Fifth Labour Government of New Zealand

Fifth Labour Government of New Zealand

Government of New Zealand from 1999–2008

The Fifth Labour Government of New Zealand was the government of New Zealand from 10 December 1999 to 19 November 2008. Labour Party leader Helen Clark negotiated a coalition with Jim Anderton, leader of the Alliance Party. While undertaking a number of substantial reforms, it was not particularly radical compared to previous Labour governments.

Quick Facts Date formed, Date dissolved ...


The previous government, the fourth National government, had been in power since 1990. It was widely unpopular by 1999, with much of the public antagonised by a series of free-market economic reforms, and was bedevilled by weakness and instability. In the 1999 general election, the Helen Clark-led Labour Party defeated the National Party easily, becoming the largest single party in the House of Representatives. Labour formed a minority coalition government with the left-leaning Alliance party, supported by the Green Party.

During its first term, the government pursued a number of reforms. The controversial Employment Contracts Act was repealed, replaced by an Employment Relations Act more friendly to unions and collective bargaining; a state-owned bank, Kiwibank, was created at the behest of the Alliance; a majority stake in the national airline, Air New Zealand, was purchased; and the public health sector was reorganised with the re-establishment of partly elected district health boards. Closing the Gaps, an affirmative action strategy targeting socio-economic inequalities between Māori and Pasifika ethnic groups and other groups, was a particularly controversial reform among right-wing National and ACT voters.[1][2]

With the disintegration of the Alliance in 2002, Helen Clark called a snap election, even though she still had the confidence of the House. Labour handily won the election. The Alliance failed to return to parliament, although a rump returned as Jim Anderton's Progressives. Labour formed a coalition with the Progressives, and turned to the centrist United Future party for confidence and supply. This second term was notable largely for its social and constitutional legislation, with the Government establishing a Supreme Court and ending appeals to the Privy Council, decriminalising prostitution, and providing for civil unions, the latter two changes in particular supported by the Green Party and opposed by United Future. The Government was also faced in this term with the foreshore and seabed controversy. While Labour, in cooperation with the New Zealand First party, eventually resolved the legal dispute by vesting foreshore and seabed title in the Crown, a dissident Labour minister, Tariana Turia, formed the Māori Party, while on the other side of the spectrum a resurgent National Party, now under former Reserve Bank governor Don Brash, became considerably more popular. In the 2005 election, the Government was returned with a slim margin on the strength of the Working for Families assistance package and financial assistance to students, benefiting also from mistakes in National's campaign.

Helen Clark moved even more to the centre, enlisting support for her Government from both New Zealand First and United Future. Almost immediately, the Government parties became involved in a protracted funding scandal, having apparently used public money for party political purposes during the election campaign. A heavy-handed attempt at campaign finance reform later in this term also harmed the Government, which by now appeared tired and at a loss for direction, although it did succeed in implementing a wide range of social and economic reforms during its time in office.[3][4]

In a 2000 feature article "Siege of Helengrad",[5] The Australian newspaper wrote that Clark's "uncompromisingly autocratic and pervasive leadership has seen New Zealand dubbed Helengrad".[6] In January 2008, the term 'Helengrad', "a noun used to describe the iron grip of New Zealand's prime minister over Wellington", was reported as having made Australia's Macquarie online dictionary among 85 other new words.[7]

In the 2008 election, the Labour Party lost convincingly to National, and the government was succeeded by the National Party led by John Key as Prime Minister.

Significant policies



Treaty of Waitangi

Treaty settlements:

Aspects of the Clark-led governments actions in relation to the Treaty of Waitangi is shown through settlements.

  • Treaty 2U exhibition funding[10]
  • New Zealand School Curriculum launch[11]
  • Moriori heritage and Identity preservation[12]
  • Te Arawa Apology[13]
  • Te Uri O Hau[14]
  • Waitangi Day Commemorative Fund[15]
  • Fisheries Scholarship[16]

Social policy

  • Within 3 weeks of taking office, the government had announced an increase in the minimum wage, removed the interest on student loans for full-time and low-income students while they were still studying, announced the reversal of accident compensation deregulation, and introduced legislation to increase taxation for those on higher incomes.[17]
  • Introduced paid parental leave of 12 weeks (2001), increasing to 14 weeks by the end of the government.[18]
  • The Working for Families package was introduced in 2004, which significantly improved social welfare assistance for low-income families and contributed to a reduction in child poverty from 28% in 2004 to 22% in 2007.[19]
  • The wage-related floor of the state pension was restored.[20]
  • The Housing Restructuring Amendment Bill (2000) provided for income-related rents and set them at 25% of household income making community housing much more affordable than it had become under the previous Government's market rental strategy.[21]
  • Equity Funding was introduced (2002), which provided additional funding to community-based ECE services most in need.[21]
  • Research funding was increased.[21]
  • The New Zealand Transport Strategy (released in December 2002) provided increased funding for initiatives to promote the use of buses, trains, cycling and walking.[21]
  • The minimum wage was increased by more than 5% each year (well above the rate of inflation) during the labour-led government's second term.[21]
  • The Health and Safety in Employment Amendment Act (2002) served to make the principal Act more comprehensive by covering more industries and more conditions.[21]
  • The ring-fencing of mental health money and the creation of more than 800 FTE mental health staff positions see this promise coded as fulfilled representing a 100% fulfilment rate for this policy area.[21]
  • ICT was expanded to students in remote areas so they could receive specialist teaching.[21]
  • Holidays Act 2003
The Holidays Act (2003) entitled employees to receive "time and a half" for working on any statutory holiday from 2004 onwards and provided for four weeks' annual leave from 2007 onwards.[22] However in 2016 MBIE found problems with underpayments on holiday pay due to the complex act, which had not been resolved in 2021.[23]
  • Passed the Prostitution Reform Act 2003
  • Passed the Property (Relationships) Act: treats de facto relationships the same as after the breakup of legal marriages, unless the individuals in the relationship contract out of the Act;
  • Civil Union Act 2004
  • Supported the Crimes (Substituted Section 59) Amendment Act 2007, which repealed and replaced section 59 of the Crimes Act 1961, which allowed "reasonable force" in the discipline of children.
  • National Statement on Religious Diversity (2007)
  • National Superannuation payments for married couples were increased (2000).[24]
  • A Parental Tax Credit was introduced (2000).[24]
  • A Child Tax Credit (which replaced the independent Family Tax Credit) was introduced (2000).[24]
  • A Family Tax Credit (which was formerly the Guaranteed Minimum Family income) was introduced (2000).[24]
  • A Modern Apprentices initiative was introduced to develop technological skills (2000).[24]
  • The Family Start programme was expanded (2000).[24]
  • Annual inflation to benefits was introduced (2000).[24]
  • Closing the Gaps policy platform introduced (2000).[25]
  • The Social Security Amendment Act of 2001 introduced various changes such as "disestablishment of the Community Wage, re-establishment of an unemployment benefit and non-work-tested sickness benefit, and the abolition of the work capacity assessment process".[24]
  • The Social Security Amendment Act (2006) established three streams for reintegrating beneficiaries into the larger community. These included a work support stream for the unemployed, a work support development stream for most other beneficiaries, and a community support stream for a small group to be exempted from work, training or planning requirements.[26]
  • Income-related rents for state-owned housing were restored (2000).[24]
  • A social allocation system was introduced and implemented with the income-related rents scheme(2000).[24]
  • Vacant sales were frozen and the Home Buy programme was ended (2000).
  • Bulk funding for schools was ended (2000).[24]
  • Expenditure was increased, or newly allocated, for the reduction of attrition of students from school, tertiary education subsidies, Maori and Pacific peoples' teacher recruitment, and Homework Centres (2000).[24]
  • Interest on student loans while students are studying was abolished, while the decision of the Fourth National Government to increase the student loan repayment rate was reversed (2000).[24]
  • Interest on student loans abolished for borrowers who remain in New Zealand (or studying overseas).[27]
  • Tertiary student fees were kept stable (2001).[24]
  • Expenditure for early childhood education was increased (2001).[24]
  • The National Certificate of Educational Achievement was established (2001).[24]
  • New funding was provided for principals' leadership and professional development (2001).[24]
  • An In Work Payment was introduced to replace the Child Tax Credit.[26]
  • The ministries that handled work and income and those that did social policy were merged to create a new Ministry of Social Development (2001).[26]



National identity

  • Completed Establishing a fully New Zealand-based honours system (2000).

Foreign affairs


The following positions were appointed by the Queen on the advice of the Government:


Supreme Court

With the creation of the Supreme Court of New Zealand in 2003, the government appointed the first full bench of the Court.

Acting judges were also appointed from the retired judges of the Court of Appeal:

Court of Appeal

The government appointed three presidents of the Court of Appeal of New Zealand:


1999 election

The Fifth Labour government was elected in the 1999 general election, after entering a coalition with the Alliance Party and a confidence and supply agreement with the Green Party. Labour managed to increase their percentage of the votes by 10.5% and won 12 more seats than in the 1996 election.[34] With this coalition in place the Labour Party returned to government for the first time in nine years,[34] and Helen Clark became New Zealand's first elected female prime minister.[35] The 1999 election was Labour's first successful MMP election.[34]

2002 election

The 2002 election was held a few weeks before the Parliamentary term elapsed.[36] This had only occurred twice before in New Zealand's political history, in 1951 and 1984.[37] The Government cited the collapse of the Alliance Party, with whom they had entered a coalition in 1999, as the reason for the earlier date. The Alliance Party had split after Jim Anderton, their leader, left to form the Progressive Coalition Party.[38] However, some critics believe that Labour could have continued to govern for the remaining few weeks. They say that the election was called early to capitalise on high opinion poll ratings before they could be undermined by a potential softening in the New Zealand economic performance.[36]

After initial polls indicated Labour might win enough seats to govern alone, a feat that had never occurred under MMP in New Zealand, they won 41.3% of the vote and 52 seats. Although this was an improvement on their results in the 1999 election, it was not enough to govern alone,[36] and Labour entered a coalition with the Progressive Coalition Party, and a confidence and supply agreement with United Future.[36] Labour's success was highlighted by the National Party's demise, as they accrued a record low 20.9% of the vote.[36]

2005 election

After initial doubt as to what date the election would be held, 17 September was the chosen day.[39] After falling behind National in the initial opinion polls, Labour fought back to obtain 41.1% of the vote. Although this was a 0.2% decrease from the previous election, it still saw them sit ahead of National by 2%.[39] The 2005 election saw a dramatic fall in the success of the minor parties. New Zealand First and United Future each won less than half of the percentage of total votes they achieved in 2002.[39] In order to reach the required majority, Labour entered confidence and supply agreements with New Zealand First and United Future. This was in addition to a coalition agreement with the Progressive Coalition Party, of whom only Jim Anderton obtained a seat.[39]

The newly formed Maori Party accrued four seats.[40] After only being formed in 2004 as a result of the controversial Foreshore and Seabed Act, they oversaw a successful campaign based on a critical assessment of Labour's record with Maori issues.[39] Their success was highlighted by the decline of ACT New Zealand, who won two seats, and the Progressive Coalition and United Future, who each won only a single seat.[40]

Election results

The table below shows the total party votes for Labour and parties that supported the Labour-led government. For more details of election results, see the election articles.

More information Election, Parliament ...


  • Following the 1999 election, Labour formed a coalition with the Alliance Party, and gained support on matters of confidence and supply from the Greens.
  • Following the 2002 election, Labour formed a coalition with the Progressive Party, and gained support on matters of confidence and supply from United Future. The Greens also entered into a formal agreement with the government, but it was not as strong as the agreements covering confidence and supply it made in the preceding and following parliaments.[41]
  • Following the 2005 election, Labour formed a coalition with the Progressive Party, and gained support on matters of confidence and supply from New Zealand First and United Future, giving the Labour-led Government a majority. The Greens signed an agreement to abstain on votes of confidence and supply, and the Māori Party also abstained on confidence and supply votes but had no formal agreement with the Government.

Prime minister

Helen Clark, prime minister from 1999 to 2008

Helen Clark was Prime Minister from when the government was elected in 1999 until it was defeated by the National Party in the 2008 elections.

Cabinet Ministers

More information Portfolio, Minister ...


  1. Piercy, Gemma; Mackness, Kate; Rarere, Moana; Madley, Brendan (2017). "Investigating commentary on the fifth Labour-led government's Third Way approach" (PDF). New Zealand Sociology. 32 (1): 51–75 via University of Waikato Research Commons.
  2. Humpage, Louise (2006). "An 'inclusive' society: a 'leap forward' for Maori in New Zealand?". Critical Social Policy 26 (1): 220–242.
  3. "The state of our nation 1999–2007 – some facts" (Press release). New Zealand Government. 30 January 2007. Retrieved 9 January 2011.
  4. "Archived copy". Archived from the original on 24 February 2014. Retrieved 4 May 2012.{{cite web}}: CS1 maint: archived copy as title (link)
  5. Dore, Christoper (21 October 2000). "Siege of Helengrad". Weekend Australian. Australia. p. 25.
  6. James, Colin (August 2003). "A farm girl, discipline and her helicopter". Management Magazine. Archived from the original on 14 October 2008. Retrieved 9 June 2008.
  7. Squires, Nick (10 January 2008). "Australians add new words to dictionary". The Daily Telegraph. London. Retrieved 4 May 2010.
  8. "Income tax rates". 8 October 2014. Retrieved 5 November 2019.
  9. "Budget 2008 – Tax Changes". 22 May 2008. Archived from the original on 25 March 2015. Retrieved 24 March 2015.
  10. "PM welcomes fisheries scholarship |". Retrieved 12 March 2024.
  11. "New Zealand School Curriculum launch |". Retrieved 12 March 2024.
  12. "More Funding for the Treaty 2U exhibition |". Retrieved 12 March 2024.
  13. "PM gives formal apology to Te Arawa |". Retrieved 12 March 2024.
  14. "Formal apology to Te Uri O Hau |". Retrieved 12 March 2024.
  15. "Waitangi Day commemorative fund |". Retrieved 12 March 2024.
  16. PM welcomes fisheries scholarship. 2001. Retrieved from:
  17. Keith Sinclair (1959). A History of New Zealand.
  18. Katherine Forbes. "Paid Parental Leave Under (New) Labour". Social Policy Journal of New Zealand (34).
  19. "Child Poverty Monitor: Technical Report". Child Poverty Monitor. 2015. Retrieved 21 December 2015.
  20. "Timeline". Labour History Project. Archived from the original on 2 June 2010. Retrieved 13 June 2011.
  21. The Post (Wellington) 23 February 2021 page 18
  22. Stephen McTaggart (December 2005). "Monitoring the Impact of Social Policy, 1980–2001: Report on Significant Policy Events" (PDF). Occasional Paper Series, Resource Report 1. Social Policy Evaluation and Research Committee (SPEAR). Archived from the original (PDF) on 10 March 2016. Retrieved 5 November 2019.
  23. Cullen, Michael (2000). "Budget Speech and Fiscal Strategy Report 2000" (PDF). The New Zealand Treasury.
  24. Jane Silloway Smith (1 August 2010). "Looking Back to Look Forward: How welfare in New Zealand has evolved". Maxim Institute. Archived from the original on 26 July 2011. Retrieved 13 June 2011.
  25. "The Kyoto Protocol". New Zealand Ministry of Foreign Affairs and Trade. 16 July 2007. Archived from the original on 5 March 2012. Retrieved 1 January 2010.
  26. Chapman, Paul. "New Zealand scraps air force warplanes". The Telegraph. 9 May 2001.
  27. Brooker, Jarrod (27 May 2006). "NZ forces on way to East Timor". New Zealand Herald.
  28. Young, Audrey. "Joint task force in Tonga this afternoon". New Zealand Herald. 18 November 2006.
  29. Alvey, James (2000). "The 1999 Election in New Zealand". Review – Institute of Public Affairs 52. 1: 17–18.
  30. "Helen Clark | NZHistory, New Zealand history online". Retrieved 23 May 2018.
  31. Geddis, Andrew (2004). "The General Election in New Zealand, July 2002". Electoral Studies. 23 (1): 149–55. doi:10.1016/s0261-3794(03)00036-2.
  32. "Our Elections Through History". New Zealand Parliament. 20 July 2017. Retrieved 24 May 2018.
  33. Vowles, Jack (2005). Gallagher, Michael; Mitchell, Paul (eds.). The Politics of Electoral Systems. New York, United States: Oxford University Press. p. 303.
  34. Geddis, Andrew (2006). "The General Election in New Zealand, September 2005". Electoral Studies. 25 (4): 809–14. doi:10.1016/j.electstud.2005.12.005.
  35. "Research papers". Retrieved 24 May 2018.
  36. "Government and Greens sign formal co-operation agreement". New Zealand Government. 26 August 2002. Retrieved 9 July 2016.

Further reading

  • Boston, Jonathan. Left Turn: The New Zealand general election of 1999 (Victoria U.P, 2000)
  • Boston, Jonathan; et al. (2004). New Zealand Votes: The 2002 General Election. Victoria University Press. ISBN 9780864734686.
  • Harvey, John; Edwards, John (2019). Annette King: The Authorised Biography. Auckland: Upstart Press. ISBN 978-1-988516-37-0.
  • Levine, Stephen and Nigel S. Roberts, eds. The Baubles of Office: The New Zealand General Election of 2005 (Victoria U.P, 2007)
  • Levine, Stephen and Nigel S. Roberts, eds. Key to Victory: The New Zealand General Election of 2008 (Victoria U.P, 2010)
  • Welch, Denis. Helen Clark: A Political Life (2009) 240pp

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