No deal yet on forming next New Zealand government

The centre-right National party won last month's election and is engaged in talks with two minor parties - ACT and New Zealand First - to build a government for the next three years.

"We've been progressing relationships and arrangements over the last couple of weeks since the election night ... and this week, we continue," Mr Luxon told Radio NZ.

Government formation talks have been a feature of New Zealand politics since 1996, when it moved to a mixed-member proportional electoral system which makes it harder for a single party to achieve a majority.

Typically, talks are led by the biggest party, in this case National, which offers policies and positions to minor parties in exchange for support.

Parties can make formal coalition deals to divvy up ministerial roles - either inside or outside cabinet - or instead agree on a policy agenda without ministries attached.

It's not clear what type of deal National, ACT and NZ First will strike, with Mr Luxon enforcing a strict 'no comment' policy on the substance on the talks.

He did give a little away on Monday morning when he said he would be surprised if either party would leave the talks to go to the cross bench, which suggests the parties are likely to form a coalition government, with ministries shared across the three parties.

"All three party leaders want to work together in a very strong collaborative way," he told Newstalk ZB.

"We're making good progress and everyone wants to be part of a strong government."

In the three weeks since the October 14 election, all three parties are yet to get in a room together, with Mr Luxon saying he favoured one-to-one talks.

"It's the most efficient way to actually understand each other and what (the) policy differences may be, and what trade-offs may be needed, and what each party's issues actually are," he said.

"Once we have those conversations complete, we'll bring everyone together and make an announcement."

A sideshow to the talks have been the inability for the minor party's leaders - ACT's David Seymour and NZ First's Winston Peters - to communicate.

The pair are fierce rivals with a long history of spats and ugly slurs, but now must fashion a working relationship in government.

Last week, Mr Seymour revealed Mr Peters had not responded to a call or text inviting him to meet, an impasse Mr Peters explained as he thought it was a prank.

"I thought this one was fake and I didn't answer it," Mr Peters said.

Mr Seymour had a small dig in reply, saying: "It seems there have been a few issues with operating a phone but now those have been overcome I think we can make progress."

The ACT leader said he was "getting very close" to a deal with National after "several weeks of really productive discussions".

Mr Peters has maintained a media silence on the coalition talks, declining dozens of questions from journalists as he walked through Wellington airport on Monday.

With so many issues and challenges on the table, its unsurprising Mr Luxon has declined to offer a timeline for forming a deal - although he has said he would like to be sworn in before next Wednesday to attend the APEC leaders summit.

"That is an important meeting for New Zealand that would be fantastic for a series of bilaterals," he said.

"Unfortunately I can't make that commitment ... my only job at the moment is to form a strong and stable government."

Australian Associated Press