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Labour Party

by Peter Aimer

The Labour Party is New Zealand’s oldest political party still in existence. Born out of the trade union movement, it first came to power towards the end of the economic depression of the 1930s, and built New Zealand’s welfare state.

Origins of the Labour Party

Formation of the party

The Labour Party is New Zealand’s oldest political party still in existence in the 21st century. In Wellington, in July 1916, representatives of left-wing political organisations and trade unions, including several members of Parliament, resolved that ‘the time has arrived for the formation of a New Zealand Labour Party for the purpose of consolidating the political forces of Labour’.1

Those present at this founding meeting included union leaders Peter Fraser, Bill Parry and Michael Joseph Savage, and Harry Holland, editor of the Federation of Labour newspaper, Maoriland Worker. They were looking ahead to the next general election and also looking back at a decade of disappointing election results for candidates representing the labour movement, and earlier failed attempts to form a single nationwide workers’ party.

Moderates and militants

During the 1890s and the first years of the 20th century, the working class was the largest section of New Zealand’s population, but was barely represented in Parliament. Workers’ interests had been mainly channelled through the politically dominant Liberal Party, but by 1905 there was growing disillusion on the left with ‘Lib–Lab’ (Liberal–labour) politics. Attempts to create an independent labour alternative to the Liberal Party were hindered by political divisions among workers’ advocates. The common labels for these divisions – ‘moderate’ and ‘militant’ – summarised deep and often bitter ideological differences. Some in the labour movement were revolutionary socialists looking to a future without capitalism. Others wanted more immediate political solutions to the worst injustices and inequalities. Some were inspired by the ‘syndicalist’ view that lasting change would be achieved through a general strike. Others preferred the legal processes of conciliation and arbitration (where third parties were involved in resolving industrial disputes).

Founding fathers

Three of the founders of the Labour Party – Harry Holland, Peter Fraser and Bob Semple – first entered Parliament by winning by-elections in 1918. All three had served prison sentences for opposing conscription during the First World War. Holland postponed returning to his homeland, Australia, to contest the West Coast seat of Grey, winning by just 148 votes. Fraser, a crusty Scottish-born watersider, then comfortably became MP for Wellington Central. The seat of Wellington South became vacant after its MP died in the influenza pandemic. That by-election was won comfortably by miners’ leader Bob Semple, who has been described as ‘the Labour Party’s verbally most violent and controversial personality’.2

Success in 1916

Labour leaders were finally successful in forming a nationwide party in 1916 because the gap between militants and moderates had lessened as new issues arose and leaders changed. Strike action by miners in Waihī in 1912, and by watersiders and their supporters in 1913, had failed disastrously, prompting advocates of industrial militancy to reluctantly accept the need for more effective political action. The labour movement’s existing political groups – the United Federation of Labour and the Social Democratic Party – were organisationally and financially weak. This added a sense of urgency, as an election was due in 1917. It was postponed until after the First World War, a delay which gave the new party more time to establish itself. The war also raised issues of profiteering, fairness of sacrifice and conscription on which most labour leaders could agree.

1919 general election

The newly formed Labour Party’s journey to political power began with promising results in the 1919 general election, when its share of the vote was almost 24%. However, for the next decade Labour’s share of the vote never exceeded 27%, and its caucus fluctuated between eight and 19 MPs out of a total of 80.

Yet in a Parliament split between three parties, Labour’s small caucus was an immediate concern to the more conservative Liberal and Reform parties. After the 1922 election, if Labour had been able to form an alliance with Liberal MPs, the Reform government would have been threatened. Labour’s strategic position was even stronger after the 1928 election, when its 19 MPs held the balance of power.

    • Quoted in J. T. Paul, Humanism in politics: New Zealand Labour Party retrospect. Wellington: New Zealand Labour Party, 1946, p. 156. Back
    • Barry Gustafson. Labour’s path to political independence: the origins and establishment of the New Zealand Labour Party, 1900–19. Auckland: Auckland University Press, Wellington: Oxford University Press, 1980, p. 136. Back

First Labour government, 1935 to 1949

Electoral surge in the 1930s

By late 1930 the effects of the economic depression were being felt throughout the country. Labour votes had kept the United (formerly Liberal) government in office since the 1928 election, but Labour withdrew its support in December 1930, as United pressed ahead with policies of retrenchment. In September 1931 the United and Reform parties combined to form a coalition government. Labour became the official parliamentary opposition. The general election in December that year was, in effect, a two-party contest and Labour’s share of the vote increased to 34%.

First Labour government, 1935

Four years later Labour surged to victory with 46% of the vote and 53 of the 80 parliamentary seats. Voters rejected the coalition government (it received 34% of the vote) in protest at its harsh policies, and in response to the grave economic and social impact of the depression. Labour promised social and economic security and presented a more benign image under Michael Joseph Savage, who had become party leader after the death of Harry Holland in October 1933.

The politicians who made up the first Labour government were drawn mostly from the union movement, especially former miners’ leaders such as Bob Semple. They included a minority of educated liberals, such as lawyer Rex Mason.

Spending and saving

Labour’s economic policies were often termed Keynesian, after the principles of British economist John Maynard Keynes. Keynes advocated a mixed public–private economy and government-led stimulation during times of recession and depression, rather than cutting back state expenditure to balance the Budget. A New Zealand review of Keynes’s breakthrough book says: ‘the most striking point about Mr Keynes’s book is that it parallels the views of the Labour Party’, suggesting that the Labour Party was developing its ideas at the same time as Keynes, rather than simply adopting them.

Two-party politics: Labour versus National

Labour’s electoral breakthrough in 1935 changed the political landscape, creating the two-party system that dominated New Zealand politics for the rest of the 20th century. In 1936 the National Party was formed out of the Liberal–Reform coalition. Labour and National alternated as either governing party or official opposition until the introduction of proportional representation in 1996.

Labour’s total years in office as a governing party lag behind National’s. Two Labour governments (1957–60 and 1972–75) have lasted only a single three-year term. However, two longer-serving (1935–49 and 1984–90) Labour governments radically changed the direction of public policy in New Zealand.

Reform within capitalism

Labour’s first period of government was also its longest to date. Its 1935 victory was reaffirmed in 1938 with the highest vote share won by any party since 1908 – almost 56%. In the pre-war period Labour was openly socialist in its political aims. It began to nationalise sections of the economy, including the Bank of New Zealand, coal mines and domestic air services. Broadcasting and transport were brought under the control of government ministers. To stimulate New Zealand’s depressed economy, Labour increased wages, launched a programme of public works and state-housing construction, and introduced a guaranteed price for dairy products. The Social Security Act 1938 greatly expanded the scope of the welfare state, introducing universal free health services and extending benefits for the aged, sick and unemployed.

Labour was an active and popular reforming government before the outbreak of the Second World War. However, after guiding the country out of economic depression, then through the crisis of the war and into the first years of post-war recovery, Labour’s reforming zeal was spent. It was defeated in the election of 1949 and remained in opposition for the next eight years.

The actions of the first Labour government set the terms of political debate and action for the next 40 years. Neither Labour’s welfare state nor its mixed economy were seriously challenged until the 1980s.

Second and third Labour governments

Second Labour government (1957–60)

The second Labour government was elected in 1957 with a slender two-seat majority. Led by 75-year-old Walter Nash, it offered a generous raft of policies including low-interest state loans for new houses, increased child benefits and the opportunity to capitalise them to make a deposit on a first home, free school textbooks and a £100 income-tax rebate. But the new government immediately faced a balance-of-payments crisis that demanded austerity. Minister of Finance Arnold Nordmeyer responded with import controls and a harsh Budget in 1958. Dubbed the ‘Black Budget’ by Labour's opponents, it increased the cost of beer, cigarettes and petrol – basic items of expenditure in Labour’s core electorates. Labour’s organisation and membership immediately began to collapse. The ‘Black Budget’ sealed Labour’s electoral fate in 1960, when many Labour supporters protested by not voting.

Socially conservative socialists

The 1972 Labour government under Norman Kirk responded to a mood for social change, especially among young people. Yet, in some ways the new government was more conservative than its National opposition. Kirk refused to consider changing restrictive laws on homosexuality and abortion. It was National MP Venn Young who introduced a private member’s bill on homosexual law reform. On the other hand, anti-abortion Labour MP Gerard Wall introduced a bill to prevent private clinics from offering abortions.

'Time for a change': the third Labour government (1972–5)

Labour, led by 49-year-old Norman Kirk, returned to power in 1972 with a 23-seat majority. During the party’s 12 years in opposition, New Zealand society had greatly changed. The 1960s had been a decade of protests against the Vietnam War, French nuclear tests in the Pacific and apartheid. Māori activists were raising issues of historical and contemporary injustice, women's liberation leaders campaigned for gender equity, students defied traditional social attitudes and authority structures, and environmental concerns reached the forefront of politics. One feature, however, remained the same – the country’s small economy remained vulnerable to international factors, specifically the United Kingdom’s move to join the European Economic Community (later called the European Union), which hurt New Zealand exports, and the power of the oil-exporting nations.

Television had become an important factor in politics and Kirk, once his public image was refined for television, appeared an articulate and decisive prime minister. At first Labour seemed to respond to the excitement of the times. It ended New Zealand’s involvement in the Vietnam War, set a date to withdraw troops from Singapore, ended conscription at home and dispatched a naval frigate to French Polynesia to protest against French nuclear tests at Moruroa (Mururoa) atoll. Fearing the effects on New Zealand’s racial harmony, and consequent civil disorder, the government cancelled a rugby tour by the all-white South African Springboks. It blocked an environmentally destructive plan to raise the level of Lake Manapōuri to generate electricity and, in a concession to counter-cultural values, sponsored the development of ‘ohu’ – rural communes.

Rowling replaces Kirk

Labour’s fortunes changed dramatically in 1974. In August, Norman Kirk died suddenly. His successor, Wallace (Bill) Rowling, was subjected to prolonged personal attack by the opposition and struggled to assert his authority. At the same time the booming economy of the government’s first years had turned sour with soaring inflation following oil price shocks in late 1973. The electorate’s confidence was shattered. In the 1975 election Labour’s majority was reversed and its programme of change, including the introduction of compulsory contributory superannuation, was terminated.

Fourth, fifth and sixth Labour governments

1984 Lange government

The Labour government led by lawyer David Lange that was elected in 1984 looked very different to previous Labour administrations. Most of its MPs had worked as either lawyers or academics. Only five, including Mike Moore – a future prime minister – had backgrounds as manual workers. Labour had been transformed into a party of the middle class.

Neo-liberalism and 'Rogernomics'

The greatest challenge to the first and later Labour governments’ policies on the welfare state and a regulated economy that combined state and private enterprise came, surprisingly, from the Labour Party. Taking its cues from mid-20th century neo-liberal theorists, the fourth Labour government deviated sharply from a social democratic path. Led within cabinet by Finance Minister Roger Douglas (who gave his name to ‘Rogernomics’) and a group of supportive ministers, the government removed a swathe of regulations and subsidies, privatised state assets and introduced corporate practices to state services.

Against witchery

Labour Prime Minister David Lange was renowned for his off-the-cuff verbal wit. In 1985 he faced pressure from the US and UK administrations to reverse his government’s policy against admitting nuclear-powered ships to New Zealand. Baroness Janet Young, the UK foreign minister, arrived to persuade Lange to abandon this policy, carrying a large black umbrella. She failed to change his mind and as she left, Lange quipped, ‘Oh Baroness, do not forget your broomstick.’1

The aim, in contrast to Labour tradition, was to reduce the role of the state in economic activity and to allow greater opportunity for private enterprise in a free-market environment. Many western countries were moving in the same direction. Labour’s foreign policy broke with the tradition of firm support for Britain and the US by declaring the country nuclear-free.

Labour divided

The first and fourth Labour governments stand out as the two most radical governments of the 20th century. Both reset the country's political agenda with the scope of their policy initiatives. But the fourth Labour government's departure from traditional Labour values and practices fractured the party at all levels. In its second term the cabinet was divided on the extent and pace of further reforms, and there was rebellion among party members and disillusion among Labour voters. Lange resigned as prime minister in 1989, handing over leadership to his deputy, Geoffrey Palmer, who in turn was replaced by Mike Moore on the eve of the 1990 election. Labour’s caucus was reduced from 56 to 29, the smallest since 1935.

Fifth Labour government (1999–2008)

When Labour returned to power in 1999 under the leadership of Helen Clark, the administration differed from all its predecessors. This time Labour was elected under the mixed-member proportional (MMP) system introduced in 1996, and was denied a clear parliamentary majority. In each of its three terms Labour governed in coalition with, or on the basis of negotiated support from, one or more minor parties. Policy concessions to its partners sometimes steered the government to the left, for example by setting up Kiwibank, promoted by Jim Anderton’s Progressive Party; sometimes to more centrist ground, such as establishing the Families Commission (later called Superu), promoted by the United Party; or towards environmental concerns, such as setting up a solar-energy programme, promoted by the Green Party.

The primary direction of policy, however, was determined by Labour’s retreat from the neo-liberal project of the 1980s. Yet it neither could, nor wished to, undo all the sweeping changes made in the name of ‘Rogernomics’. In 2008 Clark's government lost office to a National-led administration.

Sixth Labour government (2017–)

Led by Jacinda Ardern, Labour won 36.9% of the vote at the 2017 election and subsequently formed a government in coalition with New Zealand First, with support on confidence and supply from the Green Party. In 2020 Labour won more than half the party votes, enough to govern alone had it chosen to do so. Instead, Prime Minister Ardern gave ministerial portfolios to the two Green Party co-leaders. Ardern resigned as prime minister and Labour Party leader in January 2023 and was replaced by Chris Hipkins.

    • Quoted in Keith Eunson, Mirrors on the hill: reflections on New Zealand’s political leaders. Palmerston North: Dunmore Press, 2001, p. 193. Back

Ideology and the role of unions

Early socialism

In the first decades of the 20th century, industries grew strongly in New Zealand’s main cities and union membership also increased. The Labour Party was formed in this period as the political wing of the union movement, and was set up and financed by trade unions. Many union leaders adopted the ideas of Marxists and syndicalists, which had the revolutionary aim of overthrowing capitalism and abolishing the wage-earning system. Their aims were expressed in Labour’s 1916 policy objective, which called for ‘the socialisation of the means of production, distribution and exchange’.1 This meant state ownership and control of all major parts of the economy.

Party of the unions

Labour therefore began as a narrowly based sectional party. Its founding focus was on the needs of wage workers, who soon guaranteed the party a secure base in the poorer urban, milling and mining electorates. The party’s members were mostly the members of unions affiliated to the party (known as affiliate members). Individual members belonging to local party branches (general members) were at first a minority.

Widening appeal

To become a governing party, Labour had to widen its appeal to include other sections of the population. It began to do this in the 1920s and 1930s by shaping its policies to the specific problems of those times. The poverty and insecurity that spread through the community during the depression years made this transition easier.

Aid not war

In 1966 the Labour opposition, under its new leader, Norman Kirk, faced pressure from the union movement to oppose sending troops to the Vietnam War. A public confrontation between unions and the party at the Federation of Labour conference seemed likely. To avoid this, Kirk agreed to a joint statement by the unions and Labour, favouring aid for Vietnam rather than military intervention. One unionist later commented, ‘We twisted his arm a little bit’. The National prime minister asked rhetorically, ‘Do we want our country run from Parliament Buildings or from the Trades Hall?’2

‘Reform within capitalism’

During its first long term in government (1935–49), Labour’s policies were often radical and innovative, but they did not threaten to overthrow capitalism. While the socialist objective provided a rallying cry for the party’s more radical members, it also became a target for political opponents who wanted to paint Labour as a party of ideological extremists. After the Second World War the party played down divisions in society and stressed national unity. Following Labour’s defeat in 1949, many in the party saw the socialist objective as out of date and a hindrance to winning elections, and this goal was abandoned in 1951. Labour had become a social democratic party, practising reform within capitalism.

Social democracy and the mixed economy

Up to the 1980s Labour remained a party that believed in a strong role for governments in economic and social matters. However, it had been transformed from a union-dominated, socialist-orientated movement to one dominated by urban professionals and with a general middle-class appeal and social-democratic orientation. By the late 1980s Labour had moved so far away from its original socialist vision that its policies were often directly opposed to those of the union movement. Since that period, Labour has again aimed to use the power of the state to try to achieve a fairer and more equal society, based on a mixed economy in which both the state and private enterprise play a part.

From sectional party to 'catch-all' party

Since the 1930s, Labour has maintained itself as a broad-based party by responding and adapting to different social and economic problems, a changing workforce and the growth of a more socially diverse population. Although the party’s working-class origins and political focus are seen in the social make-up of ‘safe’ Labour seats (mainly in working-class urban areas) and its links to the unions, by the early 21st century its electoral roots extended across all occupational, age, gender, ethnic and educational groups.

‘Third way’ politics

In the early 21st centruy, Labour’s position draws from both humanitarian Labour traditions and neo-liberal sources, and has sometimes been called ‘third way’ politics. Labour remains a social democratic party with a strong strand of pragmatism.

    • Quoted in Bruce Brown, The rise of New Zealand Labour: a history of the New Zealand Labour Party from 1916 to 1940. Wellington: Price Milburn, 1962, p. 25. Back
    • Quoted in Austin Mitchell, Politics and people in New Zealand: studies. Christchurch: Whitcombe and Tombs, 1969, p. 147, 161. Back

Māori and women in the Labour Party

Labour and Māori

Māori voters were part of Labour’s electoral backbone for more than 60 years. In Labour's breakthrough 1935 election, two of the four Māori seats were won by Rātana candidates who then voted with Labour in Parliament. Rātana, a religious movement based around the teachings of T. W. Rātana, had entered politics in 1928. By 1943 Rātana–Labour MPs had taken all four Māori seats. The strength of the Rātana–Labour alliance ensured that these seats remained among Labour’s safest until the 1990s.

Racial rugby

The second Labour government (1957–60) was split over a scheduled South African tour by a whites-only All Black team. Some saw this as giving in to South Africa’s policy of apartheid (racial separation). However, Prime Minister Walter Nash supported the tour, saying, ‘it would be an act of the greatest folly and cruelty to the Maori race to allow their representatives to visit a country where colour is considered to be a mark of inferiority … I am satisfied that the Rugby Union has acted from the highest motives, and as true friends of the Maori people.’1 At the 1960 election, Labour’s support among Māori dropped by 10%.

Shifting Māori support

An early sign that the Rātana–Labour alliance was weakening came in 1980 with the resignation from Labour of Matiu Rata, a former minister of Māori affairs and lands. Rata formed a new party, Mana Motuhake, and although he failed to win back his Northern Māori seat, he undermined Labour’s hold on it. In 1993 Labour lost the seat to the New Zealand First party, which went on to capture all five Māori electorates in the 1996 election. Labour regained them in 1999 and retained them in 2002, but the recovery was temporary. Political relations between Labour and Māori were thrown into crisis by the Labour-led government’s Foreshore and Seabed Act 2004, which placed the seabed and foreshore in Crown ownership. Tariana Turia, a Labour minister and MP for Te Tai Hauāuru, resigned from Labour, successfully recontested her seat in a by-election and launched the Māori Party, of which she became co-leader. The Māori Party again broke Labour’s hold on the Māori seats and further damaged Labour electorally by reducing its party vote, which determines the number of seats a party holds in Parliament under the MMP system. However, by 2017 Labour had won back all seven Māori seats. Te Pāti Māori, as it was now known, regained Waiariki in 2020.

Labour and women

A small number of women played an active part in the formation of the Labour Party. They usually came from backgrounds in the suffragist and temperance movements, trade unions such as the Tailoresses Union and Wellington Housewives Union, and Labour’s political antecedents on the left. Two women, Elizabeth McCombs and Sarah Snow, were elected to Labour’s first national executive in 1916. Women’s role in national politics was still restricted as they were not eligible to stand for Parliament until 1919. Many people also still felt that politics was not a feminine activity. Consequently, for many years few women attempted to stand for Parliament and fewer still were selected in winnable seats. Among those who defied this daunting environment, Labour women candidates predominated, accounting for 28 of the 44 women elected to Parliament before 1996.

First Labour women MPs

The first Labour woman candidate for Parliament was Elizabeth McCombs, in 1928. Although she was unsuccessful in that attempt, in 1933 she became the first woman elected to Parliament when she won a by-election in Lyttelton – a seat that had been left vacant by her husband’s death. Two more Labour women had brief parliamentary careers before Mabel Howard followed her late father into the Labour caucus in 1943. Howard then became New Zealand’s first woman cabinet minister in 1947, with further appointments in the 1957–60 Labour government. In 1949 Iriaka Rātana entered Parliament as the first Māori woman MP.

Labour women leaders

From the 1960s the Women’s Division, and later the Labour Women’s Council – which was more feminist in outlook – developed into an influential section within Labour’s organisation. Through it, Labour women contributed to social policy development and supported women into organisational office and parliamentary candidacy. Between 1984 and 1995 three women in succession – Margaret Wilson, Ruth Dyson and Maryan Street – were elected president of the party. All went on to become MPs, ministers and, in Wilson’s case, the first woman speaker of the House of Representatives. Meanwhile, Helen Clark, elected in the safe Labour seat of Mt Albert in 1981, rose through ministerial portfolios to become deputy leader in 1989, leader in 1993 and prime minister from 1999 to 2008. In 2017 Jacinda Ardern became the second woman elected by caucus as leader. Following that year's election she became Labour's second woman prime minister.

Lingering prejudice

Labour has refrained from any formal quota system for women ministers, relying instead on acknowledging the need for more women in Parliament. In the early 2020s a majority of Labour MPs were women. The party’s constitution guarantees women places on all key decision-making forums, including the selection and ranking of candidates. Nevertheless, the aim of selecting more women candidates was still hampered by lingering prejudice in favour of men, and the disproportionate number of men seeking candidacy.

    • Quoted in R. M. Chapman, W. K. Jackson, and A. V. Mitchell, New Zealand politics in action: the 1960 general election. London: Oxford University Press 1962, p. 72. Back

Organisation of the Labour Party

Local branch organisation

In the early 21st century the Labour Party retained two categories of party membership – general and affiliate – reflecting Labour’s origins in the trade union movement.

General members join a branch of the party. There are many local branches, and in areas where party support is traditionally strong, there may be several such branches in a single electorate. The party also has branches for specific groups such as women, university students, Pacific peoples and people of other ethnicities.

Affiliate membership is through membership of a trade union affiliated to the Labour Party. In 2023 there were 11 affiliated unions, which paid a levy to the party based on the size of their own memberships.

Electorate organisation

Each of the 72 electorates (in 2023) has an electorate committee. A key function of this committee is to contribute towards selecting the local party candidate and supporting their election campaign.

Regional organisation

In each of six geographic regions a Labour regional council acts on regional issues, deals with policy proposals from the region’s branches and contributes to the list ranking for party candidates for Parliament. Each council includes representatives from its electorate committees.

Each region also has a Labour local body committee which works on local government election campaigns.

National organisation

The party’s New Zealand Council (the national council) takes part in candidate selection, along with representation and input from local and regional organisations. The council includes representatives of interest groups such as Māori, Pacific peoples, unions, women, youth and the Rainbow (gay, lesbian, bisexual and transgender) sector. Interests such as rural affairs, elderly people and people with disabilities are also represented.

The party’s Policy Council develops its policy and election manifesto. The council consists of five people elected by the party membership, five MPs, the party’s president and general secretary, and Māori and regional representatives.

Hononga, rauemi nō waho

More suggestions and sources

How to cite this page: Peter Aimer, 'Labour Party', Te Ara - the Encyclopedia of New Zealand, (accessed 18 July 2024)

He kōrero nā Peter Aimer, i tāngia i te 20 o Hune 2012, updated 1 o Hānuere 2023