Fourth Labour Government of New Zealand

The Fourth Labour Government of New Zealand was the government of New Zealand from 26 July 1984 to 2 November 1990. It enacted major social and economic reforms, including reformation of the tax system. The economic reforms were known as Rogernomics after Finance Minister Roger Douglas. The government also enacted nuclear-free legislation, which led to the United States suspending its treaty obligations to New Zealand under the ANZUS alliance. The government was led by David Lange for most of its time in power, and lasted for two three-year terms.

ignificant policies

Economic

*A range of economic reforms collectively known as Rogernomics. These included::*Floating the New Zealand dollar.:*Removing farming subsidies.:*Introducing GST (Goods and Services Tax).:*Reducing income and company tax.:*Removing controls on foreign exchange.:*Abolishing or reducing import tariffs.:*Corporatising many State owned enterprises such as the Post Office, Telecom and Air New Zealand to be more like private businesses. Some of these were later privatised. :*Enabling the Reserve Bank 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 alliance. Many New Zealanders (especially within the Labour Party) wanted to make New Zealand a nuclear-free zone. However this would mean banning American warships as it was US policy to 'neither confirm nor deny' whether individual ships were nuclear armed or powered. 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 celebre 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. [Young, Audrey, 'PM says easing of nuclear tensions will help trade', "New Zealand Herald", 26 March 2007: http://www.nzherald.co.nz/section/story.cfm?c_id=280&objectid=10430874] The government also reinstated diplomatic ties with India, which had been cut by Muldoon.

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, 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. [Palmer, Geoffrey (1979), "Unbridled power?: An interpretation of New Zealand’s constitution and government".] 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 was derailed partly by public indifference but mostly by opposition from Māori who believed that the Treaty of Waitangi would be sidelined in the process.

ocial policy

* Legalised sex between males over the age of 16 (Homosexual Law Reform).
* Liberalised immigration to New Zealand in 1987, particularly for skilled migrants.
* Passed the Children, Young Persons, and Their Families Act 1989, introducing Family Group Conferences
* Criminalised rape within marriage.

Treaty of Waitangi and Maori policy

* Enabling the Waitangi Tribunal 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.
* Responded to the 1987 "New Zealand Māori Council v Attorney-General" ruling of the Court of Appeal by setting out its own principles of the Treaty of Waitangi in 1989.
* Runanga Iwi Act 1990 (repealed by incoming National government).

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 initiated the Resource Management Law Reform process which later resulted in the enactment of the Resource Management Act 1991 and the Crown Minerals Act 1991, after Labour lost office in the 1990 election.

Formation

"Main article: New Zealand general election 1984"

The fourth Labour government was brought into office by a landslide victory in the 1984 election. This was a snap election called by Prime Minister Robert Muldoon 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 following the election, when outgoing Prime Minister Robert Muldoon refused to devalue the New Zealand dollar.

The 1987 election

"Main article: New Zealand general election 1987"

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, traditionally a National stronghold. Public support of the government's stand on the ANZUS 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.

Division over Rogernomics

The Labour Party was founded on socialist and social democrat principles and traditionally favoured state regulation of the economy and strong support for disadvantaged members of society. The First Labour Government made major Keynesian 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 prop it up. Meanwhile the Labour Party, once dominated by the working classes 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 apartheid and nuclear weapons, and domestic 'identity politics' issues such as the Treaty of Waitangi 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 Roger Douglas 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 David Lange 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 Douglas' ideas. It was also because of the structure of New Zealand government. Douglas' faction, which included Ministers Richard Prebble, David Caygill and Michael Bassett, dominated Cabinet. The doctrine of Cabinet collective responsibility 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, 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 later alleged that Douglas and his supporters formed a faction, known as the "Backbone Club", to ensure victory in caucus votes on policyDavid Lange, "My Life", 2005] .

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 stockmarket crash and the resulting economic recession. Douglas wanted to press on with reforms, and put forward a proposal for a flat tax. 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 resigned shortly afterwards.

The next year saw even greater fracturing. After being defeated in his bid for party presidency, Jim Anderton quit the party to form NewLabour, which stood for Labour's traditional values. Douglas was re-elected to Cabinet, leading to Lange's resignation. He was replaced with Geoffrey Palmer, 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.

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 election, Labour lost many votes to NewLabour, the Greens, and in 1993 to the Alliance Party, which had been formed by NewLabour, the Greens and several other small left wing 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, who became leader.

Defeat

"Main article: New Zealand general election 1990"

By the time of the 1990 election the government was in chaos. Lange had resigned and Mike Moore had taken over from Lange's successor Geoffrey Palmer just eight weeks before the election. Jim Anderton 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 electoral system meant that their share of the vote was not reflected in the division of seats. The National Party won the election, forming the Fourth National Government. Labour would not regain power until 1999.

The disillusionment of the electorate was also reflected in referendums in 1992 and 1993 which resulted in electoral reform in the form of a change from First Past the Post to Mixed Member Proportional, a form of proportional representation.

Electoral results

Prime Ministers

David Lange was Prime Minister for most of this Government's term. In 1989 he resigned and Geoffrey Palmer replaced him. A little over a year later, Mike Moore replaced Palmer, only eight weeks before the 1990 election:

*David Lange (1984-1989)
*Geoffrey Palmer (1989-1990)
*Mike Moore (1990)

Cabinet Ministers

References

*"Voters’ Vengeance: The 1990 Election in New Zealand and the fate of the Fourth Labour Government" by Jack Vowles & Peter Aimer (1993, Auckland University Press) ISBN 1 86940 078 X

ee also

*Governments of New Zealand
*New Zealand Labour Party
*Rogernomics