New Zealand seems to have been barking up the wrong tree for much of the last 25 years looking for a solution to the MMP threshold problem. No good solution has been identified, and MMP review recommendations remain unimplemented.
But there is a very simple, easy to understand solution that keeps the threshold but eliminates the problems.
Give voters a second choice of party vote. If a voter’s first choice party does not pass either threshold, their vote goes to their second choice party. Voters are advised to make one of their choices for a party that is certain to pass one of the thresholds. Nothing else changes.
This solution is easy to understand, easy to implement, and does away with the problems.
Many, perhaps most, voters know which major party they want to see lead the next government. Many also want to support a small party, but cannot know whether that small party will pass a threshold for gaining seats in parliament. If they do not vote for the small party, nobody ever knows they supported it. If they do vote for a small party that misses the threshold, they have no say in government formation. Many voters struggle with this choice every election.
The second-choice system allows voters to clearly state the party they want to see represent them in parliament, but also have a say in government formation if their preferred party does not pass a threshold
The second choice of party vote requires a second column on the party vote part of the voting paper. Once it is clear which parties will pass a threshold, each polling place can prepare its own results table. Results for any grouping of polling places, electorate, region, island, national, specials, overseas, etc are easily obtained by simply adding up the results from the polling places involved.
Ideas like this were suggested by numerous submitters to the 2012 MMP review, and a few described a system in detail. The proposal here is a little different in that it simplifies the allocation of second choices. The message is to choose who you like, for the first choice. If you think this party might not pass the threshold, make a second choice for a party that will pass.
The second choice has the same limitations as the present vote. The vote only counts if it is for a threshold passing party.
This change takes away all the problems with the existing threshold. People can express support for a small party, and play a part in deciding the next government.
Nobody needs to worry that votes for small parties may be wasted. Even if a small party does not pass a threshold, its true level of support is publicly known, and its supporters still have a say in government formation.
This change considerably clears the air for everybody with an interest in the election. Big parties get to keep the threshold they believe is important. No votes need to be wasted. Small parties are still excluded from being allocated seats in parliament, but their votes are recorded and their voters still have a say through their second choice. The big problem of a party just missing the threshold and so changing the lead party in government is gone. The system presents a much lower barrier to entry to small parties, while still preventing a proliferation of small parties in parliament.
The example results table shows a hypothetical situation where two small parties just miss the 5% threshold. With the two-choice system, voters for those small parties have their second choices counted instead.