New Zealand Official Yearbook 2000

New Zealand lies in the south-west Pacific Ocean and comprises two main and a number of smaller islands. Their combined area of 270,500 square kilometres is similar to the size of Japan or the British Isles.

The main North and South Islands are separated by Cook Strait, which at its narrowest point is 20km wide. They lie on an axis running from north-east to south-west, except for the low-lying Northland peninsula. The administrative boundaries of New Zealand extend from 33° to 53° south latitude, and from 160° east to 173° west longitude. In addition to the main and nearby islands, New Zealand also includes the following small inhabited outlying islands: the Chatham Islands, 850km east of Christchurch; Raoul Island in the Kermadec Group, 930km north-east of the Bay of Islands; and Campbell Island, 590km south of Stewart Island. New Zealand also has jurisdiction over the territories of Tokelau and the Ross Dependency, which are described in chapter 4.

New Zealand is more than 1,600km long and 450km wide at its widest part, and has a long coastline for its area. The coast is very indented in places, providing many natural harbours. The country is also very mountainous: under a quarter of the land is less than 200 metres above sea level. In the North Island the main ranges run generally north-east to south-west, parallel to the coast, from East Cape to Cook Strait, with further ranges and four volcanic peaks to the north-west. The South Island is much more mountainous than the North Island. A massive mountain chain, the Southern Alps, runs almost the length of the island. There are many outlying ranges to the Southern Alps in the north and the south-west of the South Island. There are at least 223 named peaks higher than 2,300 metres. There are also 360 glaciers in the Southern Alps. The largest are, on the east, the Tasman (length 29km), Murchison (13km), Mueller (13km), Godley (13km) and the Hooker (11km), and, on the west, the Fox (15km) and the Franz Josef (13km).

New Zealand's rivers are mainly swift and difficult to navigate. They are important as sources of hydro-electric power and artificial lakes have been created as part of major hydro-electric schemes.

New Zealand is in an area of the world characterised by active volcanoes and frequent earthquakes. The ‘ring of fire', as this area is known, forms a belt that surrounds the Pacific Ocean and is the surface expression of a series of boundaries between the plates that make up the earth's crust.

The boundary between the Indo-Australian plate and the Pacific plate runs through New Zealand, and the processes from their collisions have had a profound effect on New Zealand's size, shape and geology.

New Zealand is a long, narrow, mountainous country surrounded by a large expanse of ocean. The nearest major land mass is Australia some 1,600km to the west.

The climate of New Zealand is largely influenced by:

The day-to-day weather is mostly determined by a series of anticyclones and troughs of low pressure in the westerlies. Consequently New Zealand weather is changeable, typically with short periods of a few days of settled or unsettled weather. At times the westerly regime breaks down and there are cold southerly outbreaks (with snow in winter and sometimes spring), or northerly intrusions of warm, moist air when tropical depressions move southwards into New Zealand latitudes in the summer.

The main mountain chain which extends much of the length of the country is a major barrier to weather systems approaching from the west. Consequently there is a marked contrast between the climates of regions west and east of the mountains, and this is much greater than north-south climatic differences.

The surrounding ocean means that New Zealand largely has a ‘marine’ climate – except in Central Otago, which most nearly approaches a ‘continental’ climate (dry with hot summers and cold winters).

Many parts of the country are subject to extremes of wind and rain, occasionally giving rise to wind damage to buildings and forests, and flooding as depressions with their fronts pass close to or over the country. The rugged terrain is an important factor in the enhancement of the wind strength and/or rainfall.

Temperature extremes are mainly confined to places east of the main ranges. High temperatures usually occur in warm north-westerly wind conditions due to the so-called föhn effect. These high temperatures are often followed by sudden falls in temperature as a cold front moves up the east coast of both islands.

The islands of New Zealand separated from their nearest neighbours over 80 million years ago. Some of the original inhabitants endured times of turbulent change and violent upheaval, evolving and adapting to become part of a unique natural biota (or region). Other species died out (either nationally or regionally), unable to compete or survive environmental disturbances such as ice ages. For example, coconut palms were once found in New Zealand, and kauri, now confined to the north of the North Island, used to grow as far south as Canterbury. Over the years the earliest inhabitants were joined by other plants and animals carried across the oceans by wind and current.

This pre-human community was notable for the absence of snakes, land mammals (save three species of bat) and many of the flowering plant families. Whole orders and families are endemic (found only in New Zealand): tuatara, moa and kiwi, all of the native lizards, and all the native earthworms (nearly 200 species), to name just a few. Many remarkable plants, insects and birds evolved to fill the ecological niches normally occupied by mammals. Others diversified to fill the new territories created by sea-level fluctuations and land uplift. With no mammalian predators on the ground but avian predators everywhere, flightlessness was not a handicap nor was greater size. Moa (11 species, some up to 3m tall) became extinct in pre-European times, but many other large flightless birds still remain including kiwi, the nocturnal kākāpō (the only flightless parrot in the world), and weka (of the rail family). Flightless insects are numerous including many large beetles and 70 or so endemic species of the cricket-like weta.

New Zealand has the most diverse seabird fauna of any country (87 species). Almost half of all the native bird species depend on the ocean for food – the feeding zones of some extending as far south as the Antarctic continent. The extensive coastline and many islands offer a huge variety of habitat, from estuary and mud-flat to rocky cliffs and boulder bank. The ocean itself is marvellously rich – there are about 400 different marine fish resident in the waters around New Zealand as well as various species of seal, dolphins and porpoises. Thirty-two species of whale have been recorded and three of the largest (sperm, humpback and right) regularly migrate here in spring and autumn.

The most widespread and complex type of forest in New Zealand is a podocarp (conifer) broadleaf association. It is generally found at lower altitude and is characterised by a variety of species, a stratified canopy and an abundance of vines and epiphytic plants. Beech and kauri forests, in contrast, are much simpler in structure. New Zealand's beech species have close relatives in Australia and South America and the five different types of species here have exploited habitats from valley floor to mountain tops. Kauri, true forest giants, dominate only in the warmer climes to the north.

Some of the most specialised plants are those occupying the alpine zone. A remarkable 25 percent of all New Zealand's plants can be found above the treeline. Ninety-three percent of all the alpine plants are endemic (compared with 80 percent for the rest of the higher plants). Snow tussock herb-fields are one of the most distinctive elements in this cold, windswept environment. Remarkably long-lived, larger specimens may be several centuries old. Like beech trees, they seed infrequently but in profusion.

A definitive feature of New Zealand's land-based plants and animals is their degree of specialisation and narrow habitat requirements (e.g. takahē/tussock grasslands; blue duck/fast flowing rivers and streams), and their evolution in the absence of mammalian predators (birds) or browsers (plants). This specialisation, and the adaptations which make New Zealand's wildlife so unique, render them extremely vulnerable to introduced predators (such as rats and cats) and competitors (such as deer and possums) and loss of habitat.

One uniform time is kept throughout mainland New Zealand. This is the time 12 hours ahead of Coordinated Universal Time (UTC), and is named New Zealand Standard Time (NZST). It is an atomic standard maintained by the Measurement Standards Laboratory, a part of the Crown Research Institute, Industrial Research Limited. One hour of daylight saving, named New Zealand Daylight Time (NZDT), which is 13 hours ahead of UTC, is observed from 2am (NZST) on the first Sunday in October, until 2am (NZST) on the third Sunday in March. Time kept in the Chatham Islands is 45 minutes ahead of that kept in New Zealand.

In 1900 New Zealand was a self-governing colony of the United Kingdom, which had reassumed sovereignty in 1840 after Captain James Cook had claimed it in 1769. Since the signing of the Treaty of Waitangi the numbers of Māori, a Polynesian people who began to settle the main New Zealand islands after 1000 AD, had fallen by about half to 46,000, while the number of Pākehā (non-Māori, at this time overwhelmingly British settlers and their descendants) had risen from a couple of thousand to three-quarters of a million. Growing numbers of New Zealanders were of mixed ethnicity.

After successful schemes for organised British settlement began in the late 1830s Aotearoa became European-dominated New Zealand. In 1800 Māori lived in mainly small communal groups, growing Polynesian crops which survived in a cooler climate, hunting birds, fish and small animals, and gathering the resources of forest and ocean. By 1900 Māori had lost most of their land through military conquest and a sale process carried out with varying degrees of unfairness. Much of the once predominantly forested landscape gave way to pasture on which grazed domesticated animals that supplied the British imperial centre with food (aided by new technologies such as refrigeration) and other raw materials. The European population of this ‘Britain of the South’ lived on large sheep runs, smaller cropping and dairy farms, or (mostly) in towns and cities. These serviced the hinterlands and manufactured goods for local consumption. Thanks to the spread of dairy farming and the growth of suburban Auckland and Wellington, the population of the North Island exceeded that of the South for the first time since the gold rushes of the 1860s.

Far from the centres of culture and knowledge (even after New Zealand and the United Kingdom were linked via Australia by an undersea telegraph cable in 1876), ‘Maorilanders', as latter 19th century white New Zealanders fondly called themselves, prided themselves on their adaptability and resourcefulness. Most of their innovations, such as mechanised ways of separating cream from milk, were motivated by pragmatism. The imagination of the South Canterbury farmer Richard Pearse, who is believed to have flown before the Wright brothers, was exceptional. New Zealanders also recognised that resourcefulness had its limits. Concern for the welfare of ageing ‘pioneers’ led to the introduction of old-age pensions for the ‘deserving poor’ in 1898; they were to be joined over the next 40 years by other worthy but narrowly defined groups, including war veterans and widows.

Although it was not fully independent, since Great Britain retained responsibility for foreign policy, New Zealand was one of the world's most ‘democratic’ countries in 1900. It was granted self-government in the mid-1850s, and by the turn of the century almost all adult citizens were entitled to vote in elections for the House of Representatives. Māori were restricted to four dedicated parliamentary seats; this number was then roughly in proportion to the Māori share of the population. Women had won the vote in 1893 but were not to be allowed to stand for Parliament until 1919. Also around the turn of the century New Zealanders reiterated their growing sense of identity by spurning an offer to join the new Australian federation.

A resolutely populist government was entrenched in office in 1900. ‘King Dick’ Seddon's Liberals were then halfway through two decades of uninterrupted power, having defeated the ‘continuous ministry’ of the conservative elite in 1890. They shared the prevailing New World belief that the state's role was to assist the ‘ordinary working man’ and his family onto the land. This offered both physical and mental health and the promise of prosperity denied in the Old World. Land was made available by buying up some of the ‘great estates’ acquired by the nineteenth-century squattocracy, and by enthusiastic purchasing of the remaining Māori-owned land. Technological advances in refrigeration and the mechanisation of farming enabled diversification away from pastoralism and allowed family-run farms to increase in size.

The Liberal coalition of ‘small men’ was inherently unstable, and it began to unravel during the first decade of the new century. Farmers helped onto the land with cheap government loans and long-term leases, and helped to prosper by state-run railways, roads and shipping, now sought freehold titles, higher prices for their production, and the ability to employ labour as cheaply as possible. This cut across the interests of urban workers who had been placated by the introduction of compulsory arbitration and an award-based wage-setting system in the 1890s. While farmers joined forces with urban employers in a Reform Party led by William Massey, militant unionists increasingly withdrew from the arbitration system and the ‘Liberal-Labour’ alliance.

Social tensions came to a head in 1912–13, when Reform replaced the Liberals in power and crushed strikes led by mining and transport unions combined in a ‘Red’ Federation of Labour. As in other settler societies, class war seemed imminent. But the threat subsided by the time a world war broke out in August 1914. In October that year the main body of the New Zealand Expeditionary Force left to train in Egypt. One-tenth of New Zealand's population of one million served in the Great War; one in six of these were killed, and many more came home as invalids. At the end of the war, another 8,000–9,000 (including 2,000 Māori) were to die within the few months of the ‘Spanish Flu’ pandemic.

New Zealand's troops mostly served alongside the British armies on the Western Front. By chance, however, they participated in two of the turning points of the war. On 8 August 1915, the Wellington Regiment captured the summit of Chunuk Bair on the Gallipoli Peninsula, the key to forcing the Dardanelles, defeating Turkey and allowing aid to reach Russia. British commanders missed the opportunity to reinforce them, and the commanding heights were lost. The abandonment of Gallipoli saw the New Zealand Division redeployed in France, where many were killed on the Somme and at Passchendaele. In April 1918, however, it played a significant role in blunting the German offensive which threatened to capture Paris. New Zealand's mounted riflemen were also an important part of the British force which wore down the Turkish army in the Near East after 1916. The battlecruiser New Zealand, paid for by the Dominion's taxpayers, was one of the few British warships to take part in all three major clashes between the British and German battlefleets.

It was not the first time New Zealand had gone to war alongside Britain. Consistent with its self-image of being better Britons than the British, New Zealand was the first colony to send troops to support Britain when the South African War broke out in 1899; 6,500 men served there. In 1901 it acquired its own mini-empire of the Cook Islands and Niue and it moved quickly in 1914 to occupy German-controlled Western Samoa, which it continued to rule under an international mandate until 1962. (The Tokelau Islands were to be acquired from Britain in 1924.)

During the 1914–18 war, New Zealand enjoyed guaranteed markets in Britain for all the primary produce it could export. Afterwards, many returning servicemen were resettled on poor farming land in the backblocks. Their marginal status mirrored that of the whole country in the 1920s. Still tied firmly to Britain's imperial apron-strings, New Zealand's economy was buffeted by volatile world commodity prices. Working-class aspirations found a political voice in the Labour Party, which became an increasingly powerful opposition during the decade. After Massey's death in 1925 Reform reinvented itself under the energetic Gordon Coates, who was responsible, among other things, for the creation of producer boards to coordinate the marketing of New Zealand's major exports, state housing, and the construction of a countrywide hydro-electric system. An economic downturn saw the Liberal Party (renamed United) regain office in 1928 under the leadership of the septuagenarian Joseph Ward, who had previously succeeded Seddon as Prime Minister in 1906. The Government failed to cope with the Great Depression which struck in 1930, and from 1931 a coalition of the two parties retrenched government activity and cut wages.

Coates became the Coalition's Minister of Finance and introduced more innovations, including the government-run Reserve Bank and a Mortgage Corporation. But as elsewhere in the Western world, fiscal orthodoxy ruled: the state's books had to be balanced. While relief work was provided for many of the unemployed, who numbered up to 100,000 in the depths of the Depression, much of it was soul-destroyingly pointless activity providing only sustenance. There was less revolutionary political activity than in more industrialised societies: the riots of 1932 were expressions of anger rather than harbingers of class war. The Communist Party, formed after the Great War, failed to prosper. The beneficiaries of ‘The Slump’ were the Labour Party, many of whose leaders had been ‘Red Feds’ but who now sought change by constitutional means. Labour won office in 1935, by which time economic conditions were much improved.

Labour also sought to improve the living conditions of Māori, many of whom supported the party after it formed a political alliance with the Ratana church. While the Māori population had doubled since the turn of the century, infant mortality remained significantly higher and life expectancy lower than that of the general population. Public health officers worked to upgrade sanitation and housing, and welfare benefits became more available to Māori. Most still lived in rural areas, where land development schemes initiated by āpirana Ngata provided a sounder economic basis for many communities. The loss of land in the 19th century was a continuing grievance, although compensation was paid to some iwi following official enquiries in the 1920s.

The first Labour Government was genuinely reformist. After enacting progressive industrial legislation (a minimum wage, a standard 40-hour working week, compulsory unionism) it introduced a comprehensive system of social security which provided a safety net ‘from the cradle to the grave’ for those who needed it. A substantial state housing programme employed many of the skilled workers made idle by the Depression. Labour also articulated New Zealand's first independent foreign policy, voting differently to the British in the League of Nations on issues such as the Spanish Civil War and the Italian invasion of Abyssinia. But there were limits to independence: a balance of payments crisis in 1938, when the terms of trade turned against New Zealand's still narrow range of exports, necessitated the introduction of import and financial controls. These did have the advantage of encouraging the growth of secondary industries to supply the local market.

The outbreak of World War II was an economic godsend: the United Kingdom guaranteed to buy everything New Zealand farmers could produce, at good prices. The Dominion once again ranged itself alongside Britain and placed military forces at the Empire's disposal for the duration of the conflict. But there were subtle differences from the 1914–18 relationship. The government insisted on consultation over the deployment of the Second New Zealand Expeditionary Force, of which Lieutenant-General Bernard Freyberg had independent command. In practice, however, these troops were again subject to strategic demands. Like their Great War counterparts, they were destined for Britain, but offloaded in Egypt before being thrown into a futile campaign in the Aegean. In this case it was the doomed defence of Greece against the German invasion of May 1941. They too returned to Egypt, but only after Crete was lost following some poor decisions by New Zealand officers.

These experiences, and subsequent training in Egypt and Syria, turned the New Zealand Division into a formidable fighting force which served alongside other Commonwealth units in the North African desert campaigns of 1941–43 against Italian and then German armies, and then in Italy until the end of the war. However, New Zealand's per capita World War II casualties were less than half those of the Great War. New Zealand itself seemed threatened by the lightning Japanese advances of 1941–42. Prime Minister Peter Fraser, unlike his Australian counterpart, resisted pressure to bring troops back for home defence. Instead, the country was garrisoned by United States forces who trained here in preparation for the bloody ‘island-hopping’ campaigns which turned the tide of war in the Pacific. Their social significance was equally great: for the first time in a century, a non-British culture made a substantial impression, not least on the female inhabitants. Aided by radio, the cinema and later television, the American invasion ensured that New Zealand would not simply remain an outlier of the British Empire.

During the war, Labour's technocrats (joined in a government of national unity by the ubiquitous Coates) regulated, ‘manpowered’ (both sexes), directed and controlled people and resources to an unparalleled degree. Māori supported the war with a unanimity lacking in previous conflicts. The Maori Battalion fought with distinction as part of the New Zealand Division, and a Maori War Effort Organisation tapped the resources of hundreds of marae. For the first time, Māori moved into the cities in significant numbers. This trend was not interrupted until the 1980s, when manufacturing employment plummeted and rural life once more seemed attractive. ‘Native’ replaced ‘Māori’ in all official usage in 1947, and successive governments worked to assimilate Māori into mainstream New Zealand life.

In 1947 New Zealand belatedly adopted the Statute of Westminster, which formalised the independence of the British Dominions within the Commonwealth. New Zealand, and especially Fraser, had been active in the post-war formation of the United Nations. But foreign policy independence was soon circumscribed by the outbreak of the Cold War, during which New Zealand supported the United States nearly as enthusiastically as it had supported Britain. The ANZUS Pact of 1951, and participation in the Korean War, set a pattern that was unbroken until the 1980s. New Zealand troops backed colonial and post-colonial Malay(si)a against domestic and then foreign insurgents. While subsequent military participation in the Vietnam War aroused significant opposition, politicians ensured that involvement was on a relatively small scale and casualties were few.

As the Cold War intensified in the late 1940s, Labour was replaced in office by a National Party formed by the defeated conservative coalition partners in 1936. Like Reform, the new government began by crushing a waterfront strike, this time in 1951. Also like Reform, National in office proved ambivalent about rolling back the innovations of its activist predecessor. Some state houses were sold to their tenants; import controls were loosened. The policy of recruiting skilled immigrants introduced in the late 1940s continued. The new settlers were still mostly British, leavened by Dutch and other Europeans. New Zealand remained a largely monocultural society influenced on its margins by Māori values.

A Labour Party led by the ageing Walter Nash regained office for a single three-year term in the late 1950s. Apart from this irregularity, New Zealand politics in the third quarter of the century was dominated by National, which held power until 1972. Keith Holyoake's successful campaign slogan, ‘You’ve never had it so good', reveals much about this period. New Zealand's terms of trade soared with the demand for wool sparked by the Korean War, and were not to decline significantly until the 1970s. Technological innovations, some homegrown, intensified production of the narrow range of exports that had sustained New Zealand since 1900: wool, meat and dairy products. In this period these were supplemented only by exotic trees which had first been planted in significant quantities by Depression-era relief workers. The exporting of untreated logs, wood pulp and paper was extolled as evidence of diversification. New Zealand had one of the world's highest standards of living, but this depended on continued high prices for its largely unprocessed primary products. Domestic manufacturing expanded thanks to the continued protection of secondary industries from foreign competition.

Children and ‘teenagers’ (a new concept) made up a higher proportion of the population in the baby-boom years after 1945. Young people who grew up with British and American music, fashions and television chafed within the social confines set by the war and Depression generations. While there were jobs, homes, education and health care for all, some consumer goods remained subject to import licensing: the waiting list for new cars was years long. Family life in the postwar suburbs which had transformed areas such as West Auckland and the Hutt Valley was both satisfying and stultifying. Wider choices did become available. The ready availability of contraceptive pills and mind-altering alternatives to alcohol in the late 1960s offered the promise of new freedom and experiences. The ideas of ‘second-wave’ feminists and the need to enlarge the paid workforce combined to open up new opportunities for women. At the same time, the expansion of virtually free tertiary education opened new intellectual and employment horizons for many children of working-class parents.

The new generation flexed its muscles with the election of the third Labour Government in 1972. It was ‘time for a change', not least in New Zealanders’ attitude to their environment. Since the beginning of settlement the land's resources had been extracted enthusiastically. New knowledge and technologies were used to increase output, with little regard to long-term consequences. By the 1960s some consequences were becoming unavoidable. A century of deforestation had transformed much steep hill country into grassland for which it was ill-suited. Frequent storms saw much of this pasture and soil washed down to the lowlands, where it increased the severity of floods and clogged the artificial lakes required for hydro-electric power generation. It was demand for electricity which provoked the country's most intense environmental debate, when the Electricity Department proposed raising the level of the remote and pristine Lake Manapouri to increase output. The resulting controversy assisted the victory of Labour, which promised to abandon this scheme.

Labour was more tolerant of social diversity than National, implementing a more independent foreign policy, developing close contacts with post-colonial Africa and sending warships to protest against French nuclear testing in Polynesia. It also developed ambitious plans to control the sprawl of the main cities (Auckland's population had reached two-thirds of a million) by constructing satellite centres. But hopes of building a more flexible yet stable society were stymied by international economic forces. Britain's belated entry into the European Economic Community in 1973 foreshadowed the end of guaranteed markets for New Zealand's major exports. The Arab-Israeli war of the same year led to the creation of an effective cartel of most oil-producing countries which drove energy prices relentlessly upwards. New Zealanders suffered the first restrictions on the use of their family cars for three decades. More significantly, the terms of trade had turned against most primary products: the country could no longer ride to prosperity ‘on the sheep's back'. Full employment disappeared; it was not to return.

Both Labour and the National administration which swept into office in 1975 attempted to mitigate the new economic realities. National's most ambitious means was the ‘Think Big’ projects intended to increase the country's energy self-sufficiency. Planned hurriedly when a second ‘oil shock’ struck at the end of the 1970s, some of these were ill-conceived, others too ambitious, and all proved too expensive when oil prices soon fell and remained low. Prices for farm production did not recover, and it became harder to sell unprocessed products on increasingly open world markets. By its last three-year term National was propping up the rural sector with an unsustainable system of guaranteed minimum prices. Manufacturing boomed in the 1970s, but largely sheltered behind tariff and other barriers. The tyranny of distance made effective competition in world markets difficult, although the Closer Economic Relations agreement with Australia did enable New Zealand to trade with its nearest neighbour on more or less equal terms. Australia became New Zealand's largest trading partner.

In 1981 National was narrowly re-elected after a South African rugby tour divided the country. Sports grounds were invaded by protesters, and matches were played behind barbed wire with the assistance of paramilitary police squads. Increasing attention to the rights of black South Africans accompanied a renewed focus on the place of Māori. Having suffered disproportionately when full employment ended, Māori continued to fall behind Pākeha in education, health and other social indicators. (They were joined in relative poverty by many of the Pacific migrants who met the demand for unskilled labour in the 1960s-70s and tended to live in state housing areas such as Manukau city.) Many Māori saw a cultural renaissance as the key to empowerment: independent schools in which teaching was carried out in Māori sprang up from 1981, and Māori-language radio stations soon followed.

Māori also confronted the dominant culture more directly. Early in the century many Pākehā expected Māori to die out altogether; through its middle years both official policy and popular belief was that they would be integrated into the general population through miscegenation, speeded by an improvement in their economic and social status. Neither outcome eventuated. In 1975 long-standing grievances over the loss of land sparked a march which generated much support as it travelled the length of the North Island. In the same year, one of the Labour government's last acts was to establish a statutory tribunal to investigate breaches of the Treaty of Waitangi. Iwi won compensation in several high-profile claims relating to the pollution of natural resources by industrial development. They also occupied land they claimed had been taken unjustly by the Crown, notably on Auckland's Bastion Point in 1977–78 and at Raglan in 1981. The faces of protest were increasingly brown faces.

In its last term Robert Muldoon's government forced through legislation for the construction of a high dam on the picturesque Clutha River with minor-party support, and introduced a comprehensive wage and price freeze in an effort to curb rampant inflation. Led by the ebullient David Lange, and helped by a new free-market party which attracted many former National supporters, Labour regained office in 1984 with a broad but diffuse mandate for change. The economic and social transformation which followed was more sweeping than even most of its advocates had envisaged.

Muldoon had called the election because he was unsure of defeating a bill to make New Zealand nuclear-free. Labour's insistence on this soon led to the effective suspension of the ANZUS alliance, which for three decades had been seen as the cornerstone of New Zealand's security. An even more pressing problem confronted the new administration. Muldoon refused to devalue the New Zealand dollar, which was fixed against other currencies. The resulting outflow of capital led him to suspend foreign currency transactions, which only worsened the problem. The new Minister of Finance, Roger Douglas, accepted the inevitable; soon, the currency was allowed to find its own level, and Muldoon's price and wage controls were abandoned. Other financial controls soon followed, New Zealand's finance sector was deregulated to an unprecedented degree and the sharemarket boomed.

The next stage of reform was the restructuring of a public sector seen as being too dominant in both economy and society. The group of influential Cabinet ministers led by Douglas saw the role of the state as assuring citizens’ physical safety, providing a basic social welfare safety net, and light-handed economic regulation that did not interfere unduly with market forces. The other traditional functions of the New Zealand state, notably the provision and maintenance of the country's economic infrastructure, and employment creation, could be done better by the private sector, and should be. The results of this approach were dramatic. The wealthy, skilled and adaptable prospered as the top rate of personal income tax was halved from 66 percent. A Goods and Services Tax of 10 (later 12.5) percent on most purchases had a disproportionate impact on the poor.

Labour removed agricultural and consumer subsidies, import licences and export incentives. The government departments which ran railways, forests, farms, coal mines and power stations were turned into state-owned commercial enterprises which pursued profits and made many of their employees redundant. The social welfare system was refocused to target those in greatest need. After Labour's re-election just before the sharemarket bubble burst in October 1987, it turned to the reconstruction of the welfare state, which (including health and education) absorbed more than half of all government expenditure. Business-style management was introduced in the health sector, the control of schools was devolved to elected boards of trustees, and fees for tertiary education were greatly increased. Government superannuation payments were subjected to a means test. Many of the corporatised state agencies, including the Think Big projects, were sold into private (generally overseas) ownership, but in some cases at what were perceived to be discounted prices. The operations of both central and local government were reorganised with a view to making them more ‘businesslike'. Price inflation was curbed, but one in ten of the labour force were now unemployed.

The pain it had inflicted ensured Labour's comprehensive defeat in 1990. National promised a ‘decent society', but pursued this by continuing to implement Labour's agenda. The Employment Contracts Act, which restricted the rights of workers to bargain collectively and to strike, overturned a century of industrial legislation. Many of the state's remaining assets were sold. The separation of funding from the provision of services was extended to the health sector, in which hospitals became ‘Crown health enterprises’ run by boards of directors. State house mortgages were sold off, and entitlements to no-fault accident compensation under a world-leading scheme introduced in the 1970s were reduced. Core social welfare benefits were also reduced, medical prescription fees increased, and the cost of tertiary education soared. By 1993 the country's economic fortunes had improved sufficiently for National to narrowly win re-election. But by now many citizens felt betrayed by both major parties, which had in the last decade made radical changes for which they had received no clear electoral mandate. In 1993 voters seized an opportunity to restructure the politicians: the long-standing ‘first-past-the-post’ electoral system was rejected in favour of a mixed member proportional system, under which only about half the MPs would represent geographical constituencies, and all parties with significant support would be represented in the House in proportion to their share of the total vote.

During the 1993–96 Parliament, the politicians prepared themselves for the new system. Two minor parties already had seats: Alliance, comprising mainly left-wing groups hoping to roll back the post-1984 changes, and the populist New Zealand First Party, supported mainly by the elderly and Māori. Other groupings sought to occupy the centre ground which overseas experience suggested would hold the key to power. In the event, significant representation was achieved only by the four parties which had won seats in 1993, and the ACT Party, which advocated maintaining the impetus of Douglasite reform. New Zealand First ended Labour's 50-year grip on the Māori seats, and held the balance between right and left. After two months of negotiations, it formed a coalition government with National.

The proponents of proportional representation argued it would enhance democracy by encouraging diversity among MPs. This came about: women, Māori and other minorities were represented in unprecedented numbers among the 120 members of the 1996–99 Parliament. However, the party lists which ensured proportionality had been drawn up on the basis of many conflicting factors, and there was a perception that some of the party list MPs were unsuited to parliamentary life. A trickle of defections became a flood after the National/New Zealand First coalition broke up in 1998. The country's first woman Prime Minister, Jenny Shipley, kept her minority National Government in power until the 1999 election by attracting enough disaffected MPs to command a majority.

One effect of this more complex political environment was a return to a more ‘normal’ pace of change. Interest groups which had been imperiously swept aside now had to be courted. Some of the post-1984 changes were socially progressive, New Zealand became more tolerant of diversity. The legalisation in 1986 of homosexual acts by consenting men was one measure of this; another was the reorientation of immigration policy away from those of British stock. An explosion in tourist numbers also brought many more Asian faces onto New Zealand streets, and exports to East Asia boomed. A distinctive New Zealand culture flourished as never before. Many of the mid-century social restrictions that had outgrown their usefulness were removed. Women now undertake paid work in unprecedented numbers. Māori entrepreneurship has flourished – the rate of self-employment among Māori has doubled since 1981 – and several major iwi have significant economic clout since receiving compensation for the loss of land and other grievances taken to the Waitangi Tribunal. By 1999 the value of non-housing commercial assets owned by Māori was estimated at more than $5 billion.

But the success of the economic experiment remains in doubt. The traditional goal of ‘full employment’ remains well out of reach. The pace of technological change, and the consequent decline in the need for unskilled labour, makes it unlikely to ever return. But there is also less demand for skilled labour now that New Zealand industry is fully exposed in the global marketplace. Local manufacturers cannot hope to compete with Third World prices. With more of the country's economic activity tied to overseas ownership, it is unclear how much freedom any administration will have to radically change direction. In late 1999 a minority coalition government of the Labour and Alliance parties assumed office under the leadership of New Zealand's first elected woman Prime Minister, Helen Clark. Its economic and industrial policies promise to ameliorate rather than overturn the reforms of the previous fifteen years.

In 2000, as in 1900, significant numbers of New Zealand troops are serving overseas. Those in 1900 fought in South Africa as part of a British force, whereas those in East Timor, 100 years later, are there as an independent component of a United Nations operation. Sometimes reluctantly, New Zealand became steadily more independent during the 20th century. In 2000 the possibility of the country becoming a republic with an elected president in place of the British monarch is being seriously debated. New Zealand has separated its honours system from that of the United Kingdom, and it seems only a matter of time before the ending of the right of appeal to the Privy Council in London. New Zealanders head both the World Trade Organisation and the Commonwealth Secretariat, and the country hosted the most recent meeting of the Asia Pacific Economic Cooperation organisation. While they are more secure in their standing on the world stage, New Zealanders remain vulnerable to economic forces beyond their control and uneasy about relations between Māori and Pākehā. These two issues, along with constitutional arrangements, are likely to be key matters for debate early in the new century.

New Zealand's constitutional history can be traced back to 1840 when, by the Treaty of Waitangi, the Māori people exchanged their sovereignty for the guarantees of the Treaty and New Zealand became a British colony. Five years earlier on 28 October 1835, an assembly of the Confederation of Chiefs of the United Tribes of New Zealand had proclaimed the country independent and signed the ‘Declaration of Independence'. New Zealand is an independent state: a monarchy with a parliamentary government. Queen Elizabeth II has the title Queen of New Zealand.

A constitution is concerned with the establishment and composition of the legislative, executive, and judicial organs of government, their powers and duties, and the relationship between these organs. New Zealand's Constitution Act 1986 brings together in one act the most important statutory constitutional provisions and clarifies the rules relating to the governmental handover of power. The act deals with the principal components of New Zealand's statutory constitutional provisions: the sovereign, the executive, the legislature and the judiciary.

There remain a number of United Kingdom Acts (referred to as ‘Imperial Acts') which are in force as part of the law of New Zealand. Some are historic constitutional acts, such as the Magna Carta and the Habeas Corpus Act 1679.

These acts are listed and defined in the Imperial Laws’ Application Act 1988.