Policy of the National Party
The National Party took over the Treasury benches in the spirit of crusaders, determined to rescue the country from socialism, bureaucracy, inflation, and high taxation. It went a little way towards these goals. Import and price controls were relaxed, some nationalised enterprises were put under corporation control, property deals were freed from a control that had been far from effective, food subsidies were reduced. But inflation continued as prices and wages maintained their steady climb; the slogan of 1949, “make the pound go further”, was proving ambiguous. In 1951 price controls and food subsidies were re-introduced, and welfare benefits increased. The mood of the National Government, shrewdly led by Sidney Holland, was pragmatic, and pragmatism demanded State action to prevent distress and fend off unpopularity. Had economic issues maintained their pre-eminence, the election due to be held in 1952 would surely have seen the National majority sharply reduced.
But industrial strife caused that election to be anticipated in 1951, and economic issues to be temporarily obliterated by matters of more emotional urgency. The nerve centre of industrial disaffection was the waterfront, where a strong union, to the grave embarrassment of the Labour Government, had for years used its power with some irresponsibility to elevate its members into the status of a working class élite. Other unions, also strategically placed in the economic life of the country, had followed this example, while the great powerless majority had collected the crumbs that fell from the table of arbitration. Holland, with a strong man as Minister of Labour, (Sir) William Sullivan, made it his business to meet this ambitious militancy head on. Behind the vocabulary of conflict – charges of communist conspiracy and industrial wrecking – one can detect an elemental determination on Holland's part not to tolerate a rival authority within the country, an authority personalised in the watersiders' tough leader, J. Barnes. In 1951 the waterside workers ceased work, technically locked out by their employers.
The conflict, now finally joined, had had its prelude in 1950 within the trade union movement, when the militants, led by watersiders, had failed to conquer the conservative Federation of Labour, led by F. P. Walsh, and had formed a rival national body, the Trade Union Congress. The dispute of 1951 lasted for three months, and ended in a total victory for the Government, the port employers, and conservative opinion, notably of businessmen and farmers, throughout the country. Within the Labour movement the militants were isolated: the Federation was hostile, the political Labour Party, led since Fraser's death in 1950 by Nash, was indecisive. By and large, the public were either hostile or apathetic to the watersiders and their allies, the freezing workers and transport workers.
The struggle was not without its ideological elements, even though it was in the main a naked contest for power. The TUC had socialistic overtones, and talked the old radical language of nationalisation, worker control of industry, and the abolition of compulsory arbitration. For their part the Government linked the whole affair to the cold war, and made its appeal to patriotism, loyalty, freedom, and the Western alliance. Defending such values, no hold could be barred; the emergency regulations with which the Government armed itself were stringent to an unprecedented degree. When, after the election of 1951, the National Government attempted to convert these regulations into a permanent Police Offences Act, it met with marginal reverses as a public opinion committed to the liberty of the subject manifested itself and secured the withdrawal of the most illiberal provisions of the Bill.
Holland displayed his astuteness in holding this emergency election; it was the first time in this century that a parliament had not gone its full three-year term. He explicitly sought public endorsement of his Government's handling of the dispute, and this he received. The Labour Opposition, dogged by Nash's injudicious declaration that he was neither for nor against the watersiders, appeared, and was, indecisive; the National Government was returned with an increased majority. A majority of voters, it was manifest, were glad to see the watersiders and the militants put down.
But no economic difficulties had been solved by this flexing of conservative muscles, and in the next three years the old perplexities reasserted their dominance. Taxation was still high, inflation still confronted high incomes with yet higher prices, bureaucratic controls were still applied. It had become clear that in mid-twentieth-century New Zealand no retreat to the golden age of laissez faire could be made. In 1954 the National majority was greatly reduced, and the 11 per cent of the votes collected by a third party, the Social Credit Political League, proved that a minority in the country was disillusioned with both major parties, neither of which seemed in possession of the magic word needed to open the door to unqualified felicity. Though Social Credit, thanks to the dispersion of its vote, gained no seats, the League made it clear that one-tenth of the voters were ready to opt for a new magician with a new formula.