Thursday 18 September 2014

A Policy A Day: MMP Reform

In the lead-up to the election, we are going to examine one policy per (working) day. We've selected policies to be as balanced as possible across a range of policy areas and across the political parties. The idea is to explain the background, analyse the policy to investigate the pros and cons, and give a verdict on the policy at the end. Inevitably, some opinion will make its way in and we make no apology for that - after all, we're voters too. Also, I say 'we' because this series will feature some guest posts from other young people, to share their thoughts and ideas as well. A list of all the articles is available hereEnjoy!

Today's post is by Pasan Jayasinghe.

In 2010, the National-led Government enacted the Electoral Referendum Act 2010, which provided an indicative (non-binding) referendum on New Zealand’s voting system to be held in conjunction with the 2011 general election. As the majority of voters chose to keep the Mixed-Member Proportional (MMP) electoral system, an independent review of MMP by the Electoral Commission was triggered. The review process included a public submissions phase that considered written and in-person submissions across the country; the subsequent release of a Proposal Paper; a further submissions phase; and the publication of a final report in October 2012. Of the primary recommendations made by the report, lowering the party vote threshold from 5% to 4% and abolishing the one electorate seat threshold for allocating list seats (or the 'coat-tailing' provision) attracted the most attention, particularly across the spectrum of political parties who would all be affected by the changes in different ways. In 2013, then Minister of Justice Judith Collins announced that the National-led Government would not be implementing any of the Electoral Commission’s recommendations as no consensus on implementation was reached by the parties in Parliament. Opposition to the recommendations was expressed by parties such as ACT, United Future and MANA, whilst support was expressed by Labour and the Green Party.

What are the Party Vote and One Electorate Seat Thresholds?
Under MMP, a political party is entitled to a share of MPs that is the same as its share of the party vote if it reaches one of two thresholds: either it gets at least 5% of the nationwide party vote; or it gets at least one electorate seat.

Taking the 2008 General Election as an example, for instance:
  • The Green Party won no electorate seats but because it won 6.7% of the nationwide party vote (and therefore reached the 5% threshold) it got nine of the 122 seats in Parliament
  • The ACT Party did not clear the 5% party vote threshold (its nationwide party vote was 3.6%) but because one of its candidates won an electorate seat (that is, it reached the one-seat threshold), it was entitled to five seats overall (one electorate and four list seats)
  • The New Zealand First Party won 4.1% of the party vote but did not win an electorate seat,  because it reached neither threshold it did not receive any seats. 
Because governments under MMP are formed by political parties who can collectively command a parliamentary majority, and because no single party has ever received more than 50% of the seats in Parliament on its own under MMP, changes to the vote thresholds are hugely consequential. For minor parties, the thresholds determine their very existence. For the major parties, the thresholds determine their ability to form governments they are able to lead.

Policy Proposals
The Labour Party proposes to give effect to the Electoral Commission’s proposals by lowering the party vote threshold from 5% to 4% and abolishing the one electorate seat threshold. The Green Party also supports these provisions. The Labour Party’s proposals were first expressed in a Private Member’s Bill put forth by then leader David Shearer upon the government’s decision to shelve the recommendations.

Arguments for Lowering the Party Vote Threshold to 4% and Abolishing the One Electorate Seat Threshold
It is possible to consider the Electoral Commission’s arguments for the vote threshold proposals here, particularly as they are commonly expressed by the Labour Party in support of its proposals:

Lowering the party vote threshold is seen as a means of striking a balance between proportionality and stability. The present 5% is contested as being too high a barrier for parties to enter Parliament. On the other hand, lowering the threshold too much is claimed to result in a proliferation of minor parties which would make government formation and governance difficult.

With respect to the one electorate seat threshold, it is argued that whilst it increases the proportionality of Parliament, it does so arbitrarily and inconsistently (compared to lowering the party vote threshold). It is held to undermine the principles of fairness and equity, which underpin the primacy of the party vote, by giving voters in some electorates significantly more influence over the make-up of Parliament than voters in other electorates. It also causes excessive focus to be placed on a few electorates and distorts election campaigning.

Analysis of the Proposals to Change Vote Thresholds
Abolishing the one electorate seat threshold is a reasonable proposal. While it does in fact increase proportionality by giving parties who achieve it representation proportional to their party vote (so does not disenfranchise their voters) this proportionality is not uniformly guaranteed as it gives voters in certain electorates a greater and undue influence in choosing the ultimate make up of Parliament. This is best illustrated by the notorious ‘cup of tea deals’ made in the Epsom electorate in the past few elections, where National Party leaders Don Brash and then John Key both encouraged their supporters to vote for the ACT Party candidate with their candidate votes (Rodney Hide in 2005 and 2008, and John Banks in 2011). This allowed the ACT Party to bring in one and four extra MPs in 2005 and 2008 respectively. Comparing this against parties who fail to clear both thresholds despite receiving higher vote shares than one electorate seat threshold beneficiaries – for instance, New Zealand First in the 2008 example above – can be seen as both unjust and illogical. As a result, public opposition to the one electorate seat threshold is high, demonstrated by the high number of submissions against in in the MMP Review.

The 5% threshold is generally seen as too high a hurdle for parliamentary representation; only two parties aside from the two major parties cleared it during the last three MMP elections. However, it is unclear if the 4% threshold (by itself) gives smaller political parties a more reasonable chance of gaining seats in Parliament. There have been only three instances of parties receiving between 4% and 5% of the party vote in all MMP elections to date, proving that it might still be too high a hurdle. The unfairness here is not on the parties denied entry to Parliament, but rather on the voters denied representation. Under the current electoral roll for instance, a party requires the party votes of more than 123,000 voters to clear the 4% threshold; a substantial number. The situation appears even starker when considering new parties and the near impossibility they face in gaining representation given the institutional advantages offered to parties with existing parliamentary representation (including broadcasting allocations during election periods). Indeed, no party since 1996 has been able to break into Parliament without already having representation there.

The proliferation of very small parties is often used as an argument to not lower the threshold below 4%. The Electoral Commission supported this claim with the general principle that the lower the threshold, the greater the risk to parliamentary effectiveness and government stability. To examine this claim, we can look at the six elections under MMP so far, which provide a highly diverse sample of small parties at every possible size, from single MP parties up incrementally to multiple MP parties. These results further provide case studies of parties in various configurations of government, opposition or otherwise. Even a brief attempt at considering all this data shows that very small parties can hardly be seen as having caused undue instability either during government formation or actual governance; the major parties have always been able to produce governing arrangements with the aid of small parties (often numerous in number) without having to resort to another immediate election, and no government has lost its parliamentary majority mid-term. The case of the National-New Zealand First coalition following the 1996 election is an arguable case, as the National Party was still able to retain its parliamentary majority after New Zealand First’s exit from the coalition. And in any case, such a scenario has never repeated itself since. The fear that small parties’ excessive influence would decrease governmental durability and increase the level of instability has not eventuated. More often than not, it is the dog that wags the tail. Finally, there are many benefits to decreasing the burden to smaller parties entering Parliament, including the representation of a more diverse range of interests and views and greater democratic integrity for voters who are able to express truer political preferences.

Perhaps most pressingly, the lowering of the party vote threshold to 4% needs to be considered in conjunction with the one electorate seat threshold’s removal. When doing so, it is clear that there would be a rise in disproportionality from the status quo. When past election results are subjected to the Gallagher Index, which measures electoral disproportionality, there is indeed an average increase in disproportionality under a 4%–no electorate seat threshold arrangement. If the Labour Party’s proposal is implemented alongside some of the Electoral Commission’s other recommendations, such as abolishing overhangs (which restricts Parliament to 120 seats), disproportionality could further increase. This goes against the explicit intention of MMP, which is to produce Parliaments with the least possible disproportionality.

All this is grounds for lowering the threshold lower than 4%. A threshold of 3%, for instance, would lower the number of party votes required below 100,000, slightly increase the number of parties receiving representation, and more effectively counteract the disproportionality caused by the one electorate seat threshold’s removal. In regards to the proposals however, the state of affairs today may be preferable, even with the disproportionate influence it grants voters in some electorates, as that is a less negative outcome compared to the disenfranchisement of a larger numbers of voters, a smaller numbers of parties in Parliament, and increased disproportionality.

The Electoral Commission did make a provision for the 4% threshold to be reviewed in future (in three elections’ time), with a view towards potentially lowering it to 3%, and David Shearer’s Members’ Bill echoed this provision. It is unclear from the current Labour Party (or Green Party) proposals whether this would be retained. However, the waiting period for this of three elections, or nine years, is still a long time for this disproportionality to persist.

The case for abolishing the one electorate seat threshold is strong. Unfortunately, its removal when paired with the lowering of the party vote threshold to 4% produces a range of undesirable effects, from potentially disenfranchising many voters to increasing Parliament’s disproportionality. There is a stronger case to be made for lowering the party vote threshold further if the one electorate seat threshold’s removal is desired. As it is, implementing the Labour Party’s proposals is likely to produce an increased consolidation of the larger parties’ representation and power, whilst minimising minor party representation compared to now. If we subscribe to the idea that our Parliament should aim to enfranchise as many voters and represent as many different political views as possible, notions which underlie the MMP electoral system, then the proposals cannot be supported.

Pasan is currently completing a Master of Arts in Political Studies. When not crying over his thesis, he enjoys copious amounts of tea, murder mysteries, and cat appreciation.

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