The decline of the two-party system in New Zealand represents a decline of parties in general, at least in terms of the level of relatively spontaneous support they receive. The increased support that parties receive from the state makes it possible for parties to maintain their roles and institutionalize their organizations on a base of substantially lower membership than in the past. But the level of taxpayer support for parties and politicians in general is an issue in New Zealand politics, although more at the level of relatively trivial excesses in travel expenditure. The other symptom of low public tolerance for expenditure to support the political process is a campaign to reduce the size of the legislature, which increased under MMP to 120. Reduction of the size of the house received overwhelming support in a non-binding referendum held at the time of the 1999 election.
The effects of proportional representation have opened up the political marketplace, and made it more difficult to maintain any hint of a two-party 'cartel', with system-level rules that prevent or at least limit competition from outsiders (Katz 1996). Nonetheless, persistent opposition to the new electoral system indicates continued support for the reimposition of a two-party cartel among some of the key actors in New Zealand politics. The implications of such a counter-revolution on public attitudes to the party system and political legitimacy in general could be far-reaching.
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