Here’s why the outcome remains unclear and why almost 400,000 yet-to-be-counted special votes could sway the result.

So who won?

It’s currently too close to call. Neither the National party leader, Christopher Luxon, or Labour’s Chris Hipkins claimed the win on Saturday night. While preliminary results show Labour just ahead on the popular vote – 29.3% to National’s 29.2% – National won more seats in parliament, 42 seats to Labour’s 36, under the mixed member proportionate voting system (MMP).

It looks like 66 seats will be needed for a majority, and it’s not clear yet whether this can be cobbled together by the left or right bloc. We do know seven parties will be in parliament: likely Labour, Greens and Te Pāti Māori in the left bloc, and National, NZ First and Act on the right. 

Depending on what happens next, newcomers Opportunity, who have positioned themselves as centrist, could hold the balance of power.

How is a government formed, and why is everyone talking about ‘overhang’?

New Zealand’s parliament is typically made up of 120 seats. Everyone gets two votes: for their preferred party, and for the individual candidate in their electorate. There are 71 electorate seats and 49 list seats. The list parliament seats are divided up by parties depending on the proportion of the party votes they win.

The share of the party votes generally must reflect how many seats that party gets in parliament – but if a party wins more electorate seats than party votes, the parliament has to expand to make room.

For example, if Party X wins four electorate seats but won a percentage of the party votes that would allow only two seats, then two extra seats are created in the parliament to make up the balance. This is known as the overhang – a function of MMP.

On Saturday both National and Te Pāti Māori gained more share of the electorates than their party vote, meaning parliament could be 10 or 11 seats bigger.

Should an overhang happen under MMP?

Not specifically, no, but it can accommodate it. Since its introduction in 1996, there have been five overhangs, but this will be the biggest parliament in New Zealand’s history.

It’s also the first election where political groups have loudly and specifically asked voters to only give them their electorate vote, to create an overhang. Te Pāti Māori are on track to gain five of seven seats in the Māori electorates with this strategy, while various rightwing groups asked supporters to party vote for current coalition partners Act or NZ First, while backing National electorate MPs. National, who will have five or six overhang seats, warned against this, seemingly to no avail.

Critics say this strategic voting undermines the spirit of MMP, which New Zealanders voted for in the 1990s after a string of skewed results under first past the post system. Two reports since 2012 have proposed abolishing the overhang, but governments of the time chose to ignore them.

Why don’t we have a clear result yet?

It’s not typical for the two main parties to both get such low numbers on the same night.

On current results, the right bloc could put together a government, but all of the votes have yet to be counted.

The Opportunity party – who on current results have won seven seats in parliament with their 6% party vote, crossing the 5% threshold needed to enter parliament for the first time – could play a big part.

Opportunity party leader Qiulae Wong celebrates as her party crossed the 5% threshold on Saturday night. Photograph: Phil Walter/Getty Images

Luxon previously said he wouldn’t talk to Opportunity and its leader Qiulae Wong, but he might have no choice.

Talks can’t begin until 27 November, once all the special votes are counted.

What are special votes, and what makes them so important?

Special votes are those made by people living overseas, or who voted outside their geographical electorate on the day. This year, special votes total just under 400,000, according to the electoral commission.

Special vote results typically skew left. In 2023, Te Pāti Māori gained two more seats than election night results suggested and the Greens gained one. National lost two seats. This election is so close that one or two flipped seats could tilt the balance of power between coalitions.

When will we know who the next government is? 

It could be December until a final result is known – just in time for Christmas.