Policy Quarterly Volume 8 Number 2
The eight articles in this issue of Policy Quarterly cover a range of important contemporary policy problems: two are of a broadly constitutional nature (the design of electoral rules, and the use of urgency in the parliamentary process); two are concerned with climate change (the implications of the Durban conference in December 2011, and the control of agricultural emissions in New Zealand); and two address issues of particular relevance to sub-national governments (the National-led administration’s proposals for local government reform, and the options for the delivery of urban water services). The penultimate article explores the funding of tertiary education in New Zealand and presents the results of a small survey of tertiary students on their understanding of the current funding arrangements, while the final article examines some of the current anomalies and inequities concerning overseas pensions policy and recommends various policy changes.
Rather than attempting to summarize the main themes and conclusions in these articles, I will instead focus on just one topic, namely the review of New Zealand’s mixed member proportional (MMP) electoral system. First some background: in a referendum on electoral reform, held on 26 November 2011, voters chose by a clear majority to retain MMP. The question of whether New Zealand should fundamentally change its electoral system has thus been settled for the time being – proportional representation is here to stay. The task now is to decide
what amendments, if any, should be made to the rules governing the MMP system. To this end, the Electoral commission is undertaking an independent review of some of the current electoral arrangements and is due to report to the Minister of Justice by the end of October. At present, the Commission is in the process of receiving submissions. Two of the various matters under review are closely interlinked. The first is whether there should be a change to the party vote threshold (i.e. the proportion of party votes that a party must secure in order to be eligible for an allocation of list seats). Currently, this is 5%. The second issue is whether there should be a change to the electorate seat threshold (i.e. the number of electorate seats that a party must win in order to be eligible for an allocation of list seats). Currently, this is just one seat.
Compared with most other proportional electoral systems (of various types), New Zealand has a relatively high party vote threshold. Elsewhere, the minimum party vote threshold is generally lower – if not much lower – than 5%. For instance, in Norway and Sweden the threshold is 4%, in Denmark and Israel it is 2%, and in Finland, the Netherlands, Portugal and South Africa it is even lower. Against this, compared with other mixed member systems of proportional representation (i.e. where there are both electorate and list seats) the electorate seat threshold in New Zealand is low. Having said this, there are many different systems of proportional representation and even where there is a minimum party vote threshold there are often exceptions (e.g. for ethnic minority parties). As a result, the effective thresholds for parliamentary representation are typically lower than the specified party vote thresholds.
As Jack Nagel highlights in his perceptive and informative analysis in this issue of Policy Quarterly, the low electorate seat threshold in New Zealand has partially offset the high party vote threshold, thereby generating a reasonably high level of proportionality at each of the six MMP elections since 1996. Moreover, as he persuasively argues, “a high degree of proportionality is important not just to serve representational values, but also to achieve majoritarian goals: a government supported by a majority of voters, a governing party that represents the median voter, and specific policies acceptable to majorities that may – and should – differ from issue to issue. The higher the threshold, the less the likelihood that a PR system will actually deliver a high degree of proportionality”. His analysis is important because many people believe that the current low electorate seat threshold is a serious problem. This is partly because it encourages inter-party game playing and tactical voting (with an undue media focus on party leaders having cups of tea or coffee in Auckland cafes!). But worse, it can generate results that are unfair in the sense that the representation of the smaller parties in Parliament bears little relationship to their share of the party vote. For instance, a party with just under 5% of the party vote but no electorate seats will miss out on parliamentary representation, whereas a party with barely 2% of the party vote but at least one electorate seat can secure two seats in the legislature. Accordingly, it is argued that the threshold should either be raised (e.g. to two or three seats) or there should be no provision for a party to receive list seats if it wins less than 5% of the party vote. But as Nagel’s analysis indicates, altering the electorate seat threshold without any corresponding change to the party vote threshold would almost certainly reduce the proportionality of the MMP system and this would be undesirable. On this basis, if the electorate seat threshold is raised (or abolished), there should be a reduction to the party vote threshold;the two changes must go hand in hand. But at what level should the party vote threshold be set? There are several competing considerations, and certainly no correct answer. On the one hand, the principle of proportionality is undoubtedly important. It embodies the desire for electoral fairness for parties and voters; it is also critical for democratic legitimacy. On the other hand, international experience suggests that very low thresholds (e.g. 1-2%) can result in a proliferation of parliamentary parties which can complicate the process of government formation and reduce governmental stability and effectiveness. Such outcomes are not inevitable, but they are certainly a risk. Bearing such considerations in mind, some advocate a 4% threshold, while Nagel proposes 3%. Interestingly, the Parliamentary Assembly for the Council of Europe recommends that any threshold not exceed 3%. My inclination is to support Nagel’s view. After all, a 4% threshold is still relatively high by international standards and would require in the vicinity of 100,000 party votes. This is a reasonably demanding tally. In a country that is becoming increasingly multicultural and pluralistic, we would do well to ensure that significant minority voices are not excluded from our Parliament. At the same time, a 3% threshold is probably sufficient to help deter the splintering of existing parties and avoid a proliferation of very small, and potentially ineffective, parliamentary parties. Three per cent may or may not be a popular option, but I hope that these comments and Nagel’s article contribute usefully to the debate.
Finally, it is my pleasure to welcome on board Bill Ryan as my co-editor. Likewise, I would like to thank retiring Board Member, Mike McGinnis, for his contribution to Policy Quarterly over the past two years. Thanks, also, to David Bromell, Peter Hughes and Valentina Dinica for their continuing service on the Board, and a warm welcome to Guy Beatson (Ministry for the Environment), Don Gray (Ministry of Health), Gerald Minee (The Treasury) and Mike Reid (Local Government New Zealand) for their willingness to join the Editorial Board.
Published in May 2012