and formed an alliance with Labour. When
Labour came to power in 1935 it began a pro-
gramme of Maori welfare campaigns in education,
social entitlements and land settlement.
By 1946, the Maori population had increased
to about 100,000 and it had doubled a genera-
tion later (1966) to over 200,000; by then about
half the Maoris lived in urban areas. White New
Zealand no longer aimed to assimilate them.
New Zealand had become a multicultural society.
Racial discrimination lessened and was replaced by
a renaissance of interest in Maori culture. Maori
achievements in battle during the Second World
War and on the rugby field became a matter of
pride for all New Zealanders. Discrimination
remains, however – not on grounds of colour but
because of the lower educational attainments of
the Maori people. This places Maoris at a severe
disadvantage and their unemployment in times of
recession is much higher than that of white New
Zealanders.
From 1935 to 1949 New Zealand politics
regained stability with the Labour Party in power.
The party had shed much of its theoretical social-
ism and now appealed to sections of the middle
classes as well as to working people; it also guar-
anteed prices for farm produce. Labour wished to
protect the farmers and manufacturers by insu-
lating New Zealand from its dependence on world
price fluctuations through greater state control of
marketing and distribution. It also followed the
earlier humanitarian tradition of the Liberals in
extending welfare safeguards for the poor. The
Labour government led by Michael Joseph Savage
was an able one and was lucky to come to power
as world economic conditions began to improve.
It created the modern welfare state. Workers were
safeguarded by a minimum wage, but trade union
power was limited by the reintroduction of com-
pulsory arbitration for industrial disputes; public
works programmes on the model of the New Deal
were implemented; unemployment was reduced;
pensions were increased. The Social Security Act
of 1938 was also notable for starting a national
health service with virtually free treatment and
medicines a decade before Britain did so. In
1945–6 a second burst of legislative energy pro-
vided child benefits without a means test for every
family. New Zealand thus created an integrated
and comprehensive social-security system that
abolished fears of extreme poverty and included
white New Zealanders and Maoris alike. The con-
trast between New Zealand’s social policies and
Australia’s treatment of the Aborigines at the
time, and Australia’s bitter battles over health ser-
vices, is striking. But social provisions had to be
paid for by a relatively high level of taxation. New
Zealanders could afford their welfare state during
the post-war decades because there was great
demand for their farm products – beef, lamb and
dairy produce.
The opposition, the Reform Party and the old
Liberal Party, combined to form the National
Party. Like Labour it accepted the welfare-state
provisions – indeed, in outlook it no longer differed
markedly from Labour, except insofar as it empha-
sised reduced state intervention and the importance
of individual enterprise. New Zealand’s most
distinguished historian, Keith Sinclair, described
both the Labour and National Parties post-war as
‘conservative’. This remained true for Labour in
the 1980s.
In the 1949 general election the National
Party won power, promising to end unnecessary
socialist controls and to follow policies more in
New Zealand’s interests than the internationalism
of Labour had been. Sidney George Holland
became prime minister. By this time, Cold War
hysteria had spread to New Zealand. The gov-
ernment defeated the more militant unions,
which were accused of fomenting unrest in
Russia’s cause. The National Party won election
after election. New Zealanders were well satisfied,
prospering from the post-war economic boom.
Sid Holland anticipated British conservative
politics in enabling tenants to purchase on
favourable terms their publicly owned (state)
houses. But control over the marketing was
retained to ensure more stable prices. In 1957
Holland was replaced by Keith Holyoake. The
general election gave Labour a narrow victory,
only for the party to preside over three difficult
economic years, 1957–60. In consequence the
government had to raise taxes and was punished
by defeat at the next election. Keith Holyoake,
returned to power, led a government determined
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