New Zealand Politics since 1984

Prior to 1984, New Zealand Governments followed post war Keynesian economic policies, favoured by both main political parties, and progressive social policies initiated by the centre-left Labour Party.

However, by the early 1980s, excessive subsidisation of the declining farming sector, and over-investment in ambitious infrastructure projects, had created major structural problems than could no longer be contained by conventional Keynesian policies.

With the centre-right National Party dominated by the imposing personality of Keynesian interventionist Robert Muldoon, economic libertarians decided to infiltrate the centre –left Labour Party and quietly began to steer it in a neo-liberal direction.

In the 1984 election, the new look Labour Party was aided by a one-off protest party, The New Zealand Party, created by Bob Jones, a highly successful property speculator. Jones captured many votes from disgruntled National Party supporters than were unwilling to vote for the socially liberal Labour Party. With National out, Jones then promptly retired from politics - his mission accomplished.

Once in power, Labour’s economic libertarians then set about moving economic policy to the right, while its centre-left leader David Lange, began implementing a programme of left-liberal social and foreign policy initiatives, such as banning US worships from visiting New Zealand ports and legalising homosexuality.

The combined bombardment from neo-economic restructuring and liberal social reform disorientated working class white voters who turned on the traditional ‘party of the working class’ in 1990, and elected a reformed National Party that had adapted to the new neo-liberal orthodoxy.

National new neo-liberal economic programme, was opposed by a number of National MPs, the most prominent being Winston Peters and Michael Laws, who seized on the opportunity presented by the introduction of MMP (mixed member proportional representation) to form a breakaway party, New Zealand First.

New Zealand First were rightly concerned that State assets were being sold off too cheaply, and that Labour and National had gone too far in terms of removing support for manufacturing and farming - by 1990 New Zealand had one of the lowest levels of state support for research and development in the developed world.

From 1993-1996 New Zealand First developed a policy platform based on increased R and D spending, export incentives, compulsory savings and an end to state asset sales.

Meanwhile, National had responded to record unemployment and early 1990s economic stagnation, by starting a radical new wealth-based immigration initiative designed to attract wealthy East Asian Immigrants. The policy was modelled on similar immigration measures introduced in Canada.

New Zealand First, with its focus on productivity based growth, subsequently became the main advocate for limited immigration and drew criticism from the mainstream press for being xenophobic and populist.

In the 1996 election New Zealand First held the balance of power and decided to form a Government with National. However, although the two parties had similar social policies their differences on economic policy proved to great to reconcile, and the coalition collapsed 12 months out from the 1999 election.

In 1999, Labour came back into power with a Blairite economic programme based around increased education spending, investment in areas like arts, culture and tourism, and a relatively expansive immigration policy with a greater focus on British and Sub-Continental immigrants.

Labour's shift to the centre has now put New Zealand politics more closely in line with other English-speaking countries like Canada and the United Kingdom. New Zealand First survives as a vehicle for the public to intermittently voice their opposition to expansive immigration initiatives.