Explainer: Coalition Agreements

November 22, 2023

It is common in New Zealand’s MMP system for a multiple political parties to need to enter into an arrangement to secure government. In order to form government, a political party must be able to demonstrate to the Governor-General that they have the confidence of House. Therefore, a party must be able to show they can get a majority of votes in a confidence motion, and to get a budget through parliament.

To do this, the secure governing agreements with minor parties. These are often referred to as ‘coalition agreements’, but not all agreements between parties are actually coalition agreements.  

Types of governing agreements

Governing agreements allow governments made up of a variety of political parties to act collectively. The Cabinet Manual specifically states that the decision to form government is political. There are no rules on the form they take, but the most common types of governing agreement to date have been coalition agreements and confidence and supply agreements.

Coalition agreements involve two or more parties forming a single government called a coalition government. The agreements will set out an overall government policy and ministerial appointments, both of which are agreed through negotiation between the parties. All parties to the agreement will typically have Ministers inside Cabinet, as well as possibly outside Cabinet.

In a coalition government, Ministers inside Cabinet will be bound by collective responsibility in respect of all government policy, which restricts their ability to speak out in accordance with party policy or the preferences of their voting base. This can be a significant electoral drawback for minor parties, however this can be offset by ‘agree to disagree’ clauses(see below).  

Notable coalition governments in New Zealand include the2017 Labour-New Zealand First coalition government (which also relied on a confidence and supply agreement with the Green Party) and the volatile 1996 National-New Zealand First coalition government, the first government under MMP.

Confidence and supply agreements are a looser arrangement. Under this kind of arrangement, a minor party will agree to vote in the House with the governing party on matters deemed to be matters of confidence in the Parliamentary Standing Orders and on matters of supply such as the annual budgets and other appropriations necessary to fund the government. If a governing party fails to maintain confidence and supply, it is vulnerable to being ousted from government by a vote of no confidence in the House.

Minor parties usually provide this assurance in exchange for policy concessions from the governing party and/or ministerial appointments. The latter may be positions inside or outside of Cabinet, but are usually outside of Cabinet. Ministers outside of Cabinet are only bound by collective responsibility in respect of their ministerial portfolios.

Confidence and supply agreements are a trade-off for minor parties. Being freed from collective responsibility on most matters means they have greater means of maintaining their party identity and the support of their voting base. However, this greater freedom can come with a diminished ongoing influence on wider policy due to lack of representation in Cabinet.

The majority of governments since the advent of MMP have been minority governments reliant on confidence and supply from minor parties. The Fifth National Government (2008 – 2017) did not form any coalitions  relying on confidence and supply agreements with minor parties throughout.

Minor parties have obtained several notable policy victories over the years through confidence and supply agreements. Examples include the repeal of the Foreshore and Seabed Act under the National/Maori Party agreement of 2011, and the Climate Change (Zero Carbon) Amendment Act under the 2017Labour-New Zealand First/Greens agreement.

‘Agree to disagree’ arrangements

Under both coalition agreements, and confidence and supply agreements, the Cabinet Manual allows parties to ‘agree to disagree’. These agreements allow for Ministers to depart from collective responsibility and speak as party members on certain issues agreed between the parties. The issues can be agreed upfront, or the parties can agree to determine relevant ‘agree to disagree’ issues on a case by case basis. The 2017 Labour-New Zealand First/Greens confidence and supply agreement contained an example of the latter.

What are the consequences for departing from a governing agreement?

Governing agreements and collective responsibility are not legally enforceable. The extent to which they are enforced is an inherently political decision.  

However, this does not mean that they can be breached with impunity. The agreements ensure that parties with often divergent policies can function together as a single unit. The decision of whether to break a governing agreement, by any party, is usually determined by the significance of the breach of the agreement and the public appetite for this breach. If this occurs, there is a risk of the government suffering a vote of no confidence in the House, with the usual result being another election.  

Astute politicians will be aware that the electorate does not like instability, and may judge parties involved in a collapsed government harshly. Accordingly, there is a significant incentive to ensure governing agreements remain substantially complied with.

The collapse of the National/New Zealand First coalition in1998 provides an illustrative example. The coalition had formed following the first MMP election in 1996, and relations between the two governing parties were fraught from the start. These issues culminated with National’s proposed sale of government shares in Wellington Airport, prompting New Zealand First leader Winston Peters and several New Zealand First members exiting Cabinet in protest.

This defiance of the coalition agreement and collective responsibility led to the collapse of the coalition government. Following this, National managed to govern for another year, with the support of minor parties helping to avert a no confidence vote. However, at the 1999 election, National was ousted from government by a Labour/Alliance coalition government, and New Zealand First lost almost half its seats, illustrating the potential pitfalls of departing from governing arrangements and collective responsibility.

To understand more about this issue, please contact Director Brigitte Morten

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