“Labour is unlikely to benefit from the full representation rule, and so it wants it gone. Multiple parties have benefited in recent elections: the Māori Party (2014, 2020), ACT (2008) and New Zealand First (1999). In each case the party won a seat and got its full representation from the Party Vote.Seymour's list is incomplete: the Progressive Coalition (2002), United Future (2005) also gained full representation under this rule (as did ACT in 2005). And it made our Parliament a better, more representative place as a result.
Of course, ACT's opposition is driven by self-interest: they're a small party and they've benefited from the rule. But so is Labour's desire to eliminate it: they're a big party, and want to strangle any chance of political competitors rising up to challenge them (and in particular, nobble parties which oppose them). So we should look at it from first principles. What do we want from our electoral system? It's in the name: Proportional representation. The full representation rule helps ensure that. And that's why we need to keep it. As for the idea that lowering the threshold to 4% will compensate, firstly, the Electoral Commission's 2012 review is clear that it does not, and that average disproportionality would increase; and secondly, the 1986 Royal Commission recommended it with a 4% threshold. So Labour's proposal represents a rollback from what we were promised nearly 40 years ago.
(According to the Electoral Commission report, the 1986 Royal Commission also thought the one-seat rule was necessary for Māori representation. And its value on that front has been proven in this election. Which may be what saves it: Labour's Māori caucus are unlikely to want to have to explain to their voters why they have made it harder for them to get full representation, or be roadkill for a Māori Party whose only path to full representation would lie in rolling right over them).
The one-seat rule does lead to unfairness. It is unfair that the Māori Party gets full representation while the NZ First, TOP, and New Conservative parties, all of whom got more votes, do not. But that is not the fault of the one-seat rule, but of the threshold. And the way to remove that unfairness is to eliminate it entirely, and let voters, not politicians, choose who we are represented by.