Please, then, turn to slide 5, which deals with the electoral reform process that saw New Zealand adopt the MMP electoral system in 1993.
The process began with growing public dissatisfaction in the 1970s and early 1980s with the perceived fairness of our first-past-the-post system and its tendency to deliver Parliaments that did not reflect the nationwide vote.
The Royal Commission on the Electoral System was established in 1985. It met for 18 months, consulted widely with the public, considered a wide range of reform options, and reported in 1986. It recommended that a system of MMP be adopted and that a binding referendum be held with the 1987 general election to give the voters a choice between first past the post and MMP.
A referendum was not held with the 1987 election, but there followed a period of ongoing public and political debate, which included an inquiry by a Parliamentary select committee into reform of the electoral system in 1988.
Then, in 1991, legislation was introduced providing for a two-step reform process.
The first step was an indicative stand-alone referendum, held in September 1992, in which New Zealanders were asked two questions. The first question was on whether they wanted to change the electoral system. The second question, irrespective of whether or not they wanted to change the electoral system, was that if there were to be a change, which of four systems—MMP, a supplementary member system, a preferential voting system, or the single transferable voting system—would they support?
The referendum was preceded by a comprehensive public education campaign undertaken by an independent electoral referendum panel headed by the Chief Ombudsman.
Turnout at the referendum was 55.2%, and of those who voted, 84.7% voted for change in question 1 and 70.5% voted for MMP in question 2.
The second step in the process was a binding referendum held with the 1993 general election. Voters were asked to choose between first past the post and MMP. Again the referendum was preceded by a comprehensive public education campaign.
Turnout was 85.2%, and 54% voted for MMP. As a result, the Electoral Act 1993 provided for an MMP electoral system. It had already been enacted by the New Zealand Parliament in anticipation of this possible outcome and came into force by operation of law.
Preparations then began to deliver New Zealand's first MMP election in 1996. A substantial amount of work was required. Not only did the move to MMP require comprehensive revision of the systems and processes for the delivery of elections, but Parliament found the need to revisit the 1993 electoral legislation, and after select committee consideration and public consultations, amendments to the legislation were enacted in 1995.
Electoral boundaries had to be redrawn to meet the requirements of the new system. With regard to the mechanics of government formation, cabinet processes, and Parliamentary processes, consideration had to be given to the implications of coalition governments and the increase in the number of parliamentary parties that were likely likely under the new system, .
Political parties also needed time to adjust to the different requirements of the new system, including fewer electorates, new nomination processes, and the implications of the party vote for electioneering. Again a comprehensive public education campaign was required to prepare voters for the new system.
I now propose to move to slides 8 to 12 and to outline the features of New Zealand's system of MMP.
New Zealand's system of MMP is a moderate form of proportional representation that seeks to balance two important objectives. One is the principle of proportionality, the principle that a party's share of seats should reflect its share of the nationwide vote. The other is the need to ensure that elections deliver effective Parliaments and stable governments by avoiding the undue proliferation of very small parties in Parliament. A further objective, and one that is fundamental to the mixed member system, is to continue to have local electorate MPs. Therefore, the defining characteristics of MMP are a mix of MPs elected from single-member electorates and those elected from a party list as well as a Parliament in which parties' shares of seats roughly mirror their share of the nationwide vote.
New Zealand has now had seven MMP elections. Each election has resulted in between six and eight parties represented in Parliament. Each election has resulted in some form of coalition government or arrangement between political parties, as is to be expected under a proportional system. Each government has retained the confidence of the Parliament throughout the parliamentary term.
Moving to slide 9, please, we see that under MMP each voter has two votes. On the left-hand side of the ballot paper, they vote for the party they most want to represent them in Parliament. Only registered political parties can contest the party vote. On the right-hand side of the ballot paper, they vote for the candidate they most want to represent them in their electorate. Candidates of unregistered parties and independents can contest the electorate vote.
Let's go to slide 10, please. New Zealand is currently divided into 71 electorates. Electorate boundaries are reviewed after every five-year population census by an independent representation commission. The decisions of the representation commission on boundaries are final. Electorate seats are won, on an electorate-by-electorate basis, on a first-past-the-post basis.
Moving to slide 11, please, we see that the party vote is counted on a nationwide basis. To be eligible for an allocation of the seats, a party must win either one electorate seat or 5% or more of the party vote. These are known as the thresholds, and they are intended to avoid the undue proliferation of very small parties in Parliament. If a party wins 40% of the party vote in an election, for example, the party is entitled to 48 seats in a 120-seat Parliament. If that party's candidates won 30 electorate seats, the party would be topped up with 18 seats from its party list to bring its number of seats in Parliament up to 48. Thirty electorate seats plus 18 list seats equals the 48 seats its share of the party vote entitles it to. If another party wins 10% of the party vote and no electorate seats, it is entitled to 12 seats in a 120-seat Parliament. All those seats come from its party list.
A party's list seats are allocated to its candidates in the order they appear on the party's list, excluding those who win an electorate seat. We have included in the background papers provided for members an example of the party list provided to all voters at the 2014 election.
Moving to slide 12, we see there are a number of mathematical formulas available for the allocation of seats in proportional systems, and the particular formula adopted by New Zealand is the Sainte-Laguë formula. We have included an explanation of the method in the background papers provided for members. The explanation uses the 2014 elections results, an example that I think nicely illustrates the process.
One thing to note is that the New Zealand system does not prescribe a 120-seat Parliament. The current New Zealand Parliament, for example, has 121 members. This happens when a party wins more electorate seats than it is entitled to under the party vote. When this happens, the party keeps all its electorate seats and the number of list seats allocated to other parties is increased by the number of what we call overhang seats. Hence, the current government has 121 members.
Turning to slide 14, New Zealanders have, since the adoption of MMP in 1996, demonstrated a practical understanding of how MMP works. We can see this through low levels of informal voting and relatively high levels of split voting or strategic voting—that is, a voter casts a valid party vote and then casts a valid electorate vote for a candidate from a different party. We can see this also through the fact that the overwhelming majority of voters consider the ballot paper layout to be clear, concise, and easy to use.
As illustrated on slide 16, one of the benefits advanced for proportional systems like MMP is that it leads to a more diverse Parliament than tends to result from first past the post and from majoritarian systems. Certainly, as this graph shows, the New Zealand experience is that MMP has resulted in more women and more Maori elected to Parliament, the majority of them elected as list MPs.
For example, of all members of Parliament elected to Parliament from party lists, 43% have been women; by contrast, only 24% of MPs elected from electorates have been women. Also, 21% of all list MPs have identified as Maori, compared with 14% of all electorate MPs.
Representation of Pacific and Asian peoples in the New Zealand Parliament has also improved.
By way of conclusion, I would suggest that the key lessons from the New Zealand experience are that it is possible to successfully introduce a new electoral system, but at least in the New Zealand context, the process of reform is very important to public trust and confidence in the outcome, and the process needs to involve plenty of opportunity for public input, public consultation, and public education.
Our experience is that the design and development of different electoral systems raises many points of principle and many points of detail. These points are all important to people.
Again, at least in the New Zealand tradition, final decisions are confirmed by the voters at a referendum in which they have access to all the details necessary to make an informed decision, and this all takes time.
Finally, our experience is that once a decision is made, the time needed for careful planning and implementation to transition to the new electoral system is not to be underestimated, not just for electoral officials but also for those involved in the administration of executive and parliamentary processes and in the administration of political parties.
Mr. Chairman, that concludes the introductory comments I wanted to make. I also am very happy to take questions on any of that or any other matter.
Thank you.