A Royal Commission on the Electoral System was established in 1985 by the Fourth Labour Government, after the Labour Party had received more votes, yet won fewer seats than the National Party in both the 1978 and 1981 elections as a result of the existing first-past-the-post (FPP) system.

[4] A second binding referendum was held alongside the 1993 general election on 6 November 1993, asking voters to choose between changing to MMP and keeping the existing FPP system.

They were of the view that National had a hidden agenda to replace the proportional MMP system with the semi-proportional Supplementary Member (SM) system, which has been described by Labour Christchurch East MP Lianne Dalziel and Green co-leader Metiria Turei as "first-past-the-post in drag".

[6] In the referendum legislation it was announced by Amy Adams, MP for Selwyn and Chair of the Electoral Legislation Committee, that she did not believe the National Party would campaign in the referendum and instead suggested that "The whole purpose of this bill is for New Zealanders to make that decision"[7] and this view has been reaffirmed so far at National Party regional conferences.

On 20 October 2009, Justice Minister Simon Power announced that a referendum on the voting system would be held alongside the 2011 general election.

At the Select Committee stage, a $12,000 spending limit for unregistered promoters and a $300,000 spending limit for registered promoters was added in response to public consultation to "level the playing field", to "protect the integrity" of what is a constitutionally significant referendum, and to prevent wealthy individuals from influencing the outcome.

[10] This largely came from the original 1993 referendum legislation not having spending limits, allowing the anti-MMP Campaign for Better Government (CBG), which was backed by a large business lobby, to spend an estimated $1.5 million in advertising compared to the pro-MMP Electoral Reform Coalition's $300,000.

[11] The limits were also designed to match the new spending limits by third parties in general elections, which were introduced by the Electoral (Finance Reform and Advance Voting) Amendment Act 2010 that commenced at the same time as the Electoral Referendum Act on 1 January 2011.

The ACT Party proposed including a third question on whether to retain or remove the separate Maori seats (rejected due to a clause in the confidence and supply agreement between the National and Maori parties[12]) and to increase the registered promoter spending limit to $500,000 or $750,000.

The Labour and Green parties proposed holding the review of the MMP system regardless of the referendum results.

The options provided are: Simple Yes or No answers to this question have been avoided to reduce ambiguity – a problem that was encountered with the 2009 citizens-initiated referendum.

It was headed by three spokespeople: New Zealand Tertiary Education Union president Sandra Grey, chair of the Republican Movement of Aotearoa New Zealand Lewis Holden[18] and Dunedin writer and historian Philip Temple, and was supported by multiple people including former All Black captain Anton Oliver.

[19] The Green Party "welcomed" the referendum proposal, but argued for the questions to be written by an independent body,[20] and to have spending limits on the campaign.

It was headed as spokesperson by Wellington lawyer Jordan Williams, and supported by multiple people including former Crown Minister Michael Bassett, former chairman of Telecom (and main opponent of MMP in the 1993 referendum) Peter Shirtcliffe, and former Mayor of Wellington Kerry Prendergast.

Bob Harvey, former Mayor of Waitakere City, withdrew his support for the group on 3 July 2011 over allegations another founding member had white supremacist links.

[30] To prevent the delay of general election results, preliminary counts of the referendum results did not take place at polling places – instead the referendum ballot boxes were to be unsealed, inspected, packaged and sent to the Returning Officer of the electorate for an official count.