Published in National Business Review (Auckland), 26 March 2010

By Luke Malpass and Oliver Marc Hartwich

Sixty years after Germany adopted the MMP system, most Germans don’t have a clue how it works. It’s not much different here in New Zealand.

The last time that New Zealand voted on the electoral system was in 1993, and it was preceded by one of the nastiest political campaigns in its history. MMP is once again potentially up for grabs in a referendum at the next general election in 2011.

Considering the invective that flowed over the last campaign, what do we know about the origins and performance of MMP elsewhere?

In the mid-1980s, the Royal Commission on Electoral Reform observed electoral systems around the world and concluded that Germany’s MMP was the best model on which to base a proportional system in New Zealand. It seemed like a good idea at the time because West Germany in the mid-1980s, still unencumbered by the trouble of unification, had a prosperous economy, political stability, and an optimistic future. It is unlikely that any commission visiting Germany today would come to similar conclusions.

MMP in Germany suffers from the same problems as MMP in New Zealand (the other notable country sharing our electoral system is the Democratic Republic of Congo). In today’s Germany, the power of political parties has risen dramatically, and government horse-trading arrangements emerge only after the election, at which point voters have no say.

Germany introduced its MMP system after World War II. At the time, the famed ‘fathers and mothers’ of the Basic Law, the country’s constitution, were unable to agree on an electoral system. Some wanted a First-Past-The-Post (FPP) system based on the Westminster model. Others wanted proportional representation. In 1949, they compromised on MMP.

How erroneous that compromise has been for Germany is evident when 60 years later, Germans still haven’t understood how MMP works. Opinion polls before major elections regularly reveal the electorate’s utter ignorance. Many German voters, like many New Zealand voters, are unsure what their two votes mean – that one vote is for their constituency candidate and second for the overall composition of Parliament. So they usually give both votes to the party of their choice – missing out on precisely the opportunity to select their preferred local candidate.

The German parties, meanwhile, have made hay from the system. They regularly provide safety nets to some of their favoured candidates, who don’t need to be directly elected in their constituencies. Candidates can enter the Bundestag even if they don’t get elected, albeit as an MP elected on the party list. In some constituencies, three or more candidates run for the seat although they can all be certain of a making Parliament after the election through the list system. The voters’ choice has become a farce.

Germany’s political landscape is so fractured that it has become extremely difficult to form effective governments. The only viable option in the 2005 election was a grand coalition of the two biggest parties – in a Parliament of only five parties in which the smaller parties, for personal and political reasons, were unable or unwilling to work together in smaller coalition. The current two-party coalition of Christian Democrats and Free Democrats (actually a three-party coalition because the Christian Democrats are divided between Bavaria and the rest of the country) seems to be the best option of governance that Germany can hope for. Yet even this coalition hardly finds common ground to push through much needed reforms, including confronting Germany’s large social security liabilities, dealing with the effects of drastic demographic change, and consolidating public finances. Governance is further complicated by the fact that MMP also operates at the state level in the 16 states that make up the German federation. Finding any sort of agreement is nigh on impossible.

In the future, governments may well comprise coalitions of three or four parties of similar size in Germany. This would necessarily mean that German voters cannot know before election day what form the government might take after the election. Decision-making could well become a game of political roulette.

Given the German experience, it is high time New Zealand starting thinking carefully about the future of its electoral system. Has MMP cured the ills it was meant to or has it just made the system more complex? A return to bicameralism is an option rarely discussed in New Zealand, and never officially investigated. It is unclear why. One suspects, politicians who set up terms of reference for inquiries and commissions balk at the idea of a Senate asking questions of their proposed legislation.

The Senate option was deliberately not investigated the last time New Zealand pursued electoral reform in the 1980s, and David Farrar argued in his blog on Wednesday that this would have been a good debate to have in the 1990s. Current political considerations aside, if it was a good idea then maybe it is a good idea now.

A proportionally elected Senate and an FPP elected House of Representatives would provide checks on government power and make it more accountable to the people. The House of Representatives would be elected via FPP to ensure direct representation of the people, not decided by a party, because in reality, virtually no one checks a party list before casting their vote. The House of Representatives could be complemented by a Senate decided by proportional representation. Still decided by parties on a list but because bills can go to the Senate unadulterated (i.e. governments introduce their desired legislation, complete, to the house and voting public), the political onus is then on any king-making senators or senate parties to explain to the public why the government’s bills cannot and should not be passed.

Experiences in Australia suggest that senators who exercise this power irresponsibly get punished at the ballot box. It also implies that if a party wins both houses, then it has a true mandate for wide-ranging reform.

The debate around how we vote, and what we vote for, needs public discussion, but learning from the lessons of Germany would be an excellent start.