The Third National Government of New Zealand (also known as the Muldoon Government) was the government of New Zealand from 1975 to 1984. It was an economically conservative government that aimed to preserve the Keynesian economic system established by the First Labour government and was also socially conservative. Throughout its three terms it was led by Robert Muldoon, a populist but antagonistic politician who was sometimes described as the National Party's best asset and worst liability.
Significant policies
By 1975, New Zealand had a generous welfare system, which included unemployment and sickness benefits, a benefit for single parents (the DPB) and a means tested old-age pension from the normal retirement age of 60 plus a Universal pension from 65 years.
The third National government scrapped Labour's contributory scheme and introduced National Superannuation, a non-means tested pension available to all New Zealand citizens over the age of 60, linked to the average wage (initially 70% with the intention of increasing it to 80%). This was enormously expensive, costing NZ$2.5 billion per annum by 1984, but nevertheless far more popular than Labour's alternative of a Singaporean Central Provident Fund-style set of individualised compulsory savings.
Economic policy
The government continued the generally interventionist economic policies of previous governments in New Zealand. Although there was some pressure on Prime Minister and Finance Minister Robert Muldoon to take steps towards liberalising the economy, he was reluctant to do so as he felt that such moves would hurt ordinary New Zealanders. Such steps towards liberalisation made during this government's term were generally the initiatives of other politicians.
In 1980, the government launched the Think Big programme of large-scale industrial projects, mainly based around energy projects, to reduce New Zealand's dependence on foreign energy. This was a response to the oil shocks (1973 and 1979) of the 1970s, which dramatically raised the price of oil. Cabinet Minister Derek Quigley publicly criticised the Think Big policy and was demoted from Cabinet.
The control of inflation was an important goal for Muldoon, who always aimed to uphold the living standards of working and middle class New Zealanders. There was a high level of inflation worldwide in the 1970s and 1980s, leading Muldoon to intervene more and more dramatically in the economy. This interventionist policy culminated in the wage and price freeze of the early 1980s, and Muldoon's refusal to devalue the New Zealand dollar in 1984, which led to the New Zealand constitutional crisis.
The government pursued a limited number of liberalisation policies. In 1982 the land transport sector was deregulated, which allowed the restructuring of the New Zealand Railways Corporation later in the decade. The Closer Economic Relations free trade agreement with Australia was signed in 1983.
Social policies
1976 saw the phasing out of commodity subsidies and entitlement to the Additional Benefit. In 1976, the administration of many benefits, such as unemployment, sickness and the Domestic Purposes Benefit, was tightened up. Income exemptions, which the Third Labour Government had abolished and replaced with tax rebates, were reintroduced.
In 1977, the family assistance tax rebate was significantly extended. As note by Brian Easton, the tax relief for a young family "could be up to $13 a week more than for a married man without children, on the same income." In addition, full relief was available to families whose head "was on up to ten per cent above average earnings." The top income limit of the now $9 full rebate was increased to $150 a week, and a further $4 a week tax rebate for all single-income families with a child under the age of ten was introduced (it was reduced if the spouse's income exceeded $20 a week). Also, as noted by Brian Easton, there was now a tiering of family assistance, with families with children under the age of five "receiving up to $13 a week, and those with a youngest child between five and ten receiving up to $4 a week."