JIM BOLGER
1935 -
The Bolger ministry could have been an
anti-climax. After eight years on Labour’s rollercoaster and the previous nine
under Muldoon’s populist “dictatorship”, the electorate found itself led by Jim
Bolger whose style can best be described as low-key, benign and avuncular.
But it wasn’t an anti-climax. The period of
Bolger’s government coincided with the rise of the internet, email and mobile
phones. It included the years in which the MMP electoral system was lobbied for,
introduced, and finally implemented at the 1996 election, requiring a whole new
approach to voting, campaigning, forming a government and appointing a cabinet.
The era also saw the continuation of the Roger Douglas economic reforms and
asset sales; it saw the introduction of the controversial employment contracts
act (which weakened trade unions), and the slightly less controversial but
far-reaching and cumbersome resource management act adding several extra layers
of consultations to development projects, annoying developers and delighting
environmentalists. The ambitious Te Papa museum project could well have
foundered without Bolger’s support, against cabinet opposition. An energetic
minister of Treaty settlements (Doug Graham) advanced the handling of historical
claims by Maori under the expanded Treaty of Waitangi act of 1985. All this
while Jim Bolger sat quietly and unobtrusively at the helm. Economic growth was
healthy, fading just as Bolger left office in late 1997.
A sheep and beef farmer, Bolger continued a
line of farmer politicians which included Massey, Coates and Holyoake. Between
them they headed the government for 35 years of the 20th century.
With Muldoon banished to the back bench after
National’s 1984 defeat and his replacement Jim McLay attempting to lead National
in a more liberal direction one would have thought the stage was set for a
rejuvenation of the party. Instead it remained deeply split with Muldoon’s
senior ministers still in place and resisting wholesale change. When McLay
demoted George Gair and Bill Birch, both highly respected for their long
service, the caucus as a whole rose up against him. In March, 1986 they voted to
oust him in the hope that his replacement Jim Bolger would unify the party for
the 1987 election. It was a major challenge for a new party leader and perhaps
Bolger was the right person for the job.
Jim Bolger was born in rural Taranaki on 31
May, 1935. Like Coates and Holyoake he left school with minimal secondary
education. He married in 1963 and two years later the couple purchased and
settled on a farm near Te Kuiti. He became involved in young farmer politics and
after demonstrating his debating skills against a cabinet minister he was
selected as the candidate for the safe National seat of King Country in 1972. It
was a rapid leap from farmer to MP. He joined the opposition led by John
Marshall and was somewhat privileged as National’s heavy defeat that year meant
he was one of only a handful of new opposition MPs and proved to be the best
debater among them. It brought him a level of country-wide attention that he
would not have enjoyed as a small voice in a larger caucus.
Robert Muldoon would soon replace Marshall and
lead the National party back into government in 1975. He appointed Bolger
under-secretary for agriculture and fisheries and by 1977 had appointed him
minister of fisheries and associate minister of agriculture. It was a dramatic
rise and by the government’s second term Bolger was firmly ensconced on the
front bench as minister of labour. He served in that role for six years, ending
only when National was defeated in 1984. In that time he dealt with a stream of
industrial disputes resulting from a nil general wage order, introduced Saturday
shopping and, his crowning moment, abolished compulsory unionism – something the
National party had promised from the day it was formed in 1936 but never
achieved.
While Bolger had an enquiring mind, a good
memory and was not easily persuaded to change direction, he lacked the polish
and charisma that other future prime ministers had shown at this stage of their
careers. By 1980 Muldoon’s ruthless and authoritarian style was beginning to put
the idea of leadership change into the minds of the more liberal caucus members
and Jim Bolger’s name was to the fore when the so-called “colonels’ coup” to
de-throne Muldoon was planned. But Bolger went out of favour when he defected
from the plot and pledged his support for Muldoon. Jim McLay, more articulate
and better educated, became the front-runner. The plot failed but McLay
leapfrogged Bolger in March, 1984 to become deputy prime minister. Four months
after National’s humiliating defeat in July, 1984 McLay replaced Muldoon as
party leader. He lasted a mere sixteen months. As noted in the opening
paragraphs he put himself out of favour by demoting two long-serving front bench
members, and was also tormented constantly by former leader Muldoon who
intensely disliked McLay’s liberalism. The party decided Bolger would be a safer
bet for the upcoming election and voted him into the leadership in March, 1986.
Maybe the electorate still had vivid memories
of the Muldoon years when they went to the polls in 1987; maybe they were scared
off by National’s two leadership changes in quick succession possibly signalling
a still divided party; maybe they were convinced by David Lange’s assurance that
the pain of Roger Douglas’s breakneck reforms (Rogernomics) was over and now
they could look forward to the gain. Whatever the reason, Labour was
resoundingly re-elected and Jim Bolger had to swallow the disappointment of a
loss in his first election as leader.
There wasn’t much for National to do during
the 1987-90 term except watch the Labour party unravel. Despite signs that
senior National members Winston Peters and Ruth Richardson would rather like to
be party leader Bolger’s hold on the leadership remained firm and his party
steadily came back together and rose in the polls while Labour continued its
disintegration despite their own two leadership changes. It left the way open
for Jim Bolger to lead his party to a win in 1990 by the biggest margin for the
party since 1951. He was now 55 years old and had been in parliament for
eighteen years including eight in cabinet.
As prime minister, Bolger was heavily
dependent on government officials due to his lack of academic training but he
listened, took advice and approached the job with pragmatism, tolerance,
integrity and a strong and innate sense of fairness. But it was a baptism of
fire, not unlike David Lange’s. Within hours of his election win Bolger was
contacted by officials in Wellington and told to come down for an urgent
briefing on the country’s financial position. He was advised that the Bank of
New Zealand had been over-exposed to bad debt following the 1987 share market
crash and needed a $600 million cash injection to avoid total collapse – a
catastrophic prospect capable of bankrupting half of New Zealand’s major
companies. The crisis was dealt with efficiently. The bank was promised the cash
by the end of the week; it was sold to the National Australia Bank and the money
was quickly repaid.
But Bolger was very angry as he (and the
voters) had been assured the country’s finances were in good shape. He
eventually proposed legislation (the fiscal responsibilities act) that required
an independent report from Treasury (not the outgoing government) to be made
public before an election. The act enabling this was passed in 1994.
It wasn’t just the BNZ causing ructions when
the National government came to power. Collectively National decided the whole
economy needed a swift shot in the arm. Ruth Richardson was appointed minister
of finance and immediately picked up where Roger Douglas had left off, swinging
the axe into social welfare and savagely reducing beneficiaries’ incomes.
Douglas had avoided these areas. This led Bolger to renege on a key campaign
promise to abolish Labour’s crippling surtax on national superannuation. In fact
the tax was increased. Bolger justified this action in later years by comparing
poorer welfare beneficiaries’ belt-tightening with the wealthiest national
superannuitants receiving money which, in his opinion, they didn’t need.
But it was the continued expenditure cuts in
every imaginable area by the finance minister that worried Jim Bolger.
Eventually it was too much for him and he replaced Richardson in the next term
by his long-trusted colleague Bill Birch. National had come close to losing the
1993 election despite Labour still being in disarray. In fact throughout most of
the previous term Labour had enjoyed a comfortable lead in the polls and
National were relieved to scrape through considering the unpopularity of their
social, financial and industrial policies. But the majority was so narrow (50
seats against Labour’s 45 plus four won by minor parties) that it was necessary
to appoint the speaker (Peter Tapsell) from the opposition ranks.
Bolger’s first term had been eventful. The BNZ
crisis, the cuts to social welfare and the reversal of the promise to remove the
superannuation surtax made for a dramatic beginning. Then in 1991 a highly
controversial piece of legislation, the employment contracts act, was passed. It
brought the reforms started by Roger Douglas in 1984 into industrial relations,
another area left untouched by Douglas himself. It almost killed the union
movement – reducing membership by half immediately and eventually cutting it to
20% of its 1990 numbers. The act stopped unions from negotiating nationwide
agreements for whole occupational sectors. Instead workers signed individual
contracts. Those favouring the legislation pointed to the huge decrease in the
number of strikes that had dogged the country for decades. Those against it were
able to show evidence that workers’ rights had been severely curtailed. The
legislation remained in place throughout National’s term in power.
Given all of the above it is not surprising
that the 1993 election was a close call. It was Labour’s to lose.
Bubbling away in the background on the NZ
political scene ever since the 1978 and 1981 elections in which Labour won more
votes but lost the election was a lengthy process examining the electoral system
itself and looking for a fairer alternative. An even more unfair statistic in
1981 was the 20% share of the vote won by Social Credit which, under a
proportional system, would have entitled them to 20 seats in the 99 seat
parliament. In fact they won only two. Action was finally taken in 1985 when a
royal commission on the electoral system was set up. It reported the following
year and the multiple recommendations included changing to a proportional voting
system, increasing the number of MPs and lengthening the parliamentary term to
four years. It proposed that each of these major changes be put to the country
in a referendum.
The four year term was rejected by voters in
1990. A 1992 referendum invited voters to choose from several different
proportional systems and the winning system (Mixed Member Proportional – MMP)
was then placed alongside the existing First Past the Post (FPP) system for the
voters to choose between the two in a final binding referendum conducted in
conjunction with the 1993 general election. 54% favoured MMP.
Jim Bolger didn’t like MMP. He felt it gave
too much power to small parties and his view was shared by Labour leader David
Lange and many senior members of National and Labour. Needless to say it was
strongly supported by Social Credit and the other small parties which emerged
once MMP was launched in 1996 and in the years leading up to the launch. The
system gave electors two votes: one for their preferred electorate candidate and
one for their preferred party.
Like it or not, Bolger was now committed to
MMP, having given an assurance that the referendum would be held and campaigning
in 1990 and 1993 on that promise. The new political landscape was now his to
prepare for, to introduce and, if National retained power in 1996, to form a
government under it.
There had been furious lobbying and
campaigning by both supporters and opponents of MMP prior to the referendum.
After the people had spoken it became a major issue for all politicians and
electoral administrators throughout the 1993-96 term as they prepared for the
change. Foremost was the huge task of redrawing electorate boundaries. The new
system reduced the number of electorates from 99 to 65. There was a scramble for
the reduced number of candidacies and, for the losers, an equally furious
scramble for positions on the party lists from which the extra MPs would be
drawn to make up the full house of 120 members and adjust the party
representation to match the voting. A 5% threshold was imposed to prevent very
small parties from entering parliament unless they won an electorate seat.
An unexpected consequence of the new enlarged
electorates was a reduction in party membership. Many supporters were cancelling
their subscriptions, feeling the local aspect of belonging had been lost.
Over and above the introduction of MMP,
another major issue throughout the 1993-96 term (and well beyond) was renewed
interest in the implementation of the 1985 Treaty of Waitangi act. In 1992 a
huge deal had been done to secure pan-Maori interests in the fishing industry.
In 1986 a quota management system had been introduced based on the catch history
of commercial fisheries but was biased against Maori who fished for personal
consumption. The 1992 deal gave Maori a half share in Nelson-based Sealord
Fisheries and their entire fishing quota plus a large cash payment and automatic
rights for 20% of future species added to the quota system. The immediate value
of the deal was $150 million and it gave Maori a huge asset. Management was
delegated to a Treaty of Waitangi fisheries commission whose task was to
allocate quota and profits to various Iwi groups, a highly controversial
process.
But it was the land grievances that came to
the fore in 1993. Doug Graham, as minister for Treaty negotiations, tackled the
grievances and received strong support from Jim Bolger. The nature of the claims
of historical injustice to Maori under the act varied enormously and there were
major complications determining exactly who was qualified to represent Iwi
groupings. Decades of controversy lay ahead but a settlement with Waikato/Tainui
was signed in May, 1995 totalling $170 million in cash and land. This showed it
could be done and an agreement with the South Island Iwi Ngai Tahu soon
followed. These deals were a major achievement for the Bolger government and set
the standard for future negotiations.
Meanwhile minister of finance Bill Birch was
managing the economy well and growth reached 6.1% in 1994. Foreign policy
remained unchanged and even the anti-nuclear policy was retained although hints
were dropped that it could be softened.
As the 1996 MMP election neared, disillusioned
MPs from both major parties saw an opportunity to jump ship and form new
parties. Under the FPP system this was not an option – merely a guaranteed route
to oblivion. But MMP changed that.
Minor parties had graced the New Zealand
political landscape for decades with Social Credit the main player since 1954
and the Communist party on the ballot papers from 1921 to the early 1990s. Those
established more recently have usually been the result of a single MP defecting
from a major party. In 1980 Matiu Rata left Labour to form the Maori-oriented
Mana Motuhake. In 1989 Jim Anderton split from Labour and formed New Labour as a
reaction to Rogernomics. Rata and Anderton both commanded a strong personal
following in their respective electorates and continued to win their seats.
Social Credit’s high point was the early 1980s with Bruce Beetham and Gary Knapp
both in parliament. The party split in 1985 with the main body carrying on as
the Democratic party. The short-lived but high-flying right-wing New Zealand
party established in 1984 by wealthy businessman Bob Jones existed from 1983 to
1986, gaining 12% of the vote at considerable cost to National. A left-wing
Values party had been launched in 1972 and morphed into the Greens in 1990.
This all happened before MMP was even on the
horizon. The parties were formed by people whose idealism trumped their
pragmatism and freed them to express their true opinions rather than toe the
party line. But the climate changed as MMP approached. Now a new party stood a
very real chance electorally. Two first term National MPs, Gilbert Myles and
Hamish MacIntyre, expressed their opposition to the Douglas/Richardson reforms
by breaking away and forming a Liberal party in 1991. That same year Jim
Anderton combined his New Labour party with the Democratics and Mana Motuhake to
form the Alliance. The following year the Green and Liberal parties joined the
Alliance, enlarging the party to cover the full spectrum of left wing politics.
Parallel with this was the action of another disillusioned National MP Winston
Peters. He had been relieved of the Maori affairs portfolio by Bolger in 1991
due to his insistence that he should control matters involving Maori in every
ministry, not just his own. He then constantly sniped at his colleagues from the
back bench and was expelled from the National caucus by a vote of 50-15 in
September, 1992. He remained as an independent member but resigned from
parliament in 1993 to start a yet another new party, New Zealand First. It
attracted several sitting members from both National and Labour who joined him
as candidates for the 1993 election. By the time of the first MMP election in
1996 NZ First was able to field candidates in every electorate. The party’s
position on the political spectrum was a little vague but could best be
described as nationalist, populist and centrist tilting slightly to the left.
New Zealand First and the Alliance won two
seats each at the 1993 election, cutting Jim Bolger’s winning margin to just one
seat.
To complete this digression it’s necessary to
mention two other parties which launched prior to the first MMP election, both
destined to draw a considerable volume of votes from Labour and National.
Disgruntled former Labour finance minister
Roger Douglas and equally disgruntled former National cabinet minister Derek
Quigley (who had been sacked by Robert Muldoon for making a public speech
critical of his interventionist economic policies) teamed up to form the
Association of Citizens and Taxpayers in 1993. In 1994 it was renamed the ACT
political party - a right wing low-tax laissez faire grouping, and with the
support of big business was able to campaign strongly in 1996. Ex-Labourite and
strong Douglas supporter Richard Prebble was party leader for the election with
Quigley high on the party list. Douglas did not seek election and continued
working in the background. The party attracted former members from Labour
(notably Ken Shirley, another Douglas supporter), Quigley from National, and
others new to politics.
Also in 1994, after the departure from Labour
of Roger Douglas, Richard Prebble and David Caygill at the 1993 election,
financial reform supporter Peter Dunne, who had been a cabinet minister in the
1984-90 Labour government, resigned from Labour – remaining in the house as an
independent. He was feeling isolated by the party’s move back towards its
union-oriented roots. Meanwhile six other sitting MPs from both parties (notably
Clive Matthewson, Labour) were viewing the coming change to MMP with alarm,
fearing they would be left without an electorate. In 1995 they formed a new
party, United New Zealand, while they remained in parliament as a support party
to Jim Bolger’s National government. Matthewson was party leader and given a
cabinet post. Peter Dunne joined the party and he too was admitted to the
cabinet. United NZ was a party leaning to the right but more centrist than ACT.
So as the 1996 election approached a total of
six main parties were campaigning for party votes: ACT, Alliance, Labour,
National, NZ First and United NZ. Also represented in parliament prior to the
election was the Conservative party made up of two former National MPs, and the
Christian Democrats (one former National MP).
Jim Bolger was undaunted by the plethora of
new parties surrounding him even though he’d lost nine caucus members to them.
Labour had lost four. Bolger was also tasked with overseeing public education
for the new voting system. And he was also conducting his own election campaign.
Labour had surged ahead of National in 1994 due partly to their change of
leadership from Mike Moore to Helen Clark the previous year. But as the 1996
election approached National had regained the lead.
Considering the new system and the arrival of
so many minor parties the result of the 1996 MMP election was always going to be
indecisive, as indeed it was. The turnout was huge (88.28%) and the new parties
were well supported. NZ First won 13% of the vote which entitled them to 17
seats; the Alliance won 10% for 13 seats and ACT 6% for 8 seats. The two major
parties won eighty-one seats between them: National 44 and Labour 37. The
remaining seat was secured for United by Peter Dunne who won his electorate
although his party’s share of the vote was a mere 1%, well below the 5%
threshold.
Under the new system the house now held 120
members. The numbers meant both major party leaders had to negotiate with the
minor parties to either form a coalition or obtain support for a minority
government. It was clear from their political colours that the Alliance could
only go with Labour and, equally, ACT could only go with National. Neither of
those pairings reached the required 61 seats for a majority. The result
therefore swung on whichever party NZ First chose to support with their
seventeen members. National had won the most votes but Jim Bolger’s election
night speech could be little more than a vote of thanks to his supporters. The
country went to bed not knowing who was going to lead the next government.
Weeks of negotiations took place between the
election on 12 October and a televised announcement by NZ First leader Winston
Peters on 10 December. Throughout the period nothing was announced publicly by
any of the parties involved that could give any inkling regarding the progress
of the negotiations. Public opinion was that NZ First would form a coalition
with Labour and the Alliance rather than with National. After all, Peters had
been sacked from the Bolger cabinet in 1991 and expelled from the caucus in
1992. Peters’ party had more in common with Labour in key areas such as monetary
policy, asset sales, education, health, social welfare, immigration and Treaty
issues. Their policies on tax, housing and industrial relations were more in
line with National, however.
Peters’ announcement on 10 December was
rambling, vague and gave no hint on which way the party was going to jump until
he finally revealed that NZ First would sign a coalition agreement with
National. The news was greeted with surprise by most of the media and the
general public, profound shock by the Labour party and utter dismay by many NZ
First voters who believed they were voting for a change of government. Maori in
particular felt aggrieved as they had voted NZ First candidates into parliament
in all five Maori seats and now felt betrayed. Indeed, one of NZ First’s mantras
had been “time for a change” and much of the party’s campaign rhetoric was
anti-National.
There were two likely reasons for the surprise
decision. Firstly, the Labour option would entail a three-way coalition and NZ
First was not particularly friendly with the Alliance. In any event a three-way
arrangement would be less stable. Secondly, NZ First wanted to protect its
brand. Its many similarities with Labour could have seen the party subsumed as
an almost invisible junior partner. With National it could stand up for itself,
declare itself a party determined to bring in new policies and claim it had
moved National closer to the centre.
National, it must be said, had won the
greatest share of votes and under the previous electoral system would have won
the election. It is also clear that National made rather more concessions,
including promising Winston Peters the posts of deputy PM and treasurer – a new
role placing him above the minister of finance. His party was also promised five
cabinet positions and more ministerial roles outside cabinet. Labour was less
generous and wouldn’t let Peters any near a finance role.
On 10 December, 1996 Bolger and Peters
appeared together as leaders of the first MMP government. Bolger of course
remained prime minister.
Now began the task of running the country and
making the coalition work. Further details of National’s agreement with NZ First
emerged, including provision for $5 billion of extra spending, deferment of tax
cuts promised by National in the campaign and agreement to ban the privatisation
of some state assets. Bolger had to rethink his programme and also placate
several former cabinet ministers who had been demoted to the back bench to make
room for the promised five NZ First cabinet positions. The NZ First ministers
entered cabinet with, in most cases, no parliamentary experience and no inkling
of cabinet responsibility or collegiality. Several scandals were revealed
involving these ministers. There was a junket first class air trip to Paris; a
much-publicised spend in excess of $4,000 on personal clothing from a publicly
funded television channel’s funds, and a case of family favouritism when letting
a free doctors visit contract. It was not a good start for the coalition.
The extra $5 billion enabled the government to
record some achievements but support for NZ First quickly fell away in the
polls. And dark clouds were descending over Jim Bolger’s leadership, unbeknown
to him. He had been energetic and optimistic in his first two terms but the
extra stress caused by the coalition arrangement was taking its toll. Added to
this was the knowledge that NZ First was beset by internal problems and
defections which made the government unstable. Peters’ budget as treasurer
showed signs of the tax and spend philosophy reminiscent of the Muldoon era
which he had been a part of.
As the problems NZ First were experiencing
didn’t directly concern Jim Bolger he assumed his own leadership was secure. But
in the hectic days of 1997 neither he nor his senior ministers seemed to notice
that health minister Jenny Shipley was gathering support for a tilt at the party
leadership. Things went quickly downhill for Bolger and in early November a
meeting with Shipley and Wyatt Creech revealed that he no longer commanded a
majority of support in the National caucus. Rather than face a vote he
surrendered office to Shipley on 8 December, 1997.
It could hardly be claimed that bad
performance had cost Jim Bolger the prime minister’s office so suddenly and with
so little apparent warning. It was a cruel blow. Former minister Warren Cooper
theorised later that Bolger’s perceived lack of support for private enterprise
may have contributed to his demise. By and large he had done a competent job
restoring respect for National after the memory of the Muldoon years. His
government had maintained economic growth and built on the reforms which had
caused such controversy in 1984 but which also freed New Zealand politics from
crippling controls and restrictions.
Decades later Jim Bolger continued to express
bitterness over the leadership change and regretted that a caucus of forty or
less could overturn a decision made by the entire country at an election. He
recalled that the displacement of David Lange had been followed by an election
loss for Labour, and that after his own rejection National would go through four
more leaders before they won again.
Early in 1998 Bolger resigned from parliament
to take up the position of ambassador to the United States – a highly
prestigious posting. Following that he served on multiple boards of directors.
As late as 2018 he was appointed to chair a working group to review industrial
relations. By then he was 82.
Bolger’s political career was impressive by
any definition – eight years as a level-headed minister in the Muldoon
government followed by eleven years leading a rejuvenated and largely reunified
National party, seven of them as prime minister. He was not one of New Zealand’s
most memorable leaders. Seddon, Savage, Kirk, Muldoon and Lange were more
charismatic and inspirational. But Bolger was hardworking, politically shrewd
and with the sort of practical good sense that he shared with Coates, Massey and
Holyoake - all, like Bolger, from farming backgrounds. Michael Bassett’s
biography concludes that Jim Bolger left the country in better shape than he
found it.
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