Parliament consists of a single chamber – the
House of Representatives. Whoever controls that chamber makes the laws and runs the country.
There’s no upper house of review like a Senate or a House of Lords. There’s no president or chancellor with executive powers or veto rights. There’s no binding codified constitution. And there’s no federation dividing power between central government and state governments.
No other developed country has a political system as simple as New Zealand’s.
Perhaps simplicity is a good thing for a small country. Less is more. An unconstrained Government is a powerful Government. It can get things done.
Some would even say NZ’s system is more democratic than the more complex alternatives. Kiwis vote for the policies they prefer, and the Government they elect to the House of Representatives then implements those policies.
That’s the theory anyway.
It’s certainly true that no other democratic country can convert party platforms into policy outcomes as quickly and easily.
The problem is that politics is becoming more contested and more fragmented. Many people, both voters and politicians, are increasingly dogmatic and opposed to compromise. Centrism is in decline and polarisation is on the rise.
Such an environment spells trouble for a system where the government that controls the House of Representatives exercises unconstrained power. The trouble is exacerbated by both NZ’s short three-year parliamentary term and the tendency of MMP to produce coalition governments.
The most recent change of government demonstrates the dilemma.
A coalition of three parties with often diverging ideological positions, is engaging in a frenzy of legislative repeal and policy reversal. It’s out with much of the previous Labour Government’s agenda – from the environment and Māori affairs to tax and smoking – and in with the new agenda crafted in two coalition agreements.
Sweeping change is the order of the day.
The key issue is not the wisdom or otherwise of the current Government’s policies, but rather the implications of the speed and scope of the changes. And, more importantly, the likelihood that many of them will turn out to be temporary.
Chances are that within a couple of elections, a new centre-left coalition will ascend to the government benches with a very different agenda. It will unwind much of the current government’s programme and implement its own policies.
Fast-forward a few more elections and the cycle will repeat.
There’s nothing new about an incoming government overturning the work of its predecessor. However, in most liberal democracies, the constraints on government make that much more limited than in New Zealand.
For example, the policy changes following Australia’s 2022 federal election were insignificant compared to what is currently happening in NZ. The Australian Labor Government is constrained both by a Senate it doesn’t control (due to different electoral rules) and by the state governments.
What are the downsides if the NZ system fosters dramatic and recurring policy change?
Policy whiplash is the most obvious one. It’s hard enough for citizens to know the law in any given area without it constantly changing at the whim of each new government. This is acute for businesses – planning is crucial but becomes difficult if the government is continually moving the goalposts.
Sovereign risk is a major issue at a time that NZ needs to attract foreign investment. Foreign investors will be more reluctant to invest in the country if they perceive a high likelihood of constant change to the rules and regulations that govern their investments.
NZ’s international allies may be nervous about a possible lack of consistency in the country’s foreign policy.
Policy flip-flopping also brings greater bureaucracy. If each new government undertakes substantial legislative reform, that requires significant work both in drafting the new laws and educating the relevant government departments on their application.
Perhaps most importantly from the perspective of a healthy democracy, continual U-turns on material policy matters create an impression of volatility and instability. Among voters, that feeds frustration, distrust, and disengagement. And the more extreme the policy swings, the greater the risk of increased social division.
Some commentators lay the blame for policy volatility solely at the door of NZ’s MMP voting system. However, the previous system, first past the post, had other faults including disproportionate representation.
The volatility problem lies in a combination of factors – the policy horse trading required to form a coalition government under MMP, the increasingly febrile nature of modern politics, and above all, the lack of constraints on the power exercisable by Kiwi governments.
None of these looks set to change any time soon.
The best solution would be MPs and political parties more willing to work across the aisle, to compromise, and to develop policies capable of surviving the electoral cycle.
Don’t hold your breath.
