Warren Smart has analysed the recent performance of Australian and NZ universities in the three most prominent international university rankings (ARWU, QS, THE). There is a lot of detail there, not all of it depressing. It is going to be hard for NZ to keep being satisfied with “punching above its weight” in the face of lower income per student than just about anywhere we want to compare ourselves with. As a country, we may indeed have too many universities for them all to rank well internationally. But the good thing about NZ is that change can happen rapidly. So, please consider the policies of all parties in the areas of tertiary education, research, innovation, etc when voting in the general election on 20 September 2014.
Edit: the situation with NZ university rankings has been discussed quite widely recently. Some links: