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Not a Fair Go: A History and Analysis of Social Credit’s Struggle for Success in New Zealand’s Electoral System A thesis submitted in fulfilment of the requirements of Master of Arts in Political Science at University of Waikato by David Calderwood The University of Waikato 2010 Abstract This thesis is an examination of the main issues Social Credit contended with while trying to succeed in New Zealand politics. Its historical and political analysis is in the context of the electoral system. The first section argues for and describes the changing electoral context and outlines how this created difficulties for Social Credit. It concludes that the movement faced very adverse electoral periods for third parties. The second part examines founder Major C.H. Douglas’s Social Credit vision and charts Social Credit’s political adaptations from its New Zealand beginnings to the time Bruce Beetham took over as leader in 1972. It challenges the myths that Social Credit could not change without ceasing to be Social Credit and that its economics were unworkable. In the third section the centrality of Beetham’s leadership to Social Credit success is explored by looking at his life, personality, beliefs and vision for the movement. It concludes that he believed in Social Credit and that his drive and dedication were essential to Social Credit’s revival. Then the thesis follows Social Credit’s electoral progress from 1972 to 1981. It examines the impact from its own activities and other political actors and circumstances. This includes effects from organisational changes, the effect of growing and changing membership and the sources of its votes. The fifth part outlines the factors that put Social Credit into permanent decline after 1981. These include the Clyde dam issue, the emerging New Zealand party, the 1984 snap election and the failure to revitalise the party. Finally, it examines Social Credit influence on the electoral system itself, particularly in regard to the move to proportional representation. Here its existence and size mattered more than direct action. The contribution of this thesis is, firstly, in challenging the usual roles assigned to third parties. Second, it outlines the characteristics of different electoral periods. Third, it examines the nature of Social Credit in a more positive way. Fourth, it looks at the electoral elements that shaped Social Credit’s successes and failures. Finally, it shows the effects of professionalisation on a typical party branch. ii Acknowledgments I am particularly grateful to Dr Alan Simpson for agreeing to be my supervisor and for the generous time he has put in. He has been very encouraging in his comments and has helped me over difficulties in structure when I had trouble seeing the wood for the trees. He is unerring in spotting something that does not flow, is unclear or has a serious omission. Sessions with him have always been friendly, enjoyable and helpful. I also owe a debt to Dr James Beattie from the History Department for teaching me well on the methods of researching and writing history. Thanks to the staff of the University of Waikato Library for their assistance in finding resource material and in helping me chase down references. An acknowledgment to the members of Eden Social Credit who gave me an intriguing inside view of branch workings. Finally a big thanks to my wife Jenny for putting up with a husband who turned the study into an archivist’s nightmare and who has often been more focussed on this thesis than she liked. She will be glad to have me (and her craft table) back. iii Table Of Contents 1. Introduction 1 2. Electoral Context 5 3. Establishment and Revival 21 4. Bruce Beetham 61 5. Trying for a Breakthrough 77 6. The Decline of Social Credit 107 7. The Legacy of Proportional Representation 133 8. Conclusion 145 Appendix 157 Bibliography 161 iv Tables Page A.1. Summary Election Results: 1938-1993 157 A.2. Third Party Votes and Seats Won in Each Electoral Period 158 A.3. Candidates Per Electorate 158 A.4. Third Party Peak Vote: 1943-1993 158 A.5. Excerpted NRB Poll Results, September 1969 159 to November 1978 A.6. NRB Poll Results, May 1979 to November 1981 160 A.7. NRB Poll Results, May 1982 to June 1984 160 Abbreviations AGM Annual General Meeting CER Closer Economic Relations DL Democratic Labour EEC European Economic Community ERC Electoral Reform Coalition FPP First Past the Post (Simple Majority) MMP Mixed Member Proportional MP Member of Parliament NRB National Research Bureau RDM Real Democracy Movement PR Proportional Representation STV Single Transferable Vote v Chapter One Introduction The 1981 election campaign was not confined to the period between announcing the election date and polling day. Arguably, it was one of the longest in modern New Zealand political history and was certainly so for the Social Credit Political League. In varying degrees, it had been campaigning since September 1980 when the League’s local East Coast Bays by-election campaign became a nationwide one after winning the seat. The result was bolstered by opinion polls, which put Social Credit level with Labour on 30% by the end of the year. It was unprecedented that ‘an electoral dog pound for strays’, as political scientist Austin Mitchell put it in 1969,1 long regarded in political circles as a bunch of ‘funny money’ cranks should suddenly become a serious contender. This incredulity came from a long held idea that under a two-party first past the post (FPP) system a third party could only have a limited role. However, it could be argued that it was not limited. In 1972, after becoming Social Credit leader, Bruce Beetham suggested that the League would reach the Treasury Benches by 1981. He based this view on the fact that Labour took 27 years to become the government from its formation as a third party.2 By 1981 it could be said that Social Credit was an unsuccessful third party as it had existed for 28 years with only two parliamentary seats to show for it while Labour had just become the Opposition 28 years after its formation in 1904.3 This assumed that the electoral system presented the same opportunity for third parties throughout and implied that Social Credit failure came from lack of appropriate effort. 1 Austin Mitchell, Politics and People in New Zealand (Christchurch: Whitcombe and Tombs, 1969), p.220. 2 Spiro Zavos, Crusade (Wellington: INL Print, 1981), p. 32. Beetham considered that the Labour party began in 1908. 3 The technical formation of the Labour party in 1916 was an exercise in unity rather than beginning a new party. A Labour party contesting elections independently from the Liberals was initially formed in 1904. 1 Assuming the basis for electoral success to be the same throughout New Zealand’s electoral history was also a common view but the process of election changed markedly over seventy years. To compare it with Labour is simplistic. Certainly it did progress from a third party to a governing one and is the only one to have done so. However, Labour had a unique set of favourable political circumstances and was helped by an electoral system that, at the time, was far friendlier to third parties. Social Credit did not have these significant advantages. It had to operate in a quite different way than Labour did to succeed and compensating for these differences markedly reduces the gap between the two. The main premise of this thesis is that Social Credit was the most successful modern third party in New Zealand under the two-party FPP electoral system prevailing after 1935. Its success should not simply be measured in terms of electoral seats gained but by a whole range of measures.4 This would include positive ones such as party organisation, leadership, fundraising and publicity as well as countering negative ones such as the electoral system and access to media. Too often third parties have been in the position of Alice and the Red Queen, having to run as fast as they can just to stay where they are and run even faster if they want to get somewhere.5 This thesis considers such a range of positive and negative factors and analyses how successful Social Credit was in this context. Comprehensively detailing the whole history of Social Credit in New Zealand is beyond the scope of this thesis, so it focuses on several aspects. First, it covers the changing electoral context Social Credit worked in and argues that it initially operated in the electoral period most disadvantageous to third parties. Its revival under Beetham occurred in a period where electoral success was possible but very difficult. Second, it examines the nature of the movement itself and charts its adaptations to cope with changing electoral and political circumstances to the time Beetham took over as leader.6 Third, it explores the centrality of 4 The author is indebted to his supervisor Dr.