Foreign Correspondent: Pseudo-Progress


Auckland, New Zealand. At the general election of November 1975, the New Zealand National Party, led by Mr. Rob Muldoon, devastated the sitting Labour government. In one of the biggest electoral swings in the country's history, Labour's 12-seat majority in the 87-seat parliament was turned into a minority of 15. Unfortunately, this did not portend a change in the principles of government, but merely a change in its style. For anyone who loved his freedom, however, if the past performances of the parties were anything to go by, National was infinitely preferable to Labour.

Although both parties are deeply rooted in the welfare state—and New Zealand has been a welfare state for more than 40 years now—the National Party is generally considered to be "conservative" or "right wing." This is because in the past they have shown a far greater reluctance to interfere with the functions of the market or to open up new areas of welfare spending than has the Labour Party. True to their reputation of being conservative, the National Party has generally stood for the preservation of the status quo although when public expectations have made it expedient for them to extend the dominion of the state, they have always been prepared to do so.

The Labour Party, on the other hand, has always been much more radically socialist. Continually bombarding the electorate with new welfare programs, they put permanent pressure on the National Party to come up with programs of their own. Many people seem to have the odd idea that by voting for National's more moderate welfare policies they can have the (supposed) benefits of socialism—such as state hospitals, state education, old age pensions and so on—without actually having socialism.

The superannuation [retirement] scheme is a classic example. Midway through their three year term of office the Labour Party introduced compulsory superannuation. Under this scheme all wage and salary earners had to pay one percent of their income into a special fund while employers had to make a matching contribution on behalf of their employees. So that the money would not just sit around devaluing, the government said that they would do what the insurance companies did: they would invest it and make a handsome profit for the contributors. What they did not mention was that within about 10 years there would be enough money in the fund to buy up all the industry in the country.

The National Party took the opportunity to launch a two-pronged attack. On the one hand they came up with a simpler, more efficient scheme of their own which was actually just an extension of the existing system of old age pensions. On the other hand they were able to cry "communist" at the purchase-of-industry clause in the Labour Party's scheme. This meant that they were able to lure the voters by dangling a golden carrot in front of them while whipping them with the fear of communism from behind.

But in general, the Labour Party defeated themselves. In violation of their 1972 election pledge they refused visas to a South African football team while taxes rose by 87 percent in three years. Like most socialists they did not understand money and tried to govern on the never-never. They borrowed heavily overseas while spending recklessly at home, creating record deficits both external and internal. With export markets severely threatened by Britain's entry into the E.E.C., double-digit inflation, and high levels of unemployment throughout most of the Western world, the fear of recession over-shadowed the election.

People were looking for strong, competent leadership, capable of implementing sound economic policies while protecting them from both the growth of government and the ravages of the trade unions. Along came Rob Muldoon and the National Party. Mr. Muldoon artfully created the impression that he was more than capable of salvaging the economy while actually not specifying an economic policy at all. The National Party hit all the right issues. They were going to save the economy, end compulsory unionism, abolish the Labour Party's superannuation scheme, let people play sport with whomsoever they pleased, and "review" death duties. They were the grim saviours of the economy, prepared to implement any necessary austerity measures. At the same time they were the champions of freedom, tossing around terms like such as "private enterprise" and "individual rights" with reckless abandon. National's was probably the most skillfully managed election campaign in the country's history while Labour's was probably the worst.

If it had not been apparent before the election just what type of government the National Party would be, they did not take long to make it obvious afterwards. The trend toward executive government—an inevitable consequence of a mixed economy—was going to continue. Soon after taking office the new government announced that because the Superannuation Act was going to be repealed, payments into the fund would no longer be mandatory. This was blatantly illegal as the Act was still in force. When someone tried to bring a private prosecution against a company that had stopped making the payments, the Attorney General, Mr. Wilkinson, rather than allow the matter to be decided in a Court of Law, used his discretionary powers to block the prosecution. What the Prime Minister should have done was to call Parliament together and have the Act repealed. In fact, Parliament was not convened until June 1976, after the National Party had taken office on the first of December 1975.

From the outset it was obvious that the government's power was going to be concentrated firmly in Mr. Muldoon's hands. When he appointed his cabinet he allocated the key portfolio of finance to himself. He appears, at least for the moment, to be keeping a tight rein on his parliamentary colleagues and has shown a disturbing tendency to make savage personal attacks on political opponents and critics of his policies. But it is common knowledge that some of the new National M.P.s are worried about Mr. Muldoon's attitude towards power, as are many long-standing rank and file members of the Party. An explosion within the National Party, sometime before the next election, is a distinct possibility.

One of the major election issues was the question of voluntary unionism. In New Zealand any worker not self-employed is legally bound to join a trade union. There is widespread public resentment towards these laws and the National Party decided to cash in on it. In the name of individual rights, they said, they would introduce voluntary unionism. This would consist of the Labour Department conducting a secret ballot within each union so that the members could decide whether or not their union was to be compulsory.

The Federation of Labour—the organization to which most unions are affiliated—was terrified when National won the election. They acted as if the end was nigh, which for them it probably will be if the government honors its election pledges. So far they have introduced a lot of repressive legislation, restricting strikes and other union activities, but no voluntary unionism.

One issue that Americans may be familiar with is the question of sporting contacts with South Africa. The government refused to prevent a rugby football team from touring South Africa, declaring, correctly, that the decision was the prerogative of the players. This stand created a bitter controversy within New Zealand and caused a number of African and Carribean governments to boycott the Montreal Olympics as a protest. As a result of the boycott the government has been slowly changing its attitude. They are now saying that although they will not interfere, sporting bodies have a responsibility to "consider the consequences to New Zealand" of maintaining contacts with South Africa.

National's economic policies have shown that their high-sounding phrases about "private enterprise" and "individual rights" are just words, words, words. They have done nothing about the high taxation and tangle of regulations that are slowly destroying industry. Right now we are in the middle of a wage and price freeze.

Other moves effecting the economy include a highly controversial cut in Pacific Islands immigration and a confrontation with the oil companies. Mr. Muldoon announced a $3 per barrel levy on all oil produced in New Zealand. The oil companies threatened to halt exploration and the development of known fields. With New Zealand being heavily dependent on overseas capital, the government was forced to beat an ignominious retreat and the levy was dropped.

People are clearly disillusioned with both major parties and the next election will probably see minor parties and splinter groups capturing seats in the House. However, it will be a long time before the country elects a party for the task of dismantling the Welfare State.