The Fourth Labour Government of New Zealand
governed New Zealand from 26 July 1984 to 2 November 1990 (the period up to 8 August 1989 is also called the Lange Government). It was the first
Labour government to win a second consecutive term since the
First Labour Government of 1935 to 1949. The policy agenda of the Fourth Labour Government differed significantly from that of previous Labour governments: it enacted major social reforms (such as legalising
homosexual relations) and economic reforms (including
corporatisation of state services and
reform of the tax system).
The economic reforms became known as "
Rogernomics", after Finance Minister
Roger Douglas
Sir Roger Owen Douglas (born 5 December 1937) is a retired New Zealand politician, economist and accountant who served as a minister in two Labour governments. He is most recognised for his key involvement in New Zealand's radical economic rest ...
. According to one political scientist:
The Labour government also enacted
nuclear-free legislation, which led to the United States suspending its treaty obligations to New Zealand under the
ANZUS
The Australia, New Zealand, United States Security Treaty (ANZUS or ANZUS Treaty) is a collective security agreement between Australia, New Zealand, and the United States that was signed in 1951, and from which New Zealand has been partially su ...
alliance.
David Lange
David Russell Lange ( ; 4 August 1942 – 13 August 2005) was a New Zealand politician who served as the 32nd prime minister of New Zealand from 1984 to 1989. A member of the New Zealand Labour Party, Lange was also the Minister of Education ...
led the government for most of its two three-year terms in office. Lange and Douglas had a falling-out that divided the party. The government suffered a defeat at the
1990 general election, but the
incoming National government retained most of the reforms.
Significant policies
Economic
*A range of economic reforms collectively known as
Rogernomics.
These included:
**Floating the New Zealand dollar.
**Removing all
agricultural subsidies
An agricultural subsidy (also called an agricultural incentive) is a government incentive paid to agribusinesses, agricultural organizations and farms to supplement their income, manage the supply of agricultural products, and influence the ...
.
**Introducing GST (
Goods and Services Tax).
**New banks were allowed.
**Reducing income and company tax.
**Removing controls on
foreign exchange
The foreign exchange market (forex, FX, or currency market) is a global decentralized or over-the-counter (OTC) market for the trading of currencies. This market determines foreign exchange rates for every currency. By trading volume, it i ...
.
**Abolishing or reducing import tariffs.
**Corporatising many
State owned enterprises such as the
Post Office
A post office is a public facility and a retailer that provides mail services, such as accepting letter (message), letters and parcel (package), parcels, providing post office boxes, and selling postage stamps, packaging, and stationery. Post o ...
,
Telecom and
Air New Zealand
Air New Zealand Limited () is the flag carrier of New Zealand. Based in Auckland, the airline operates scheduled passenger flights to 20 domestic and 28 international destinations in 18 countries, primarily within the Pacific Rim. The airline h ...
to be more like private businesses. Some of these were later privatised.
**Disestablishing the
NZ Forest Service and sold the forests.
**Abolishing
price controls
Price controls are restrictions set in place and enforced by governments, on the prices that can be charged for goods and services in a market. The intent behind implementing such controls can stem from the desire to maintain affordability of go ...
and
interest rate
An interest rate is the amount of interest due per period, as a proportion of the amount lent, deposited, or borrowed (called the principal sum). The total interest on an amount lent or borrowed depends on the principal sum, the interest rate, ...
control.
**
Privatised
Privatization (rendered privatisation in British English) can mean several different things, most commonly referring to moving something from the public sector into the private sector. It is also sometimes used as a synonym for deregulation wh ...
state assets, such as
New Zealand Steel
New Zealand Steel Limited is the owner of the Glenbrook Steel Mill, a steel mill located 40 kilometres south of Auckland, in Glenbrook, New Zealand. The mill was constructed in 1968 and began producing steel products in 1969. Currently, the ...
.
**Enabling the
Reserve Bank
A central bank, reserve bank, national bank, or monetary authority is an institution that manages the monetary policy of a country or monetary union. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the mone ...
to autonomously pursue an inflation target.
**Improving the reporting and accountability for government expenditure (
Public Finance Act 1989).
Foreign policy
The government's most notable foreign policy initiative concerned nuclear weapons and the
ANZUS
The Australia, New Zealand, United States Security Treaty (ANZUS or ANZUS Treaty) is a collective security agreement between Australia, New Zealand, and the United States that was signed in 1951, and from which New Zealand has been partially su ...
alliance. Many New Zealanders (especially within the Labour Party) wanted to make New Zealand a
nuclear-free zone
A nuclear-free zone is an area in which nuclear weapons and nuclear power plants are banned. The specific ramifications of these depend on the locale in question, but are generally distinct from nuclear-weapon-free zones, in that the latter only b ...
. An opinion poll conducted by the Defence Committee showed that 92% of the population opposed the presence of nuclear weapons entering New Zealand. However this would ultimately require the banning of all American warships from entering New Zealand waters as it was US policy to 'neither confirm nor deny' whether individual ships were nuclear armed. The warships had been visiting New Zealand as part of the ANZUS alliance, and most people hoped that the alliance could be preserved even if the nuclear ban took effect. The issue came to a head shortly after the 1984 election, as a proposed visit by the
USS Buchanan was on the cards. Lange announced that the Buchanan would not be welcome, and the US suspended its treaty obligations to New Zealand under the ANZUS alliance. The issue became a ''
cause célèbre
A ( , ; pl. ''causes célèbres'', pronounced like the singular) is an issue or incident arousing widespread controversy, outside campaigning, and heated public debate. The term is sometimes used positively for celebrated legal cases for th ...
'' in New Zealand, perhaps primarily because small countries rarely stand up to larger and more powerful countries in such a way. In America, those on the right called for trade sanctions against New Zealand while those on the left idealised the country. New Zealand's diplomatic relations with America have never returned to their pre-1984 status, although the nuclear issue is becoming less important.
The government also reinstated a diplomatic representative resident in India (Muldoon had closed the
High Commission there) and appointed
Edmund Hillary
Sir Edmund Percival Hillary (20 July 1919 – 11 January 2008) was a New Zealand mountaineering, mountaineer, explorer, and philanthropist. On 29 May 1953, Hillary and Sherpa people, Sherpa mountaineer Tenzing Norgay became the Timeline of M ...
to the post.
Defence
* In 1989, New Zealand withdraws all forces of the 1st Battalion, Royal New Zealand Infantry Regiment from Dieppe Barracks,
Singapore
Singapore, officially the Republic of Singapore, is an island country and city-state in Southeast Asia. The country's territory comprises one main island, 63 satellite islands and islets, and one outlying islet. It is about one degree ...
.
Constitutional
* Created the
Royal Commission on the Electoral System (1985).
*
Constitution Act 1986 – codified important constitutional conventions in one enactment.
*
New Zealand Bill of Rights Act 1990 – enumerated civil and political rights.
The government's constitutional reforms were primarily the work of
Geoffrey Palmer Geoffrey Palmer may refer to:
Politicians
*Sir Geoffrey Palmer, 1st Baronet (1598–1670), English lawyer and politician
*Sir Geoffrey Palmer, 3rd Baronet (1655–1732), English politician, member of parliament (MP) for Leicestershire
*Geoffrey Pal ...
, a constitutional lawyer who for many years had been concerned about New Zealand's lack of a written constitution and the 'unbridled power' of the executive. These concerns came to the fore when the Government was elected to office, and led to the Official Committee on Constitutional Reform, which reported back to Parliament in February 1986 and led to the 1986 Constitution Act. Ironically, Palmer's government would provide a key example of the executive abusing its power, as one faction in cabinet exerted power disproportionate to its numbers (see Division over Rogernomics, below). Palmer's plan for a written constitution and entrenched
Bill of Rights
A bill of rights, sometimes called a declaration of rights or a charter of rights, is a list of the most important rights to the citizens of a country. The purpose is to protect those rights against infringement from public officials and pri ...
was derailed partly by public indifference but mostly by opposition from Māori who believed that the
Treaty of Waitangi
The Treaty of Waitangi (), sometimes referred to as ''Te Tiriti'', is a document of central importance to the history of New Zealand, Constitution of New Zealand, its constitution, and its national mythos. It has played a major role in the tr ...
would be sidelined in the process.
Local government
Reformed local government in 1989, amalgamating 850 local bodies into 86 authorities.
Social policy
Justice
* Legalised sex between males over the age of 16 (
Homosexual Law Reform).
* Passed the
Children, Young Persons, and Their Families Act 1989, introducing Family Group Conferences.
* The death penalty was fully abolished.
* Rape within marriage was criminalised.
* Road safety standards were improved through tighter law enforcement of substance-affected drivers.
Social development and welfare
* Spending on education and health was significantly increased from 1985/86 to 1988/89, by 24% and 9.6% respectively.
* Disability benefits were increased, with the 1985 budget raising the Handicapped Child's Allowance by 31% and the disability allowance by 80%. A special earnings exemption of $20 per week was also introduced for severely disabled beneficiaries as an incentive to personal effort.
* A new family support benefit (introduced as the family care benefit in 1984) raised the incomes of some poor families.
* The Social Assistance programme was reformed (1986) with the introduction of a guaranteed minimum family benefit. This fixed an income floor above the statutory minimum wage for persons with dependant children in full-time employment. Known as the Guaranteed Minimum Family Income, it guaranteed working families roughly 80% of the average post-tax wage, although its impact on participation rates was limited by rising unemployment and high effective marginal tax rates.
[Welfare and Work in the Open Economy, Volume 2: Diverse Responses to Common Challenges, edited by Fritz W. Scharpf and Vivian A. Schmidt]
* The abatement level for most benefits was raised to make it easier for social security beneficiaries to enter the workforce without fear of losing their benefits until they were more established.
* Social assistance programmes were expanded and consolidated.
* A Ministry of Women's Affairs (now the
Ministry for Women) was established (1986) to promote equality for women; the first minister was
Ann Hercus.
* The Parental Leave and Employment Protection Act 1987 extended coverage to women and their partners or spouses to take unpaid leave from their employment.
* Skills training programme were continuously developed, as characterised by the Access programme, which trained 60,000 people a year by 1990.
* The 1985 Tax Reform Package reduced the tax burden for low and middle-income households and left most New Zealanders better off.
* The 1985 Budget made the benefits system fairer by introducing more generous income exemption limits and benefit abatement. Although benefits became taxable, the budget also gave price compensation to beneficiaries for the introduction of GST and included them in Family Support payments. Altogether, these measures meant that beneficiaries were actually better off on the introduction of GST and this in turn reduced inequalities.
* Liberalised
immigration to New Zealand
Immigration is the international movement of people to a destination country of which they are not usual residents or where they do not possess nationality in order to settle as permanent residents. Commuters, tourists, and other short- ...
in 1987, particularly for skilled migrants.
* The government set out to encourage the Broadcasting Corporation to provide appropriate facilities and to recruit and train sufficient staff already fluent in the use of Maori and Pacific Island languages. TVNZ's commitment to the development and strengthening of an independent and indigenous production presence on screen was demonstrated "in the appointment of a Commissioning Editor to pursue an increase in the acquisition of independent productions, and in the setting up of a Maori Programmes Department whose Head had a special involvement in establishing a training scheme for Maori broadcasters." Similar encouragement was also provided for Pacific Island broadcasting with Tagata Pasifika first screening in 1987 with Pacific Island staff involved in its production.
* Accommodation Benefit was increased (1985).
* Superannuation and other benefits were increased (1984).
* Universal payment of the Family Benefit was abolished to target families most in need.
* Family Benefit capitalisation limits for first-home seekers were increased (1985).
* Changes were made to National Superannuation (1988) by ensuring that "all new superannuitants would be paid the same rate, regardless of age of spouse".
* Increased assistance was provided to veteran pensioners and single superannuitants (1990).
* Annual indexation of war-related pensions, social security benefits, and National Superannuation was restored due to falling inflation (1988).
* A Special Accommodation Benefit for low-income earners struggling with rents was introduced (1985).
* Tax concessions were introduced for low-income families within the Guaranteed Family Income and Family Support schemes (1986).
* Income limits for Family Benefit capitalisation were increased for modest-income earners (1985).
* New policies were developed to address the needs of women and senior citizens, together with general diverse housing needs (1989).
Industrial relations
* The 1987 Labour Relations Act was passed with the intention of increasing unions' relative power while at the same time decentralising bargaining to the 'enterprise' (firm) level. Unions were bolstered by the passing of this legislation.
* The closed shop for private sector unions was reinstated.
* Social service spending for public sector unions was expanded.
Education
* In tertiary education, the Fourth Labour Government introduced charges equalling 10 percent of tuition costs, although students on low incomes were compensated with targeted allowances.
* Public funding of day care was increased substantially and maternity and paternity leave were extended (feminists inside and outside the New Zealand Labour Party helped bring about these developments).
* Improvements in education were made, as demonstrated by the expansion and strengthening of early childhood education, significant increases of teaching staff at kindergarten, enhancement of teacher education, attention to special education and support for Taha Maori, and funding for a measure which allowed for the universalisation of three year integrated childcare and kindergarten teacher training.
* The Education Amendment (No.2) Act 1987 amended the 1964 Education Act so that persons with special educational needs (whether by reason of disability or otherwise)had the same rights to enrol and receive education at institutions established under the Act as persons without such needs.
* Multi-cultural education was encouraged via increased levels of recruitment of teachers from minority cultures, and this policy resulted in a considerable increase in the number of applicants accepted for training as well as in more minority teachers for primary, secondary, and multicultural schools.
* Access to extramural study was significantly expanded.
* The fee for overseas students was reduced from $1,500 to $1,000 in 1984 and then abolished in 1987.
* Vocational opportunities for school leavers were significantly expanded, as characterised by the merging of various vocational programmes into a single Training Assistance Programme (1985).
* Early childhood teacher training was extended.
* The University Entrance (UE) examination was abolished, which had a far-reaching significance for the education of students in the senior forms of secondary schools. "Instead of being seen solely as preparation for university study, the courses leading to Sixth Form Certificate (SFC) provided a wider and more general education. This award more satisfactorily accommodated the diverse needs of students in Form 6, and thus recognised the changing, broader composition of the student population at that level".
* In 1985, the National Film Library initiated "a video cassette loan service alongside its traditional 16 mm film services.* This measure provided schools with "access to the wide range of programmes being produced in video and television format".
* Funding was allocated to early childhood education, which allowed for the universalisation of three-year integrated childcare and kindergarten teacher training.
* The Education Amendment (No.2) Act 1987 altered the 1964 Education Act so that persons with special educational needs (whether by reason of disability or otherwise) had the same rights to enrol and receive education at institutions established under the Act as persons without such needs.
* Four-minute reading and reading recovery, the teaching procedure which reduces the incidence of reading failure among 6-year-old children, was extended to a further 200 schools between 1985 and 1986.
* Five new Kura Kaupapa schools were commissioned as a means of raising Maori educational achievement (1990).
* Spending on full-time primary, secondary, polytechnic and area sector school teaching/tutoring/teachers college positions was increased (1987).
* Spending on preschool education was increased (1989).
* Extra funding was provided for the mainstreaming of special education students (1990).
Health
* The Nurses Amendment Act (1990) ensured that midwives regained autonomy as independent practitioners and provided them with the same levels of pay as doctors who practised obstetrics.
* The government subsidy of general practitioner care was increased in 1988 and again in 1990 for the elderly, children, and the chronically ill. From September 1990 onwards, practitioners were provided with the option of joining "a contract scheme which offered an inflation-adjusted subsidy for all consultations in return for limits on user charges and the provision of patient information for a national database".
[International Health Care Reform by Colleen Flood] This scheme was abandoned by the Fourth National Government
* Spending on the General Medical Services and immunisation benefits was increased (1985).
Housing
* The Homestart programme (introduced in 1986) gave families and individuals on low to middle incomes a first home start with subsidised assistance to bridge the deposit gap.
* The housing package in the November 1984 budget introduced flexible loans levels which reflected individual family circumstances and regional differences in house prices thus granting access to mortgage finance on a fairer basis.
* The housing package in the November 1984 budget introduced flexible loans levels "reflecting individual family circumstances and regional differences in house prices thus granting access to mortgage finance on a fairer basis".
* Changes to loan and formal experience requirements for settlement and other land purchase made it easier for young and new farmers to acquire land.
* A pilot fund was put aside for financing housing projects aimed to help low-income women and families.
* Encouragement was given to local authorities to purchase existing homes for modernisation and re-sale. Purchase and rehabilitation loans authorised for local authorities increased by over 3465% between 1985–7.
* The government proposed to lodge bond money with an independent authority which would invest it in authorised institutions rather than it being held by landlords, and claimed that: "Interest on this money will be used to cover the costs of the tenancy tribunal." The subsequent Residential Tenancies Act 1986 "legislated for all interest paid out of the bond fund to be used in payment of all salaries, wages, fees, allowances, expenses, costs, and disbursements payable to the Tenancy Tribunal".
* The Residential Tenancies Act (1986) provided new guarantees for tenants.
* The income tax abatement scheme for interest payments on first homes was abolished (1984).
* Income-related mortgage repayments were introduced (1984).
* Expenditure was increased for Maori Affairs department lending, Housing Corporation loans, refinancing of home loans (in extreme difficulty), and the construction of state rental units (1984).
* A new housing package was introduced, designed to target housing assistance to those in greatest need (1984).
* More flexible Housing Corporation lending was introduced, with interest rates adjusted to take into account a person's ability to pay (1985).
* Increased expenditure was allocated to increasing the construction or acquisition of the Housing Corporation's rental units (1985).
* Family Benefit capitalisation for modest-income first-home seekers was increased (1985).
* A Special Accommodation Benefit for wage and salary earners having problems with paying their rent was introduced (1985).
* The Rent Limitation Regulations were abolished to encourage new investment in the private rental sector (1985).
* Income-related rates and rents were introduced (1985).
* The Old People's Home Regulations (1987) required that bathrooms, kitchens, sanitary fittings and laundries in Old People's Homes have an approved sink with an adequate supply of hot and cold water.
* Expenditure was allocated for New Zealanders unable to find accommodation in the private sector, together with expenditure for state housing rental stock (1989).
* The special lending programme was expanded to help community and welfare organisations to provide support housing (1989).
Institutional reform
* The Department of Conservation was established (1987) to "…manage endangered, vulnerable, rare, and protected plants, animals, and ecosystems to ensure their long term viability".
* A Ministry of Consumer Affairs was established (1986) "to advise the Government on matters affecting consumers; to promote and participate in the review of consumer related legislation, policies and programmes; to promote awareness among consumers and the business sector of their rights and obligations in the market place; and to support and co-ordinate non-Government involvement in consumer issues".
* Government departments were required to meet the "demand for the placement of people with disabilities in the Public Service." Sixty places were "allocated for the Employment of Disabled Persons scheme" and by the end of the government's first term, 57 had been filled.
* The government introduced ‘A New Deal in Training and Employment Opportunities’ (1985) which represented a shift "to an active longer term labour market approach, centred on training and skill development and integration into the workforce".
* Government departments were required to meet the "demand for the placement of people with disabilities in the Public Service." Sixty places were "allocated for the Employment of Disabled Persons scheme" and by the end of the Fifth labour Government's first term, fifty-seven had been filled.
* In 1988/89, OSH (Occupational Safety and Health) sought to emphasise health in the workplace by "enforcing compliance with the standards established by regulation or in Codes of Practice."
* The 1988 State Sector Act and the 1989 Public Finance Act established private sector-style wage and work disciplines in the traditional welfare state and in those ‘non-commercial’ agencies still overseen by the State Services Commission, leading to "more customer-friendly service delivery in many instances".
Treaty of Waitangi and Maori policy
* Enabling the
Waitangi Tribunal
The Waitangi Tribunal (Māori: ''Te Rōpū Whakamana i te Tiriti o Waitangi'') is a New Zealand permanent commission of inquiry established under the Treaty of Waitangi Act 1975. It is charged with investigating and making recommendations on c ...
to investigate
Treaty claims dating back to 1840 (
Treaty of Waitangi Amendment Act 1985).
* Making
Te Reo Māori (the Māori language) an official language of New Zealand, with the
Māori Language Act. The act also established the Maori Language Commission, which amongst its objectives include the maintenance and promotion of the Māori language.
* Responded to the 1987 ''
New Zealand Maori Council v Attorney-General'' ruling of the Court of Appeal by setting out its own
principles of the Treaty of Waitangi in 1989.
* The Papakainga housing scheme was introduced, which enabled people to borrow money to construct or purchase housing on Maori land in multiple ownership.
* The Maori attestation scheme, He Tohu Matauranga, was extended to the primary service (1988). The attestation process was administered by the trustees of a marae. It confirmed the candidate's fluency in the Māori language and understanding of Maori culture. Applicants for primary teacher training could use attestation as an additional criterion for entry to a three-year training course. As a result, "Maori enrolments at colleges of education increased by 175 (41%) from 1988 to 1989".
* The Runanga Iwi Act of 1990 empowered tribal authorities to deliver government programmes. It was repealed by the incoming National government.
* The
Māori Loan Affair The Māori loan affair (or Hawaiian loans affair) of 1986 and 1987 in New Zealand was an unauthorised attempt by the Department of Māori Affairs (today called Te Puni Kōkiri) to raise money overseas for Māori development. The affair was first rai ...
(about a proposed unauthorised overseas loan) was exposed by
Winston Peters
Winston Raymond Peters (born 11 April 1945) is a New Zealand politician. He has led the political party New Zealand First since he founded it in 1993, and since November 2023 has served as the 25th Minister of Foreign Affairs (New Zealand), ...
on 16 December 1986, and continued into January and February 1987.
Environmental policy
The Fourth Labour Government made significant reforms to resource management, conservation, planning and mining legislation and local government as well as the state sector. Significant new legislation included:
* The
Environment Act 1986, which created the
Ministry for the Environment, and,
* The
Conservation Act 1987, which created the
Department of Conservation.
Geoffrey Palmer Geoffrey Palmer may refer to:
Politicians
*Sir Geoffrey Palmer, 1st Baronet (1598–1670), English lawyer and politician
*Sir Geoffrey Palmer, 3rd Baronet (1655–1732), English politician, member of parliament (MP) for Leicestershire
*Geoffrey Pal ...
initiated the Resource Management Law Reform process which later resulted in the enactment of the
Resource Management Act 1991
The Resource Management Act (RMA) passed in 1991 in New Zealand is a significant, and at times, controversial Act of Parliament. The RMA promotes the sustainable management of natural and physical resources such as land, air and water. New Zea ...
and the
Crown Minerals Act 1991, after Labour lost office in the 1990 election.
In 1988, the Fourth Labour Government initiated the first work programme for developing policy for climate change. This was in response to the establishment of the
Intergovernmental Panel on Climate Change
The Intergovernmental Panel on Climate Change (IPCC) is an intergovernmental body of the United Nations. Its job is to "provide governments at all levels with scientific information that they can use to develop climate policies". The World Met ...
. The policy programme was coordinated between agencies by the Ministry of the Environment.
Formation
The fourth Labour government was brought into office by a
landslide victory
A landslide victory is an election result in which the winning Candidate#Candidates in elections, candidate or political party, party achieves a decisive victory by an overwhelming margin, securing a very large majority of votes or seats far beyo ...
in the
1984 election. This was a snap election called by Prime Minister
Robert Muldoon
Sir Robert David Muldoon (; 25 September 19215 August 1992) was a New Zealand politician who served as the 31st prime minister of New Zealand, from 1975 to 1984, while leader of the National Party. Departing from National Party convention, Mu ...
after he lost confidence in his ability to command a majority of Parliament. The very short lead-up time to the election meant that Labour had no time to put together a formal manifesto, and this gave it licence to enact many policies which it had not told voters about before the election. Muldoon was extremely unpopular by this time, and most voters had become disillusioned with his economic policies, so it is entirely likely that Labour would have won this election even if they had announced their programme in advance. There was also a major run on the New Zealand Dollar caused by the
constitutional crisis
In political science, a constitutional crisis is a problem or conflict in the function of a government that the constitution, political constitution or other fundamental governing law is perceived to be unable to resolve. There are several variat ...
following the election, when outgoing Prime Minister Robert Muldoon refused to devalue the New Zealand dollar.
The 1987 election
Although the government gained one seat, two extra seats had been created since the previous election and its majority remained unchanged at 17. Its share of the vote rose from 43% in 1984 to 48%, although voter turnout was down slightly. It had lost votes from traditional strongholds but gained them in formerly National-leaning seats. According to Lange, this alerted him to the fact that the Labour Party was drifting away from its traditional support base. He was particularly alarmed that Labour had nearly won the wealthy seat of
Remuera
Remuera is an affluent suburb in Auckland, New Zealand. It is located four kilometres southeast of the city centre. Remuera is characterised by many large houses, often Edwardian era, Edwardian or mid 20th century. A prime example of a "leafy ...
, traditionally a National stronghold. Public support of the government's stand on the
ANZUS
The Australia, New Zealand, United States Security Treaty (ANZUS or ANZUS Treaty) is a collective security agreement between Australia, New Zealand, and the United States that was signed in 1951, and from which New Zealand has been partially su ...
issue probably also won it votes.
Despite internal divisions, the government managed to maintain a united front before and during the 1987 election. On election night, Lange raised Douglas' hand in a boxing-style victory pose, to convey unity.
However divisions had already emerged in January and February 1987 over the
Māori loan affair The Māori loan affair (or Hawaiian loans affair) of 1986 and 1987 in New Zealand was an unauthorised attempt by the Department of Māori Affairs (today called Te Puni Kōkiri) to raise money overseas for Māori development. The affair was first rai ...
, with only two other ministers supporting the proposal of Lange and Palmer that
Koro Wētere
Koro Tainui Wētere (22 June 1935 – 23 June 2018) was a New Zealand politician. He was an MP from 1969 to 1996, representing the Labour Party. He served as Minister of Māori Affairs in the Fourth Labour Government (1984–1990).
Biograph ...
should resign as
Minister of Maori Affairs and from his seat in Parliament, with a consequent election-year by-election.
Division over Rogernomics
The
Labour Party was founded on socialist principles and traditionally favoured state regulation of the economy and strong support for disadvantaged members of society. The
First Labour Government made major
Keynesian
Keynesian economics ( ; sometimes Keynesianism, named after British economist John Maynard Keynes) are the various macroeconomic theories and models of how aggregate demand (total spending in the economy) strongly influences economic output an ...
reforms along these lines, and subsequent governments continued this system. By the 1970s, the system of regulation, protectionism and high taxes was no longer functioning properly, and required ever more regulation to stabilise it. Meanwhile, the Labour Party, once dominated by working-class and trade unionists, had attracted many middle-class people with its
liberal social and independent foreign policies. These new members were interested in international issues such as the
apartheid
Apartheid ( , especially South African English: , ; , ) was a system of institutionalised racial segregation that existed in South Africa and South West Africa (now Namibia) from 1948 to the early 1990s. It was characterised by an ...
system in
South Africa
South Africa, officially the Republic of South Africa (RSA), is the Southern Africa, southernmost country in Africa. Its Provinces of South Africa, nine provinces are bounded to the south by of coastline that stretches along the Atlantic O ...
and nuclear weapons, and domestic '
identity politics
Identity politics is politics based on a particular identity, such as ethnicity, Race (human categorization), race, nationality, religion, Religious denomination, denomination, gender, sexual orientation, Socioeconomic status, social background ...
' issues such as the
Treaty of Waitangi
The Treaty of Waitangi (), sometimes referred to as ''Te Tiriti'', is a document of central importance to the history of New Zealand, Constitution of New Zealand, its constitution, and its national mythos. It has played a major role in the tr ...
and feminism. This group held a very wide range of economic views, but the majority had little interest in or knowledge of economics.
When the Fourth Labour government took office, most members accepted the need for some economic reform.
Finance Minister
A ministry of finance is a ministry or other government agency in charge of government finance, fiscal policy, and financial regulation. It is headed by a finance minister, an executive or cabinet position .
A ministry of finance's portfoli ...
Roger Douglas
Sir Roger Owen Douglas (born 5 December 1937) is a retired New Zealand politician, economist and accountant who served as a minister in two Labour governments. He is most recognised for his key involvement in New Zealand's radical economic rest ...
and his supporters felt that a complete overhaul of the New Zealand economic system was required. Initially most of the government supported this, although a number of traditionalists were already suspicious of Douglas. Gradually more and more MPs, including
Prime Minister
A prime minister or chief of cabinet is the head of the cabinet and the leader of the ministers in the executive branch of government, often in a parliamentary or semi-presidential system. A prime minister is not the head of state, but r ...
David Lange
David Russell Lange ( ; 4 August 1942 – 13 August 2005) was a New Zealand politician who served as the 32nd prime minister of New Zealand from 1984 to 1989. A member of the New Zealand Labour Party, Lange was also the Minister of Education ...
became alarmed at the extent and speed of the reforms. Those in the government who wanted to slow or stop the reforms found it difficult to do so. This is partially because few of them knew much about economics, and were thus unable to convincingly rebut the "Douglas" proposals. In 1984,
David Caygill and
Richard Prebble
Richard William Prebble (born 7 February 1948) is a former member of the New Zealand Parliament. Initially a member of the New Zealand Labour Party, Labour Party, he joined the newly formed ACT New Zealand party under Roger Douglas in 1996, bec ...
had been made associate ministers to Douglas, with Douglas, Caygill and Prebble, known as the "Troika" or the "Treasury Troika", becoming the most powerful group in Cabinet.
The "Douglas" faction, which supported the reforms, dominated
Cabinet. The doctrine of
Cabinet collective responsibility
Cabinet collective responsibility, also known as collective ministerial responsibility, is a constitutional convention in parliamentary systems and a cornerstone of the Westminster system of government, that members of the cabinet must publicly ...
under the "Westminster system" requires all Cabinet members to support Cabinet policy, even if they do not agree with it. Since the Cabinet had a slight majority in the Labour
caucus
A caucus is a group or meeting of supporters or members of a specific political party or movement. The exact definition varies between different countries and political cultures.
The term originated in the United States, where it can refer to ...
, the Douglas faction was able to dominate caucus even though they were a minority. It was later alleged that Douglas and his supporters had used underhand tactics such as introducing important motions at the last minute, preventing serious debate. David Lange also complained in his autobiography about the "
Backbone club", a ginger group chaired by
Ron Bailey which supported Douglas and Rogernomics.
The divisions within the government came to a head in 1988. Lange felt that New Zealand had experienced enough change in a short period, and that the country needed time to recover from the reforms and from the effects of the
1987 stock market crash
Black Monday (also known as Black Tuesday in some parts of the world due to time zone differences) was a global, severe and largely unexpected stock market crash on Monday, October 19, 1987. Worldwide losses were estimated at US$1.71 trillion. ...
and the resulting
economic recession
An economy is an area of the Production (economics), production, Distribution (economics), distribution and trade, as well as Consumption (economics), consumption of Goods (economics), goods and Service (economics), services. In general, it is ...
. Douglas wanted to press on with reforms, and put forward a proposal for a
flat tax
A flat tax (short for flat-rate tax) is a tax with a single rate on the taxable amount, after accounting for any deductions or exemptions from the tax base. It is not necessarily a fully proportional tax. Implementations are often progressi ...
. Lange initially supported this, but then realised it would inevitably lead to cuts in social services. Without informing his colleagues, he held a press conference announcing that the flat tax scheme would not go ahead. Douglas released a letter and press statement stating a lack of confidence in Lange, and Lange treated it as a resignation. He was replaced as Minister of Finance by
David Caygill, who said in an ''Eyewitness'' special that he stood for a continuation of Rogernomics.
The next year saw even greater fracturing. After being defeated in his bid for the party presidency,
Jim Anderton
James Patrick Anderton (born Byrne; 21 January 1938 – 7 January 2018) was a New Zealand politician who led a succession of Left-wing politics, left-wing parties after leaving the New Zealand Labour Party, Labour Party in 1989.
Anderton's pol ...
quit the party to form
NewLabour; which stood for Labour's traditional socialist values. Douglas was re-elected to Cabinet, leading to Lange's resignation. He was replaced with
Geoffrey Palmer Geoffrey Palmer may refer to:
Politicians
*Sir Geoffrey Palmer, 1st Baronet (1598–1670), English lawyer and politician
*Sir Geoffrey Palmer, 3rd Baronet (1655–1732), English politician, member of parliament (MP) for Leicestershire
*Geoffrey Pal ...
, a Lange supporter and constitutional lawyer. However he lacked the charisma to attract voters, and shortly before the
1990 election he was replaced by
Mike Moore Michael Moore is an American filmmaker and author.
Michael Moore may also refer to:
Academia
* Michael G. Moore (fl. 1970s–2020s), professor of education
* Michael S. Moore (academic) (fl. 1960s–2020s), American law professor
* Michael Mo ...
.
The Labour Party took several years to recover from the damage of these years and to regain the trust of their former supporters. In the
1990
Important events of 1990 include the Reunification of Germany and the unification of Yemen, the formal beginning of the Human Genome Project (finished in 2003), the launch of the Hubble Space Telescope, the separation of Namibia from South ...
election, Labour lost many votes to
NewLabour, the
Greens, and in
1993
The United Nations General Assembly, General Assembly of the United Nations designated 1993 as:
* International Year for the World's Indigenous People
The year 1993 in the Kwajalein Atoll in the Marshall Islands had only 364 days, since its ...
to the
Alliance Party, which had been formed by NewLabour, the Greens and several other small left-wing political parties.
Douglas did not stand at the 1990 election, and several of his supporters were defeated. He went on to form the
ACT Party, which aimed to continue his reforms. He was later joined by
Richard Prebble
Richard William Prebble (born 7 February 1948) is a former member of the New Zealand Parliament. Initially a member of the New Zealand Labour Party, Labour Party, he joined the newly formed ACT New Zealand party under Roger Douglas in 1996, bec ...
, who became leader.
Defeat and legacy
By the time of the
1990 general election the government was in chaos.
Lange had resigned and
Mike Moore Michael Moore is an American filmmaker and author.
Michael Moore may also refer to:
Academia
* Michael G. Moore (fl. 1970s–2020s), professor of education
* Michael S. Moore (academic) (fl. 1960s–2020s), American law professor
* Michael Mo ...
had taken over from Lange's successor
Geoffrey Palmer Geoffrey Palmer may refer to:
Politicians
*Sir Geoffrey Palmer, 1st Baronet (1598–1670), English lawyer and politician
*Sir Geoffrey Palmer, 3rd Baronet (1655–1732), English politician, member of parliament (MP) for Leicestershire
*Geoffrey Pal ...
just eight weeks before the election.
Jim Anderton
James Patrick Anderton (born Byrne; 21 January 1938 – 7 January 2018) was a New Zealand politician who led a succession of Left-wing politics, left-wing parties after leaving the New Zealand Labour Party, Labour Party in 1989.
Anderton's pol ...
had quit the party to form
NewLabour, which represented the
Labour Party's traditional values.
The election was a disaster for Labour. The party lost nearly half its seats, including one to
Anderton. Anderton's
NewLabour Party and the
Greens took many votes from Labour, although the
first-past-the-post
First-past-the-post (FPTP)—also called choose-one, first-preference plurality (FPP), or simply plurality—is a single-winner voting rule. Voters mark one candidate as their favorite, or First-preference votes, first-preference, and the cand ...
electoral system meant that their share of the vote was not reflected in the division of seats.
Michael Bassett
Michael Edward Rainton Bassett (born 28 August 1938) is a former Labour Party member of the New Zealand House of Representatives and cabinet minister in the reformist fourth Labour government. He is also a noted New Zealand historian, and h ...
commented that the government "whimpered away unlamented, a victim of low commodity prices that delayed economic recovery, but more particularly of catastrophically poor leadership in its second term".
The
National Party won the election, forming the
Fourth National Government. Labour would not regain power until
1999
1999 was designated as the International Year of Older Persons.
Events January
* January 1 – The euro currency is established and the European Central Bank assumes its full powers.
* January 3 – The Mars Polar Lander is launc ...
.
Jim Bolger
James Brendan Bolger ( ; born 31 May 1935) is a New Zealand retired politician of the National Party who was the 35th prime minister of New Zealand, serving from 1990 to 1997.
Bolger was born in Ōpunake, Taranaki, to Irish immigrants. Bef ...
said after inheriting two financial crisis from Labour (a budget deficit not a surplus, and the need to bail out the
Bank of New Zealand
Bank of New Zealand (BNZ) is one of New Zealand's Big Four (banking)#New Zealand, big four banks. It has been operating since October 1861, and since 1992 has been owned by National Australia Bank (NAB), retaining local governance with a New Z ...
) that Labour had lied during the campaign: he was still angry because ''the lie was so big''. Despite campaigning on the promise of delivering a "Decent Society" following Rogernomics, Bolger's Fourth National Government essentially advanced the free-market reforms of the Fourth Labour Government—this continuation of Rogernomics was called
Ruthanasia. The economic structure introduced by Roger Douglas has remained essentially unchanged since the 1980s.
The disillusionment of the electorate was also reflected in
referendum
A referendum, plebiscite, or ballot measure is a Direct democracy, direct vote by the Constituency, electorate (rather than their Representative democracy, representatives) on a proposal, law, or political issue. A referendum may be either bin ...
s in 1992 and 1993 which resulted in
electoral reform
Electoral reform is a change in electoral systems that alters how public desires, usually expressed by cast votes, produce election results.
Description
Reforms can include changes to:
* Voting systems, such as adoption of proportional represen ...
in the form of a change from first-past-the-post to
mixed-member proportional
Mixed-member proportional representation (MMP or MMPR) is a type of representation provided by some mixed electoral systems which combine local winner-take-all elections with a compensatory tier with party lists, in a way that produces pr ...
(MMP), a form of
proportional representation
Proportional representation (PR) refers to any electoral system under which subgroups of an electorate are reflected proportionately in the elected body. The concept applies mainly to political divisions (Political party, political parties) amon ...
.
The Fourth Labour Government's
nuclear-free zone
A nuclear-free zone is an area in which nuclear weapons and nuclear power plants are banned. The specific ramifications of these depend on the locale in question, but are generally distinct from nuclear-weapon-free zones, in that the latter only b ...
policy is still occasionally debated and has been a subject of controversy in New Zealand.
Don Brash
Donald Thomas Brash (born 24 September 1940) is a former New Zealand politician who was Leader of the Opposition (New Zealand), Leader of the Opposition and Leader of the New Zealand National Party, leader of the New Zealand National Party from ...
(
National Party leader from 2003 to 2006) talked about repealing the
anti-nuclear Act to six visiting
United States senators in May 2004, even going so far as to say the ban on
nuclear-ship visits would be "gone, by lunchtime even".
[
Compare]
Nuclear policy – gone by lunchtime under Nats
He and his party received much criticism for promising foreign politicians to ban something so ingrained in
New Zealand political culture.
Election results
Prime ministers
David Lange
David Russell Lange ( ; 4 August 1942 – 13 August 2005) was a New Zealand politician who served as the 32nd prime minister of New Zealand from 1984 to 1989. A member of the New Zealand Labour Party, Lange was also the Minister of Education ...
was
Prime Minister
A prime minister or chief of cabinet is the head of the cabinet and the leader of the ministers in the executive branch of government, often in a parliamentary or semi-presidential system. A prime minister is not the head of state, but r ...
for most of this Government's term. In 1989 he resigned and
Geoffrey Palmer Geoffrey Palmer may refer to:
Politicians
*Sir Geoffrey Palmer, 1st Baronet (1598–1670), English lawyer and politician
*Sir Geoffrey Palmer, 3rd Baronet (1655–1732), English politician, member of parliament (MP) for Leicestershire
*Geoffrey Pal ...
replaced him. A little over a year later,
Mike Moore Michael Moore is an American filmmaker and author.
Michael Moore may also refer to:
Academia
* Michael G. Moore (fl. 1970s–2020s), professor of education
* Michael S. Moore (academic) (fl. 1960s–2020s), American law professor
* Michael Mo ...
replaced Palmer, only eight weeks before the
1990 election:
File:David Lange (1992).jpg, David Lange
David Russell Lange ( ; 4 August 1942 – 13 August 2005) was a New Zealand politician who served as the 32nd prime minister of New Zealand from 1984 to 1989. A member of the New Zealand Labour Party, Lange was also the Minister of Education ...
served 1984-89
File:Geoffrey Palmer.jpg, Sir Geoffrey Palmer Geoffrey Palmer may refer to:
Politicians
*Sir Geoffrey Palmer, 1st Baronet (1598–1670), English lawyer and politician
*Sir Geoffrey Palmer, 3rd Baronet (1655–1732), English politician, member of parliament (MP) for Leicestershire
*Geoffrey Pal ...
served 1989–90
File:Mike Moore, 1992 (crop).jpg, Mike Moore Michael Moore is an American filmmaker and author.
Michael Moore may also refer to:
Academia
* Michael G. Moore (fl. 1970s–2020s), professor of education
* Michael S. Moore (academic) (fl. 1960s–2020s), American law professor
* Michael Mo ...
served 1990
Cabinet ministers
See also
*
List of New Zealand governments
The New Zealand Government exercises executive power in New Zealand. This article lists spans of government under a party or coalition, as well as ministries under a prime minister. There have been three distinctly different periods of governme ...
*
New Zealand Labour Party
The New Zealand Labour Party, also known simply as Labour (), is a Centre-left politics, centre-left political party in New Zealand. The party's platform programme describes its founding principle as democratic socialism, while observers descri ...
*
Rogernomics
*
Fish and Chip Brigade
References
Further reading
*
*
*
*
*
* Holland, Martin, and Boston, Jonathan eds. ''The Fourth Labour Government: Radical Politics in New Zealand'' (1988)
*
*
*
*
*
*
*Vowles, Jack, and Peter Aimer. ''Voters' Vengeance: The 1990 Election in New Zealand and the fate of the Fourth Labour Government'' (1993, Auckland University Press)
{{DEFAULTSORT:Labour Government Of New Zealand, 4th
Ministries of Elizabeth II
Labour 4
Government 4
20th century in New Zealand
1984 establishments in New Zealand
1990 disestablishments in New Zealand
Cabinets established in 1984
Cabinets disestablished in 1990