The final report from the official review of New Zealand’s Mixed-Member Proportional (MMP) electoral system is now posted [PDF].
I have not yet digested the entire report, but the highlights of the recommendations are: dual candidacy OK, closed lists OK, dump the one-seat threshold, lower list-vote threshold to 4%, consider fixed 60:40 ratio of electorate to list seats. If one-seat threshold abolished, also get rid of overhang provision.
All good, though I’m not sure about that last one. The report says, on p.8:
Abolishing the one electorate seat threshold would increase the chances of significant numbers of overhang seats being generated by parties that win electorate seats but do not cross the party vote threshold. Therefore, if the one electorate seat threshold is abolished, we also recommend the provision for overhang seats be abolished. Parties that win electorate seats would keep those seats. However, the size of Parliament would remain at 120 seats because no extra list seats would be allocated. This would have minimal impact on the proportionality of Parliament.
I suspect most of the voting for small-party candidates in single-seat districts (electorates) is motivated by the possibility that said party would win more than this one seat, if it had a party vote sufficient for two or more seats (but less than 5% of the vote). Without the district win granting it a chance at list seats, there is usually little incentive to vote for such a party. An exception would be the Maori Party, which is able to win several of these seats even while getting few list votes. And it is this (very big) exception that calls into question the Commission’s claim of a minimal effect of their recommendation on proportionality. Without adding seats to parliament to (partially) compensate other parties for the party that is overrepresented due to district wins, it would seem that there would be considerable potential for increased disproportionality.