1984 New Zealand Politic

Why is the year 1984 regarded as a watershed in the history of post-war New Zealand politics?

The year 1984 was the turning point that marks a new era for New Zealand. There were many major changes economically, socially and politically, which significantly affected the course of New Zealand history, and defined its characteristics of today.

The Third National Government led by Robert Muldoon was in charged during 1975 to 1984. It was a socially and economically conservative government, which had a generous welfare system and a strictly controlled economy. Muldoon intervened a lot in the economy and caused the failure of the Public Service Investment Society, which took years to recover the instability he created 1. The rise of oil price worldwide and Muldoon’s energy policy in 1981 caused inflation to increase dramatically. New Zealand also owed huge foreign debt due to the generous welfare and subsidies policies and was facing a currency crisis for its dollar was overvalued. The day after the election it had been announced that almost $1.4 billion had left the country, as much as the Reserve Bank usually handled in foreign exchange in a year. Robert Muldoon refused to devaluate the currency, ignoring the Reserve Bank’s advice 2. By the time late 1984 arrived, the National Government lost its popularity resulting in the success of the Fourth Labour Government led by David Lange in the General Election.

Labour brought in many left-winged policies and reforms that would significantly influence the future prospect of New Zealand political and social landscape.

Muldoon’s refusal on devaluation led to a constitutional crisis in 1984. It pushed a constitutional revision later on, which resulted in an unwritten convention that allows the transfer of executive power from the incumbent to the elect government (known as the caretaker convention). The Royal Commission on the Electoral System and the New Zealand Bill of Rights Act 1990 were also important...