"We do have a world-class electoral system. But we need to make sure the rules remain fit for purpose and meet the needs of our future voters," Faafoi said.
While the focus for the review so far has been whether New Zealand would shift from a three-year term to something longer (likely four years), there is also a push to lower the voting age to 16, which could also be recommended.
The terms of reference require the review panel to consider the recommendations of the election reviews held by the Justice Select Committee after each election since 2011 and the 2012 review into MMP by the electoral commission.
That review recommended dropping the 5 per cent threshold to 4 per cent, abolishing the "one seat" threshold that allows parties to claim additional seats in Parliament from their party vote if they win an electorate seat.
It also recommended fixing the ratio of electorate seats to list seats to ensure a proportional distribution of seats in Parliament. It recommended fixing this ratio at 60:40, which works out as 72 electorate seats for the 120-seat Parliament - the ratio that currently exists.
The formula for calculating electorate seats is based on the South Island's guarantee of 16 electorate seats. Census estimates of the South Island electoral population are used to calculate the electoral population of these seats, which is then used to calculate the population of seats in the North Island.
Each electorate must be roughly the same population size. Because the South Island has grown more slowly than the North Island, the average population size of each electorate is not growing as quickly as the population as a whole.
This means that additional North Island seats are added to keep each electorate a roughly equal electoral population, while guaranteeing the South Island its 16 seats.
This increases the number of electorate seats increases overall and eats into the number of list seats.
As New Zealand's population continues to grow in the North Island, new electorate seats will be added to Parliament. If that particular recommendation is adopted, the Parliament would have to add list seats at the same time it adds electorate seats to maintain the ratio - this would see the overall size of Parliament increase.
The terms of reference also require the panel to look at who enforces electoral law in New Zealand, specifically the role of the Electoral Commission, the New Zealand Police, and the Serious Fraud Office. The wave of political donations scandals during the last Parliament involved all three organisations.
The terms of reference include looking at rules around the process of voting and counting votes, advance voting (nearly two million advance votes were cast in 2020), and the use of digital technology to assist in counting votes - whether to move to wholesale electronic voting was not included in the terms of reference.
The panel is tasked with looking at overseas voting rules. Currently people overseas must have returned to New Zealand in the previous three years to be able to cast a vote. This is out of step with many overseas jurisdictions and there are concerns that pandemic travel restrictions will mean this rule could disenfranchise many potential voters.
The review will also look at political financing, and the "balance between private and public funding sources", which could pave the way for further restrictions on donations, and more public funding of political parties.
Public funding for broadcast advertising during the election campaign is also up for review, as is the ban on election advertising on election day itself.
The panel will also look at the "security and resilience" of the electoral system. This includes the "flexibility to use emergency powers to conduct an election" - something that was tested during the Covid-19 outbreak, and the "risks of electoral manipulation and foreign interference", which was a topic of concern last Parliament after questions were raised about donations linked to organisations associated with the Chinese Communist Party.
Faafoi said the panel had been appointed with bipartisan support and will be chaired by Deborah Hart, who is currently chair of the Consumer Advocacy Council and the Holocaust Centre of New Zealand.
The other members are Dr Maria Bargh, Professor Andrew Geddis, Alice Mander, Robert Peden, and Dr Lara Greaves.
The terms of reference explicitly excluded looking at alternatives to the MMP voting system, whether to retain or ditch Māori electorate seats, whether New Zealand should re-establish an Upper House, and the role of the Head of State. The review would not look at increasing the number of MPs, aside from the specific question of whether an electorate-list ratio should be maintained.
The Panel will deliver its recommendations in November 2023, after the next election, which will be held under the current electoral rules. The Government said last year the review would take place in two parts. The first part would make targeted changes to electoral rules ahead of next year's election.
