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No to elections: maybe we should only have them every four years?

We are all over it, aren’t we, this election that won’t quit. But is it also bad for business? Kirk Hope of BusinessNZ asks whether a longer cycle between voting would be better for all of us.

The last time New Zealand had a full debate about the pros and cons of a three-year parliamentary term was in 1990, and at that time, 60.7% of voters voted for a three-year term, and 30.7% for a four-year term.

That referendum was one of the recommendations of the 1986 Report of the Royal Commission on the Electoral System, which also of course led to MMP.

However, it is interesting to see in the same report the Royal Commission looked at 39 broadly democratic countries and found that, at that time, 19 favoured a four-year term, 17 a five-year term, and only Australia, Sweden and New Zealand had a three year term. Hence the recommendation for a referendum.

As post-election negotiations continue and people consider the political landscape in 2017, it does feel like another round of discussions about the length of our parliamentary term would be worthwhile.

Often when I speak with Kiwi business leaders they tell me they think our three-year parliamentary term is too short, and a longer election cycle would bring greater business confidence and stability. Since 1999, every election year has seen business confidence drop and uncertainty creep in just before an election, according to research from the New Zealand Institute for Economic Research. In real terms that means less business is being done, with households and businesses making fewer sales, orders and investments.

And this year is no exception, with the latest NZIER quarterly survey of business opinion finding confidence fell in the September quarter, with a net seven percent of businesses expecting improvement in economic conditions. Last month’s ANZ Business Outlook also found a net zero per cent of businesses are optimistic about the year ahead, that is the lowest level since September 2015.  

These jitters are often temporary, but nonetheless, I think the business sector would welcome debate about the current three-year parliamentary term because it’s possible a four-year cycle could improve New Zealand’s long-term economic outlook, and it would certainly reduce election costs.

Across the ditch, the Australian Institute of Company Directors is “very supportive” of longer election cycles, arguing that current political discourse is weighed down with too many elections, bringing distractions and short-term thinking.

“We think the essence of good governance is supporting the long-term view. And a three-year term, which is usually two-and-a-half, hardly gives you that,” chairwoman Elizabeth Proust says. I think many Kiwi businesses would agree with her point. It seems like every election year the politicking kicks-off earlier in the cycle when businesses need long-term thinking and certainty for their investment and innovation decisions.

Proust also says it would bring the benefit of  “people thinking about infrastructure, energy policy in a way which took them beyond polls and opinion. I think that if we can get to a four-year term, hopefully we can get governments to focus on planning in the national interest.” She rejects the argument that extended terms bring the risk of more damage from bad parliaments or governments, contending: “On that basis, we should give them only one year and see how they go.”

Quite.

Kirk Hope is chief executive of BusinessNZ, an advocacy body for businesses.


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