This is a post for the Canadians. The Australians should already know about preferential voting. If any Australian wants to correct me on this, feel free. This is just how I perceived it when I was in Australia.
Preferential voting is where each voter can list out their 'preferred' representatives in order. For example, assume there is an election and a voter has a choice between John, Jack, and Mary. The voter may list out their preferences with Mary first, John second, and Jack third.
Determining the winner in a 'preferential voting' scheme is a simple process of elimination:
1. Tally up the number of 'first preference' votes for each candidate.
2. Eliminate the candidate with the lowest number of votes so far.
3. Redistribute those votes to the surviving candidates, based on preference.
4. Eliminate the candidate with the lowest number of votes so far.
5. Redistribute those votes to the surviving candidates, based on preference.
... repeat until only one candidate is left standing ...
So how does this produce good government?
Each candidate tends to recommend a 'preference ordering' that their supporters should follow. For example, Mary may recommend that her supporters vote Mary first, Jack second, John last. Similarly Jack may recommend that his supporters vote Jack first, Mary second, John last. In this case Mary and Jack are said to have "exchanged preferences". If Mary were to lose in the first round then her votes would go to Jack, and vice-versa. They only "exchange preferences" if their policy platforms are similar enough. And if they can't "exchange preferences", they may be willing to negotiate on their policy platforms until they can...
The advantages to this scheme are:
- Niche political parties are allowed to participate in pre-election debate, they can present their views, and you can vote for them. These niche parties often only have policies on a few specific issues, but those views need to be represented. Common examples are the environmentalists, socialists, liberalists, etc.
- Mainstream political parties try to "exchange preferences" with as many niche parties as possible. They do this by producing a complete and coherent "policy platform" with the widest possible appeal. Lunatic niche parties with completely unrealistic policies are just ignored.
- Mainstream political parties win most seats. You get a functional majority government, but their "policy platform" has been swayed by the niche parties. The party which 'wins' the election was, by definition, the party which could produce the optimal compromise between all viewpoints. You get governments which are very 'centrist'.
- Inidividual voters don't have to vote "strategically". They can just list out what they really prefer, which means you get a more accurate tally of what people want. And ultimately every single vote is counted, so there is less disillusionment.