How Bizarre, A New Zealand timeline

The end of an era
The general election of 1984 saw a Labour government come to power under its charismatic leader, David Lange. This however was overshadowed by the agenda relentlessly pursued by his Minister of Finance, Roger Douglas, whose Neoliberal outlook concerned and embittered many of his colleagues. Continuing disagreement over the general direction of the government caused very public disagreements, with David Lange publicly rejecting a proposal to substantially cut tax rates for business and the wealthy. Though the Labour Party itself had carefully navigated through the 1987 general election without the presentation of a manifesto, Roger Douglas and Richard Prebble were determined to continue with the program, regardless of what Lange wanted. A firesale of assets continued throughout 1988, ignoring constant petitions and submissions along with public protests. In late 1988 Roger Douglas’s ally, Richard Prebble was removed from cabinet. This precipitated a vicious and very public row between to two. Prebble when asked whether he would resign promptly replied, “Never”. Next to go was Robert Burgess an influential friend of Douglas. This turn of events also affected the opposition. Jim Bolger who had been leader of the National Party since 1986 was concerned his radical financial spokeswoman, Ruth Richardson would be detrimental to his party as a whole.

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In September 1988 he attempted to demote her to the back benches, replacing her with the more moderate Bill Birch. This came as a shock to many on the Classical Liberal wing of the NZNP. He then targeted both Simon Upton and Lockwood Smith, due to their public promotion of economic liberalism. This shadow cabinet rampage caused an uproar in the National Party, as on the surface. It appeared the NZNP was once more becoming a conservative paternalistic rump party, this appealed to Robert Muldoon who publically commended Bolger’s tough and somewhat dictatorial leadership. By 1989 National quickly closed the deficit in the polls as the economy lurched towards recession. David Lange after experiencing the severe strain of party bitterness resigned in August 1989, and thus Geoffrey Palmer took the helm of what many in the press considered a sinking ship.

However, the internecine civil war within both the NZNP and NZLP was showing, Douglas, Prebble, Richardson, Lockwood Smith, and others opted to form the “Reform Party” under the banner of the “Association of Consumers and Taxpayers” or ‘ACT’ for short. And even polled at 8% by January 1990 under the leadership of Lockwood Smith. Jim Bolger scorned them, calling them “Jelly beans” and “Turncoats”, Muldoon also publically shamed them when asked on his opinion he replied “Who Richardson?, she’s a party nobody. The resident nutter”. Mike Moore became Prime Minister in September 1990, after a desperate coup, orchestrated by Helen Clark propelled him to the leadership. He was well aware his re-election prospects were slim. Jim Bolger, campaigned for the “Decent society” and attacked Labour’s policies emphasizing immigration in a series of ads that were openly racist about Polynesians and Asians. The Labour campaign was further handicapped by the break off Socialist Party led by Jim Anderton, to many observers the possibility that Labour could disappear altogether was very much possible. On election night, the pollsters braced themselves for a Labour disaster. Early results suggested the Socialist Party had taken the Labour heartland with two seats in Auckland switching. Labour lost 30 seats to the National Party and the renewed Social Credit Party while National gained a huge mandate, winning 69% of the seats in the Parliament. The Reform Party failed to gain any traction, and only won 38,291 votes.
Upon entering office the leaving government revealed a large budget deficit along with the imminent collapse of the Bank of New Zealand. Treasury suggested sweeping cuts to public services, Jim Bolger, though shaken by the news. Would not countenance such proposals, all of which were rejected. On the 19th of December he presented large tax increases to offset the outlays in the public finances while substantially cutting the GST from 12.5% to 10%. This however, failed to address the deficit as it grew from the projected 2.9 billion to 3.1 billion by January 1991. Grudgingly, he agreed to limited cuts in education, but resisted cuts in health. This was further complicated due to the fact the economy shrank by 2.2% that year, unemployment did contrary to all projections remain stable at 8.8%. Due in part to greater than expected government intervention in the economy.
The Governor of the Reserve Bank, Don Brash became increasingly frustrated as Bolger demanded reductions in interest rates to boost the already fragile economy. He refused, as he was concerned inflation would inevitably increase as a result, Bolger then publically suggested changes to the Reserve Bank Act 1989 see here. Don Brash retaliated by shaming him on the Paul Holmes current affairs show calling the government “Irresponsible with the public finances”.

Bill Birch rebuffed these claims, when, in January 1992 the budget deficit had been swiftly reduced without sweeping cuts. However, unemployment still remained relatively stagnant at 7.8%, though was significantly lower than that of Australia and Canada. Another area which bore criticism was the tax system which had been increased in December 1991, with the top marginal tax rate being increased from 40% to 52%, changes were introduced to address this in April 1992 with all income taxes being reduced with the top marginal rate being cut to 36% to appease the disillusioned economically liberal wing of National Party.​

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Minister of Finance, Bill Birch discussing the economic outlook.

The strong re-bounding economy in 1992/1993 led newspapers to expect National winning the upcoming election candidly, the opposition was still in limbo with suggestions of a challenge from Labour's rising star Helen Clark. Mike Moore failed to gain any traction against Bolger as his popularity soared. This was compounded by the positive state of the New Zealand economy, with 3.4% economic growth and a static unemployment rate of 6.4%, along with a significantly smaller deficit of 1.9 billion and was projected to become a surplus within three years. Immigration which had been a issue in the previous election had been addressed in the 1991 Immigration Act, though this was attacked by Labour as being insidiously racist towards Asian and Indian applicants. Though Minister of Immigration, Winston Peters permitted entrance to Fijian Indian Labourers (and later their families) for contracted work in 1992. Sensing imminent disaster members of the inner Labour caucus contemplated a leadership change this was voted against, as it became obvious that virtually no candidate would win the up coming general election.

The general election was also held alongside the long anticipated Mixed Member Proportional referendum which had been promised by Bolger upon entering government. By May 1993 the 'Yes' campaign was losing steam due to a popular government and satisfaction with the political system as a whole. Jim Bolger regularly spoke out against it, while rural interests were concerned that future legislation could be "watered down" by coalition agreements. This was further convoluted due to neither Labour nor National supporting it, with only Social Credit and minor parties favoring it.

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Referendum results

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Results by electorate
 
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Why is Social Credit a factor in 1993? They were at their height in 1978 and 1981 and had collapsed by the 90s. What about the Alliance and NZ First? This looks interesting though, no Ruthanasia is good. Watching this.
 
Sorry for the sloppy work on the infobox and grammar, I am currently quite busy but I am in the process of developing the next piece of the timeline. As @Pericles asked the POD here is the merging of the Democrats for Social Credit and the "Socialist Party" led by Jim Anderton (he is now converted to the theory of monetary reform on social credit lines). There will also be major POD's in terms of international events, i.e. the end of Neoliberalism and a return of more statist policies, this is essentially a POD where Neoliberalism is considered a failed ideology etc etc. I was also thinking of creating a Bolger in '87 timeline if anyone is interested.
 
Election in 1985? What happened in 84? Did Muldoon hang on by his fingernails and then fall a year later? Glad to see MMP fail and do we keep an Air Force worthy of the name.
 
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