Prime Minister John Key convincingly won a second term as New Zealand's leader in elections Saturday that open the door for the sales of billions of dollars worth of government assets as part of a plan to reduce the country's debt.

Key's center-right National Party has promised to get the nation's books in order and begin paying down foreign debt within the next three years. That message has taken on a new resonance after the country's credit rating was downgraded this year and the situation in Europe has shown how debt can quickly become toxic.

The National Party dominated the election, coming up just short of getting enough votes to govern alone. With most of the votes counted, the party was projected to win 60 of the 121 seats in Parliament, an increase of two. Key will look to some of the minor parties for support in forming a stable government.

"Tonight New Zealanders voted for a better future, and there will be a better future," Key said in his victory speech.

The center-left Labour party, which had opposed asset sales, won just 27 percent of the vote, meaning it will lose about nine of its 43 seats. Like National, it also promised to get the books in order _ but Labour planned to do it by introducing a capital gains tax and raising the age of retirement by two years, to 67.

Phil Goff, Labour's leader, said the party was "bloodied, but not defeated."

"It wasn't our time this time," he told supporters. The poor showing makes it likely Goff will soon step aside.

Key plans to sell minority stakes in four government-owned energy companies and in Air New Zealand in order to raise an estimated 7 billion New Zealand dollars ($5.2 billion).

The National Party's win could also open the door for more mineral exploration and offshore oil drilling. Labour had proposed a moratorium on deep-sea drilling after a cargo ship ran aground last month near the North Island port of Tauranga, spilling about 400 tons of fuel into the ocean and onto local beaches.

Key's win will also likely continue the country's warming relationship with the United States. For a quarter-century, New Zealand's ban on nuclear warships caused a rift, particularly over defense. However, New Zealand's small troop presence in Afghanistan and a promise by the U.S. to send a contingent of Marines to New Zealand next year point to a thaw.

The U.S. and New Zealand are also among nine Pacific countries negotiating a free trade deal in the region.

The election was also marked by the unexpected return to Parliament of Winston Peters, the mercurial leader of the anti-immigration New Zealand First party, which has shored up support among older voters who approve of its generous policies for them.

New Zealand First won about 7 percent of the vote, enough for eight seats, after getting shut out of the last election in 2008.

The Green party, meanwhile, enjoyed its best showing ever, winning 11 percent of the vote.

But the election also spelled the near-demise of the conservative Act party, which won five seats in the last election but this time could manage just one. Act party leader Don Brash announced he would resign Sunday.

National's campaign hinged on the personal popularity of Key, a former currency trader whose easygoing demeanor appeals to many. His image was placed on hundreds of National billboards.

Key's common touch was reassuring to people when a powerful earthquake struck Christchurch last February, said Jennifer Lees-Marshment, a political studies lecturer at the University of Auckland. It also enabled him to share in their excitement in October when the country's national All Blacks team won the Rugby World Cup.

Voters were also deciding whether to keep their electoral system, in which parties win parliamentary seats based on the proportion of votes they receive. Some wanted to return to a winner-takes-all format, although polls indicated most favored sticking with the current system.

The final results of that measure won't be known for two weeks. In early results, however, about 54 percent of voters favored keeping the German-style proportional system.