Confidence and supply

In a parliamentary democracy based on the Westminster system, confidence and supply are required for a government to hold power. A confidence and supply agreement is an agreement that a party or independent member of parliament will support the government in motions of confidence and appropriation (supply) votes by voting in favour or abstaining, while retaining the right to otherwise vote on conscience.

In most parliamentary democracies, members of a parliament can propose a Motion of Confidence or Motion of No Confidence in the government or executive. The results of such motions show how much support the government currently has in parliament. Should a motion of confidence fail, or a motion of no confidence pass, the government will usually either resign and allow other politicians to form a new government, or call an election.

Most democracies require an appropriation bill or something similar to be passed by parliament in order for a government to receive money to enact its policies. If an appropriation bill fails, the government loses control of the money supply, and is therefore virtually powerless. The failure of a supply bill thus has the same effect as the failure of a confidence motion. In early modern England, the withholding of funds was one of parliament's few ways of controlling the monarch.

Between 1977 and 1979, Jim Callaghan's Labour Party stayed in power thanks to a confidence and supply agreement with the Liberal Party, in a deal which became known as the Lib-Lab Pact. In return, the Labour Party agreed to modest policy concessions for the Liberal party.

Years later, Callaghan said that he regretted the agreement and had "doomed the Labour party."

John Key's National Party administration formed a minority government in 2008 thanks to a confidence and supply agreement with the ACT, United Future and the Maori Party. A similar arrangement in 2005 had led to Helen Clark's Labour Party forming a coalition government with the Progressive Party, with support on confidence and supply from New Zealand First and United Future.

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