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With elections due by late 2002, Labor Prime Minister Helen Clark tried to drum up business in Asia for New Zealand's exports, while keeping public spending in check. Analysts said the government's tight budget unveiled in May was partly an effort to bolster Labor's credentials among business leaders. Trailing Labor in the polls, the conservative National Party in October named as its new leader 40-year-old Bill English, a former finance minister. Despite the global economic downturn, New Zealand's resource-based economy avoided a recession in 2001, although growth slowed late in the year. Analysts said the country's low public debt and inflation rate gave the government room to boost spending or cut interest rates should flagging growth in Japan and other key markets prove too much of a drag on New Zealand's small, open economy.
New Zealand achieved full self-government prior to World War II, and gained full independence from the United Kingdom in 1947. Since 1935, political power in this parliamentary democracy has alternated between the mildly conservative National Party and the center-left Labor Party. Both parties helped to develop one of the world's most progressive welfare states.
Seeking to sharpen New Zealand's economic competitiveness in the face of increasing global competition, the Labor government in 1984 began cutting farm subsidies, trimming tariffs, and privatizing many industries. The harsh effects of the economic changes and a deep recession contributed to a National Party landslide at the 1990 elections. Rather than reverse course, however, Prime Minister Jim Bolger's government pushed the reforms even further by slashing welfare payments, reworking the labor law to discourage collective bargaining, and ending universal free hospital care. Bolger led the National Party to reelection in 1993 and again in 1996 before being forced to resign in 1997 by an intraparty coup led by Jenny Shipley, the transport minister. Heading a National Party faction favoring more conservative economic policies, Shipley tried to sell off government-owned shares of Wellington International Airport and other state assets.
Led by Clark, Labor won the November 1999 elections following a campaign dominated by questions about the accountability of state agencies and the Shipley government's controversial plan for electricity reform. Labor won 52 out of parliament's 120 seats and formed a coalition government with the small Alliance Party, which took 11.
Released in May 2001, the government's budget for the fiscal year ending in June 2002 keeps new spending to about $640 million (U.S.$262.4 million), or about 0.6 percent of gross domestic product. Clark, 51, also worked during the year to increase New Zealand's trade ties with Japan, China, Hong Kong, and other Asian markets. East Asia accounts for some 40 percent of New Zealand's exports and 30 percent of tourism. Drought in some areas and the global economic downturn helped trim economic growth to 0.7 percent in the third quarter, down from 1.8 percent in the preceding quarter. By comparison, the economy grew by 3.4 percent in 2000. Economists, however, said that solid consumer confidence figures in December pointed to good retail sales growth, indicating that domestic demand would cushion the impact of the global downturn.
New Zealanders can change their government through elections and face few restrictions on basic rights. Parliament is elected under a mixed proportional system that is designed to help smaller parties gain seats. The electoral system combines voting in geographic districts with proportional representation balloting. It also reserves six seats for members of the Maori population.
New Zealand's judiciary is independent, and defendants can appeal to the Privy Council in London. The government is responding to a serious problem of prison overcrowding by building new prisons. New Zealand's private newspapers and magazines cover politics vigorously and offer a range of political views. Following an outcry by domestic watchdog groups and the opposition National Party, the government in November withdrew a last-minute provision in an electoral bill that would have allowed for criminal defamation suits over articles written during election campaigns. The government said it would reintroduce the provision in 2002.
While Prime Minister Helen Clark and several other women hold senior government posts, women on the whole are underrepresented in government and politics. They also earned only 86 percent of men's average ordinary hourly wage, as of the second quarter of 2000. Despite numerous government initiatives aimed at curbing spousal abuse, violence against women is a continuing problem that affects all socioeconomic groups. A 1997 government-sponsored survey found that 1 woman in 7 living with a male partner was abused physically or sexually by the partner in the previous 12 months. The survey also found that 1 in 16 women are sexually assaulted each year.
New Zealand's indigenous Maori minority and tiny Pacific Islander population face unofficial discrimination in employment and education, according to the United States State Department's February 2001 report on New Zealand's human rights record in 2000. The government's Closing the Gaps Report in 2000 noted that Maoris continued to be found in disproportionate numbers on unemployment and welfare rolls, among school dropouts, in infant mortality statistics, among single-parent households, and among prison inmates. Though they make up just 15 percent of New Zealand's population, Maoris account for more than half of all inmates. The government has introduced numerous programs to help advance the social and economic status of Maoris and Pacific Islanders. By most accounts, many of these initiatives, like a policy of bringing more minorities into the public sector, have been only marginally successful. A special tribunal continues to hear Maori tribal claims to land and other resources stemming from the white settlement of New Zealand. The 1840 Treaty of Waitangi between the British and the Maoris leases Maori land in perpetuity to the white "settlers."
Led by the New Zealand Council of Trade Unions, the main labor federation, unions advocate worker's rights forcefully and practice collective bargaining extensively. In a gain for unionized workers, the government in 2000 passed the Employment Relations Act, which promotes collective bargaining and strengthens unions. The act also requires management and workers to bargain in good faith to achieve either collective or individual employment agreements. The International Labor Organization had ruled that the previous Employment Contracts Act, since repealed, violated the Geneva-based group's standards on collective bargaining, the right to strike, and freedom of association. However, sympathy strikes, secondary strikes, and strikes over social or political causes are still illegal. Despite these provisions, the government did not interfere with a brief strike in 2000 expressing solidarity with Fijian trade unionists. Less than 20 percent of wage earners are unionized.