Fourth Labour Government of New Zealand

The Fourth Labour Government of New Zealand was the government of New Zealand

Governments of New Zealand

The Government of New Zealand , formally Her Majesty's Government in New Zealand, is based on the Westminster system of responsible government...

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

Rogernomics

The term Rogernomics, a portmanteau of "Roger" and "economics", was coined by journalists at the New Zealand Listener by analogy with Reaganomics to describe the economic policies followed by Roger Douglas after his appointment in 1984 as Minister of Finance in the Fourth Labour Government...

after Finance Minister

Finance minister

The finance minister is a cabinet position in a government.A minister of finance has many different jobs in a government. He or she helps form the government budget, stimulate the economy, and control finances...

Roger Douglas

Sir Roger Owen Douglas , is a New Zealand politician who formerly served as a senior New Zealand Labour Party Cabinet minister. He became arguably best-known for his prominent role in the radical economic restructuring undertaken by the Fourth Labour Government during the 1980s...

. The government also enacted nuclear-free

New Zealand's nuclear-free zone

In 1984, Prime Minister David Lange barred nuclear-powered or nuclear-armed ships from using New Zealand ports or entering New Zealand waters. Under the New Zealand Nuclear Free Zone, Disarmament, and Arms Control Act 1987, territorial sea, land and airspace of New Zealand became nuclear-free zones...

legislation, which led to the United States

United States

The United States of America is a federal constitutional republic comprising fifty states and a federal district...

suspending its treaty obligations to New Zealand under the ANZUS

ANZUS

The Australia, New Zealand, United States Security Treaty is the military alliance which binds Australia and New Zealand and, separately, Australia and the United States to cooperate on defence matters in the Pacific Ocean area, though today the treaty is understood to relate to attacks...

alliance. The government was led by David Lange

David Lange

David Russell Lange, ONZ, CH , served as the 32nd Prime Minister of New Zealand from 1984 to 1989. He headed New Zealand's fourth Labour Government, one of the most reforming administrations in his country's history, but one which did not always conform to traditional expectations of a...

for most of its time in power, and lasted for two three-year terms.

Economic

A range of economic reforms collectively known as Rogernomics
Rogernomics
The term Rogernomics, a portmanteau of "Roger" and "economics", was coined by journalists at the New Zealand Listener by analogy with Reaganomics to describe the economic policies followed by Roger Douglas after his appointment in 1984 as Minister of Finance in the Fourth Labour Government...

. These included:
Floating the New Zealand dollar
New Zealand dollar
The New Zealand dollar is the currency of New Zealand. It also circulates in the Cook Islands , Niue, Tokelau, and the Pitcairn Islands. It is divided into 100 cents....

.
Removing farming subsidies.
Introducing GST (Goods and Services Tax
Goods and Services Tax
A goods and services tax or value added tax is a tax on exchanges.By country:*Goods and Services Tax *Goods and Services Tax *Goods and Services Tax *Goods and Services Tax...

).
New banks were allowed.
Reducing income and company tax.
Removing controls on foreign exchange
Foreign exchange market
The foreign exchange market is a global, worldwide decentralized financial market for trading currencies. Financial centers around the world function as anchors of trading between a wide range of different types of buyers and sellers around the clock, with the exception of weekends...

.
Abolishing or reducing import tariffs.
Corporatising many State owned enterprises such as the Post Office
New Zealand Post
New Zealand Post, commonly referred by its acronym, NZPost is a State owned enterprise responsible for providing postal service in New Zealand.-History:...

, Telecom
Telecom New Zealand
Telecom New Zealand is a New Zealand-wide communications service provider , providing fixed line telephone services, a mobile network, an internet service provider , a major ICT provider to NZ businesses , and a wholesale network infrastructure provider to other NZ CSPs...

and Air New Zealand
Air New Zealand
Air New Zealand Limited is the national airline and flag carrier of New Zealand. Based in Auckland, New Zealand, the airline operates scheduled passenger flights to 26 domestic destinations and 24 international destinations in 15 countries across Asia, Europe, North America and Oceania, and is...

to be more like private businesses. Some of these were later privatised.
Enabling the Reserve Bank
Reserve Bank of New Zealand
The Reserve Bank of New Zealand is the central bank of New Zealand and is constituted under the Reserve Bank of New Zealand Act 1989. The Governor of the Reserve Bank is responsible for New Zealand's currency and operating monetary policy. The Bank's current Governor is Dr. Alan Bollard...

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
ANZUS
The Australia, New Zealand, United States Security Treaty is the military alliance which binds Australia and New Zealand and, separately, Australia and the United States to cooperate on defence matters in the Pacific Ocean area, though today the treaty is understood to relate to attacks...

alliance. Many New Zealanders (especially within the Labour Party) wanted to make New Zealand a nuclear-free zone

New Zealand's 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

USS Buchanan (DDG-14)

USS Buchanan , named for Admiral Franklin Buchanan, was a Charles F. Adams class guided missile armed destroyer in the United States Navy....

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
Cause célèbre
A is an issue or incident arousing widespread controversy, outside campaigning and heated public debate. The term is particularly used in connection with celebrated legal cases. It is a French phrase in common English use...

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

Edmund Hillary

Sir Edmund Percival Hillary, KG, ONZ, KBE , was a New Zealand mountaineer, explorer and philanthropist. On 29 May 1953 at the age of 33, he and Sherpa mountaineer Tenzing Norgay became the first climbers known to have reached the summit of Mount Everest – see Timeline of climbing Mount Everest...

to the post.

Constitutional

Created the Royal Commission on the Electoral System
Royal Commission on the Electoral System
The Royal Commission on the Electoral System was formed in New Zealand in 1985, and reported in 1986. The decision to form the Royal Commission was taken by the Fourth Labour government, after the Labour party had received more votes, yet won fewer seats than the National Party in both the 1978 and...

(1985).
Constitution Act 1986 — codified important constitutional conventions in one enactment.
New Zealand Bill of Rights Act
New Zealand Bill of Rights Act
The New Zealand Bill of Rights Act 1990 is a statute of the New Zealand Parliament setting out the rights and fundamental freedoms of the citizens of New Zealand as a Bill of rights...

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

Constitution

A constitution is a set of fundamental principles or established precedents according to which a state or other organization is governed. These rules together make up, i.e. constitute, what the entity is...

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

Bill of rights

A bill of rights is a list of the most important rights of the citizens of a country. The purpose of these bills is to protect those rights against infringement. The term "bill of rights" originates from England, where it referred to the Bill of Rights 1689. Bills of rights may be entrenched or...

was derailed partly by public indifference but mostly by opposition from Māori who believed that the Treaty of Waitangi

Treaty of Waitangi

The Treaty of Waitangi is a treaty first signed on 6 February 1840 by representatives of the British Crown and various Māori chiefs from the North Island of New Zealand....

would be sidelined in the process.

Social policy

Legalised sex between males over the age of 16 (Homosexual Law Reform
Homosexual Law Reform Act
The New Zealand Homosexual Law Reform Act 1986 is a law that legalised consensual sex between men aged 16 and older. It removed the provisions of the Crimes Act 1961 that criminalised this behaviour.-Background:...

).
Liberalised immigration to New Zealand
Immigration to New Zealand
Immigration to New Zealand began with Polynesian settlement in New Zealand, then uninhabited, in the tenth century . The role of Moriori settlement is currently disputed, with some suggesting that the Moriori arrived in New Zealand before the Maori, and were distinct from Maori, & others favouring...

in 1987, particularly for skilled migrants.
Passed the Children, Young Persons, and Their Families Act 1989
Children, Young Persons, and Their Families Act 1989
The Children, Young Persons, and Their Families Act 1989 is an Act of the New Zealand Parliament, passed in 1989. The Act provided for the care and protection of children as well as youth justice...

, introducing Family Group Conferences.
The death penalty was fully abolished.
Rape within marriage was criminalised.
A new family support benefit (introduced as the family care benefit in 1984) raised the incomes of some poor families.
Disability benefits were improved, with the 1985 budget increasing 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.
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.
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.
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 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”.
Spending on education and health was significantly increased from 1985/86 to 1988/89, by 24% and 9.6% respectively.
The closed shop for private sector unions was reinstated.
Social service spending for public sector unions was expanded.
In tertiary education, the Fourth Labour Government introduced charges equaling 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).
A Ministry of Women’s Affairs was established (1986) to promote equality for women.
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 practiced 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”. This scheme was abandoned by the Fourth National Government
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 Parental Leave and Employment Protection Act 1987 extended coverage to women and their partners or spouses to take unpaid leave from their employment.
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).
The Department of Conservation was established (1987) to “…manage endangered, vulnerable, rare, and protected plants, animals, and ecosystems to ensure their long term viability”.
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.
Early childhood teacher training was extended.
Skills training programme were continuously developed, as characterised by the Access programme, which trained 60,000 people a year by 1990.
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”.
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.
Changes to loan and formal experience requirements for settlement and other land purchase made it easier for young and new farmers to acquire land.
Standards of road safety standards were improved through tighter enforcement for substance-affected drivers.
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”.
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.
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.”
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 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.
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.
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.
Superannuation and other benefits were increased (1984).
Accommodation Benefit was increased (1985).
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).
Spending on the General Medical Services and immunisation benefits was 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).
The Residential Tenancies Act (1986) provided new guarantees for tenants.
Five new Kura Kaupapa schools were commissioned as a means of raising Maori educational achievement (1990).
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 in order to encourage new investment in the private rental sector (1985).
Income limits for Family Benefit capitalisation were increased for modest-income earners (1985).
Income-related rates and rents were introduced (1985).
Expenditure was allocated for New Zealanders unable to find accommodation in the private sector, together with expenditure for state housing rental stock (1989).
New policies were developed to address the needs of women and senior citizens, together with general diverse housing needs (1989).
The special lending programme was expanded to help community and welfare organisations to provide support housing (1989).
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).

Treaty of Waitangi and Maori policy

Enabling the Waitangi Tribunal
Waitangi Tribunal
The Waitangi Tribunal is a New Zealand permanent commission of inquiry established under the Treaty of Waitangi Act 1975...

to investigate Treaty claims
Treaty of Waitangi claims and settlements
Treaty of Waitangi claims and settlements have been a significant feature of New Zealand race relations and politics since 1975. Over the last 30 years, New Zealand governments have increasingly provided formal legal and political opportunity for Māori to seek redress for breaches by the Crown of...

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
Maori Language Act
The Māori Language Act 1987 was a piece of legislation passed by the New Zealand Parliament. It gave Te Reo Māori official language status, and gave speakers a right to use it in legal settings such as in court...

. The act also established the Maori Language Commission, which amongst its objectives include the maintenance and promotion of the Maori language.
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
Treaty of Waitangi
The Treaty of Waitangi is a treaty first signed on 6 February 1840 by representatives of the British Crown and various Māori chiefs from the North Island of New Zealand....

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 Maori 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 enrollments 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.

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
Environment Act 1986
The Environment Act 1986 established the Ministry for the Environment and the Office of the Parliamentary Commissioner for the Environment.-References:* .*...

, which created the Ministry for the Environment, and,
The Conservation Act 1987
Conservation Act 1987
The Conservation Act 1987 is New Zealand's principal act concerning the conservation of indigenous biodiversity. The Act established the Department of Conservation and Fish and Game, and complements the National Parks Act 1980 and the Reserves Act 1997....

, 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

Crown Minerals Act 1991

The Crown Minerals Act is an Act of Parliament passed in 1991 in New Zealand. It controls the management of Crown owed minerals. Potential changes to Schedule 4 of the Act created controversy and opposition in 2010...

, after Labour lost office in the 1990 election.

Formation

The fourth Labour government was brought into office by a landslide victory in the 1984 election

New Zealand general election, 1984

The 1984 New Zealand general election was a nationwide vote to determine the shape of the 41st New Zealand Parliament. It marked the beginning of the Fourth Labour Government, with David Lange's Labour Party defeating long-serving Prime Minister Robert Muldoon of the National Party. It was also the...

. This was a snap election called by Prime Minister Robert Muldoon

Robert Muldoon

Sir Robert David "Rob" Muldoon, GCMG, CH served as the 31st Prime Minister of New Zealand from 1975 to 1984, as leader of the governing National Party. Muldoon had been a prominent member of the National party and MP for the Tamaki electorate for some years prior to becoming leader of the party...

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

New Zealand dollar

The New Zealand dollar is the currency of New Zealand. It also circulates in the Cook Islands , Niue, Tokelau, and the Pitcairn Islands. It is divided into 100 cents....

caused by the constitutional crisis 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

New Zealand National Party

The New Zealand National Party is the largest party in the New Zealand House of Representatives and in November 2008 formed a minority government with support from three minor parties.-Policies:...

-leaning seats. According to Lange

David Lange

, this alerted him to the fact that the Labour Party

New Zealand Labour Party

The New Zealand Labour Party is a New Zealand political party. It describes itself as centre-left and socially progressive and has been one of the two primary parties of New Zealand politics since 1935....

was drifting away from its traditional support base. He was particularly alarmed that Labour had nearly won the wealthy seat of Remuera

Remuera

Remuera is a residential suburban area within Auckland city, in the North Island of New Zealand. It is located four kilometres to the southeast of the city centre...

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

ANZUS

issue probably also won it votes.

Despite internal divisions, the government managed to maintain a united front before and during the 1987 election

New Zealand general election, 1987

The 1987 New Zealand general election was a nationwide vote to determine the shape of the 43rd sitting of the New Zealand Parliament. The governing New Zealand Labour Party, led by Prime Minister David Lange, was re-elected for a second term, although the Opposition National Party made gains...

. On election night, Lange raised Douglas

Roger Douglas

' hand in a boxing-style victory pose, to convey unity.

Division over Rogernomics

The Labour Party

New Zealand 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

First Labour Government of New Zealand

The First Labour Government of New Zealand was the government of New Zealand from 1935 to 1949. It set the tone of New Zealand's economic and welfare policies until the 1980s, establishing a welfare state, a system of Keynesian economic management, and high levels of state intervention...

made major Keynesian reforms along these lines, and subsequent governments continued this system. By the 1970s the system of regulation, protectionism

Protectionism

Protectionism is the economic policy of restraining trade between states through methods such as tariffs on imported goods, restrictive quotas, and a variety of other government regulations designed to allow "fair competition" between imports and goods and services produced domestically.This...

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

Middle class

The middle class is any class of people in the middle of a societal hierarchy. In Weberian socio-economic terms, the middle class is the broad group of people in contemporary society who fall socio-economically between the working class and upper class....

people with its liberal

Cultural liberalism

Cultural liberalism is a liberal view of society that stresses the freedom of individuals from cultural norms. It is often expressed, in the words of Thoreau as the right to "march to the beat of a different drummer"...

social and independent foreign policies. These new members were interested in international issues such as apartheid and nuclear weapons, and domestic 'identity politics

Identity politics

Identity politics are political arguments that focus upon the self interest and perspectives of self-identified social interest groups and ways in which people's politics may be shaped by aspects of their identity through race, class, religion, sexual orientation or traditional dominance...

' issues such as the Treaty of Waitangi

Treaty of Waitangi

The Treaty of Waitangi is a treaty first signed on 6 February 1840 by representatives of the British Crown and various Māori chiefs from the North Island of New Zealand....

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

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

Prime minister

A prime minister is the most senior minister of cabinet in the executive branch of government in a parliamentary system. In many systems, the prime minister selects and may dismiss other members of the cabinet, and allocates posts to members within the government. In most systems, the prime...

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

Richard Prebble

Richard William Prebble CBE, born 7 February 1948, was for many years a member of the New Zealand Parliament. Initially a member of the Labour Party, he joined the newly formed ACT New Zealand party under Roger Douglas in 1996.-Early and personal life:...

, David Caygill

David Caygill

David Caygill, CBE is a former New Zealand politician. After being New Zealand's youngest city councillor at 22 , he was an MP from 1978 to 1996, representing the Labour Party...

and Michael Bassett

Michael Bassett

Michael Edward Rainton Bassett, QSO is a former Labour Party member of the New Zealand House of Representatives and cabinet minister in the reformist fourth Labour government...

, dominated Cabinet. The doctrine of Cabinet collective responsibility

Cabinet collective responsibility

Cabinet collective responsibility is constitutional convention in governments using the Westminster System that members of the Cabinet must publicly support all governmental decisions made in Cabinet, even if they do not privately agree with them. This support includes voting for the government in...

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

Caucus

A caucus is a meeting of supporters or members of a political party or movement, especially in the United States and Canada. As the use of the term has been expanded the exact definition has come to vary among political cultures.-Origin of the term:...

, 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 policy.

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

Black Monday (1987)

In finance, Black Monday refers to Monday October 19, 1987, when stock markets around the world crashed, shedding a huge value in a very short time. The crash began in Hong Kong and spread west to Europe, hitting the United States after other markets had already declined by a significant margin...

and the resulting economic recession

Late 1980s recession

The recession of the early 1990s describes the period of economic downturn affecting much of the world in the late 1980s and early 1990s.-Causes:...

. Douglas wanted to press on with reforms, and put forward a proposal for a flat tax

Flat tax

A flat tax is a tax system with a constant marginal tax rate. Typically the term flat tax is applied in the context of an individual or corporate income that will be taxed at one marginal rate...

. 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

David Caygill

David Caygill, CBE is a former New Zealand politician. After being New Zealand's youngest city councillor at 22 , he was an MP from 1978 to 1996, representing the Labour Party...

, 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 party presidency, Jim Anderton

Jim Anderton

James Patrick Anderton, usually known as Jim Anderton , is the leader of the Progressive Party, a New Zealand political party. He has served in Parliament since 1984. He served as Deputy Prime Minister from 1999 to 2002 and is currently also the sitting Father of the House, the longest...

quit the party to form NewLabour

NewLabour Party (New Zealand)

NewLabour was a left-of-centre party founded in 1989 by Jim Anderton, an MP and former President of the New Zealand Labour Party.NewLabour was established by a number of Labour Party members who left the party in reaction to "Rogernomics", the economic policies implemented by the Labour Party's...

, 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

New Zealand general election, 1990

The 1990 New Zealand general election was held on 27 October to determine the composition of the 43rd New Zealand parliament. The governing Labour Party was defeated, ending its controversial two terms in office...

he was replaced by Mike Moore.

The Labour Party

New Zealand 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

New Zealand general election, 1990

election, Labour lost many votes to NewLabour

NewLabour Party (New Zealand)

, the Greens, and in 1993

New Zealand general election, 1993

The 1993 New Zealand general election was held on 6 November 1993 to determine the composition of the 44th New Zealand Parliament. It saw the governing National Party, led by Jim Bolger, win a second term in office, despite a major swing back towards the Labour Party. The new Alliance and New...

to the Alliance Party

Alliance (New Zealand political party)

The Alliance is a left-wing political party in New Zealand. It was formed in 1991, and was influential in the 1990s, but has since declined and has no representation in parliament. It suffered a major setback after Jim Anderton, the party's leader, left the party in 2002, taking several of the...

, 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

Richard Prebble

, who became leader.

Defeat

By the time of the 1990 election

New Zealand general election, 1990

the government was in chaos. Lange

David Lange

had resigned and Mike Moore had taken over from Lange's successor Geoffrey Palmer just eight weeks before the election. Jim Anderton

Jim Anderton

had quit the party to form NewLabour

NewLabour Party (New Zealand)

, which represented the Labour Party

New Zealand Labour Party

's traditional values.

The election was a disaster for Labour. The party lost nearly half its seats, including one to Anderton

Jim Anderton

. Anderton's NewLabour Party

NewLabour Party (New Zealand)

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

New Zealand National Party

The New Zealand National Party is the largest party in the New Zealand House of Representatives and in November 2008 formed a minority government with support from three minor parties.-Policies:...

won the election, forming the Fourth National Government

Fourth National Government of New Zealand

The Fourth National Government of New Zealand was the government of New Zealand from 2 November 1990 to 27 November 1999. Following in the footsteps of the previous Labour government, the fourth National government embarked on an extensive programme of spending cuts...

. Labour would not regain power until 1999

New Zealand general election, 1999

The 1999 New Zealand general election was held on 27 November 1999 to determine the composition of the 46th New Zealand Parliament. The governing National Party, led by Prime Minister Jenny Shipley, was defeated, being replaced by a coalition of Helen Clark's Labour Party and the smaller Alliance...

.

The disillusionment of the electorate was also reflected in referendum

Referendum

A referendum is a direct vote in which an entire electorate is asked to either accept or reject a particular proposal. This may result in the adoption of a new constitution, a constitutional amendment, a law, the recall of an elected official or simply a specific government policy. It is a form of...

s 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

Proportional representation

Proportional representation is a concept in voting systems used to elect an assembly or council. PR means that the number of seats won by a party or group of candidates is proportionate to the number of votes received. For example, under a PR voting system if 30% of voters support a particular...

Electoral results

Election	Parliament	Seats	Total votes	Percentage	Gain (loss)	Seats won	Change	Majority
1984 New Zealand general election, 1984 The 1984 New Zealand general election was a nationwide vote to determine the shape of the 41st New Zealand Parliament. It marked the beginning of the Fourth Labour Government, with David Lange's Labour Party defeating long-serving Prime Minister Robert Muldoon of the National Party. It was also the...	41st 41st New Zealand Parliament The 41st New Zealand Parliament was a term of the Parliament of New Zealand. Its composition was determined by the 1984 elections, and it sat until the 1987 elections....	95	829,154	43%	+4%	56	+13	17
1987 New Zealand general election, 1987 The 1987 New Zealand general election was a nationwide vote to determine the shape of the 43rd sitting of the New Zealand Parliament. The governing New Zealand Labour Party, led by Prime Minister David Lange, was re-elected for a second term, although the Opposition National Party made gains...	42nd 42nd New Zealand Parliament The 42nd New Zealand Parliament was a term of the Parliament of New Zealand. Its composition was determined by the 1987 elections, and it sat until the 1990 elections....	97	878,448	48%	+4%	57	+1	17
1990 New Zealand general election, 1990 The 1990 New Zealand general election was held on 27 October to determine the composition of the 43rd New Zealand parliament. The governing Labour Party was defeated, ending its controversial two terms in office...	43rd 43rd New Zealand Parliament The 43rd New Zealand Parliament was a term of the Parliament of New Zealand. Its composition was determined by the 1990 elections, and it sat until the 1993 elections....	97	640,915	35.14%	-12.86%	29	-28

Prime ministers

David Lange

was Prime Minister

Prime Minister of New Zealand

The Prime Minister of New Zealand is New Zealand's head of government consequent on being the leader of the party or coalition with majority support in the Parliament of New Zealand...

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

New Zealand general election, 1990

David Lange
David Lange
David Russell Lange, ONZ, CH , served as the 32nd Prime Minister of New Zealand from 1984 to 1989. He headed New Zealand's fourth Labour Government, one of the most reforming administrations in his country's history, but one which did not always conform to traditional expectations of a...

(1984–1989)
Geoffrey Palmer (1989–1990)
Mike Moore (1990)

Cabinet Ministers

Ministry	Minister	Term(s)
Deputy Prime Minister Deputy Prime Minister of New Zealand The Deputy Prime Minister of New Zealand is second most senior officer in the Government of New Zealand, although this seniority does not necessarily translate into power....	Geoffrey Palmer	1984–1989
	Helen Clark Helen Clark Helen Elizabeth Clark, ONZ is a New Zealand political figure who was the 37th Prime Minister of New Zealand for three consecutive terms from 1999 to 2008...	1989–1990
Attorney-General Attorney-General (New Zealand) The Attorney-General is a political office in New Zealand. It is simultaneously a ministerial position and an administrative office, and has responsibility for supervising New Zealand law and advising the government on legal matters...	Geoffrey Palmer	1984–1989
	David Lange David Lange David Russell Lange, ONZ, CH , served as the 32nd Prime Minister of New Zealand from 1984 to 1989. He headed New Zealand's fourth Labour Government, one of the most reforming administrations in his country's history, but one which did not always conform to traditional expectations of a...	1989–1990
Minister of Defence Minister of Defence (New Zealand) The Minister of Defence is a minister in the government of New Zealand with responsibility for the New Zealand armed forces and the Ministry of Defence.The present Minister is Dr...	Frank O'Flynn Frank O'Flynn Francis Duncan O'Flynn QC. was a New Zealand politician of the Labour Party.He represented the seat of Kapiti from 1972 to 1975, when he was defeated, and then Island Bay from 1978 to 1990, when he retired. He was the Minister of Defence from 1984 to 1987.He was a Queen's Counsel...	1984–1987
	Bob Tizard	1987–1990
	Peter Tapsell Peter Tapsell (New Zealand) Sir Peter Wilfred Tapsell, KNZM, MBE, FRCS, FRCSEd was Speaker of the New Zealand House of Representatives from 1993 to 1996...	1990
Minister of Education Minister of Education (New Zealand) The Minister of Education is a minister in the government of New Zealand with responsibility for the country's schools, and is in charge of the Ministry of Education.The present Minister is Anne Tolley, a member of the National Party.-History:...	Russell Marshall Russell Marshall Cedric Russell Marshall, CNZM was a New Zealand politician of the Labour Party, who had been a Methodist minister from 1960 to 1972, and school teacher 1955–56 and 1972.-Member of Parliament:...	1984–1987
	David Lange David Lange David Russell Lange, ONZ, CH , served as the 32nd Prime Minister of New Zealand from 1984 to 1989. He headed New Zealand's fourth Labour Government, one of the most reforming administrations in his country's history, but one which did not always conform to traditional expectations of a...	1987–1989
	Phil Goff Phil Goff Philip Bruce Goff is the current Leader of the Opposition and the Leader of the New Zealand Labour Party. During the Fifth Labour Government, he served in a number of ministerial portfolios, including Minister of Defence of New Zealand, Minister of Corrections, Minister of Foreign Affairs and...	1989–1990
Minister of Employment	Phil Goff Phil Goff Philip Bruce Goff is the current Leader of the Opposition and the Leader of the New Zealand Labour Party. During the Fifth Labour Government, he served in a number of ministerial portfolios, including Minister of Defence of New Zealand, Minister of Corrections, Minister of Foreign Affairs and...	1984–1990
Minister of Finance Minister of Finance (New Zealand) The Minister of Finance is a senior figure within the government of New Zealand. The position is often considered to be the most important Cabinet role after that of the Prime Minister....	Roger Douglas Roger Douglas Sir Roger Owen Douglas , is a New Zealand politician who formerly served as a senior New Zealand Labour Party Cabinet minister. He became arguably best-known for his prominent role in the radical economic restructuring undertaken by the Fourth Labour Government during the 1980s...	1984–1988
	David Caygill David Caygill David Caygill, CBE is a former New Zealand politician. After being New Zealand's youngest city councillor at 22 , he was an MP from 1978 to 1996, representing the Labour Party...	1988–1990
Minister of Foreign Affairs Minister of Foreign Affairs (New Zealand) The Minister of Foreign Affairs is a major ministerial portfolio in the government of New Zealand.The current Minister of Foreign Affairs is Murray McCully, who was National Party Spokeperson of Foreign Affairs and Shadow Minister of Foreign Affairs. There are also Associate Minister roles...	David Lange David Lange David Russell Lange, ONZ, CH , served as the 32nd Prime Minister of New Zealand from 1984 to 1989. He headed New Zealand's fourth Labour Government, one of the most reforming administrations in his country's history, but one which did not always conform to traditional expectations of a...	1984–1987
	Russell Marshall Russell Marshall Cedric Russell Marshall, CNZM was a New Zealand politician of the Labour Party, who had been a Methodist minister from 1960 to 1972, and school teacher 1955–56 and 1972.-Member of Parliament:...	1987–1990
	Mike Moore	1990
Minister of Health Minister of Health (New Zealand) The Minister of Health is a minister in the government of New Zealand with responsibility for the New Zealand Ministry of Health and the District Health Boards.The present Minister is Tony Ryall, a member of the National Party.-History:...	Michael Bassett Michael Bassett Michael Edward Rainton Bassett, QSO is a former Labour Party member of the New Zealand House of Representatives and cabinet minister in the reformist fourth Labour government...	1984–1987
	Helen Clark Helen Clark Helen Elizabeth Clark, ONZ is a New Zealand political figure who was the 37th Prime Minister of New Zealand for three consecutive terms from 1999 to 2008...	1987–1990
Minister of Housing	Phil Goff Phil Goff Philip Bruce Goff is the current Leader of the Opposition and the Leader of the New Zealand Labour Party. During the Fifth Labour Government, he served in a number of ministerial portfolios, including Minister of Defence of New Zealand, Minister of Corrections, Minister of Foreign Affairs and...	1984–1987
	Helen Clark Helen Clark Helen Elizabeth Clark, ONZ is a New Zealand political figure who was the 37th Prime Minister of New Zealand for three consecutive terms from 1999 to 2008...	1987–1990
Minister of Justice Minister of Justice (New Zealand) The Minister of Justice is a minister in the government of New Zealand. The minister has responsibility for the formulation of justice policy and for the administration of law courts....	Geoffrey Palmer	1984–1989
	Bill Jeffries Bill Jeffries William Patrick "Bill" Jeffries was a New Zealand politician of the Labour Party.He represented the Heretaunga electorate from 1981 to 1990, when he was defeated by a National candidate in a swing against Labour....	1989–1990
Minister of Local Government	Michael Bassett Michael Bassett Michael Edward Rainton Bassett, QSO is a former Labour Party member of the New Zealand House of Representatives and cabinet minister in the reformist fourth Labour government...	1984–1990
Minister of Māori Affairs Minister of Maori Affairs The Minister of Māori Affairs is the minister of the New Zealand government with broad responsibility for government policy towards Māori, the first inhabitants of New Zealand. The current Minister of Māori Affairs is Dr. Pita Sharples.-Role:...	Koro Wetere Koro Wetere Koro Tainui Wētere, CBE is a former 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 .-Member of Parliament:...	1984–1990
Minister of Railways Minister of Railways (New Zealand) The Minister of Railways was the minister in the government responsible for the New Zealand Railways Department 1895–1981, the New Zealand Railways Corporation 1981–1993, and New Zealand Rail Limited 1990–1993...	Richard Prebble Richard Prebble Richard William Prebble CBE, born 7 February 1948, was for many years a member of the New Zealand Parliament. Initially a member of the Labour Party, he joined the newly formed ACT New Zealand party under Roger Douglas in 1996.-Early and personal life:...	1984–1990
Minister of State Owned Enterprises	Richard Prebble Richard Prebble Richard William Prebble CBE, born 7 February 1948, was for many years a member of the New Zealand Parliament. Initially a member of the Labour Party, he joined the newly formed ACT New Zealand party under Roger Douglas in 1996.-Early and personal life:...	1987–1988
	.......	1988–1990

Economic

Foreign policy

Constitutional

Social policy

Treaty of Waitangi and Maori policy

Environmental policy

Formation

The 1987 election

Division over Rogernomics

Defeat

Electoral results

Prime ministers

Cabinet Ministers

See also