The mixed member proportional (MMP) electoral system is robbing our government of potency, says Business Roundtable executive director Roger Kerr.
He said the inconclusive initial outcome of the election, which looked likely to result in a coalition of disparate allies, would leave New Zealand without a government possessing the necessary
mandate to take tough economic decisions.
Business had always been concerned about MMP and mindful of its potential to produce compromised decision-making and political stalemate.
"It looked attractive to a number of people," said Kerr.
"At the time Germany [which has proportional representation] was looking like being a rather successful economy. Twenty years down the track Germany is in deep trouble."
Kerr said believed New Zealand needed to hold another referendum on MMP.
"The evidence is even clearer from this election that it is a flawed electoral system and is not conducive to the interests of a small economy that needs to keep nimble and flexible."
But Business NZ chief executive Phil O'Reilly believes New Zealand's politicians were now sufficiently experienced in MMP to make it work.
"That's what we've got and it's up to the political parties to try and sort that out and make sure that all the people in New Zealand including business have confidence that they can form a stable and sustainable government."
