The Fourth Labour Government of New Zealand governed New Zealand from 26 July 1984 to 2 November 1990 (the period up to 8 August 1989 is also called the Lange Government). It was the first Labour government to win a second consecutive term since the First Labour Government of 1935 to 1949. The policy agenda of the Fourth Labour Government differed significantly from that of previous Labour governments: it enacted major social reforms (such as legalising homosexual relations) and economic reforms (including corporatisation of state services and reform of the tax system).
The economic reforms became known as "Rogernomics", after Finance Minister Roger Douglas. According to one political scientist:
The Labour government also enacted nuclear-free legislation, which led to the United States suspending its treaty obligations to New Zealand under the ANZUS alliance. David Lange led the government for most of its two three-year terms in office. Lange and Douglas had a falling-out that divided the party. The government suffered a defeat at the 1990 general election, but the incoming National government retained most of the reforms.
Significant policies
Economic A range of economic reforms collectively known as Rogernomics. These included: Floating the New Zealand dollar. Removing all agricultural subsidies. Introducing GST (Goods and Services Tax). New banks were allowed. Large reductions in income and company tax, along with the proposed implementation of a flat tax. Removing controls on foreign exchange. Abolishing or reducing import tariffs. Corporatising many State owned enterprises such as the Post Office, Telecom and Air New Zealand to be more like private businesses. Some of these were later privatised. Disestablishing the NZ Forest Service and sold the forests.http://teara.govt.nz/en/exotic-forestry/page-5 "NZ Forest Service Disestablished and Forests Sold" Abolishing price controls and interest rate control. Privatised state assets, such as New Zealand Steel. Enabling the Reserve Bank 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 alliance. Many New Zealanders (especially within the Labour Party) wanted to make New Zealand a nuclear-free zone. An opinion poll conducted by the Defence Committee showed that 92% of the population opposed the presence of nuclear weapons entering New Zealand. However this would ultimately require the banning of all American warships from entering New Zealand waters as it was US policy to 'neither confirm nor deny' whether individual ships were nuclear armed. 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 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 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 to the post.
Defence
In 1989, New Zealand withdraws all forces of the 1st Battalion, Royal New Zealand Infantry Regiment from Dieppe Barracks, Singapore.
Constitutional Created the Royal Commission on the Electoral System (1985). Constitution Act 1986 – codified important constitutional conventions in one enactment. New Zealand Bill of Rights Act 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 and the 'unbridled power' of the executive.Palmer, Geoffrey (1979). Unbridled Power?: An Interpretation of New Zealand's Constitution and Government. 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 was derailed partly by public indifference but mostly by opposition from Māori who believed that the Treaty of Waitangi would be sidelined in the process.
Local government Reformed local government in 1989, amalgamating 850 local bodies into 86 authorities.
Social policy
Justice Legalised sex between males over the age of 16 (Homosexual Law Reform). Passed the Children, Young Persons, and Their Families Act 1989, introducing Family Group Conferences. The death penalty was fully abolished. Rape within marriage was criminalised. Road safety standards were improved through tighter law enforcement of substance-affected drivers.
Social development and welfare Spending on education and health was significantly increased from 1985/86 to 1988/89, by 24% and 9.6% respectively. Disability benefits were increased, with the 1985 budget raising 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. A new family support benefit (introduced as the family care benefit in 1984) raised the incomes of some poor families.The commercialisation of New Zealand By B. H. Easton 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.French welfare state reform: idealism versus Swedish, New Zealand and Dutch Pragmatism by James Angresano 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.Welfare and Work in the Open Economy, Volume 2: Diverse Responses to Common Challenges, edited by Fritz W. Scharpf and Vivian A. Schmidt 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. A Ministry of Women's Affairs (now the Ministry for Women) was established (1986) to promote equality for women; the first minister was Ann Hercus.The History of New Zealand by Tom Brooking The Parental Leave and Employment Protection Act 1987 extended coverage to women and their partners or spouses to take unpaid leave from their employment. Skills training programme were continuously developed, as characterised by the Access programme, which trained 60,000 people a year by 1990. 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. Liberalised immigration to New Zealand in 1987, particularly for skilled migrants. 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. Accommodation Benefit was increased (1985). Superannuation and other benefits were increased (1984). 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). 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). Income limits for Family Benefit capitalisation were increased for modest-income earners (1985). New policies were developed to address the needs of women and senior citizens, together with general diverse housing needs (1989).
Industrial relations 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 closed shop for private sector unions was reinstated. Social service spending for public sector unions was expanded.
Education In tertiary education, the Fourth Labour Government introduced charges equalling 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).Development and Crisis of the Welfare State: Parties and Policies in Global Markets by Evelyn Huber and John D. Stephens 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 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.