Explainer: New Zealand's MMP Electoral System and Coalition Dynamics

New Zealand Prime Minister Christopher Luxon has sparked debate by stating his openness to a referendum on the nation's electoral system. Critics have labeled any such move a potential "power grab" by major parties, particularly as the current mixed-member proportional (MMP) system has consistently led to coalition governments since its implementation three decades ago. New Zealand adopted MMP in 1996, replacing a first-past-the-post system, to ensure smaller parties had better representation. Governments formed under MMP have typically been coalitions, with the exception of Labour's majority in 2020 following its success in managing the early COVID-19 pandemic. The MMP system, originating in Germany, is also used in countries like Bolivia, Lesotho, South Korea, and Thailand. Voters under MMP cast two votes: one for their local candidate and another for a political party. The party vote determines the overall allocation of seats in Parliament, ensuring proportionality. While Parliament normally has 120 seats, additional seats can be created if a party wins more electorate seats than its party vote share would normally allow, a situation that has occurred previously and may happen again. Minor parties have frequently played a crucial role as "kingmakers" in forming governments, with New Zealand First being a notable example, having supported both National and Labour-led governments in the past. The potential for smaller parties like the centrist Opportunity Party to influence government formation remains a key feature of the MMP system.