After 9 years in office, the National Party lost the November 1999 election. Labour under Helen Clark outpolled National by 39% to 30% and formed a coalition, minority government with the left-wing Alliance. The government often relied on support from the Green Party to pass legislation.

The Labour Party retained power in the 27 July 2002 election, forming a coalition with Jim Anderton’s new party, the Progressive Coalition, and reaching an agreement for support with the United Future party. Helen Clark remained Prime Minister.

Following the 2005 general election on 17 September 2005, negotiations between parties culminated in Helen Clark announcing a third consecutive term of Labour-led government. The Labour Party again formed a coalition with Jim Anderton’s Progressive Party, with confidence and supply from Winston Peters’ New Zealand First and Peter Dunne’s United Future. Jim Anderton retains his Cabinet position; Winston Peters becomes Minister of Foreign Affairs and Trade, Minister of Racing and Associate Minister for Senior Citizens; Peter Dunne becomes Minister of Revenue and Associate Minister of Health. Neither Peters nor Dunne will be in Cabinet, however.