All over for hard
Labour down under
THE Labour Party was annihilated in the New
Zealand general elections held on October 27,
1990. In the last election in 1987 Labour won 58 out of 96 seats; a majority of 20 over the rival
National Party (conservative). Between the elections, it lost one seat when Jim Anderton quit to form the breakaway New Labour party.
So, Labour had a healthy lead coming into the
RONTE ISLAND SOUTH ISLAND 3 Stewarte
H OWEVER, in the biggest par-
liamentary shake-up since 1935, the National Party (NP) has obtained 68 seats, a majority of some 40 seats over Labour's 28. The New Labour Party (NLP) held onto its seat and the difference between the number of seats held by the ruling party and opposition parties is now greater than it has ever been since party politics emerged in the 1890s. Clearly an unprecedented change has occurred in the political climate.
Out of a Labour cabinet of 18 ministers, eight have lost their seats. The Speaker of the House, representing the West Coast electorate, also lost his seat. This is significant, because the West Coast is the birthplace of the New Zealand labour movement and the seat has been held by Labour since 1928. At least one more cabinet minister is also likely to lose her seat when the special votes have been counted.
These results were not unexpected either by the pollsters or the parties. In August, the polls already indicated almost exactly these results were in the pipeline. It began to dawn on the ministers that even they stood to lose their seats. So, in August, they ousted the prime minister Geoff Palmer, and replaced him with foreign trade minister Mike Moore. They blamed Palmer for their low ratings in the polls. Whatever else the election shows, clearly not all the fault lay with Palmer.
If you didn't know anything about the New Zealand Labour government, you might conclude from these results that the 1990 election was a huge political victory for the National party and the bosses. That would be wrong for two reasons. Firstly, the NP only gained about 4% more votes than it did in 1987, an increase which dis-
PACIFIC OCEAN appears when the growth of the voting oro 15O MILE! population is taken
250 км into account. On current figures, National won 48% of the vote while Labour's share fell by 13% to 34%. The minor parties scored in total 18%, of which the lion's share went to the Greens (with 6.7%) and the NLP (with 5.2%). Taken overall, this election signifies the defeat of the Labour Party rather than a clear win for National.
Secondly, the New Zealand Labour Party cannot be described in any sense as a mass workers party, bourgeois or otherwise - whether in terms of membership, social composition, programme or leadership. Up to the fall of the third Labour government in 1975, the Labour Party was still in the vanguard of international social democracy. Back then, it championed the cause of the trade union movement and had members. But today the party is funded mainly by big business and has barely 5,000 members — about the same as New Labour.
### Muldoon's fine-tuning
The disaffection of workers, farmers and small business people with Labour is a straightforward response to the radical free market since 1984. When Labour swept into power in 1984, wages, prices, rents and interest rates were frozen. This in turn had been the culmination of ten years of finetuning under National's economic wizard Rob Muldoon, during the economy grew by less than 1% a year. Labour's 1984 victory signified popular rejection of Muldoon's "authoritarian" interventionist policies, which were pursued with increasing intensity but did not seem to Muldoon, millionaire property developer
NEW ZEALAND 1990 election. GEOFF PEARCE Bob Jones arranged a party specifically for yuppies, the New Zealand Party (NZP). The NZP took 10% away from the National vote and thereby lifted Labour into pow-
On taking power, the Labour government under David Lange "opened the books" on the economy. Finance minister Roger Douglas, the sorcerer's apprentice, not only abandoned the freeze, but also began to dismember the framework of protection and regulation that had been in place since the great depression 1930s. Initially the policy seemed to work, as the economy experienced a short burst of growth. To be sure not everybody was happy with Labour since real buying power (especially for low income owners) fell sharply while profits soared. Bob Jones own political creation, arguing that if it continued it might lose the election. Indeed, in 1987 Labour actually increased its majority by picking up the yuppie vote.
### Yuppie bubble bursts
That was in August 1987 — but in October the stock market crashed, and the yuppie bubble burst. Ever since that time, Labour have been in trouble. The free market experiment had gone further than anyresults, as indicated by the level oy enem where else in the world, and ployment, investment, trade, debt and so on, were no better than under Muldoon. Unfazed by the evidence that restructuring was not delivering, Labour decided to deepen the experiment by restructuring the state sector as well.
Thatcher and Reagan could only have dreamed of going as far as the fourth Labour government. For us it has been a nightmare. In the past six years, the financial system has been completely deregulated and the state-owned Bank of New Zealand sold. The result was that billions 13 of dollars of savings went down the tube.
International Viewpoint #194 • November 12, 1990
NEW ZEALAND Farm subsidies were virtually eliminated, forcing thousands of small farmers off the land. Major state assets were sold to pricountry's foreign debt; coal mines, forest plantations, steel works, shipping lines, petrochemical plants, airports, harbours, the national airline, telecommunications, the Post Office, state insurance, the Government Printing Office, the Tourist and Hotel Corporation and so on.
To date more than NZ$10bn has been realized through the sale of state assets — yet the state debt is now twice as large as in 1984. Unemployment, too, has doubled under Labour and new investment, despite the addition of a 12.5% consumption tax income tax, which raised taxes for low income earners and cut the maximum rate from 60% to 33%, has shrunk to one-fifth
The lack of success of Labour's policies and declining popularity ate away at the Party itself. In 1988 Prime Minister Lange sacked his finance minister after a public squabble about introducing a single income tax rate. In 1989, when former party president Jim Anderton split to form the New Labour Party, many key national and branch officials went with him. Not long afterwards Lange succumbed to a coup which put Palmer into the top job. When Moore replaced Palmer there had been three prime ministers in just 13 Unconditional union support
Given the failure of its policies, it is hardly any wonder that Labour alienated 13% of its supporters and lost the 1990 election. Indeed, without the unconditional support of the NZ Council of Trade Unions (NZCTU), Labour would have fared even worse. In August, the new PM Mike Moore negotiated a "growth agrecwith the unions, which entailed wage restraint (2% maximum limit) without any price, interest or rent controls. Moore also promised government funding for 40,000 jobs in the 100 largest companies. Not surprisingly, the biggest companics supported the growth agreement and firms have funded the Labour government and the unions have tried to muster electoral support for it. Despite this assistance, it
The top trade union leaders supported Labour through thick and thin because Labour promised to maintain compulsory unionism — where, state sector apart, all employees must belong to the union which covers the type of work — a sort of national closed shop system. Compulsory unionism means that dues are paid to unions irrespective of whether or not union officials ever visit their members or obtain what their members want in nation14 al Award negotiations. National, on the • other hand, will make it possible for employees to hold ballots to opt out of unions or to choose some other agency to bargain for their pay and conditions.
For this same reason the central union bureaucracy has been hostile to the New Labour Party. The NLP has a programme of social democratic reforms which should make it the favourite of the trade union movement. But the NZCTU sees the NLP as a dangerous adventure; New Labour cannot win an election, but it can weaken Labour's chances against the National Party. By tying itself to the LP, the NZCTU has alienated large number of worker who were opposed to Labour's policies, and it will, undoubtedly, share in Labour's defeat.
To be sure, other parties did unseat some Labour politicians in the 1990 election, but just as important were the people who did not vote at all. Some 93% of eligible voters turned out in 1984; 89% in 1987 and 75% this year. In all probability and over six years Labour lost as many votes to "voter apathy"' as it did to the NLP. The inability of either a "free" or a programme of reform to produce growth, jobs and security has, especially for workers and low income earners, eroded their confidence in politics and politicians. A week before the elections, 35% of people said that they either would not vote or they had not decided who they should support.
### Green surprise
The surprise of the elections was the Green Party. Although there has been a tradition of concern about environmental issues in New Zealand for some time (the Values Party which stood candidates in the early 1970s was probably the world's first Green party, the Green Party was formed only one year before the elections. Apart from environmental issues they identifiable policies, no real structure, no leaders and waged only a minimal campaign. Yet they won more than 6% of the vote, although they did not stand in all areas. They were most successful in Auckland and Wellington, where they contributed to a 13% swing against Labour and where they helped to unseat quite a few cabinet ministers.
There were left wing candidates: the Communist League (an linked to the US Socialist Workers party) stood 10 candidates on a platform of selling the Militant newspaper, support for Cuba and opposition aggression in Iraq. Such campaigns, by little groups from all parts of the political spectrum, and individuals, gathered in a total of 3% of the vote.
At the time of writing it is not yet possible to fully analyze the 1990 election results and make firm predictions. But some things are obvious and other suggest
The new National government will push in the same direction and along the same paths as its Labour predecessor. Reform of the labour market apart, the policies of are almost identical. In 1987, the two parties differed on the question of visits by nuclear ships, since then National has adopted the Labour position - that these should be banned from entering our harbours. The stumbling block for the new National government, as it has been for all New Zealand governments since 1973, will be how to share out the costs of insufficient economic growth. The economy has been more or less in recession since 1987 and it seems that only a dramatic increase in world trade, especially in wool, meat and dairy products, could shock our economy into expansion. But this does not, to say the least, appear to be on the horizon.
National's enormous majority in parliament is not matched by overwhelming voter support. And National will not be able to rely on support from the Trade Union Movement to help it out of its sticky situations. These things taken together, we expect more extra-parliamentary activity during the next period. This especially since Labour's poor standing will make it difficult for its functionaries Io channel opposition through the Party and into parliament.
Two wings
Traditionally, the New Zealand labour movement has divided into two wings: the political, that is the Labour Party, and the industrial, that is the unions. That relationship is breaking down and may well fly
The LP is mainly a machine for aspiring MPs and the now proven inability of the NZCTU to deliver them the votes they need will mean they will push for more independence from the unions. Voluntary unionism and the right of workers to elect what union they want to join will force unions to become a more aggressive and effective fighting force simply to maintain a membership - which will probably push them closer to the New rather than the old Labour Party.
It may even be that the LP cannot survive. After all, if it has lost the vast bulk of its grassroots membership when it was in government what will happen now? The main momentum of the party has been to service the MPs, with only 28 MPs to service perhaps the momentum will stop Also, the most staunch NZLP members were converted during the period of the first Labour government (1935-49), and they will stay through thick and thin, but they are now quite old. And, unless it can give the impression that it might one day regain the treasury benches, it is almost certain that Labour's funding from business will dry up as well.
But all that is speculation; all that is certain today is that in New Zealand the work of revolutionary socialists is more urgent
Bush's financial
1990, of the stock exchange (which has now lost 42% of of a "financial Viet-
UNITED STATES New York Times of September 2 headlined, and on its impact on the rest of the world economy.
The unadmitted recession
For several quarters, there has been a striking fall in the profits of the principal
THE "third oil shock" is approaching. A ready made explanation for the chill in the world economy has been found. In the