Wellington, New Zealand
New Zealand's Labour government has major promises to keep after winning another term in office in the Aug. 15 general election. This is needed to restore the faith of its traditional supporters in the labor unions and lower income groups, who have warned they expect to see some old-fashioned socialist policies put into place over the next three years. To do this, Prime Minister David Lange has now targeted major improvements in the nation's health, education, and welfare services as his government's main aim. Many long-time Labour voters stayed away from the polls to protest economic policies that seemed to benefit the wealthy at their expense.
But enough conservative voters, who normally support right-wing parties, shifted to Labour to give it a healthy 15-seat majority (56 to 41) in the 97-seat House of Representatives.
Since coming to power in 1984, Mr. Lange's administration had concentrated on a radical reform of the economy on free market lines. It launched a massive deregulation program, floated the New Zealand dollar, abolished farming and manufacturing subsidies, and dismantled protectionist barriers. A number of government departments were converted into corporations and told to earn a profit.
The policy turned one of the world's most over-regulated and protected economies into one of the most free-wheeling. Financiers and speculators made millions, but the man in the street suffered as inflation soared to a record 18.9 percent, mortgage rates topped 20 percent, and unemployment rose. The government admits that unemployment (now 6.3 percent) is still rising and that this remains its biggest problem. It has pledged massive programs to give unskilled workers the training they need to get jobs.
Mr. Lange promised that things would get better if given more time. ``We will use a dynamic economy to make New Zealand a fitter place for people to live in,'' he said. Voters believed him. Jim Bolger, leader of the conservative opposition National Party, marvelled after the election: ``The tolerance of the electorate to pain was higher than most people believed.''
Lange claims Labour could not improve living standards while saddled with a stagnant economy. He says the government must create more wealth before it can start redistributing it and raising spending on welfare programs to help the needy.
Independent economists say that inflation should drop below 10 percent by next March, with a corresponding fall in interest rates.
The National Party, which suffered heavy losses in the cities, is now in danger of becoming a rural party. The main third party, the Democrats (formerly Social Credit), virtually disappeared as a political force, polling lower than at any time since they were founded in 1954 and losing their only two seats.
Voters apparently supported the government's strong antinuclear policies, which have caused a major rift with New Zealand's old ally, the United States. The antinuclear feeling is so strong that the National Party reversed its previous stance toward visits by US nuclear ships and declared it too would keep New Zealand nuclear-free if elected (but would do so not through a legal ban but through trust that the US would not send visiting ships that have nuclear weapons).
Buoyed by the mandate for his antinuclear policy, Lange is preparing to launch a worldwide campaign for nuclear disarmament, saying New Zealand has a platform to advance the cause on the international stage.