In a new draft report, the Independent Electoral Review has recommended wide-ranging changes to the electoral system.

If all of the recommendations were implemented, parties would only need to get 3.5 percent of the vote to make it into Parliament, the ‘coat-tail’ rule would be abolished, the voting age would be lowered to 16 and political donations would be capped. A referendum could also be held on extending the term of Parliament to four years.

Deborah Hart, chair of the panel, said it was a good time to look at the big picture of MMP.

“While many parts of Aotearoa New Zealand’s electoral system work well, we found it can be improved,” she said.

The report lands as parties are gearing up for the October election, with submissions open through mid-July. The final report and set of recommendations will be presented to the Government in November.

The review was launched by then-Justice Minister Kris Faafoi in October 2021, with the hope of delivering changes by the 2026 election. Alongside Hart, the panel includes political scientists Maria Bargh and Lara Greaves, public law professor Andrew Geddis, disability advocate and law student Alice Mander and former chief electoral officer Robert Peden.

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If implemented, the draft recommendations would have a major effect on elections and campaigning in New Zealand.

The panel said the Electoral Act needs to be completely re-written, because it still references things like faxes and is inflexible when responding to challenges like a pandemic. The new act would also entrench some overlooked parts of the system, like the Māori seats and the right to vote. A requirement to give effect to Te Tiriti o Waitangi should be added too, the review said.

Three important tweaks to MMP were recommended. The 5 percent threshold should be lowered to 3.5 percent, while the ‘coat-tail’ rule which allows parties to bring in list MPs if they win an electorate even if they don’t meet the threshold should be abolished.

“Many people told us that this rule was really unfair and we agree. It means parties might get more seats than they would otherwise based on where their supporters are. It also gives voters in some electorates more say than voters in other electorates, about which parties get represented in Parliament,” Hart said.

This could have a significant impact on how future elections play out. Minor parties become more viable – twice in recent elections, parties have crossed the 3.5 percent level but not the 5 percent threshold, finding themselves out of Parliament.

If previous election results were calculated under this new method, the Conservative Party would have had five MPs after the 2014 election and New Zealand First would have received five seats in 2008. National would have needed the support of New Zealand First or the Māori Party to govern in 2008.

If applied to this Parliament, Te Pāti Māori co-leader Debbie Ngarewa-Packer would not have made it in off the list and National would have received an extra seat.

The third MMP change would see the ratio of electorate seats to list seats fixed at 60:40. As the number of electorates grows, the size of Parliament would also increase. By 2044, Parliament would be expected to have added around eight to 10 seats.

The panel didn’t take a particular view on four-year parliamentary terms, but said the arguments in support were good enough that a referendum should be held. The last such referendum was in 1990, prior to the introduction of MMP.

Voting rights should be expanded more broadly, the review also recommended. That includes lowering the voting age to 16, giving all prisoners the right to vote and allowing Kiwis overseas to still vote as long as they return at least once in every two election cycles.

Residents who currently need to be in the country for a year before gaining the franchise would instead have to wait a full election cycle.

Māori would be able to switch on and off the Māori roll at will, except in the three months preceding a by-election. This goes slightly further than the Government’s recent changes, which restrict Māori from changing rolls in the three months leading up to a general election too. Hart said this is the time people are most likely to want to switch rolls and there’s no evidence it would cause any distortion issues.

Finally, the panel suggested a major shake-up to political financing and campaigning rules. A single set of rules related to campaigning would be applied to the entire election period, meaning the election day blackout would go.

“Only a third of the people voted on election day proper [in 2020] and there’s no reason to think that’s going to change,” Geddis said. There’s no real justification for limitations on election day but not the two weeks leading up to it, in the panel’s view.

Rules against knowingly spreading false information to influence an election would also be toughened.

Political donations would be capped at $30,000 for any one party and its candidates. Only registered voters could donate, meaning foreign nationals, companies and unions wouldn’t be able to finance elections. The threshold for disclosing names of donors would also be shifted much lower, from $15,000 to $1,000, but there would no longer be a requirement to list donors’ addresses.

If applied to political donations gathered in 2020, these rules would have seen parties miss out on tens of thousands of dollars in donations. Worst affected in dollar terms would be the Labour Party, which earned hundreds of thousands from donations from unions. Te Pāti Māori, which got most of its money from then-co-leader John Tamihere, would miss out on nearly $350,000 due to the cap on donations.

While the panel hadn’t found significant evidence of undue influence from donations or foreign interference, submitters expressed widespread concern about these issues. These changes would bolster confidence and trust in the system.

In order to account for the potential decrease in funding, the panel suggested a modest increase to the $4 million in existing state funding provided to registered parties each election cycle. The current broadcasting allocation process which distributes this funding would be scrapped. Instead, some of the cash would be distributed on the basis of votes received in previous elections, each party would get $10,000 to help with compliance costs and special pots of money for outreach to under-represented communities would be available.

Perhaps the biggest change here is that some of the money would be returned to donors as a tax credit, similar to existing credits for donations to charities.

Combined, these changes are designed to shift donations and election financing away from a handful of wealthy individuals and corporations towards a broad-based, grassroots fundraising landscape.

Marc Daalder is a senior political reporter based in Wellington who covers climate change, health, energy and violent extremism. Twitter/Bluesky: @marcdaalder

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