The short answer to the MMP question is, I agree with everything Great Wonk Andrew Geddis said here. Change the List Vote threshold from 5 to 2.5 percent. LITFA* for by-election candidates, dual candidacy, order of List candidates, overhangs, and the ration of List to Electorate MPs.
* LITFA = Leave It The F*ck Alone. Status quo.
As an introduction for the scenic route, I consider that six seasons of MMP has proven fairly successful. New Zealand has enjoyed stable, predictable government, of both minority and majority hues. NZ has enjoyed an absence of coups in that time. Every government has lasted the constitutionally recognised three year term without imploding, which is more than you can say for some Developed World nation states (Canada, Belgium, Italy, Greece).
However, MMP has encountered one major flaw. There has been a failure to produce any new political representation in Parliament. Every single party since 1996 has either been an incumbent, or formed from the demagoguery of waka jumpers to secure a seat in the House for their new political vehicle (Greens and Progs from Alliance, Maori Party from Labour, Mana from the Maori Party). The only party to ever crack into Parliament from the outside was led by a former Parliamentarian, with Richard Prebble leading the Act Party into the Legislative Chamber at MMP's birth in 1996.
I consider the five percent threshold for representation primarily responsible for this outcome. Any new political movement is staring at a target of around 100,000 voters to get into Parliament, slightly less than the quota for calling a Citizens' Initiated Referendum. Compared with the insider knowledge and various advantages of the incumbent parties (for example, the Broadcasting Allocations for TV exposure), new political movements stand no chance to build their base. The hurdle is too damned high.
There are symptoms of this abyss. Since MMP's introduction, the fastest growing segment of the body politic has been the Enrolled Non Vote. Clearly, something in the machinery of proportional representation has fouled up to make this the case. Fully one quarter of the populace was disenfranchised by omission in last year's general election. This democratic deficit needs patching.
The original royal inquiry into the electoral system in 1986 recommended a four percent threshold. The rationale for this was to ensure nutjobs didn't hold the balance of power. I contend that this threshold hasn't prevented nutjobs from entering Parliament; Alamein Kopu, Gordon Copeland, John Banks and Richard Prosser, to name a few. Parliament has endured without damage. Indeed, the general electorate has if anything proven only too happy to chuck out parties who play silly buggers. RIP Alliance, Mauri Pacific, Progs.
The threshold for List representation in the Party Vote should be lowered to 2.5 percent. The lower threshold would eliminate the electorate seat exception which appears to screw the electoral scrum with dirty deals in Fortress Epsom and Ohariu Pa. Why should, as Graeme Edgeler said here, Epsom voters get more power than other electorates? It defies the convention of proportionality:
35. But while that was not in itself unfair, what was wrong was that it was the voters of Epsom who had the power to decide whether the 85,496 people who gave ACT their party vote were going to be represented.2.5 percent equates to 50,000 votes, around the same size as an electorate. So what if an electorate is spread out over the entire country? They should still have representation. You can trust the electorate to judge them the next time around on their merits.
OK, that's the threshold done and dusted. The last five points of contention are straight forward.
I have no worries about existing List MPs standing in by elections, or of candidates standing for both Electorate and List seats. If the Greens consider outspending the Act Party in the Mt Albert by election as money well spent, good for them. The party can choose its calculus for national exposure versus winning the seat. The public can read, write and execute the final say at the voting booth.
But don't expect them to be experts at the raw code. Giving voters the opportunity to rank List candidates is like Marxism; nice in theory but devastating in practice. MMP works with a Two Ticks front end. The punters don't have to know how to compute the Sainte-Laguë back end. Hell, even a political animal like me doesn't know how that formula works. But it does. Do not add undue complexity to this elegance, especially when the marginal utility of shuffling the List positions is three quarters of bugger all.
Overhangs and the balance of List to Electorate seats are part of the package, not bugs in the system. Do not muck with these settings.