Actually the main problem with the New Zealand parliamentary system is the short three year term. The two main parties always get 30-40% chunks of the vote apiece, and from there it is generally just a matter of the largest winner cobbling together a coalition out of agreeable minority parties, of which there are always an ample supply. And, as every cabinet since MMP has been a coalition cabinet, all of the parties have gained extensive experience in how to make these arrangements work. Sticking points are hashed out in the post-election night negotiations and, as far as I am aware, no coalitions have ever fallen apart or gotten into serious squabbling later on. It helps that the minor parties are all pretty pragmatic about their relative lack of negotiating power, and used to trading horses.

It's the short term that really hamstrings the ability of parliament to go through a thorough, protracted legislative review process and pass high-quality new acts. A lot of legislation-in-progress gets shelved as election year approaches, and when the new term rolls round, and the new parliament gets settled in, conditions have changed and the process needs to be started afresh. And legislation that does get passed is often rushed and quickly becomes obvious that as needing revision. The result is in my understanding a recurrent self-reinforcing cycle of low-quality legislation.