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Political separation of the two islands was an issue in the 1860s. The more populous North Island was riven by war and political turmoil while the South Island was prospering, especially after gold was discovered (1861) at Gabriel's_Gully in Central Otago. The South Island grew very tired of financially supporting the North Island while receiving very little in return. The feeling was particularly bitter between Auckland and Otago where Dunedin journalist, Julius Vogel began a strong campaign to make the South Island completely independent. The matter was put to a vote in Parliament on September 19, 1865. Seventeen members voted for separation and 31 for unity, so New Zealand remained united. Vogel later became Prime Minister of a united New Zealand.

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.

British culture in New Zealand has been significantly influenced by Maori and other Polynesians. Scottish influences are strong, mainly in the South Island. In general, early immigrants from other parts of Europe and Asia, and World War II refugees (particularly the Dutch) were readily assimilated.

New Zealand has a strong party system in place. The first political party was founded in 1891, and its main rival was founded in 1909 — from that point until a change of electoral system in 1996, New Zealand had a two-party system in place. Today, New Zealand has a genuinely multi-party system, with eight parties currently represented in Parliament. Neither of the two largest parties has been able to govern without support from other groups since 1996, meaning that coalition government is common.

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.