Coalitions, confidence and supply: What you need to know

Explainer - MMP has meant majority or one-party governments have become more unusual - the 2020 Labour majority was the first - so governments typically need the support of more than one party.

It's important for voters to have an idea of what they're voting for, but these multi-party agreements form a government with different priorities than what parties had initially campaigned on.

This means a lot of discussion and debate during the election campaign can focus on a party's "bottom lines" and who would be willing to work with whom.

But what kind of deals does this lead to, what rules do the negotiations have to follow, and what happens if they can't agree?

RNZ is here to clear it all up.

'Coalition' vs 'Confidence and supply'

So far there have been three basic forms of agreement political parties can come to after an election: Coalition, confidence and supply, or cooperation.

A coalition is where two or more parties agree to be in government together. This means those parties each being in Cabinet together, meeting to make decisions on all matters. They may also have negotiated certain policy positions, specific areas of ministerial responsibility, and the rules under which they would support each other.

Confidence and supply agreements are like a watered-down version of a coalition, where one party will agree to support another on the most important matters.

A core difference between the two is a coalition typically requires the ministers to support government decisions once they've been made in Cabinet, under Cabinet collective responsibility rules. Confidence partners on the other hand have a little more leeway to air disagreements outside of any ministerial portfolios.

The 2017 Parliament offers good examples of coalitions and confidence and supply agreements. Labour and NZ First were in a coalition together, with both holding positions around the Cabinet table and making decisions as a team. The Greens had a confidence and supply agreement, guaranteeing their support to the Labour-led government in return for it introducing a Zero Carbon Act and tackling other policy areas, and giving certain ministerial positions to the Greens.

"Confidence" refers to the need for a majority of MPs in Parliament to support the government's ability to pass laws, under the leadership of the prime minister - that is, the government must have the backing (or "confidence") of most of the Parliament to avoid losing a vote by MPs of "no confidence" in the prime minister's ability to lead the country.

"Supply" relates to money, and the government's ability to spend it in the Budget, and through other budget processes - that is, the "supply" of funding for everything the government wants to do.

What this boils down to is that once the election dust has settled and the number of each party's members is known, more than half of them need to agree on who the prime minister is, and agree the government is allowed to spend taxpayers' money.

A confidence and supply agreement also typically (more on this later) has certain policy positions or ministerial responsibilities set out in negotiations.

The 2020 election led to yet another option: a cooperation agreement. Labour had won a majority in Parliament so did not need any other party to support it on confidence or supply but agreed to cooperate with the Green Party anyway, including granting two ministerial positions outside Cabinet.

Rules of engagement: How negotiations work

University of Otago law professor Andrew Geddis says the form negotiations take and what's on the table is almost entirely up to the political parties.

"Outside of the obvious ones like your criminal law - you can't bribe someone to support you, that sort of thing - but in terms of the structure, the negotiation, the policies, that's all politics for the parties to work out amongst themselves," he says.

The Cabinet Manual is certainly clear on the matter:

6.42 The process of forming a government is political, and the decision to form a government must be arrived at by politicians. Government formation may involve one or more parties.

University of Otago professor of politics Janine Hayward says this means the options for what kind of agreements are possible are still evolving.

"Whatever kind of creative solution the parties can come up with, is possible. That sounds sort of vague, but I think the point is to say that there are no rules, really, around coalition building.

"The idea, even, of ministers sitting outside Cabinets - that was kind of a new thing in the Helen Clark years. We've had that change ... we have language now around 'support ministers'.

"A government wouldn't even need to have a majority support, it just needs to not have majority opposition to confidence and supply."

Agreeing to disagree?

Hayward is referring there to another option speculated about by media and political parties alike - but not yet really tested - known as 'abstention', 'minority government' or 'sitting on the cross benches'.

Technically, it would be a minimalist kind of confidence and supply agreement, where a party agrees to support the government on confidence and supply - or at least not vote against it (abstain).

This type of government would need the parties involved to accept the arrangement: An agreement to disagree, basically. Geddis says it seems unlikely because it would mean the smaller party giving up leverage for nothing.

"It would be in theory possible for a party to say 'we will give you our confidence and supply, we will vote for you' without asking anything in return - it's hard to see why a party would want to do that."

He says it would be a very tenuous basis for a government to operate under, with every proposed law (apart from the Budget) needing to be negotiated between all the parties in Parliament to achieve a majority and get passed.

"That does put a bit of a crimp on the government's ability to do anything ... if they want to change the procedures of the House, or [pass laws under] urgency, anything like that, they have to get an agreement of that other party to do it. And so that would give that other party quite a bit of leverage."

Whether that political leverage would be valuable enough to outweigh the chance to make lasting change in government is questionable, Hayward says.

"You don't want to annoy voters, but you would also [want to] avoid a redo of the election because you are intent on becoming government … these are office-seeking people who are running for election, I think they would be intent on finding an arrangement that works."

However, she says the possibility cannot be ruled out.

"That's exactly the kind of question that I never answer any more about New Zealand politics ... things keep happening that you wouldn't really predict. We've had all kinds of developments in recent elections: Parties adapt."

It's worth noting this concept is different to minority governments seen in some other countries. Former governor-general Patsy Reddy, in a speech in early 2020, said:

"In some other democracies, like Canada, minority governments have taken office and have had to demonstrate at a later time that they can muster the support of a majority in the House - say, when a vote of no confidence is moved in them, or when seeking approval of their budget. That is not New Zealand's constitutional tradition."

Risk of a hung parliament

Geddis says the leverage offered by the minority-government kind of approach also has its limits.

"The government always has the option of saying 'this doesn't work, we need a new election' ... if they [the smaller party] push too far and government becomes impossible and so there's a new election - you know who's going to get the blame for that, and you know what's going to happen to their vote."

A re-run of the election could also happen if parties are unable to come to an agreement on confidence.

Parliament has a baseline 120 MPs. It's an even number, which means there's a possibility two groups - the left and right blocs, for instance - could have an equal number and be unable to agree on a prime minister.

"It's something you might have thought was thought about in more depth whenever MMP was first created, but apparently it wasn't," says Geddis. "The polls, you know, they have been close. If they close up again as we've seen in recent months it's an entirely possible outcome, come October."

Some deadlines

There's no formal time limit the parties must come to an agreement by, but there are a few important dates to be aware of:

• Writ Day (10 Sept for the 2023 election): The official start of the election period, when the governor-general directs the Electoral Commission to hold the election. This takes place within seven days of the dissolution of Parliament. Among other things, it sets out the date for the election.
• Election Day (14 Oct in 2023): Voting closes at 7pm, determining which MPs enter Parliament based on electorate votes and the remaining numbers filled by lists, proportionate to voters' party votes. This is set down as 20 days after nomination day, the deadline for electorate candidates and party lists.
• Last day for return of the writ (9 Nov in 2023): This is 60 days after writ day, to allow time for recounts and challenges.
• Last day to commission opening of Parliament (21 Dec, 2023): Parliament must be opened within six weeks of the return of the writ. The governor-general does this by summoning the MPs, who go to Parliament, are sworn in, and elect a Speaker (basically Parliament's referee and landlord).
• State opening of Parliament (at the latest, 22 Dec in 2023): The governor-general attends Parliament and delivers a 'Speech from the Throne' setting out the government's general agenda. Traditionally, the opposition also calls for a vote of no confidence in the government - marking the first chance to test confidence.

Caretaker government

This is when the Caretaker Convention is important. The previous government basically continues to govern right through the election until the new government is formed, but avoids doing anything new.

Here's the Cabinet Manual:

6.21 On occasion, it is necessary for a government to remain in office on an interim basis, when it has lost the confidence of the House or, after an election, until a new ministry is appointed following the government formation process. During such periods, the incumbent government is still the lawful executive authority, with all the powers and responsibilities that go with executive office. However, governments in this situation have traditionally constrained their actions until the political situation is resolved, in accordance with what is known as the convention on caretaker government.

The caretaker period has in the past lasted between two weeks and two months before the new government is confirmed by the governor-general.

If it's clear who the next government will be but they haven't yet taken office, the caretaker government launches no new policy and acts on the incoming government's advice. If the next government isn't yet decided, significant matters are deferred or handled using short-term solutions.

Last chances

Once the new Parliament has been formed, the governor-general must have some idea of what to say in their speech, but still there's no firm date for the MPs to come to final agreement on the government.

Hayward says this is "uncharted territory in the sense that the governor-general then has to try and determine what to do next.

"I think what would occur would be the governor-general seeking the incumbent prime minister's advice on how to proceed, the prime minister would then have some kind of cross-party discussion with the House to see what happens next, whether negotiations continue, or whether there is support to ask the governor-general to dissolve parliament and call another election."

However, it's still up to the parties themselves to make the call on whether a government can be formed, and Parliament could conceivably just continue to sit while the negotiations continue.

In Dame Patsy's 2020 speech, she said the governor-general assesses "quantity and clarity" when judging the confidence of the House.

"First to quantity: The formation of government depends on one or more parties being able to show that they are able to obtain the support a majority in the House of Representatives.

"For the first time, following the 2017 election, it was not the leader of the party with the single-largest share of seats who was able to secure a majority, and so form the government and be appointed as prime minister. Despite not having the single largest share of seats, Jacinda Ardern as leader of the Labour Party was able to demonstrate "quantity".

"Next to clarity. It is not enough for a party or grouping of parties simply to have the numbers in the House. They must also publicly communicate the result of their negotiations - in clear and public statements."

So it all comes down to confidence. Geddis says the governor-general's role is limited to being a "final backstop".

"If that process started to drag on into the months, at some point the governor-general may start to get a little more proactive and start to say 'Hey, folks, something needs to happen here, for the good of the country, you need to get on with us and get me a result'.

"If they all say 'no, it's just not working, we just can't do it' then the governor-general would have no option but to call a new election. However, the onus is on the leaders of the political parties to do all this, the governor-general has no real power to force them to."