15.6 Post-Second World War Political Economy
New Zealand retained its‘Senate’(Legislative Council) until 1950, when it was
euthanized by the newly-elected conservative National government; an echo of
the abolition of the provincial assemblies in 1876. The resulting unicameral
system has been likened to an‘elected dictatorship’; an ability for governments
to legislate with minimal checks. A referendum in 1967 to extend the parliamen-
tary term to four years was soundly defeated. For four decades, the short parlia-
mentary term was New Zealand’s only constitutional check on the abuse of
power.
Political and economic life in the two countries was conducted in parallel.
Defence alliances in the form of the Australia, New Zealand, United States
Security Treaty (ANZUS) and the Southeast Asia Treaty Organization (SEATO)
meant that a military relationship was retained, albeit under the USA’s over-
sight. Australia’s military contribution to South-East Asian regional conflicts
was greater than New Zealand’s, and Australia’s alliance with the USA was
somewhat tighter. This is shown by the substantially different scales of
involvement in the Vietnam War, and in New Zealand’s somewhat casual
(in Australian eyes) departure from ANZUS in 1985. Australia sent conscripts
to Vietnam, New Zealand did not; a reversal of the First World War, when New
Zealand conscripted and Australia did not.^26
There was some economic convergence from 1965, starting with the hope-
ful New Zealand Australia Free Trade Agreement (NAFTA) and currency deci-
malization, though most facilitated by the devaluation in 1967 of the New
Zealand dollar and by Britain’s entry into the EEC in 1972. The devaluation, in
particular, extended the Australian market for New Zealand’s manufactured
goods. In the 1970s and 1980s, that period of exceptionally‘stormy seas’
(Easton 1997), New Zealand policy initiatives reoriented the export economy
towards Asia, creating unusually strong relationships with China from the late
Maoist period, the Soviet Union during that period of Cold War intensifica-
tion, and with revolutionary Iran in the years around 1980. New markets were
found for those staples formerly sold almost exclusively to Great Britain, while
new export industries emerged.‘Closer Economic Relations’with Australia in
1982 followed (CEDA 1985) the China, Soviet, and Iranian initiatives, sub-
stantially extending market opportunities for New Zealand manufacturers.
Australia and New Zealand came to see Asia as an opportunity rather than as
a threat. And they rediscovered each other. Economic tensions remained,
however, most visibly through the Ansett Airlines collapse in 2001 (and the
subsequent blockading of the New Zealand Prime Minister in Melbourne
(^26) Conscription also operated in the Second World War, legislated for by Prime Minister Peter
Fraser, who himself had been imprisoned as a conscientious objector in the First World War.
Keith Rankin