First Labour Government of New Zealand

The First Labour Government of New Zealand was the government of New Zealand from 1935 to 1949. It set the tone of New Zealand's economic and welfare policies until the 1980s, establishing a welfare state, a system of Keynesian economic management, and high levels of state intervention. The government came to power towards the end of, and as a result of, the Great Depression of the 1930s, and also governed the country throughout World War II.

Significant policies

Industrial

• Significant improvements in working conditions took place, partly through greater competition for labour and partly through legislative provisions.
• Enacted compulsory trade unionism(1936).
• Introduced the 40 hour working week. Legislation in 1945 and 1946 made this almost universal, in industry as well as in shops and offices.
• A large public works programme was initiated to provide employment on full wages instead of relief.
• The Court of Arbitration was required in 1936 to lay down in its awards and agreements a basic wage sufficient to keep a man, his wife and three children in a fair and reasonable standard of comfort.
• The Minimum Wage Act (1945) established a minimum wage for all workers aged twenty-one and above.
• Legislative provision was made in 1944 for an annual two weeks holiday for all workers.
• Underground mine workers were granted a seven-hour workday in 1948 and 1949.
• The Government Railways Act (1949) established a Government Railways Industrial Tribunal with the power to stipulate salaries and wage rates, hours of work, and other conditions of employment for railway workers.

Foreign affairs and military

In the 1930s, Labour was a supporter of the League of Nations (a forerunner to the United Nations), seeing the League as the best way to prevent another major war. However the League proved to be ineffectual, and was unable to prevent the Japanese invasion of Manchuria or the Italian invasion of Abyssinia. Under Labour, the New Zealand representative in the League spoke strongly against appeasement of aggressors, particularly the Italian invasion of Abyssinia and the German occupation of Czechoslovakia. When World War II broke out, New Zealand immediately declared war on Germany, with Savage saying that 'where Britain goes, we go'. During the war, conscription was introduced. This led some to accuse Labour of hypocrisy, as it had strongly opposed conscription in World War I. The government argued that while the First World War had been an unnecessary imperialist scuffle, the Second World War was a just war against fascist aggressors. Following the war, Fraser became involved in the setting up of the United Nations, and was especially concerned that small countries not be marginalised by the great powers.

Economic

• Increased government spending in an effort to stimulate the economy.
• The Reserve Bank of New Zealand was immediately nationalised, transferring control from private bankers to the Minister of Finance.
• A State Advances Corporation Act was set up which stimulated house-building and provided cheap loans to farmers.
• The Finance Act of 1936 restored all cuts in wages and salaries imposed during the depression period.
• Introduced wide-ranging tariffs and other import controls.
• The graduated land tax was reintroduced at high rates.
• The top rate of income tax was significantly increased, from 42.9% (and 57% for ‘unearned income’ such as rent, interest or dividends) in 1939 to 76.5% by 1949.
• The 1942 budget, which raised taxes, marked the beginnings of Keynesian thinking being explicitly followed in New Zealand.
• Various attempts at government planning were made. The Industrial Efficiency Act of 1936 established a Bureau of Industry to guide the Minister of Industries and Commerce on planning and development, whilst the Organisation for National Development was set up in 1944 with the aim of studying and making plans for a post-war society.

Welfare

• The unemployed were provided with a Christmas bonus.
• Aid was provided to agricultural labourers.
• The Social Security Act of 1938 introduced a comprehensive system of social security. The rates of family allowances and of existing benefits for the unemployed, miners, invalids, widows, the blind, and the aged were increased. The qualifying age for old-age benefits was reduced from 65 to 60. Family allowances were extended. New welfare benefits were introduced for orphans and those whose incomes had ceased on account of sickness. Provision was made for emergency benefits for persons suffering hardship who were not entitled to any other benefits. A system of universal superannuation, payable without means test to all residents 65 years of age or over, was also introduced.
• Payments for deserted wives were introduced.
• Universal family benefits were introduced (1946).
• An improved invalid pension for the totally blind and incapacitated was established (1936).
• Removed most fees for healthcare and secondary education.
• Began the state housing programme, providing rental houses for low-income workers.
• Farmers were provided with guaranteed prices for their produce.
• Free inpatient treatment for the whole population was introduced (1939).
• Free outpatient treatment, free pharmaceuticals, and part payment of general practitioners' bills were introduced (1941).
• Free maternity care was introduced.

Education

• The age at which children could commence school from six years to five years was restored (1936).

A "new freedom" was introduced in primary schools, with an attempt made to diminish formal instruction in the elementary years of schooling and replace it by experiential learning.

• The proficiency examination was abolished (1938) to enable all pupils to proceed to full secondary schooling.
• Free post primary education was introduced for everyone up until the age of 19.
• Free school milk was introduced (1937).
• Spending on staff, facilities, and assistance to students was increased.
• The education vote was increased.
• The school-leaving age was raised from 14 to 15 (1944).

Constitutional

• Passed the Statute of Westminster Adoption Act 1947, to adopt the Statute of Westminster 1931. This Act was a significant step to the Independence of New Zealand, technically New Zealand ceased to be the Dominion of New Zealand and became the Realm of New Zealand, and was fully able to direct its own foreign affairs and military. It also legally separated the British Crown from a New Zealand Crown, meaning that the New Zealand monarchy became legally independent of the British monarchy, and thus the King became King of New Zealand (the first monarch to be declared as such was Queen Elizabeth II in 1952).
• Abolished the country quota so that rural and urban electorates contained the same number of voters.

Treaty and Māori

• Replaced the term 'Native' with 'Maori' in official usage, including the Minister of Māori Affairs.
• The well-being of Maori improved as a result of the extension of health services by the Department of Health, the improvement of public health standards, and the expansion of land development schemes.

Formation

Main article: New Zealand general election 1935

The immediate context of the 1935 election was the Great Depression which had started in 1929 and affected New Zealand as badly as most other Western countries. Following the 1931 election the Reform and United (also known as Liberal) parties had formed a coalition to deal with it. The Labour Party formed the opposition, arguing that the only way out of the depression was socialism. The coalition government instead supported the economic orthodoxy which was that a balanced budget was of paramount importance and that state spending had to be cut in order to offset the decline in taxation revenue. They also believed that to provide the unemployed with money without making them work was morally wrong, and so put thousands of unemployed to work on often-pointless 'relief work'. Labour argued that the government needed to increase spending and create real jobs. By 1935 - after the election had been delayed a year because of the depression - many voters who would not otherwise have trusted Labour were disillusioned with the economic orthodoxy and prepared to try something new. Labour was helped by a change of leadership in 1933, after leader Harry Holland died and was replaced by Michael Joseph Savage, who did not seem to be a frightening communist but rather a kindly uncle figure. Labour achieved an overwhelming victory, taking 53 out of 80 seats. A further two were won by the Māori Ratana movement, which formed an alliance with Labour. Despite the size of its victory, Labour won only 46.1% of the popular vote; the government vote was split between Reform and United, and both parties lost votes on the right to the Democrats and the Country Party.

The 1938 election

Main article: New Zealand general election 1938

The government increased in popularity during its first term, as people felt the benefits of its policies and of economic recovery. It cannot realisticly be credited with ending the Depression in New Zealand, as most economic indicators were showing signs of improvement before the 1935 election. However government policies such as an increase in pay for relief workers, job creation and generous education policies did bring major benefits to many. Labour's share of the popular vote increased by nearly 10%, but it did not gain any new seats. While in 1935 the anti-Labour vote had been split between two major and two minor parties, by 1938 the United and Reform parties had merged into the New Zealand National Party, which was able to achieve 40.3% of the popular vote and win 25 seats. The Country and Democrat parties' share of the vote collapsed, with the Country Party losing both its seats. From this point on, New Zealand politics would be dominated by the Labour and National parties.

The 1943 election

Main article: New Zealand general election 1943

The 1943 election was held during World War II, and had been postponed by about two years due to the war. Conscription was a minor issue in the election; although both major parties supported it, some saw Labour as hypocrites as they had strongly opposed conscription during World War I. The issue may have lost Labour some support on the left, to the Democratic Labour Party, which had been formed by dissident Labour MP John A. Lee following his expulsion from the Labour Party. However the new party received only 4.3% of the vote and won no seats. Labour was given significant help by the votes of New Zealand soldiers overseas, who turned an apparent election-night victory for National into one for Labour. The election was also notable for the defeat of Māori statesman Apirana Ngata, by the Labour-Ratana candidate Tiaka Omana. Labour was to hold the four Māori seats until 1996.

The 1946 election

Main article: New Zealand general election 1946

By 1946 the National Party had gained in strength and credibility. However its support was strongest in rural areas, and in previous elections it had benefited from the country quota, which organised New Zealand electorates so that rural electorates had fewer voters, and therefore rural votes were worth more. In 1945 the government had abolished the quota, which may have cost National the election. Labour gained nearly 4% of the popular vote, but lost three seats, reducing its majority to four. Since the seats it held included the four Māori seats, the government was said by its opponents to rely on a 'Māori mandate'. It was insinuated that Labour would need to pass unwise pro-Māori policies in order to stay in power.

Defeat

Main article: New Zealand general election 1949

By 1949 the government had been in power for 14 years, five of them in wartime. It seemed increasingly worn out and uncertain. The three referendums held in 1949 (in addition to the usual referendum on alcohol licensing, which was held in conjunction with every election), were symptomatic of this. Meanwhile, National had announced that it would not repeal any of Labour's welfare state policies, which endeared it to many who had supported and benefitted from these policies but were tired of the government. National won 51.9% of the popular vote and 46 of out the 80 seats in parliament. Labour would be out of power for another eight years, and would not be in government for more than a single term until the 1980s.

Electoral results

Election	Parliament	Seats	Total votes	Percentage	Gain (loss)	Seats won	Change	Majority
1935	25th	80		46.1%	+11.8%	53	+29	26
1938	26th	80	946,393	55.8%	+9.7%	53	-	26
1943	27th	80		47.6%	-8.2%	45	-8	10
1946	28th	80		51.3%	+3.7%	42	-3	4
1949	29th	80	1,073,154	47.2%	-4.1%	34	-8	-

Prime Ministers

The government was led by Michael Joseph Savage until his death in 1940. He was succeeded by Peter Fraser, who was Prime Minister for the rest of the government's term.

Cabinet Ministers

Ministry	Minister	Term(s)
Attorney-General	Rex Mason	1935–1949
Minister of Defence	Frederick Jones	1935–1949
Minister of Education		1935–1940
	Rex Mason	1940–1947
	Terry McCombs	1947–1949
Minister of Finance	Walter Nash	1935–1949
Minister of Foreign Affairs	Michael Joseph Savage	1935–1940
	Frank Langstone	1940–1942
	Peter Fraser	1942–1949
Minister of Health	Peter Fraser	1935–1940
	Tim Armstrong	1940–1941
	Arnold Nordmeyer	1941–1947
	Mabel Howard	1947–1949
Minister of Justice	Rex Mason	1935–1949
Minister of Māori Affairs	Michael Joseph Savage	1935–1940
	Frank Langstone	1940–1942
	Rex Mason	1942–1946
	Peter Fraser	1946–1949
Minister of Railways	Daniel Sullivan	1935–1941
	Bob Semple	1941–1949
Minister without portfolio	Mark Fagan (MLC)	1935–1939
Minister without portfolio	David Wilson (MLC)	1939–1949

See also

• Governments of New Zealand
• New Zealand Labour Party