Third Labour Government of New Zealand
The Third Labour Government of New Zealand was the government of New Zealand from 1972 to 1975. During its time in office, it carried out a wide range of reforms in areas such as overseas trade, farming, public works, energy generation, local government, health, the arts, sport and recreation, regional development, environmental protection, education, housing, and social welfare. Māori also benefited from revisions to the laws relating to land, together with a significant increase in a Māori and Island Affairs building programme. In addition, the government encouraged biculturalism and a sense of New Zealand identity. The government lasted for one term before being defeated a year after the death of its popular leader, Norman Kirk.
Significant policies
The government's most significant policies concerned attempts to create a distinct New Zealand identity, both internally and in the world. For most of its history, New Zealand had been, economically, culturally and politically, highly dependent on Britain. This began to change during World War II, when it became clear that Britain was no longer able to defend its former colonies in the Pacific. As Britain began to turn away from what was left of its former Empire and towards Europe, New Zealanders became less inclined to think of themselves as British. Initially the country turned instead to the United States, and so entered into the ANZUS pact with the US and Australia, and aided the US in the Vietnam War. However, by the early 1970s many New Zealanders felt the need for genuine national independence, a feeling strengthened when Britain joined the European Economic Community in 1973, causing serious problems for New Zealand trade. Most of this government's policies can be seen in this light.Treaty of Waitangi
This was the first government to give serious recognition to the Treaty of Waitangi, first by making the anniversary of its signing a national public holiday, and then by establishing the Waitangi Tribunal to investigate contemporary breaches of it. Both were concessions to increasingly angry Māori protest, as was the appointment of Matiu Rata to Minister of Māori Affairs. He was the first Māori Minister of Māori Affairs since the 1930s and the first ever Māori Minister of Lands.The Treaty of Waitangi Act 1975 was the first legal recognition of the Treaty, but did not allow the Tribunal to investigate historical breaches. The New Zealand Day Act 1973, which made Waitangi Day a national public holiday, also fulfilled the Māori demand for greater acknowledgement of the Treaty. However it was also a part of the government's programme of nationalism, as the name of the day indicates. New Zealand Day was intended to appeal to New Zealanders of all ethnicities, including those who were neither Māori nor Pakeha.
Economic
- New Zealand's economy was heavily dependent on overseas trade, and Prime Minister Norman Kirk felt that it made little sense to be dependent on foreign-owned shipping firms. A state-owned shipping line, Shipping Corporation of New Zealand was created, but was to be financially unsuccessful.
- The Development Finance Corporation bill was passed, which reconstituted the Development Finance Corporation as a wholly Government-owned body. It operated like a Development Bank in assisting with the promotion of regional development and new industrial projects.
- Wage controls instituted by the previous government were abandoned.
- The government tried to avoid inflation via massive overseas borrowing and a variety of local regulations. A scheme was introduced to fix maximum retail prices, while to keep people in employment it added the post office, the railways, milk, lamb, mutton, and wool to the number of industrial subsidies.
- Office, rail, and bulk power charges were controlled.
- During the government's first year in office, adjustments were made to the salaries of State Servants while the Stabilisation of Remuneration Regulations were introduced, which provided wider flexibility for employers and trade unions to negotiate new pay rates. These changes enabled wage and salary-earners to negotiate with their employers for a better deal, which they quickly did.
- The Development Finance Corporation was provided with powers to "grant up to 40 per cent of the capital cost of plant and machinery for projects designed to achieve a high export performance".
- New provisions were introduced to encourage employers "to finance their employees into shareholding agreements with the company".
- Subsidies and suspensory loans were introduced to encourage regional development, together with selective investment incentives "to encourage desirable changes in the pattern of industry."
- Many of the direct penalties on strikes and lock-outs were removed.
- Average real wages rose substantially, with the share of the economic "cake" accruing to labour rising from 45% in 1972/73 to 48% in 1975/76.
- In his first budget, Bill Rowling announced that state spending on housing and electricity capital works would increase, and 14% more would be spent on education and 19% more spent on health.
- Bob Tizard reduced income tax rates for many on lower incomes, and a standard tertiary bursary and additional house lending were included in the 1975 budget.
- Including benefit payments, new training, export and production incentives, and further money for health, education, housing, culture, and recreation and regional development pushed expenditure up by 19% for 1974–75.
Foreign affairs
- Recognition of the People's Republic of China.
- Opposition to French nuclear testing in the Pacific Ocean.
- Refusal to allow sporting contacts with apartheid South Africa.
- Abolished compulsory military training.
Constitutional
- Altered the Queen's title in New Zealand
- Passed the Constitution Amendment Act 1973
- Lowered the voting age from 20 to 18.
- An electoral amendment bill increased Māori representation.
- The Māori Affairs Amendment Act of 1974 redefined a Māori as "a person of the Maori race of New Zealand; and includes any descendant of such a Maori," thereby broadening the definition of who was a Māori.
Social policy
- Payment of the Christmas Bonus."
- Establishment of the Domestic Purposes Benefit for single parents.
- Establishment of compulsory pension savings' scheme.
- The introduction of Additional Benefit .
- The introduction of the Disability Allowance .
- An expanded welfare system.
“The Kirk-Rowling Government gave exceptional attention to the needs of the needs of the least privileged – often recent Pacific Island immigrants or 'solo mums'.
Substantial increases were made to social security benefits such as married couple’s benefits, single benefits, and pensions. The basic benefit was also increased and sickness benefit was liberalised: where a married couple had both been in full-time employment for at least 12 months and intended to remain members of the regular workforce, a sickness benefit would be paid for up to three months at half the rate payable to married couples, if one couple became sick. There would be no income test on this. Prior to this reform, if a husband had fallen ill while his wife was working, no Social Security payment was made. Pensions were increased and state insurance rebates were also introduced for pensioners. Fathers became entitled to the Domestic Purposes Benefit in 1973, albeit under more restrictive conditions than those applying to mothers. In addition, the Xmas bonus was subsequently repeated in 1973 and 1974, while age benefits were adjusted six times from 1972 to 1975. The real incomes of many means-tested beneficiaries were further increased by the introduction of telephone, television, and rates rebates in 1973. In 1974, aid was given to help pay the insurance premiums on the homes of pensioners, and a major effort was undertaken to increase the availability of suitable accommodation for the elderly. Increased financial assistance was also provided to voluntary groups working with handicapped or underprivileged persons, while four weeks paid relief was provided for those caring for the disabled and handicapped at home. From January 1974 onwards, approved day-care centres for children received a government grant of $4.50 per week per child. In addition, wheelchair access to buildings was promoted.
In February 1973, the maximum Advance Payment of Benefit was doubled from $400 to $800 "to be used for home maintenance or provision of essential services." In July 1974, Cabinet agreed that where special annuities were paid as though they were equivalent to a War Widows Pension or a War Pension, the cost of living adjustment granted to War Pensions would apply to these annuities as well. In December that same year, a Special Christmas payment was provided to beneficiaries.
The amount of income that income-tested beneficiaries could receive before their benefit levels were affected was also increased, while the basic dental service for children was extended to dependants up to the age of eighteen. In addition, the physiotherapy benefit was increased while a new hearing aid benefit was introduced. Altogether, the increases in welfare benefits and pensions helped narrow the gap between one-income families and welfare recipients.
Although numerous benefits such as pensions, sickness benefits, and unemployment benefits were increased Third Labour Government's time in office, it failed to increase the family benefit, which continued at a nominal rate set in 1972 by the previous National government at $3 a week per child, which led to the real value of the family benefit being reduced to the extent of $1 a week for each child. In defending the Third Labour Government's family policy record, however, Labour MPs pointed to subsidies on a variety of consumer products including gas, electricity, postal charges, wool, milk, meat, eggs, bread, and some transport items.
- Major initiatives in housing.
The government increased the total number of houses built, sustained the building industry, increased government involvement in housing, and achieved stabilised property prices by the 3rd quarter of 1975. 31,000 houses completed in 1973–74, compared with 27,400 in 1972–73 and 22,400 in 1971–72. State Housing construction was also encouraged, with nearly 4,000 State Houses completed in 1975–76, compared with 700 constructed in 1972–73. The criteria for allocating State Housing was also changed, which led to more people being offered such houses. Income limits for 3% housing loans were also increased, and rent subsidies for pensioners were introduced.
New housing loans were introduced, such as a new 4.5% loan for those whose qualifying incomes were between $70 and $75 a week, plus $5 for each dependent child. An additional loan was also introduced for applicants who had a total income of less than 490 a week and were eligible to capitalise on the family benefit. Greater flexibility was extended to the State Advances Corporation "in determining the size of average loans "to be made available both at 3 and at 5 per cent." In the first budget, a special fund was announced for refinancing mortgages where people had second and third mortgage commitments that were placing strains on the family budget. Rent Appeal boards were also set up to restrict the rights of landlords to make arbitrary increases in rents to protect the rights of tenants.
New Home Ownership Accounts were introduced to encourage people on low and middle incomes to save towards housing. Savers were entitled to a tax concession of 25% if savings were retained in the account for at least three years and were then put towards the purchase or construction of a first house or apartment. A Property Speculation Tax was introduced in 1973 in an attempt to control speculative dealing in property, and in 1974 building restrictions were imposed on commercial building and the construction of larger houses. A land tax was also introduced to control profit-making on rezoned land. Improvements were made in the design and planning of State housing accommodation, with additions such as carports, driveways, tree-planting, and landscaping. In addition, an amendment to the Public Works Act provided more generous arrangements for those whose property had been taken under the Act, while other legislation ensured that a joint family home was exempted from death duties on the death of whichever spouse died first. Additional house lending was later provided in the 1975 budget. Local authorities were authorised, under the Local Government Act of 1974, "to provide housing loans and subdivide council-owned land for housing," and could also "sell or lease allotments and apply to their local authority's loans board to borrow to purchase land for subdivision."
- Major initiatives in education.
Labour had committed itself in its 1972 election manifesto to expand community-based learning, and went about fulfilling this commitment by providing grants in its 1973 Budget for hobby classes and assisting various schools in developing second-chance education programmes for mature students. Attempts were also made to extend the teaching of Māori language and culture. Māori was introduced an optional subject in many secondary schools, proficient speakers of Māori were recruited for teacher training, Māori language lecturers were appointed in all teacher's training colleges. In tertiary education, more technical institutes were constructed, as indicated by large increase in annual gross voted expenditure on capital works for different tertiary institutions between 1972 and 1975: 25% for universities, 50% for teacher's colleges, 97% for primary and secondary schools, and 157% for technical institutes. For students in training colleges, technical institutes, and universities, were to receive $24 a week for up to three years of tertiary education, and the allowance would be increased to $27 for subsequent years if the course required more than three years. Special provision was also made for married students. In 1975, the Standard Tertiary Bursery was made available for part-time study, where the student was not otherwise employed.
Numerous measures were introduced which extended pre-school services and supported local voluntary organisations. These included the creation of ten district pre-school committees with the purpose of co-ordinating development at the local level. The subsidy for building play-centres and kindergartens was doubled and provision was made for helping in the purchase of sites. New salary scales for kindergarten teachers were approved, and assistance was extended to day-care centres, with the government providing a grant of $4.50 per week for each child cared for in an approved centre, which also qualified for a two-thirds subsidy on construction costs. In 1972, 1 in 3 children received pre-school education, while in 1975, the equivalent figure was 2 in 3.
Phil Amos, the Minister of Education from 1972 to 1975, was instrumental in establishing open-plan classrooms and was responsible for numerous measures such as the promotion of the debate on sex education in schools and the integration of Catholic schools. Amos's time in office also witnessed the opening of the first community college in Hawkes Bay, with the intention of incorporating adult and community education "on an equal footing with vocational education and set out to achieve increased representation from groups traditionally under-represented in post-school education."
- Major initiatives in health.
In 1974, various improvements were made in state medical benefits. In 1974, a higher private hospital benefit for non-surgical hospitals was introduced, together with a higher General Medical Services benefit for children. That same year, free treatment for all accident induced injuries and occupational disease was introduced. In 1974, lump-sum benefits were introduced for dependents not covered by accident compensation, and in 1975 sickness benefits for working spouses were introduced.
- Accident Compensation Amendment Act .
- A major improvement in the national minimum wage.
- The Counties Amendment Bill No. 3 and the Municipal Corporations Amendment Bill No. 2.
- Measures to combat sex discrimination.
- The Industrial Relations Act .
- The Māori Affairs Amendment Act .
- The Education Amendment Bill No. 5.
- The introduction of a scheme of national walkways.
- The Recreation and Sport Act .
- Improvements in holiday entitlements .
- The Fire Services Amendment Bill.
- Introduction of the rates rebate scheme.
the establishment of a public health laboratory, and the setting up of a committee to advise on noise control procedures.
organisations were increased considerably from 1972 to 1975.
made available by 1975.
New tax scales were introduced, which reduced taxes married taxpayers earning under $6,000 per annum, while New Zealanders earning over $12,000 per annum saw a slight increase in their tax burden. In addition, a new property speculation tax was introduced. According to Brian Easton, however, “the Labour Government’s reduction of taxation on low income recipients while inflation raised taxation on many earners had the effect of raising taxes on single-income families, who tend to be poorer, but perhaps lowering taxation on multiple -income families.”
Formation
By 1972, National had been in power for twelve years, and was seen by many as tired and stale. Long-serving National Prime Minister Keith Holyoake had retired earlier in the year to be replaced by Jack Marshall. While generally respected, Marshall lacked the charisma of Labour leader Norman Kirk. Labour's election publicity focussed on Kirk, and used the slogan 'It's Time', signifying that the government had been in power for too long. Labour won 48.37% of the popular vote and 55 seats, to National's 41.5% and 32 seats.Defeat
Labour was defeated in the 1975 election, after only one term in power. In a reversal of the previous election's results, National won 47.6% of the popular vote and 55 seats, while Labour retained only 39.6% and 32 seats. Several factors contributed to the result:Leadership
Kirk's death the year before had robbed Labour of its biggest asset. In response to Kirk's popularity, National had replaced Marshall with Robert Muldoon, a brash but popular man who could hold his own against Kirk.Bill Rowling replaced Kirk, although the party National Executive and the Federation of Labour had preferred Hugh Watt. But Rowling lacked the charisma of either Kirk or Muldoon, and was the subject of frequent mockery from Muldoon and Bob Jones.
Watt declined to stand for deputy, saying he had "done his fair share" as deputy to two leaders. The party whip Ron Barclay heard that Arthur Faulkner who was known to be indecisive expected to become deputy on the first ballot. He persuaded Warren Freer to stand and split the vote so that Faulkner would be defeated by Bob Tizard or Colin Moyle; either being preferable to Faulkner. So there were five candidates, including Joe Walding who dropped out first. Then Moyle and Freer were eliminated on the second and third ballots, and on the fourth ballot Tizard won by 28 votes to 26, as one of Faulkner's supporters failed to keep their promise.
The caucus decided to have a full re-election for cabinet rather than re-electing the cabinet as a whole. Sixteen were re-elected plus Ron Bailey. The last vacancy was filled by Phil Amos rather than by Norman Douglas, Frank O'Flynn or Jonathan Hunt, and two further ballots selected Amos over Douglas by one vote. The new cabinet agreed that Labour should "go to the country", to get a mandate for Rowling and so that several policy "millstones" could be dropped. But Rowling referred it to caucus, who voted against a snap election. Freer said later that Rowling "procrastinated, as usual".and by 1975 that Rowling was "incapable of vigorous leadership" There was belated talk of a "snap election" in early 1975 after the oil shock.
Economic factors
New Zealand, like most other countries, was hard hit by the 1973 oil crisis. In addition, Britain had joined the European Economic Community the same year, restricting New Zealand's agricultural exports to its biggest market. Labour seemed to lack the economic skills to handle these crises. By contrast, National's leader, Muldoon, was also its finance spokesperson, and an accountant by profession. He was able to convince many voters that he could solve New Zealand's economic problems.Ironically, another factor in Labour's defeat was the popularity of National's universal superannuation scheme compared to Labour's compulsory savings programme. Universal superannuation, which replaced Labour's scheme, was to cause major financial headaches for subsequent governments.
Social factors
Labour's progressive social and cultural policies, which encouraged biculturalism and the growth of Māori culture, may have caused a backlash amongst working class Pakeha, who had traditionally supported Labour. The cancellation of the proposed Springbok Tour was particularly unpopular. Many disliked and distrusted what Kirk's government was doing, but found Muldoon's style and message strongly appealing. This shift, along with the appeal the government's policies had for many middle class intellectuals, helped to change the culture of both parties, in Labour's case permanently. Under Muldoon, National had much more working class support than previously or since. The third Labour government's policies attracted a large university-educated liberal contingent to Labour, transforming the party from its working class, trade union roots. This shift in party culture explains how the fourth Labour government's policies differed so dramatically from those of its predecessors. As a result of this change, Kirk was to be the second to last Labour leader to come from a working class and union background rather than be university-educated.Election results
Prime ministers
was Prime Minister from the 1972 election until his death in August 1974. He was replaced by Wallace Rowling.Cabinet Ministers
| Portfolio | Minister | Start | End |
| Prime Minister | 31 August 1974 | ||
| Prime Minister | 12 December 1975 | ||
| Deputy Prime Minister | 10 September 1974 | ||
| Deputy Prime Minister | 12 December 1975 | ||
| Minister of Agriculture | 12 December 1975 | ||
| Attorney-General | 12 December 1975 | ||
| Minister of Broadcasting | 12 December 1975 | ||
| Minister of Civil Defence | 10 September 1974 | ||
| Minister of Civil Defence | 12 December 1975 | ||
| Minister of Customs | 13 March 1975 | ||
| Minister of Customs | 12 December 1975 | ||
| Minister of Defence | 10 September 1974 | ||
| Minister of Defence | 12 December 1975 | ||
| Minister of Education | 12 December 1975 | ||
| Minister of Electricity | 10 September 1974 | ||
| Minister of Electricity | 12 December 1975 | ||
| Minister for the Environment | 10 September 1974 | ||
| Minister for the Environment | 12 December 1975 | ||
| Minister of Finance | 10 September 1974 | ||
| Minister of Finance | 12 December 1975 | ||
| Minister of Foreign Affairs | 31 August 1974 | ||
| Minister of Foreign Affairs | 12 December 1975 | ||
| Minister of Forestry | 12 December 1975 | ||
| Minister of Health | 10 September 1974 | ||
| Minister of Health | 12 December 1975 | ||
| Minister of Housing | 10 September 1974 | ||
| Minister of Housing | 12 December 1975 | ||
| Minister of Immigration | 12 December 1975 | ||
| Minister of Internal Affairs | 12 December 1975 | ||
| Minister of Island Territories | 10 September 1974 | ||
| Minister of Justice | 12 December 1975 | ||
| Minister of Labour | 10 September 1974 | ||
| Minister of Labour | 12 December 1975 | ||
| Minister of Local Government | 12 December 1975 | ||
| Minister of Maori Affairs | 12 December 1975 | ||
| Minister of Mines | 12 December 1975 | ||
| Minister of Overseas Trade | 12 December 1975 | ||
| Minister of Police | 12 December 1975 | ||
| Postmaster-General | 10 September 1974 | ||
| Postmaster-General | 12 December 1975 | ||
| Minister of Railways | 10 September 1974 | ||
| Minister of Railways | 12 December 1975 | ||
| Minister for Social Welfare | 12 December 1975 | ||
| Minister for Sport and Recreation | 12 December 1975 | ||
| Minister of Statistics | 12 December 1975 | ||
| Minister of Tourism | 12 December 1975 | ||
| Minister of Trade and Industry | 12 December 1975 | ||
| Minister of Transport | 12 December 1975 | ||
| Minister of Works | 29 August 1974 | ||
| Minister of Works | 10 September 1974 | ||
| Minister of Works | 13 March 1975 | ||
| Minister of Works | 12 December 1975 |