Labour's associate justice spokeswoman Lianne Dalziel also said it was time to stop the "political stitch-ups".
But Act leader John Banks said the recommendation was woeful and the commission had buckled to partisan public pressure over the one-seat threshold.
Mr Dunne also believed the electorate threshold should stay. He denied it was out of self-interest, saying it enhanced proportionality. He said it would be a shame if it was abolished because of the public backlash over events such as the "cup of tea" incident.
"If a particular incident has triggered a reaction - one incident over six elections - then it's not a particularly good basis on which to make a decision."
Chief Electoral Officer Robert Peden said the electorate seat threshold was the most disliked aspect of MMP in the submissions. More than three quarters of the 2347 people who put in submissions on that aspect of MMP were opposed to it.
The future of the proposals will rest with National - which has previously argued in favour of staying with the status quo. Yesterday a spokesman for deputy Prime Minister Bill English said the proposal would be carefully considered by National over the coming weeks.
Mr Peden said the commission believed that few changes were needed, but those that were were important and would enhance public confidence in the fairness of MMP. He did not believe a referendum was required because the changes did not alter the nature of the voting system.
Legislative changes could be made by Parliament in time for 2014. Final recommendations would be made after further public submissions, due to close on September 7.
Victoria University professor in public policy Jonathan Boston said the party vote threshold should drop to 3 per cent if the electorate-seat threshold was to be wiped.
"That would more likely guarantee proportionality while also minimising the risk of Government instability."
Campaign for MMP spokeswoman Sandra Grey said it should be reduced to 4 per cent, or even 3 per cent. She said concerns that it would mean a glut of "fringe" parties made it into Parliament, making it harder to form a stable Government, were misplaced.
The commission's other recommendations included abolishing overhang seats and retaining "dual candidacy" which allowed candidates to stand both on a party list and in an electorate.
REVAMP
* The Electoral Commission's proposals:
* Abolish the one-seat electorate threshold allowing other MPs into Parliament.
* Lower the party vote threshold from 5 per cent to 4 per cent.
* Continue to allow candidates to stand in electorates and on the party list.
* Continue to allow list MPs to stand in byelections.
* Abolish provisions for overhang seats.
* Review the proportion of electorate seats to list seats to ensure it does not affect diversity.
SPOT THE DIFFERENCE
What would have happened if there had been no electorate seat threshold, a 4 per cent party vote threshold, and no overhang.
2011
National would need the Maori Party to have the 61 votes for a majority so it would be one vote short for policies such as partial asset sales that the Maori Party does not support. The Maori Party would be "kingmaker" because National would have had one fewer seat (58 instead of 59), due to the overhang of one seat. As it stands, it can currently pass laws with Act's John Banks and United Future's Peter Dunne.
2008
NZ First would make it back into Parliament and the Maori Party would be kingmaker. Labour could have formed a Government with the Maori Party, the Green Party and NZ First. National would need either the Maori Party or NZ First because Act would have only one MP (Rodney Hide in Epsom) rather than five. The Green Party would have eight instead of nine because of the overhang caused by the Maori Party's five electorate seats.
2005
Labour would need the Green Party to get a majority in Parliament. Its support arrangements with NZ First, United Future and Progressives would have yielded only 60 votes instead of 61. Labour would have had one more MP but United Future would have had two fewer, and the Greens would have seven instead of six. Act would have one instead of two.
2002
Little practical difference to Labour's governing arrangements with the Progressives and United Future. The Progressives would have had one instead of two MPs, and United Future would have nine instead of eight.
1999
No difference.
1996
The Christian Coalition would have made it into Parliament with 4.33 per cent, giving it five MPs, but NZ First would still have been the kingmaker. National and Labour would have two fewer MPs each, and the Alliance would have 12 instead of 13.
