The party's new rules will give New Zealand its first experience of an election akin to a presidential primary in the United States. Like a US primary, it will be a very public campaign for the votes of a partisan electorate. Candidates will be under pressure to take more extreme positions than they would in a general election.
This carries risks not just for Labour but for the good government of New Zealand if the consensus between the two major parties on economic fundamentals is undermined by a leader's public commitments in a campaign for the party's vote.
There is good reason to confine these elections to a party caucus. MPs are generally well briefed on policy issues and aware of the national interest. They also work closely with leadership contenders and are best-placed to assess their character and capabilities.
But there are virtues in giving ordinary party members a vote for its leader. It should boost party membership which has been flagging for a generation now. In fact Labour has to be careful that its election is not white-anted by opponents or extremists who join the party just in time to vote. To be eligible, voters must have joined by midnight on the day the election was triggered (last Thursday) and they have until September 6 to pay this year's dues.
Their votes will count for 40 per cent of the result as will the caucus vote, with delegates of affiliated unions carrying a possibly crucial 20 per cent.
The unions are under party orders not to vote as a bloc, which might ensure the party does not suffer the experience of its British counterpart. British Labour's current leader, Ed Miliband, was elected with union votes despite MPs' preference for his brother.
The machinery for union voting in New Zealand Labour's election is fiendishly complicated. Votes may be cast by a union's national conference delegates or its eligible membership. It is up to the union to decide its procedure, which must be approved by Labour's ruling council.
It might not be the easiest or best way to find the right leader - but it will be interesting to see what happens.