A longer term for stronger government

By Pip England, Chief Executive Partner, Chapman Tripp

As we head into the clamour of the coming campaign, we know that across the economy investment decisions are being put on hold until the election outcome is known – which will not be on the night but weeks after, when the coalition agreements are signed.

Which is why I used this forum in 2023 to argue the case for a four-year term and why I’m making that argument again this time. Because, although there’s been a bit of activity around the idea over the last three years, the wheels have been spinning in the mud and we’re still substantially where we were.

A key reason for a longer electoral cycle is that it creates a stronger base for good government because it allows more time for policies to be bedded in, creating a more settled policy environment and enabling the electorate to make a more informed judgement of the quality of governance on offer.

There has been movement in this area. As we say in the infrastructure section of this document, there is encouraging evidence that MPs have got the message about avoiding unnecessary and debilitating policy churn – especially in the infrastructure space where the 30-year National Infrastructure Plan has been signed up to by the Coalition Government, the Labour Party and the Greens.

The Labour Party in particular has committed to project continuity where projects are already underway, albeit subject to certain caveats.

Some of the credit for this must go to BusinessNZ and to the wider infrastructure sector for its strong messaging around the need for investment certainty, and some must go to the New Zealand Infrastructure Commission Te Waihanga for the excellence of its analysis.

I note in passing that the Commission is itself an example of consensus in action – having been created by the 2017 Labour-led Government and continued by the current Government.

Of course, there will always be areas of policy contest. A Labour-led Government will promote some form of union-led, multi-employer collective bargaining and will retreat from some of the recent health and safety changes. And tax policy is shaping up to provide a colosseum-style battleground.

But this is healthy. This is what democracy is about.

So, yes, there’s been some progress in terms of political culture without wanting to overstate it. And yes, National has already committed to running a referendum on a four-year term if re-elected.

And yes, ACT, Labour, New Zealand First and the Greens also support a shift to four years – ACT so much so that it committed the Government in its coalition agreement with National to promote a Bill enabling a binding referendum through first reading and to select committee.

So what went wrong?

ACT was concerned that a four-year term would strengthen the significant influence that the executive already wields over the Parliament in the New Zealand political system. To avoid this, its Bill provided that three years remain the default term and that a four-year term be available only if select committee membership was proportionate not to the membership of the whole House but to the party membership of the rank-and-file MPs (excluding Ministers and Parliamentary Under-secretaries).

And that formula had little appeal beyond ACT. Among the concerns raised by submitters was that the variable term approach would mean that voters wouldn’t know when casting their vote whether they were making a three or a four-year decision. So, the committee recommended that “the change should be subject to a referendum without the proportionality requirement”.

And that’s where we stand. I’m confident that a referendum will be held (probably at the 2029 election if not before). Whether it will succeed is another matter entirely.

The New Zealand public likes to keep its politicians on a short leash, having twice voted down an extension of term – by more than two-thirds majorities in 1967 and 1990. And the cost-of-living crisis is creating significant grumpiness in the electorate which could easily reinforce this tendency.

So the supporters of change are going to have to make their case by highlighting the hidden costs of the status quo and the benefits of a longer, four-year horizon to the governance of the country.