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Issue 46, April 2000

A left government in New Zealand?

THE NEW ZEALAND Labour Party/Alliance coalition has celebrated its 100th day in power. After two decades of vicious neo-liberal policies from Labour in the 1980s and the National Party in the 1990s, this new government seems to offer relief and hope of change. But will the presence in government of the Alliance, the main component of which is the NewLabour Party, see the government take more radical measures than the other social democratic administrations elected in so many Western European countries?

The new government has abolished the hated Employment Contracts Act, which championed individual non-union contracts. This is good news for workers who want collective workplace agreements and it also boosts the power of the union leaders. Indeed, one of the aims of the new administration is to bring the union leaders back into the fold, to help the them sell future 'hard decisions' - spending cuts and the like - rather than by-passing them as previous governments had.

Small improvements to the minimum wage and pensions, coupled with symbolic talk of a republic, defence cuts and improving Maori relations, have generated an atmosphere of optimism and strong support in the polls. None of these changes cost much, however, and in reality the government is very much in the mould of the Bracks state government in Victoria, Australia or Gerhard Schröder's coalition government in Germany.

NewLabour was created in 1989 when 5,000 Auckland workers led by union leader, Matt Macarten, and Labour MP, Jim Anderton, split from Labour in disgust at its neo-liberal policies. New Zealand went from having probably the best social security safety net amongst the OECD countries to the worst during the lifespan of that Labour government, which held office for most of the 1980s. No advanced capitalist country went further along the road of privatisation, social security and spending cuts. Once dubbed the 'workers' paradise', Labour government ministers won a series of awards from the international business press for its neo-liberal agenda. All the National Party governments had to do in the 1990s was merely continue and deepen the changes.


The cowardly surrender of most of the trade union leaderships helped this process - a point not lost on even the most craven Australian union bureaucrats. All the unions in Australia have flown New Zealand's union leaders over the Tasman Sea to encourage Australian workers to resist similar changes there. In New Zealand not only have wages and conditions been slashed (boilermakers earn A$22-plus an hour on big construction sites in Sydney and Melbourne, compared with around A$10 an hour in Auckland), but whole unions have been wiped out in some sectors.

At the time of the NewLabour split, socialists internationally looked with great interest at this development, hoping to see a similar process elsewhere and not ruling out the possibility of the creation of a new mass workers' party on a left programme in New Zealand. Not for the first time, the New Zealand workers' movement led the way and in the following years similar splits occurred in Italy, Japan and other advanced capitalist countries.

However, developments took a negative turn. In the wake of the collapse of the Stalinist bloc and the strong recovery from the recession of the early 1990s, there was a strong ideological backlash against socialism by the capitalist class and their media. Not only the traditional social democratic parties but these new left parties shifted to the right. NewLabour won control of Auckland city council and undertook a policy of cuts and counter-reforms. In the mid-1990s the party joined with small liberal parties in an Alliance. This provided a cover for its rightward shift. Last year the Greens (more left-wing than in Germany) left the Alliance, partly in response to this degeneration.


The election programme of the Alliance was extremely moderate, making Labour quite comfortable about inviting them into the coalition government. They called for cheaper student loans, not an end to the loans system, and a tax rise for those earning over NZ$60,000 from 33 cents to 39 cents in the dollar (which would have hit many skilled workers). The minimum wage policy was for an increase from NZ$7 to NZ$7.50 an hour! The Alliance also called for a NZ$20 rise in pensions but this was quickly dropped when the Labour prime minister, Helen Clarke, raised a finger of protest.

The Alliance knew that their most radical proposal - for the re-nationalisation of electricity companies privatised in the past two years - would be blocked by Labour. And it was.

Despite the hopes generated in the early 1990s, when the Alliance would win up to 30% support in opinion polls, last year's elections saw it win just 7.8% of the vote, a 2% drop from the previous general election in 1996. Alongside Labour's 40% vote, however, and with the support of the Greens (who won 6%), it was enough for the Labour/Alliance coalition to take power.

Unfortunately, the Alliance has been unable to withstand the pressures of globalisation and the neo-liberal ideological onslaught of the last decade. The whole saga underlines the importance of building a strong Marxist current in the New Zealand and international workers' movement.

Stephen Jolly


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