Upset Down Under

So cosseted are New Zealanders by the costly welfare state of the Labor Party that most have become almost soporific. In power for 17 of the past 25 years, the Labor Party has set up a womb-to-tomb socialist program that provides baby bonuses, housing allowances, tax-paid medical care, and even off-track betting services. The islands have full employment, no poverty, but little wealth; more than 20% of the labor force is on the government payroll and nearly 50% of the population receives some sort of government pension. But tired of the controls and exorbitant costs of the welfare benefits, New Zealanders trooped to the polls, and, in a record vote last week, sent the socialist government to a crushing defeat, returning to power the conservative National Party.

Labor's decline began shortly after the 1957 general elections. Campaigning on a platform of reduced taxes and tax rebates, the party slipped back into power with a paper-thin two-vote majority in New Zealand's 80-seat, one-chamber Parliament. But within months Labor Prime Minister Walter Nash, now 78, announced that a balance-of-payments financial crisis had forced his government to renege on its campaign promises. To pay its bills, the government slapped new taxes on beer, tobacco and petrol, which more than canceled the tax rebates. Above all, New Zealand's voters were irritated by the feeling of pervasive government supervision of their tight little, right little island nation. A frequent gripe is that in the midst of prosperity, no one can buy an automobile except after paying exorbitant import duties and taxes (137% on U.S. cars), and even then the red tape makes delivery a matter of months.

New Zealand's new Prime Minister is Keith J. Holyoake, 56, who will have a solid ten-vote majority in the new Parliament. The son of a farmer, Holyoake left school at twelve to help run the family farm in Riwaka. He finished his education with correspondence courses, has been in Parliament since 1932, save for one five-year break.

A conciliator rather than an innovator, Holyoake will maintain most of the Labor Party's existing welfare programs, but will call a halt to further nationalization in an effort to stimulate the renewed growth of private enterprise. With Labor's leadership either enfeebled by age or shot down in the election returns, the National Party is preparing for a long stay in power.

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