Wellington: Prime Minister Jacinda Ardern delivered the biggest election victory for her centre-left Labour Party in half a century on Saturday as voters rewarded her for a decisive response to COVID-19.

The mandate means Ardern, 40, could form the first single-party government in decades and will face the challenge of delivering on the progressive transformation she promised but failed to deliver in her first term, where Labour shared power with a nationalist party.

"This is a historic shift," said political commentator Bryce Edwards of Victoria University in Wellington, describing the vote as one of the biggest swings in New Zealand's electoral history in 80 years.

Labour was on track to win 64 of the 120 seats in the country's unicameral parliament, the highest by any party since New Zealand adopted a proportional voting system in 1996.

Ardern, 40, promised supporters she would build an economy that works for everyone, create jobs, train people, protect the environment and address climate challenges and social inequalities.

"We are living in an increasingly polarised world," she said. "A place where more and more have lost the ability to see one another's point of view. I hope that with this election, New Zealand has shown that this is not who we are."

Opposition National Party leader Judith Collins said she congratulated the prime minister for an "outstanding result".

Labour had 49.0% of the votes, far ahead of National at 27%, the Electoral Commission said, with 95% of ballots counted.

Ardern said she would wait until the final result to say if her government would include smaller groups like the Green Party, a former coalition partner that secured a bigger 8% mandate.

Voters swing

National leaders were decimated in their strongholds by young Labour candidates who appealed to voters with progressive, democratic messages, and highlighted the party's success in beating coronavirus.

"The last seven months of this government, all of the issues around their past promises have been put aside because of COVID-19. It's that simple," said Deputy National leader Gerry Brownlee who lost his long-held seat.

Despite the election's tilt to the left, Ardern "is likely to continue to chart a centrist course, largely aiming to implement incremental change that she hopes will outlast a future change in government," because she owes her victory to centre-right voters who previously supported National, said Geoffrey Miller, analyst at political website Democracy Project.

'Be strong, be kind'

The prime minister won global acclaim for her handling of a mass shooting last year by a white supremacist in Christchurch, with her inclusive "be strong, be kind" mantra and swift action to ban guns.

She burnished that reputation this year with a "go hard, go early" approach to the new coronavirus, which has eliminated locally spread COVID-19 in the nation.

The election was delayed by a month after new COVID-19 infections in Auckland that led to a second lockdown in the country's largest city.

While known internationally for promoting progressive causes such as woman's rights and social justice, at home Ardern faced criticism that her government failed on a promise to be transformational.

Life is back to normal in New Zealand, but its borders are still shut, its tourism sector is bleeding and economists predict a lasting recession after the harsh lockdowns.

The economy shrank at an 12.2% annual clip in the second quarter, its steepest drop since the Great Depression. Debt is forecast to rise to 56% of gross domestic product from less than 20% before the pandemic.

New Zealanders also voted on Saturday in referendums to legalise euthanasia and recreational marijuana, with results to be announced on Oct. 30. The latter vote could make New Zealand only the third country in the world to allow the adult use and sale of cannabis nationwide, after Uruguay and Canada.