Last week, the New Zealand Labour Party finalised negotiations with two minor parties allowing it to form the 47th parliament. With the Greens giving Labour leader Helen Clark no guarantee of support for the next three years, the party signed a deal with the morally conservative, right wing United Future Party (UFP). 

Labour still fell short of its goal to form a majority in the120 seat Parliament. Yet the negotiations have left Labour’s main opposition in disarray; the National Party, the main party of big business rule for decades, suffered its worst ever election result, receiving just 21 per cent.

The 27 July parliamentary elections revealed widespread disillusionment amongst working class people with the political establishment. Abstention rates reached 22%, and 38% of the electorate voted for an array of smaller parties.

This follows many years of draconian neo-liberal policies that have devastated jobs, social services and welfare. The standard of living has fallen from 1.25 times the average standard of living in the high-income countries in 1965 to 0.6% in 2001. Despite being touted as a ‘textbook’ example of free market capitalism, New Zealand has experienced much slower growth rates than in the rest of the ‘developed world’. The rise of agricultural protection and Britain’s accession to the European Union damaged the New Zealand economy hugely. This convinced the ruling classes to embark on a ferocious neo-liberal programme in the 1980s. However productivity and living standards have hardly risen as a result.

After days of post election negotiations, it appears the Progressive Coalition, led by Jim Anderton, will remain as Labour’s primary coalition partner. Several years ago, Anderton split from Labour to form the Alliance, and until recently led the party in the governing coalition. The Alliance originated as an alternative to the right wing policies of Labour and for many workers promised to prepare the way for a credible socialist alternative. This was reflected in its mid-1990s polls successes, which were as high as 18%. But the Alliance failed to develop a distinctly socialist programme, occupying the crowded ‘centre ground’ instead. This course inevitably meant it failed to build a large base of support amongst the working class and youth.

In April, the Alliance split in two, with Anderton forming the Progressive Coalition. The party crisis was provoked over a government decision to send elite SAS troops to Afghanistan, as part of the US-led "war on terror". In the July elections, the Progressive Coalition ran a campaign with Anderton’s familiar message, "...more jobs, more skills, more investment in NZ, progress in making it secure." Yet it was unable to win more than two seats (1.8%). The rest of the former Alliance won only 1.2% of the vote and is not represented in the parliament.

The Greens received 6% (8 seats) of the vote, gaining support as a ‘left’ alternative to Labour and the Alliance, just as the Greens have done in neighbouring Australia. However their determination to oppose Labour’s plan to allow genetic engineering trials will leave them outside of the coalition. Greens leader, Jeanette Fitzsimmons, remained steadfastly uncompromising, "I’m sure the government is pursuing the best agenda for the government...we are pursuing the best agenda for the Greens." reported the OneNews media agency.

The Greens however have not provided a fundamentally different approach to Labour’s pro-market policies on many key issues facing working people, such as the joblessness scandal and economic problems. The party polled up to 11% during the election campaign but by mainly concentrating on the genetic engineering issue, important as it is, and without a comprehensive programme providing a credible alternative to capitalist crisis, it was not able to sustain or build on this support.

Populist right make gains

The smaller right parties successfully exploited the situation during the election campaign with a populist rhetoric that appeared to many electors to address the pressing social and economic issues. They blamed immigrants for the problems blighting working class communities, including unemployment, housing and price rises. Combined, the New Zealand First party, the Association of Consumers and Taxpayers (ACT) and the United Future Party (UFP) polled more than the National Party.

The UFP, which is really a loose coalition rather than a clearly defined party, played on ‘law and order’ issues and which won nine seats (7%). Its leader, Peter Dunne, is a former Labour member of parliament, who appeals to a middle class constituency as ‘safe’ and ‘moderate’ pair of hands. It has links to Christian fundamentalist groups.

The New Zealand First party is led by Winston Peters. His party came third in the polls after Labour and the National Party, winning 13 seats (10.6%). The First party advocates anti-immigrant policies, as well as tougher law and order methods. Opportunistically, the party attacks mass unemployment and welfare cutbacks. This has won it support amongst Maoris, who suffer the most from cutbacks and joblessness.

The First party has therefore managed to regain much of the ground lost after its entry into the National Party dominated coalition government in 1999. As finance minister Winston Peters was responsible for ‘reforms’ that worsened the situation for Maoris and Pacific Islanders, as well as other big sections of the working class and poor.

Clark government faces storms

The long-term implications of the deal between the Labour Party and UFP could cost premier Helen Clark much support as rumblings of discontent over the prospect of sharing power with arch conservatives are already simmering both in parliament and amongst the electorate. This has not stopped the Council of Trade Unions, the national trade union federation, from welcoming the formation of another Labour dominated government. Amazingly, the CTU leadership claims Helen Clark’s administration will be a barrier to more ‘New Right policies’.

Clark has been careful to try to appear resistant to the more extreme aspects of neo-liberalism that characterised previous governments but the fact is that when in office Labour has shown its willingness to carry out new policies on behalf of big business. The slight upturn in the economy, mainly due to the low price of the New Zealand dollar, which has helped export growth, will not prevent future economic downturn. This will set the new government on conflict with the working class and will most likely blow apart the coalition administration.

The polarisation between the right and left in New Zealand society, and the big loss of support for traditional pro-capitalist establishment parties, signifies profound changes afoot. An opposition mood will develop amongst the unions and the working class as a whole, which at a certain point can mean the creation of a new Alliance-style party. With a clear socialist programme and working class membership, a new Left party can quickly make big gains, providing an alternative to both the big parties of the bosses and the right wing demagogues.

Committee for a workers' International publications

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