There are two clear turning points in New Zealand’s Political history with respect to the Keynesian and Neoliberal policy regimes. What two elections mark these turning points? Which party won these elections?
1935 First Labour Government: Keynesian economic principles were introduced to NZ policy making with the newly elected government.
Classical liberal economic ideas of Small government, low taxation, limited state intervention and free-market responsibilities. → The Great depression of the 1930’s, stagflation, rising unemployment and low economic growth.
1984 Fourth Labour Government: Neoliberal economic principles were introduced to NZ, by the fourth labour government.
The mounting crown debt, fiscal austerity, low inflation, deregulation and commercialization and privatization of the public sector, regressive taxation, reduce the power of labour unions and create less reliance on state support particularly in social welfare.
Briefly list four key features of the Keynesian policy regime.
- Using fiscal policy (usually in the form of government budget deficits) to boost aggregated demand and economic growth.
- Using macroeconomic management through fiscal policies to maintain full employment and level out cyclical capitalist economic cycles.
- Provide housing, Health, Education, Welfare and superannuation; funded by progressive to ensure equity in a society.
- Income policies
What was the key idea underpinning the Keynesian policy regime?
○ The central idea that underpinned the Keynesian policy regime, was that capitalist market economies are inherently unstable and crisis-prone.
4) How many people were unemployed in 1950?
○ Unemployment was 12 people in 1950
5) What is the key idea underpinning the Neoliberal Policy regime?
The central idea that underpinned the Neoliberal policy regime, was that a capitalist economy is inherently self-adjusting if governments adopt the correct
approach to managing it.
6) Briefly list four key features of the Neoliberal policy regime implemented from 1984 to 1999.
(1) Welfare State retrenchment; (2) Commercialisation, Corporatisation and Privatisation of public assets and services; (3) Adopting a monetarist approach
where Fiscal austerity and restrictive monetary policy are used to maintain low inflation; (4) Promote market liberalisation.
7) Briefly outline two points For and against the Neoliberal policy regime.
For Neoliberalism
(1) Fiscal Responsibility & Efficiency
Aims for low inflation and balanced budgets.
Achieved through corporatisation, commercialisation, and privatisation of state assets.
Reduced government spending by shifting services to the private sector.
(2) Market Liberalisation
Promotes competition, deregulation, and free trade.
1980s reforms: deregulated financial sector, floated NZ dollar.
Expanded international trade, boosting exports and globalisation.
Against Neoliberalism
(1) Rising Inequality
Tax cuts (top rate from 60% → 33%) and GST (10%) favoured the wealthy.
Welfare cuts under Ruth Richardson (up to 30%) hurt low-income groups.
Increased gap between rich and poor.
(2) Weakened Workers’ Rights
Employment Contracts Act 1991 reduced union power.
Shift from full-time to casual work; unions fell to 17.7% membership by 2001.
Less job security and bargaining power for workers.
8) Third Way of the Fifth Labour Government
The Third Way – Helen Clark (1999–2008)
Definition:
Balanced market economy with a fair, more equal society — a blend of Keynesian social democracy (First Way) and Neoliberalism (Second Way).
Key Features:
Retained core neoliberal policies: monetarism, market liberalisation, smaller public sector, limited welfare.
Replaced Employment Contracts Act 1991 with Employment Relations Act 2000 (restored collective bargaining).
Introduced paid parental leave (2001) → 14 weeks by 2008.
Re-nationalised Air NZ, ACC, NZ Rail.
Launched Working for Families, interest-free student loans (2006), and increased health & education funding.
9) Briefly outline two points for and two points against the Third Way
Social Democracy – Fifth Labour Government (1999–2008)
Arguments For:
1️⃣ Pragmatic Alternative: The Third Way offered a balanced middle ground between Neoliberalism and Keynesianism.
2️⃣ Social Support: Policies like Working for Families reduced child poverty and eased inequality.
Arguments Against:
1️⃣ Persistent Inequality: By 2008, inequality remained higher than 1980 levels; taxation stayed less progressive.
2️⃣ Limited Reform: Labour avoided major policy shifts to reverse neoliberal-era inequality.
10) List the four governments that were in power form 1984 to 1990, 1990 to 1999, 1999 to 2008, 2008 to 2017.
(1) David Lange’s fourth Labour Government (1984 - 1990); (2) Jim Bolger’s Fourth National Government (1990 - 1999); (3) Helen Clark’s Fifth Labour Government (1999 - 2008); (4) John Key’s Fifth National government (2008 - 2017).
11) The critics of Liberal Pluralism argue that business can exert dis-proportionate influence on government policy-making. Briefly state two points that they make.
(1) Structural Power
Governments in capitalist societies are generally bias and in favour of businesses. This is because firstly governments rely on business investment to generate
13)
Capitalism generates high levels of socioeconomic inequality. According to Marxists, this generation of socio-inequality centrally involves a process of_________.
= Exploitation
14) According to Marxists, what are two key sources of Working class power?
(1) Through worker trade unions, or social democratic political parties most aligned with workers interests, can organize large and disruptive movements can influence public opinion and government policy. Workers, when organized and acting collectively are the most powerful type of movement group, where there is a far greater number of them than capitalists, giving them an enormous amount of power to influence change.
(2) Workers make the economy operate, by for filling jobs, exchanging capital, allowing the flow of transactions, which is essential for an economy to continue operating. This gives them leverage beyond the workplace in negotiating social change or employment remunerations.
15) What are three major forms of democracy to have emerged thus far in history? Go to the Electoral system PowerPoint Athenian
Democracy; which it facilitated a high level of citizen participation in governance.
Liberal Democracy; emerged from a series of revolutionary upheavals, economic and political crisis, wars and civil wars. It separated a persons economic status or socio-economic class, where every citizen got a free and fair vote in an election.
Socialist Participatory Democracy; emerged during the Paris Commune of 1871, the Russian revolution (1905 and 1917) and the revolutionary wave in Europe (1917 - 1923). Socialist participatory democracy built on the positive achievements of the Athenian democracy, capitalism, and the liberal democracy.
16) Describe one respect in which the shift from FPP t
16) Describe one respect in which the shift from FPP to MMP has improved the representativeness of parliament and one respect in which the representativeness of parliament has not improved.
How MMP Improved Representativeness:
Shift from FPP → MMP made Parliament more proportional and inclusive.
Voters now cast two votes: one for a party (determines seat share) and one for an electorate MP.
Minor parties only need 5% of votes to enter Parliament.
Increased gender, ethnic, and party diversity in representation.
How MMP Has Not Improved Representativeness:
Social-class diversity remains low — over 50% of MPs (2020) from middle-class, professional backgrounds.
Few working-class MPs.
The 5% threshold discourages class-based or small regional parties, favouring broader appeal.
17) What impact has the shift from Keynesian to Neoliberalism in tertiary education policy-making had on: a) student allowances; b) tuition fees; c) student debt?
Tertiary Education Policy: Keynesianism → Neoliberalism
Keynesian Era (Pre-1984):
Funded by progressive taxation — those who benefited most paid more later.
Education as a right, ensuring equal opportunity in a liberal democracy.
Neoliberal Era (Post-1984):
Introduced ‘user pays’ model under the Fourth Labour Government.
Tertiary fees introduced: $1,250 (1990) → $1,300 (1991).
Govt funding fell from 2.2% → 1.5% of GDP (mid-1990s).
Ongoing fee rises through the 1990s–2000s.
Student Allowances:
1991 ‘Mother of all Budgets’ (Ruth Richardson) restricted eligibility — only ⅓ of students qualified.
Student Loans:
1992: Loan scheme for all full-time students to cover rising costs.
2006 (Fifth Labour Govt): Interest-free loans for NZ-based students and graduates.
1998: Repayment threshold = income over $14,716, paying 10c per $1 via tax deduction.
18) When was the Labour Party established and what social movement did it emerge out of?
Origins of the New Zealand Labour Party (1916)
Formed: 1916, from the Social Democratic Party (SDP) and United Federation of Labour (UFL).
Context: Early 1900s urbanisation and industrialisation created poor working conditions → social unrest & protests (1908–1913).
1913 Unity Conference (Wellington): SDP & UFL coordinated labour movement (no formal party yet).
1916 Merger: SDP + UFL = New Zealand Labour Party, founded to represent the working class and advance workers’ and unions’ rights.
19) Draw on lecture notes to briefly outline two themes of Labour Party ideology.
The Labour party is a centre-left based political party, with an ideology that primarily focuses on Social Democratic reformism and representation for the working
○
class
20) Since it was founded in 1936, the National Party has been consistently supported by members of two powerful social classes. What are these classes?
The National party is said to be the most successful class-based party in New Zealand politics, with it early on solidifying itself with support amongst the Upper middle class (typically businesses) and the farmers.
Since they were founded in 1936, the National Parties voter base has been consistently supported by both farmers and the Upper-middle class members of the
Business community, which both have powerful social status through their impacts on living standards, job opportunities and economic growth.
21) Draw on lecture notes to briefly outline two themes of National Party ideology.
○ The National party is the centre-right based political party, with an ideology that primarily focuses on Pragmatic Conservatism and central Neoliberalism.
22) Briefly outline two major policies of one of the following minor parties: ACT, NZ First, Te Pāti Māori, the Greens.
ACT:
(1) Defending equal rights and Democracy: Through removing the division of rights between Pakeha and Māori in state organisations and government policies. (2) Restoring Law and Order: Through increasing the rights of victims over the rights of criminals and imposing tougher sentences for gang members.
21) Draw on lecture notes to briefly outline two themes of National Party ideology.
The National party is the centre-right based political party, with an ideology that primarily focuses on Pragmatic Conservatism and central Neoliberalism.
22) Briefly outline two major policies of one of the following minor parties: ACT, NZ First, Te Pāti Māori, the Greens.
ACT:
(1) Defending equal rights and Democracy: Through removing the division of rights between Pakeha and Māori in state organisations and government policies. (2) Restoring Law and Order: Through increasing the rights of victims over the rights of criminals and imposing tougher sentences for gang members.
23) For several decades, New Zealand has maintained an independent foreign policy and a ‘hedging strategy’ between China, on one side, and the US, Australia, and UK, on the other. Briefly outline one reason why New Zealand governments have maintained this approach, and one factor that is making it increasingly difficult for them to do so.
NZ Foreign Policy: Balancing China & the USA
Export-driven economy: NZ relies heavily on China and the US for key exports — dairy, meat, timber.
Economic dependence encourages an independent, neutral foreign policy to protect markets and stability.
US–China tensions (economic rivalry, security, Pacific influence) have increased over the past two decades.
NZ response: Maintains neutral stance to avoid economic and diplomatic fallout while upholding sovereignty.
