NEW ZEALAND: BRACING FOR THE ELECTION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP04T00907R000200200001-9
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 18
• Document Creation Date: December 22, 2016
• Document Release Date: May 24, 2012
• Sequence Number: 1
• Publication Date: July 1, 1987
• Content Type: REPORT

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Directorate of SecT^et
Intelligence
New Zealand:
Bracing for the Election
Seeret
EA 87-10027
July 1987
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Directorate of Secret
New Zealand:
Bracing for the Election
This paper was prepared by
Office of East Asian Analysis, with a
Southeast Asia Division, OEA
contribution from Office of
Leadership Analysis. Comments or queries are
welcome and may be addressed to the Chief,
Secret
EA 87-10027
July 1987
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New Zealand:
Bracing for the Election
Key Judgments Despite the ruling Labor Party's comfortable lead in opinion polls, we
Information available believe the national election on 15 August will be closely contested and the
as oft July 1987 outcome decided in a few districts in which the government holds only a slim
was used in this report.
lead. Although Prime Minister Lange is favored to win a second term,
undecided voters could swing the election to the opposition National Party.
In our judgment, Prime Minister Lange would interpret a Labor victory as
vindication of his antinuclear policy and approval to continue Finance
Minister Douglas's free market economic reforms. If the Nationals win, we
believe party leader Jim Bolger would lack the parliamentary and public
support needed to overturn the antinuclear legislation. Bolger may propose a
compromise policy allowing for US Navy ship visits, but such an arrange-
ment would almost certainly be rejected by the New Zealand public and
media as a ploy to get around the antinuclear legislation.
Lange's bid for reelection will be hampered by New Zealand's sluggish
economy, which has so far failed to respond to the Labor government's
economic reforms. Labor has won increased support from the business
community for boosting exports and reducing government intervention in
the financial sector, but the opposition will stress that under Labor:
? Unemployment is at a near-record high of 6 percent, while inflation is over
18 percent.
? Government overseas borrowing jumped from almost $1 billion to $3
billion in the past year. New Zealand's total foreign debt is about half of
gross domestic product.
? The current account deficit has improved little, and will be about $1
billion this year.
Lange will almost certainly lose votes from traditional party backers-
especially trade union members-who have been hurt by import com-
petition, cost-cutting layoffs, and higher taxes and prices. The Labor Party
probably hopes to make up for lost blue-collar votes by attracting middle-
class voters who have benefited from the party's tilt to the right on economic
issues. Most of these beneficiaries, however, do not live in the crucial swing
districts that Lange needs to win to assure victory.
We believe Lange will focus his campaign on the Labor Party's popular
antinuclear policy and the fact that he has made good on a 1984 campaign
promise to pass legislation banning all nuclear-powered or -armed ships
from New Zealand. Despite strong public support for the Labor Party's
antinuclear legislation, in our judgment the issue has become anticlimactic
and does not guarantee Labor another term because of the New Zealand
public's disinterest in defense and foreign policy issues.
Secret
EA 87-10027
July 1987
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The National Party will have difficulty convincing voters that it can do a
better job managing the economy, as many New Zealanders blame the
former National government under Prime Minister Muldoon for creating
the current economic problems. Bolger, nonetheless, will almost certainly
try to capitalize on discontent among farmers, manufacturers, and pension-
ers with Labor's economic reforms. The Nationals will also try to win votes
by blaming the government for increases in violent crime.
US-New Zealand relations would almost certainly remain strained during
a second Lange term, but bilateral ties would improve gradually under a
National government. National would probably work to restore the
ANZUS alliance, although Bolger's government would be constrained by
the antinuclear legislation. Bolger may also attempt to increase bilateral
trade by seeking a free trade agreement with Washington.
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Key Judgments
Lange Heading for a Second Term?
Lange's Management of the Economy
... With Disappointing Results 2
Assessing the Political Impact 3
The Antinuclear Issue 4
The Campaign Shapes Up 5
The National Party in Opposition 5
Labor's Strategy-Staying the Course 7
Looking Ahead 8
A National Victory: No Ship Visits ... Maybe 8
Implications for the United States 8
A. Key Points of Antinuclear Legislation
B. Voter Polls
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New Zealand:
Bracing for the Election
Lange Heading for a Second Term?
Prime Minister David Lange is campaigning to be-
come New Zealand's first two-term Labor Party
prime minister in over 40 years against a background
of a sluggish economy, near-record-high unemploy-
ment, and rising public concern about a surge in
violent crime. According to the US Embassy, public
opinion surveys cite the economy and crime as the two
most important issues facing New Zealand. Lange,
however, has received high praise for carrying out a
much-needed restructuring of the New Zealand econ-
omy and for his popular antinuclear policies. Al-
though polls show that 15 percent of voters are still
undecided, the US Embassy reports that public sup-
port for the Labor Party has increased recently
because the Lange government's economic and anti-
nuclear policies are attracting voters who backed
third-party candidates in 1984. One public opinion
survey taken in June gave Lange's party a 26-point
lead over the conservative National Party, led by Jim
Bolger.
Despite Labor's comfortable lead in opinion polls,
most observers agree that the 15 August election will
be closely contested, with a few key constituencies
determining the outcome. Opinion polls concentrate
on urban areas where Labor is traditionally strong,
and reflect the popular vote rather than districts won
and lost. According to the US Embassy, nine seats in
Parliament currently controlled by the Labor Party
are in jeopardy; a loss of seven seats would cost Labor
the election. We believe, however, that the Nationals
will probably fall short of capturing enough Labor-
controlled seats to oust the Lange government. Labor
strengthened itself in three of its narrowly held seats
through redistricting in April, and the US Embassy
reports that the candidates the Nationals have select-
ed in some of the other vulnerable districts are weak.
Figure 1
New Zealand: Parliamentary Breakdown
The new Parliament will have 2 new seats for a total of 97 seats.
At least 49 seats must be won by either major party to take the
election.
deficit was equivalent to 9 percent of gross domestic
Lange's Management of the Economy product and government spending had soared to 35
The New Zealand economy, mired in recession, prom- percent of GDP. A current account deficit of more
ises to be Lange's most difficult election issue. When
his government took office in July 1984, the budget
1 Secret
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than $1 billion persisted despite heavy import tariffs
and export subsidies. New Zealand was having little
success diversifying exports away from agricultural
products, which were suffering from a drop in world
commodity prices and shrinking quotas in New Zea-
land's key European Community market. Moreover,
external debt had reached $6 billion by March 1984,
and debt servicing was being funded by further
borrowing.
Ambitious Efforts ... Lange gave Minister of Finance
Roger Douglas carte blanche to try to deal with these
problems. Douglas immediately sought to implement
policies to permit an export-led recovery and to shift
the burden of support for the economy's growth from
the government to the private sector. Following a
strict policy of "no subsidy, no protection," the Labor
government's medium-term goals were to increase the
processing of New Zealand's predominantly agricul-
tural exports for more specialized markets and to
boost manufactured exports.
Douglas has supplemented his reform measures with a
consistent set of monetary and fiscal policies. Key to
what the New Zealand press calls his Rogernomics
program is deregulation of the financial sector to
control inflation, which has been running three times
that of New Zealand's trade partners and business
competitors. In March 1985 Wellington allowed the
exchange rate to float in an effort to make exports
more competitive. A 10-percent goods and service tax
was introduced in October 1986, and sales of govern-
ment bonds were instituted to cut the budget deficit.
In a controversial move, the April 1987 turnover of
government services-including the telephone system,
land managment, and electricity distribution-to the
private sector was intended to cut government spend-
ing.
... With Disappointing Results. The economy has
responded to Douglas's remedies only sluggishly, and
the rapid growth the government had hoped for before
the election has not occurred. Despite some gains-
for example, exports probably will increase by 3
percent this year, and the stock market enjoyed a
boom in 1986-the overall picture remains bleak.
Indeed, GDP growth stagnated in 1985-86 and proba-
bly will be less than 1 percent in 1987.
Roger Douglas
Minister of Finance
A free market economist and outspoken architect of
New Zealand's reformist economic policies ...
`growth first " economic views have earned him repu-
tation as maverick within socialist-oriented Labor
Party ... remains committed to reducing protection-
ism ... target of criticism from leftwingers and trade
unions for his deregulation policies ... on good terms
with Lange, who admires his innovative ideas ...
named Finance Minister of the Year in 1985 by
international finance magazine Euromoney ... suc-
cessful businessman able to take independent politi-
cal stand without regard for voter reaction.
Unemployment has been rising because the govern-
ment ended subsidies to the farming sector and
because Douglas's policies have encouraged marginal-
ly profitable manufacturers to fold or to trim their
work forces to become more competitive. The unem-
ployment rate was estimated by the US Embassy in
March 1987 to be 6.1 percent, the highest since Lange
took office, and the total number of jobless persons is
at a 50-year high. According to the US Embassy,
inflation climbed to over 18 percent last year, largely
the result of the new goods and services tax and
spiraling wage increases. Interest rates have remained
correspondingly high at 20 percent, angering home-
owners, farmers, and the business community. More-
over, the government has not reduced the budget and
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Figure 2
New Zealand: Economic Indicators, 1980-87
Unemployment
Percent
I I I I I I I I
0 1980 81 82 83 84 I 85 86 87a
Muldoon Lange elected
July 1984
a Projected.
Source: OECD and US Embassy.
1980 81 82 83 84 I 85 86 87'
Muldoon Lange elected
July 1984
current account deficits, and New Zealand's interna-
tional credit rating was lowered recently by two
leading US financial institutions because of the large
foreign debt. As a result of the shocks of rapid change
and high popular expectations that the economy
would turn around quickly, the credibility of the
Labor Party has been damaged, according to the US
Embassy (see table).
Assessing the Political Impact
Until recently, Labor's economic reform policies en-
joyed the widespread, albeit grudging, respect of a
substantial majority of New Zealanders, especially
those in the deregulated financial management sector.
According to the US Embassy, New Zealanders had a
visible, if somewhat perverse, sense of pride in being
subjected to one of the fastest and most wide-ranging
reform programs of any major economy. Several
months of unrelentingly bad news earlier this year,
however, have tarnished Wellington's ability to con-
vince the country of impending improvements, and we
believe key voter groups are shifting their political
allegiances. Disunity over economic policies is grow-
ing within the Labor Party and, in our view, is
weakening Lange's position.
Trade Unions. According to Embassy reporting, al-
though the New Zealand Federation of Labor public-
ly supports Lange's reelection, he will probably lose
some votes from rank-and-file union members, who
are traditionally strong Labor Party supporters. They
are disgruntled with the government's calls for pri-
vate-sector wage restraint and have called Douglas's
open-market economic policies "a betrayal of socialist
principles."
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Comparative Economic Statistics,
1984-87
Million US $
Budget deficit
1,800
3,100
Current account deficit
1,600
1,000
Trade balance
69
-67
Total foreign debt
5,700
8,800
Debt service share of GDP
18.6
24.0
Inflation
3.6
18.9
Unemployment
3.6
6.1
Sources: US Embassy, Organization for Economic Cooperation and
Development, International Monetary Fund.
Farmers. Wellington's withdrawal of subsidies and
special farm tax breaks, calculated to force the agri-
cultural sector to modernize, have caused record
mortgage defaults on farms and unemployment in
rural areas, according to open-source reporting. Even
though farmers normally vote for the Nationals, we
believe the downturn in the farm economy has hurt
Labor voters in semirural towns.
Business. Lange can take some comfort in the unprec-
edented support Labor is receiving from the business
community. According to the US Embassy, corporate
contributions to the National Party have been limited
because the business community fears that former
Prime Minister Muldoon would force a National
government to undo Labor's reforms and revert once
again to intervening extensively in the economy.
Moreover, polls show that a majority of those conser-
vative New Zealanders and members of the business
community who abandoned the National Party to vote
for third-party candidates in 1984 will vote for Labor
in the next election.
The Antinuclear Issue
Although likely to be overshadowed by the debate
over the economy, New Zealand's antinuclear stance
will also be an important election issue. Indeed, we
believe Lange timed the passage of the Labor govern-
ment's antinuclear legislation in June 1987, after
several postponements, to maximize leftist support for
the Labor Party during the campaign. The legislation
bans visits by nuclear-armed or -powered ships and
nuclear-armed aircraft, although aircraft supporting
Operation Deep Freeze-the US Navy's Antarctic
exploration program based in Christchurch-are ex-
empted (see appendix A). Formal ratification of the
antinuclear policy, which has been in effect since
1985, will make it difficult for a future government to
reverse the policy on port calls.
Public support for the government's antinuclear legis-
lation has persisted despite criticism of Lange's de-
fense policies by former military leaders and the New
Zealand media. According to the US Embassy, little
public debate takes place on defense issues because
most New Zealanders probably share the Labor
government's view that the country faces no immedi-
ate external threat. In addition, many National Party
supporters, especially younger party members, favor
the antinuclear legislation.
As far as we can determine, the only potential
backlash Lange faces is from antinuclear activists,
who might try to make an issue over the provision that
exempts from the legislation US aircraft transiting
Christchurch. In our judgment, however, the blanket
clearance and the continued use of Christchurch as a
transit and supply base for Operation Deep Freeze
will bolster Lange's claim that New Zealand is still
observing the ANZUS alliance. In this way Lange
will probably be able to pacify those critics who have
charged him with damaging relations with Washing-
ton.
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Fiscal
? Flat /0-percent tax on goods and
services.
? 20-percent cut in personal income tax.
? Widen tax base to include dividend
income.
Agricultural
? Remove all farm subsidies.
? Farmland available for purchase by
foreign investors.
? Eliminate agricultural tax breaks.
? Farm consolidation allowable.
Trade
? Eliminate 500 import tariffs.
? Float exchange rate.
? Import license phaseout.
? Decontrol foreign exchange allocations.
Financial institutions
? Lift restrictions on operation of foreign
banks in country.
Overall increase in tax revenue. Balance gov-
ernment budget, reduce overseas borrowing
and costly debt servicing, and trim inflation.
Major restructuring and modernization of
moribund pastoral economy, meat and dairy
processing industry. Reduce production of
agricultural products that cannot be easily
sold. Emergence of new generation of business
leaders willing to operate without subsidies.
Cut government spending and improve terms
of trade with more sophisticated exports
geared to specialized markets.
Increase competitiveness, modernization of
industry. Stimulate export growth and allo-
cate resources more efficiently.
New investment opportunities, increased capi-
tal fow, new jobs.
Tax revenue shortfall of over $5 billion;
government and Reserve Bank borrowing
still high. GST caused 5-percent hike in
consumer prices, and continuing double-
digit inflation of 12 to 15 percent project-
edfor 1987.
Some modernization and consolidation
but overall decline of pastoral economy;
record unemployment and mortgage de-
faults in rural areas. High interest rates
keeping pastoral exports uncompetitive in
already saturated world markets. Labor
Party losing support in towns servicing the
farming sector and with agricultural prod-
uct processing unions.
Unions and manufacturers federation re-
sisting change; worried that open market
practices will lead to job losses, wage
cuts, and local production undercut by
cheaper and better made imports. Labor
Party receiving some financial support
from larger corporations now able to ex-
pand overseas trade.
Banking and insurance sectors have wel-
comed change and resulting growth; possi-
ble increased support for Labor Party
although sector not generally politically
active.
The Campaign Shapes Up
The National Party in Opposition. The National
Party, which ruled New Zealand for most of the
postwar period until Labor's victory in 1984, in our
judgment has had difficulty adjusting to its unaccus-
tomed role as an opposition party. Bolger has been
party leader only since April 1986 and has been
criticized by National members of Parliament for
failing to develop a strong, detailed party platform. In
addition, the US Embassy reports that Bolger's front
bench is made up of uninspiring, rural-based mem-
bers, who frequently disagree in public on party policy
and give the public a picture of a party in disarray (see
inset "The Muldoon Factor").
In our judgment, the Nationals will pin their election
hopes on the slumping economy to bring down the
Lange government, even though Bolger, if elected,
would probably adopt economic policies close to those
of the Labor government. At the party's only confer-
ence under Bolger in August 1986, for example,
delegates rejected resolutions calling for special farm
subsidies and government intervention to lower inter-
est rates. The Nationals, nonetheless, will almost
certainly try to take advantage of the pain Labor's
economic reforms have caused some groups with
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Antinuclearism to be played as a moral issue.
Will stress benefits of antinuclear legislation, but
support blanket clearance for US planes using
Christchurch Operation Deep Freeze facility.
Will deny that antinuclear stance has damaged
relations with US or UK and will denounce
foreign meddling in domestic affairs.
Will stress tough line against Soviets (ousted
Soviet diplomat in May) and Libya (refused to let
accredited diplomats have residency in Welling-
ton). Will portray New Zealand as major player
in Pacific without overreacting to events.
Will attack the National Party for its interven-
tionist policies, and chastise Bolger for keeping
Muldoon on front bench. Lange likely to gloss
over economic problems, counting on charisma
and image as friend of working class. Will stress
positive aspects of reform and point out long-
term benefits.
Will try to capitalize on growing support of
white-collar workers and managers, but will
point to Labor's benefits to unions, especially
compulsory unionism.
Will charge Labor with damaging relations with
US and UK; endangering vital trade with EC.
Muldoon considers antinuclear policy hypocriti-
cal because Christchurch aircraft policy deviates
from ship visits policy. If elected, Bolger may
hope to apply legislation's aircraft criteria to ship
visits.
Any stance will be complicated by Muldoon's
outspokenness which may not accurately reflect
the party's platform.
Favors structural reform and departure from
Muldoon's interventionist strategy, but objects to
fast pace of change, high unemployment, and
inflation, and overall decline in economic condi-
tions. Muldoon's outspokenness likely to confuse
issues.
May get political mileage out of recent closing of
country's largest meat-processing plant and
record-high farm mortgage defaults. Likely to
have success courting union rank-and-file vote
despite Federation of Labor's official support of
Lange.
Could exploit public concerns over rising crime
and racial tensions with "get tough " stance.
vague promises of assistance to farmers, pensioners,
and manufacturers, while calling for a slower pace of
reform.
Although Bolger probably will try to avoid making
US Navy ship visits a campaign issue, we believe he
will argue that the antinuclear legislation has dam-
aged relations with the United States and the United
Kingdom, and has fostered Soviet and Libyan influ-
ence in the South Pacific. Bolger will probably take
the position that he supports visits on a "neither
confirm nor deny" basis, which was the practice under
the Muldoon government. Bolger will insist, however,
that New Zealand would remain nuclear free under a
National government-a claim that Lange will al-
most certainly attack in light of Bolger's avowal to
repeal the antinuclear legislation.
The Nationals will also attempt to draw votes by
blaming the government for increases both in violent
crime and in racial troubles involving the indigenous
Maoris, who make up about 10 percent of the popula-
tion. Violent crime is often associated with Maori
youth gangs, whose members experience high unem-
ployment, are poorly educated, and suffer from drug
and alcohol abuse. The Nationals have announced a
tough law-and-order policy, but the US Embassy
reports that the media and public dismiss it as
unrealistic. The party will also try to capitalize on
strained relations between Maoris and the Lange
government caused by a bitter parliamentary investi-
gation earlier this year into the efforts of the Ministry
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Although controversial, former Prime Minister Mul-
doon is a force in National Party politics, and polls
show that he still enjoys considerable public support.
Muldoon's disagreements with the National Party on
economic issues have forced party leader Bolger to
refute him publicly, while privately assuring support-
ers that the National Party will not return to its past
interventionist policies. Bolger, however, has given
Muldoon free reign to attack some of Lange's key
foreign policy decisions, including the government's
granting an exemption from the antinuclear legisla-
tion to Operation Deep Freeze. In our judgment,
of Maori Affairs to secure an unauthorized $300
million loan. Although the Nationals have selected
more Maori parliamentary candidates than in 1984,
we believe they will have little success in breaking the
Labor Party's traditional hold on the Maori vote.
Labor's Strategy-Staying the Course. Lange is sure
to emphasize his frequent claim that a National
government would "snuggle up to the bomb," but we
do not believe that the antinuclear legislation will
guarantee a Labor Party victory. Nor do we expect
any good economic news in the runup to the election
on which Lange will be able to capitalize. Lange,
Bolger will probably continue to allow Muldoon-the
opposition's spokesman for Foreign Fairs-a free
hand in criticizing Lange's defense and foreign poli-
cies during the campaign. According to the US Em-
bassy, Muldoon is one of the few National Party
ministers who can hold his own in debate against
Lange.
By using Muldoon to counter Labor's charges that a
National government would allow nuclear-armed
ships in New Zealand's ports, Bolger may hope to
slow Lange's campaign attack while keeping Mul-
doon away from economic issues. Muldoon, however,
is unlikely to cooperate, if his record is any guide.
The US Embassy notes that Muldoon has been
interested only in his own career's resurgence since
Bolger rescued him from his back bench exile in
1986. We believe that Muldoon aspires to be prime
minister again, and a Lange victory in August would
give him a good chance of wresting control of the
National Party from Bolger. Bolger will remain, in
our judgment, at Muldoon's mercy because he cannot
remove the former Prime Minister from the shadow
cabinet without losing the support of conservative
voters loyal to Muldoon.
however, is likely to attempt to defuse public discon-
tent over the state of the economy and boost Labor's
image by:
? Pointing to poll results. In April, polling indicated
that over 50 percent of voters believed the economy
would improve in the next 12 months. This was a
22-point improvement over a similar poll in
February.
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? Resolving the embarrassing public dispute with the
government-owned businesses that are being trans-
ferred to the private sector. The new corporations
and the government are squabbling over the worth
of assets that the businesses must now purchase
from Wellington.
? Emphasizing the positive outcome of reforms, in-
cluding personal tax breaks, increased business and
investment opportunities, and rising exports.
Lange may be intentionally risking some blue-collar
disaffection by distancing his campaign from the
trade unions in an effort to gain middle-class and
white-collar votes. According to the US Embassy-
following a strike-ridden year in 1985 and a well-
publicized series of strikes caused by a radical union
at a papermill in 1986-surveys show that most New
Zealanders believe the trade unions have too much
power. Lange has tried to capitalize on this by
claiming that the Labor Party is the party of the
working class, but not the handmaiden of the trade
unions.
Looking Ahead
A Lange Win: No Ship Visits. We believe that the
Labor Party is probably heading toward an election
win, but that Lange will have a reduced majority in
the new Parliament. Under these circumstances,
Lange would almost certainly have to continue sup-
porting the antinuclear legislation to appease leftist
party backers during a second term. Normal port
access, therefore, would not be restored during a
second Lange term, and, in our view, any step taken to
ease restrictions on port visits would threaten Labor
Party unity.
A National Victory: No Ship Visits ... Maybe. In our
judgment, a Bolger government would not repeal the
antinuclear legislation because his National Party is
divided on the antinuclear issue and because public
support for the legislation will almost certainly remain
strong. According to the US Embassy, Bolger has
privately proposed resuming ship visits under an
arrangement whereby Washington would state its
"neither confirm nor deny" policy and Bolger would
state his opposition to nuclear-armed or -powered
ships entering New Zealand. Nonetheless, we doubt
Shrewd, highly capable, articulate politician ...
considered "down to earth, " trustworthy leader ...
aggressive debater, skillful negotiator... conservative
on moral and economic issues ... pro-American, pro-
ANZUS, would like to repeal antinuclear legislation
... criticized for inability to control former Prime
Minister Muldoon, whose outbursts often contradict
lags both Lange and Muldoon in popular opinion
polls ... successful sheep and cattle farmer ... hard-
line labor relations minister, 1978-84.
that a National government could accept the US
policy while the legislation remains in effect, because
it requires that the Prime Minister be satisfied that
the ships and aircraft entering New Zealand are not
nuclear powered or carrying nuclear weapons. If
Bolger, or any other prime minister, certifies that
ships or aircraft are nuclear free, it would violate
Washington's policy.
Implications for the United States
New Zealand's bilateral relations with the United
States would probably not improve during a second
Lange government. Although a growing economy
would reduce the left wing's influence on Labor Party
policy in the long term, it would also allow Lange to
increase spending on joint defense programs with
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Australia, thereby undercutting pro-ANZUS critics
of Lange's defense policies. We believe, moreover,
that strong public support for the government's anti-
nuclear policies will persist.
Bilateral ties under a National government would
probably improve slowly. Under Bolger, National
would probably work to restore the ANZUS alliance,
even though he has indicated that his government
would need time to "educate" the New Zealand
public on defense issues. Bolger will almost certainly
appease leftists by encouraging Washington to seek
arms control agreements with the Soviet Union-he
has promised to appoint an Ambassador for Disarma-
ment if the Nationals win the election-and may urge
the United States to reconsider signing the South
Pacific Nuclear-Free-Zone Treaty.
In our view, bilateral trade will continue to decrease
as Wellington increases trade with Australia and
Japan. Bilateral trade has already fallen because of
New Zealand's declining agricultural exports caused
by the termination of farm subsidies under the Labor
government. A National government would probably
be pressured by its rural supporters to boost agricul-
tural exports, and we believe that Bolger might seek a
free trade agreement with the United States to appeal
to National's rural backers.
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Appendix A
Key Points of Antinuclear Legislation
Objective
"An Act to establish in New Zealand a Nuclear-Free
Zone, to promote and encourage an active and effec-
tive contribution by New Zealand to the essential
process of disarmament and international arms
control."
The New Zealand Nuclear-Free Zone
"Comprises:
a. All of the land, territory, and inland waters within
the territorial limits of New Zealand;
b. The internal waters of New Zealand;
c. The territorial sea of New Zealand;
d. The airspace above the areas specified."
Aircraft and Ship Visits
The Decision Process: "When the Prime Minister is
considering whether to grant approval to the entry of
foreign warships [and military aircraft] into the inter-
nal waters of New Zealand, the Prime Minister shall
have regard to all relevant information and advice
that may be available to the Prime Minister including
information and advice concerning the strategic and
security interests of New Zealand."
The Ground Rules: "The Prime Minister may only
grant approval for the entry into the internal waters of
New Zealand by foreign warships if the Prime Minis-
ter is satisfied that the warships will not be carrying
any explosive nuclear device upon their entry into the
internal waters of New Zealand .... The Prime Minis-
ter may only grant approval to the landing in New
Zealand by any foreign military aircraft if the Prime
Minister is satisfied that the foreign military aircraft
will not be carrying any nuclear explosive device
when it lands in New Zealand."
Provisions possibly exempting Operation Deep Freeze
flights to Christchurch: The Prime Minister may
grant an exemption from the Legislation "to a catego-
ry or class of foreign military aircraft."
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Appendix B
The respected New Zealand public opinion survey
group AGB:McNair compared results from 1984
preelection polls with answers to the same questions
asked earlier this year.' Both parties have gained
support, mostly at the expense of smaller third parties,
but Labor-traditionally known as a socialist- and
populist-oriented party-has picked up surprising
support in urban areas and among white-collar work-
ers. This probably is a reflection of these groups'
positive reaction to the deregulated financial sector
and other aspects of economic reform. National,
however, will probably pick up votes in the critical
swing districts, mostly rural and small town areas,
where the farm economy has been hard hit by Labor's
elimination of agricultural subsidies.
Professionals and Executives
1984
(percent)
19872
(percent)
Labor
55
57
National
23
37
NZ Party
11
1
Democratic
10
4
Others
1
1
1984
(percent)
19872
(percent)
Labor
48
54
National
31
41
NZ Party
14
1
Democratic
6
3
Others
1
1
1984
(percent)
19872
(percent)
1984
19872
Labor
40
59
National
30
37
(percent)
(percent)
NZ Party
23
1
Labor
33
39
Democratic
5
1
National
48
58
Others
2
2
NZ Party
9
1
Democratic
10
2
1984
19872
(percent)
(percent)
1984
19872
Labor
36
47
(percent)
(percent)
National
37
48
Labor
39
57
NZ Party
18
1
National
25
37
Democratic
8
2
NZ Party
29
2
Others
1
1
Democratic
6
4
Because of rounding and estimation, figures may not add to 100.
' First quarter.
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