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In October 1990, the National Party again formed the government, for the first of three, three-year terms. In 1996 New Zealand elected its first MMP Parliament. The system was designed to increase representation of smaller parties in Parliament and appears to have done so. Since 1996, neither the National nor the Labour Party has had an absolute majority in Parliament, and for all but one of those years, the government has been a minority one. The current Labour government followed its November 1999 election success by outpolling National 41 per cent to 21 per cent in the July 2002 general election. Labour formed a coalition, minority government with Jim Anderton's Progressive Coalition, a left-wing party (subsequently named "Progressive Party") which holds two seats in Parliament.

New Zealand comprises two main islands and a number of smaller islands. The South Island is the largest land mass, and is divided along its length by the Southern Alps, the highest peak of which is Mount Cook, at 3754 metres. There are 18 peaks of more than 3000 metres in the South Island. The North Island is less mountainous than the South, but is marked by volcanism. The tallest North Island mountain, Mount Ruapehu (2797 metres), is an active cone volcano.

Partly because of its geographical isolation from neighbouring countries, and partly because of the number and location of numerous uninhabited islands belonging to it, New Zealand's Exclusive economic zone of marine resources was the world's fifth largest, at 4.2 million square kilometres in the year 2000 (according to New Zealand's National Institute of Water and Atmospheric Research).

During the late 1980s, the New Zealand Government sold a number of major trading enterprises, including its telecommunications company, railway network, a number of radio stations and two financial institutions in a series of asset sales. Although the New Zealand Government continues to own a number of significant businesses, collectively known as State-Owned Enterprises (SOEs), they are operated through arms-length shareholding arrangements as stand alone businesses that are required to operate profitably, just like any privately owned enterprise. Various items of protective legislation establish business objectives yet prevent shareholding governments from having influence over day to day operations of the business.

New Zealand's head of state is the Queen of New Zealand, currently Elizabeth II. The New Zealand monarchy has been distinct from the British monarchy since the New Zealand Royal Titles Act of 1953, and all Elizabeth II's official business in New Zealand is conducted in the name of the Queen of New Zealand, not the Queen of the United Kingdom. In practice, the functions of the monarchy are conducted by a Governor-General, appointed on the recommendation of the Prime Minister.

Sporting and outdoor activities still play a significant part in the recreation of New Zealanders. Participation in a sport, rather than mere spectating, is considered a worthy pursuit. Team sports and sporting abilities are generally held in high regard, with top-performing players often becoming celebrities. However, New Zealanders can often be scathing when national sports teams and athletes lose.

New Zealand has no formal, written constitution; the constitutional framework consists of a mixture of various documents (including certain acts of the United Kingdom and New Zealand Parliaments) and constitutional conventions. Most constitutional provisions became consolidated into the Constitution Act 1986. There have, at times, been proposals for a formal constitution, but there have not yet been any serious moves to adopt one.

New Zealand functions as a constitutional monarchy with a parliamentary system of government. The basic system is closely patterned on that of the United Kingdom, although a number of significant modifications have been made. The head of state is Queen Elizabeth II, but actual government is conducted by a Prime Minister and Cabinet drawn from an elected Parliament.

While New Zealand men often take pride in being 'strong, silent types', this attitude may have a downside in contributing to New Zealand having one of the highest suicide rates among young males in the industrialised world.

New Zealand is a unitary state rather than a federation — regions are created by the authority of the central government, rather than the central government being created by the authority of the regions. Local government in New Zealand has only the powers conferred upon it by Parliament. These powers have traditionally been distinctly fewer than in some other countries. For example, police and education are run by central government, while the provision of low-cost housing is optional for local councils. Many of them used to control ports and gas and electricity supply, but nearly all of that was privatised in the late 20th century.

The South Island contained most of the white population until around 1900 when the North Island again took the lead and has supported an ever greater majority of the country's total population through the 20th century and into the 21st.

New Zealand is world-famous among glider pilots for hosting the 1995 Gliding World Cup at Omarama in North Otago near the centre of the South Island. The Southern Alps are known for the excellent wave soaring conditions. Steve Fossett has recently tried to beat the world gliding altitude record there.

While New Zealand, like Australia, prides itself as being more egalitarian than Britain, there is a degree of inverse snobbery known as the 'Tall Poppy Syndrome', in which people who are seen as (over)ambitious and having ideas above their station are cut down to size. This is also known as the 'Great Kiwi Clobbering Machine', and has prompted many of the country's best and brightest to emigrate.

Immigration policy in New Zealand has often been controversial, with some politicians claiming that the pace of immigration has been too rapid for New Zealand to absorb, and that recent immigrants are having trouble adapting to the New Zealand society. This position is seen by others as a cynical appeal to xenophobic sentiment in order to gain votes near election time, and these views are not widely supported by the general population.

New Zealand has a population of slightly over 4 million. About 80% of the population is of European descent. Maori people are the second largest ethnic group (14.7%). Between the 1996 and 2001 censuses, the number of people of Asian origin (6.6%) overtook that of Pacific Islanders (6.5%) (note that the census allowed multiple ethnic affiliations).