The Birth of the Social Welfare State in NZ The 1935 election of the first Labour Government
The Labour Party had read the mood of public discontent and so they entered the 1935 election campaign with policies designed to tackle the problems of the Great Depression still facing the New Zealand public. Their primary goal was to ensure a minimum standard of living for all New Zealanders. Their social policies were aimed at restoring people’s standard of living and removing the threat of insecurity from their lives. As such they campaigned to have a much greater influence over how the economy was run with the state taking an active hand in people's lives. This was in affect a watered down version of socialism - a radical notion for New Zealand.
From 1933 Savage had traveled around New Zealand repeatedly with an intensity and evangelical fervour previously unknown in New Zealand politics. In the months leading up to the 1935 election Savage came to personify the Labour Party's commonsense humanitarian approach. He spoke with sincerity, eloquence and power, convincing many voters that he and his colleagues not only understood their problems but could be trusted to solve them. Savage refused to play the blame game, rather he sought to unite as many people as possible behind a common dream of a better and fairer society. The leadership style and proposed policies resonated with the New Zealand public as they elected the Labour Party and Savage to power in the 1935 election. Savage was so popular that many New Zealanders placed a framed image of him in their living room. He has endured as one of New Zealand's most popular Prime Ministers.
- Labour gains 55 of the 80 seats available in parliament
- Labour wins 46% of the vote
- Labour wins all four Maori seats (after entering into a formal agreement with the Ratana Church who had gained two seats, 53+2=55)
- Labour won seats in conservative rural areas for the first time (their usual support came from citizens from urban areas)
The Labour Party leader and his Cabinet Ministers quickly introducing a number of social welfare policies to raise the living standards of New Zealanders.
- Wage cuts implemented by the Coalition Government were reversed
- Relief workers were given seven days' annual holiday
- A minimum wage was set and a Christmas Bonus was paid to all those who were unemployed (the election was held in December of 1935)
- Pensions were increased and were expanded to cover NZ residents of Asian descent
Government spending, it was hoped, would boost business confidence. More public works would mean more employment and the workers would spend their wages. These economic theories were in line with the noted economist John Maynard Keynes whose Keynesian economic theory advocated the use of government spending and increased taxation to influence the performance of the economy. As part of this theory the Labour Government took total control of the Reserve Bank so that they could control borrowing and exchange rates.
Do you remember the guy on the left? Savage admired his first social policies and used one of his key phrases in his own writings - "From the Cradle to the Grave". He also is credited with summarising his political hopes for New Zealand in this memorable quote, “I can promise the people of this country,” he said in 1938, “that before very long they will have reached a condition of social security unsurpassed in any other country in the world.”
The measure of his greatness as a leader and a man is that he lived up to his promise. Under his guidance, the first Labour Government transformed the economic, political and social landscape of the country.