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By Richard Shaw* 
David Lange becomes prime minister (right) and Geoffrey Palmer becomes deputy prime minister (left) after the Labour Party wins the 1984 general election.
photo: supply
View – It’s easy to recall those bad haircuts, beige clothes and Brown Honeycomb Carpet And a chuckle. But whatever one thinks of its aesthetics, the fourth Labour government – elected 40 years ago on July 14 – was no laughing matter.
After nine years Economic nationalism and Social Conservatism Under the leadership of National Party Prime Minister Robert Muldoon, David Lange’s new policy swept away everything. In just a few years, Neoliberal theory and neoclassical national minimalism, which reshaped the nation.
The new government, driven by Muldoon Constitutional crisis Just days after the election, the political system allows a government with a parliamentary majority to Legislate with relative impunity.
Lange and his Treasury Secretary, Roger Douglas, also relied heavily on intellectual support from senior Treasury officials who had absorbed the free-market philosophy of the Chicago School of Economics during their time at Muldoon.
Labour has made full use of the political resources of a new reform government. Its list of reforms reflects both the country we once were and the country we are now.
The rise of Rogerian economics
During his first term, public subsidies to the agricultural and forestry sectors were eliminated, foreign exchange and interest rate controls were removed, the US dollar was placed on a floating exchange rate regime, and financial market regulations were significantly relaxed.
The Goods and Services Tax (GST) was introduced to simplify the personal income tax structure, with the top tax rate on personal income reduced from 66 cents per dollar to 48 cents per dollar.
Roger Douglas interviewed after the 1984 Budget
photo: New Zealand TV
Government enterprises and departments were corporatised. Many were subsequently privatised, particularly after the Labour Party gained greater support at the 1987 general election. One of the most heavily regulated economies in the world quickly became one of the most open.
It was called “Rogernomics,” but the social and foreign policy reforms of the Lange-Douglas government were almost as significant. Eventually bannedhomosexual legalizationand No Nuclear Law As part of a newly adopted confident and independent foreign policy.
Attorney-General Geoffrey Palmer amended parliamentary standing orders to transform our legislature into one of the most open in a parliamentary democracy. Palmer also pushed the Constitution Act (1986) through the House of Representatives, which formally ended the outdated rule that the New Zealand Government could ask the British Parliament to legislate on its behalf.
The past shapes the present
The Lang government would push for other, deeper changes over time. For example, how Labour and its National successors exercised their executive influence explains much about MMP proportional electoral system 1993.
Many may have naively hoped that MMP would reduce the power of the political executive. But the more astute architects of reform recognised that MMP was the perfect institution to lock in the structural reforms undertaken by Labour and National in the 1980s and 1990s.
The radical politics required to overturn the neoliberal reforms implemented since 1984 is much more difficult in a multiparty system than in a two-party dominated country with alternating executive power.
Moreover, the DNA of Labour’s Lange-Douglas era can still be found in the party system that has developed under MMP.
Most notably, the Action Party was co-founded by Roger Douglas. It drew inspiration from Ayn Rand’s Atlas Shrugged Rather than the Ministry of Finance’s epoch-making briefing 1984 New Government economic management. New Zealand First leader Winston Peters still Compliance Lange and his inner cabinet put an end to this world.
Maori Week is the latest in a series of attempts to wring benefits for New Zealand from the Westminster parliamentary system. The political context for Maori Week has been shaped by Labour’s push to expand its Powers of the Waitangi Tribunal.
The new orthodoxy
Yet the fourth Labour government’s most enduring legacy is perhaps the least obvious: it has changed the way we talk about and think about politics, and in particular what we now consider to be politically possible or beyond the pale.
We voluntarily choose to limit our ability to control fiscal and currency policy. These self-imposed limits on state power are now so deeply embedded in legislation that any form of fiscal activism—e.g. Saving jobs and businesses During a pandemic – this seems very unusual.
The idea that the human condition is synonymous with the rational pursuit of self-interest is equally widespread. By this reasoning, wealth inequality—of which there is a great deal of More than 1984 — is a moral issue, not a market failure. Not even a global financial crisis or a pandemic can really change this pattern.
These days, it’s common to think of these things as natural and immutable rather than political choices. Without anyone really noticing, two equivalent fictions—the “dead hand” of the state and the “invisible hand” of the market—have acquired the status of legend and law.
In France, one of the crucibles of modern democracy, the fall of the old regime during the revolution is commemorated on Bastille Day, July 14. On the same day in 1984, the old order in New Zealand fell. It was replaced by a new orthodoxy that effectively stifled alternative political or economic imaginaries.
We still live in the shadow of 1984. That is the real legacy of the fourth Labour government.
* Richard Shaw Professor of Political Science at Massey University
This article was originally published on dialogue.
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