False Left Hope - The Rise and Fall of the Alliance

by Niall Mulholland (05/09/02)

THE NEW Zealand general elections in July 2002 saw many unprecedented changes in voting patterns. The Labour Party was, with a small rise in support, able to remain in power by forming a new coalition government. Their partners this time include the populist right wing United Future Party (UFP). Abstention rates reached 22% and 38% of the electorate voted for an array of smaller parties. The National Party (NP), the traditional party of big business suffered its worst ever election result, receiving just 21% support. A number of smaller right wing parties actually won a combined vote larger than the NP.

There is clear hostility to the establishment parties, which are seen as having been responsible for years of cuts that have massively widened the gulf between the rich and poor. As a result, no party has a solid basis of support and the electorate express sharp fluctuations in support for parties.

To the 'Left' of Labour, the Green Party managed to score 6% in July. However, the Alliance, which presented itself as a 'Left' alternative to Labour for years, and for this won considerable poll support in the mid-1990s (18%), did not win enough percentage support to maintain any seats in parliament. Just before the election, the Alliance split into two, with one faction around Jim Anderton, called the Progressive Coalition, scraping into parliament. But Anderton will not represent a protest voice against the prevailing neo-liberal agenda in parliament, as he once did. In fact, he has joined the ruling coalition, helping to carry out more of the anti-working class policies that have been so disastrous for the Alliance.
A few years ago, many workers and youth regarded the Alliance in New Zealand as a possible new mass socialist alternative. Internationally, many on the Left hoped the Alliance could represent a model for the development of new formations. So how did it come to fall apart in 2002 and suffer defeat at the ballot box?

Labour's 'Rogernomics'

The origins of the Alliance are to be found in the profound shift to the right by the Labour Party (NZLP) leadership in the 1980s. Labour was seen as the party of the working class for decades; a social democratic party that was considered the chief author of the welfare state, one of the most extensive in the world.

In the aftermath of the deep economic recession of the early 1980s, Labour won office in 1984 on the basis of the massive opposition to the National Party government of Robert Muldoon. Rather than introducing policies to better the conditions of the working class, the Labour administration decided to follow the Thatcher and Reagan 'free market revolution' then under way in Britain and the US. Under the impact of capitalist crisis internationally since the mid 1970s, which marked the decisive end of the post war economic boom, and with it the ability or willingness of national governments to implement meaningful reforms, Labour adopted rightwing neo-liberal policies.

New Zealand was held up internationally as a model for the free market agenda, surpassing even the neo-liberal 'experiment' in Chile under the vicious right wing dictator, Agusto Pinochet. Labour's brand of policies, dubbed 'Rogernomics' after the Labour Finance Minister, Roger Douglas, created mass unemployment and a widening gulf between the rich and poor.

Privatisation was introduced on a massive scale, with state banks, airways, insurance, printing, mining, telecommunications, petrochemicals, tourist hotels and most forestry sold off. As Labour sought to make the working class pay for the crisis of New Zealand capitalism, levels of benefits were reduced, unemployment soared and the introduction of regressive taxes on goods and services hit the poor hardest. Charges were brought in for public services, including for health and third level education. On the other hand, taxes on the wealthy were reduced.

A party that historically was associated with one of the most developed welfare states in the world carried out a wholesale war against the same system.

Yet, for all the 'shock treatment' and 'tough medicine' of those years, the capitalist commentators were not particularly impressed with the results. "Economic growth is meagre, unemployment is stubbornly high, business confidence is waning and the balance of payments is deteriorating," commented the Wall Street Journal in the early 1990s. From the 1960s to the early 1990s, New Zealand slid down the league of national incomes from third to eighteenth place.

Labour's fundamentalist monetarist policies left an under-performing economy and high joblessness. The social effects of Rogernomics were disastrous. Control of rents and energy prices were scrapped, directly leading to the phenomena of 'street kids' in Auckland. A 2% limit on wage rises led to a six-year fall in real wages.

Labour was returned to power in 1987, largely due to a feeling in working class communities that there was no alternative. The government staggered on until the 1990 elections, suffering damaging internal rows that really reflected the deep unpopularity of its policies.

After six years in power, the party was decimated in the October 1990 elections. The working class had had enough. Deep-seated anger and alienation amongst working class voters resulted in a sharp swing against the ruling party. Labour was reduced to holding 28 out of 97 parliamentary seats and 12 out of 18 cabinet members lost their seats! Underlining the scale of the defeat, the West Coast constituency was lost to the NP for the first time in 65 years. This is where militant miners and timber workers had founded the Labour Party.

Characteristic of the 1990 election was the mood of disgust and betrayal expressed by many workers and youth. Turnout was 76%, compared to 94% in 1984. It was estimated that around 75% of the Maori people failed to cast a ballot, as they rejected a system that had so badly failed them. The National Party won by default therefore and certainly not because of any great enthusiasm for their policies.

The new government gladly continued Labour's assault on the working class, selling state assets and attacking conditions and rights.

Rise of 'alternative parties'

If 1990 saw a bitter harvest for Labour's betrayals, it also witnessed the rise of 'alternative' and protest parties and formations.

New Labour, which had split from Labour eighteen months earlier as a 'Left critic', polled 5.2% in the elections. The Greens won 6.3%, the Democrats 1.7% and the Maori based party, Manu Motuhake, won 5.2%. Looked at in detail, the progress of these small and mainly new parties was impressive. Jim Anderton, the leader of New Labour, became the first MP to resign from his party and be re-elected standing again. Manu Motuhake ran second to Labour in four Maori seats. The Greens regularly came in third place in traditional Labour areas.

These were relatively modest but important results for parties largely seen as to the left of Labour and the Nationals. Moreover, the early gains acted as a powerful impetus towards creating some larger coalition. Already an electoral accommodation had been made between Manu Motuhake and New Labour during the 1990 elections. A post-election multi-party conference of small parties took place in 1991, and later that year the Alliance Party was established, made up of five constituent parties: the Democrats, Manu Motuhake, New Labour, the Green Party and the Liberals (a splinter from the Nationals, headed by two former National MPs).

The Alliance founders had great hopes for the new formation, the "new movement was unprecedented - nowhere in the English speaking Western world had such a significant force arisen on the Left of the political spectrum", they claimed.

But from the start, the Alliance was by no means a clearly defined socialist party. Neither was it homogenous. The component parts represented a variety of class and sectional interests. What mainly bound them together was opposition to the extremist neo-liberal programme of the two largest parties.

Most of the Alliance parties were new entities, but the Democrats had been inexistence since the early 1950s. It represented small business people and farmers (middle sections of the population hammered by Labour and the National's obedience to big business), and a section of workers. The Democrats vote peaked in 1981 with 20.7%, only to fall and to remain low.

Manu Motuhake had its roots in the Labour Party. Its founder, Matiu Rata, became a cabinet minister in the 1972-1975 Labour government. Labour traditionally had strong roots in the oppressed Maori population but during the rise of the struggle for land, language and cultural rights in the 1970s, the Labour leadership were found wanting. Rather than struggle to develop a militant socialist wing in the party that would successfully champion Maori rights and challenge the leadership, Rata left the Labour Party in 1979 and formed Manu Motuhake.

The New Labour party split from Labour ten years later, when the right wing degeneration of the leadership had gone much further. New Labour was made up of ex-party activists, including the Labour MP, Jim Anderton.

Anderon had held the presidency of the Labour Party from 1979-1984 and built a reputation as a campaigner and leader of the Left. Opposition to nuclear policy and to the party leadership's destruction of the welfare state earned him the support of many rank and file members. In 1988, he nearly won the presidency again with support from left party branches and unions.

Matters came to a head with the leadership when Anderton refused to vote in parliament for the sell-off of the Bank of New Zealand. Anderton was suspended from the parliamentary caucus, only to have the decision rescinded when it was declared unconstitutional. Anderton however decided to quit the party and a month later, on May Day 1989, New Labour was created.

The new party claimed 4,000 members, including ex-Labour members, socialists that had remained outside of Labour and community activists. It drew support from many of those most affected by Labour's policies - the poor, elderly, unemployed and unskilled workers.
New Labour called for public ownership, progressive taxation and full employment. This received popular support, with the young party rating over 10% in the polls at one stage, despite hostility from the media and Labour hierarchy.

The Green Party was also keen to join the new movement. Although only three months old at the time of the 1990 elections, the Greens drew on support from those who had voted for the defunct Values party, an environmental based organisation active in the 1970s. In common with Greens in a number of Western countries in the late 1980s and early 1990s, the NZ brand appealed to people beyond those interested in environmental issues. The Green movement was seen as something new and radical - an alternative to the discredited establishment parties, which now included the social democrats. The Greens scored 6% in the New Zealand 1990 elections, despite standing on a very basic programme and without any real party structures.

Alliance Declaration

On 1 December 1991, the Greens joined New Labour, Manu Monutake and the Democrats at a meeting where they launched the 'Alliance Declaration'. The doubters in the Green Party were given a shove in the direction of the Alliance one month previously when the winning Alliance candidate in the Auckland Regional Council by-election beat their candidate into fourth place. This result went to show that many working class and middle class voters wanted more than a 'radical green' alternative to the pro-big business parties - they were searching for a complete social and economic change.

The Alliance Declaration was filled with Left sounding, vague aspirations. It stated the component parties would work, "in total commitment to the advancement of NZ and its people and the need to rebuild and re-establish a society where human worth, dignity and respect for each other becomes the norm, irrespective of race, colour, creed, age, gender or sexual orientation, where co-operation and diversity is freely acknowledged". The statement also committed the parties "to forming, if elected, an Alliance government whose objective will be the social, economic and environmental reconstruction of NZ."

Shortly after the Declaration, the Liberals joined the Alliance, and Alliance leaders also had discussions with another National Party split off, the New Zealand First Party. These defections reflected the serious damage the National policies were doing to those working and middle class communities that voted for them. In the event, NZ First decided to go it alone, winning two seats in the next elections.

The Alliance declared it was cemented around three very general principles: more government intervention, disillusionment with the "political system and culture" created by the big capitalist parties, and the need to get rid of the First-past-the-post electoral system. For a time, these common points could generally unite the disparate groups and even mean electoral breakthroughs.

Alliance leaders also claimed to have pioneered a unique form of consensus making inside a political party in New Zealand. In reality, this really reflected the contortions necessary to keep such a heterogeneous organisation together. In the absence of a bold socialist programme, which would advance a crash programme of major reforms and investment, and advocate democratic control and planning of the major arms of the economy by working people to end poverty, homelessness, unemployment and the crisis facing small businesses, the Alliance would eventually come unstuck and the component parts, representing separate class and sectional interests, and basing themselves on the capitalist system, would break from one another.

Poll successes

Early electoral success for the Alliance arrived in 1992, when it came within a few hundred votes from taking the Tamaki parliamentary seat off the Nationals in a by-election. Eight months later, the Alliance gained 42% support and control of regional government in Auckland. Furthermore, the Alliance won a majority of seats on the Auckland Regional Services Trust (ARST) following a highly public campaign by the new party against the sale of municipally owned assets. Alliance leaders boasted that they would demonstrate that public assets could be, "effectively managed without resort to privatisation".

In their 'History of the Alliance', the party leaders describe the excitement and hopes surrounding the new party at the time, "was also significant because it brought thousands of New Zealanders - not just experienced electoral campaigners and trade unionists from out of the Labour Party, but also social activists, Left-wing academics, and a number of socialists who had never belonged to a mass party - into one organisation. The movement represented a return to grassroots and people-oriented politics. For the first time in many years a party existed that actually wanted to involve the public and recreate some sort of citizen participation in the state…Clearly the party had evolved into something considerably greater than the various parties involved. It had about it an aura of lively idealism and tremendous political energy".

Indicative of the support the Alliance was attracting, it scored an impressive 18.3% in the 1993 general election. The very unpopular National Party barely retained power. However the existing FFP electoral system meant that the Alliance was only represented in parliament by two seats. Jim Anderton won his Sydenham seat with a huge majority, and in Auckland, Sandra Lee, with a reputation for leftwing environmental activism, became the first Maori woman to win a general election seat.

The Alliance went on to play a central role in the referendum contest that saw over half the population vote for a new electoral system, MMP (mixed member proportional representation system), despite opposition from big business and the two main parties, who understandably saw its introduction as a potential big boost to the fortunes of smaller radical and Left parties. Indeed, the new system allowed the Alliance to grow from just two seats in the national parliament to thirteen in 1996, although its overall vote had sharply dropped to 10.3%.

The fall in the vote was blamed by Alliance leaders on the populist, racist appeal of New Zealand First, led by Winston Peters. NZ First made immigrants scapegoats for the social crisis, even though Peters had been a cabinet member of the outgoing government. The Alliance also explained away its lost support by its demand that government coalition agreements should be made before elections. The Labour Party had refused to enter such a pact with the Alliance. "As Labour would not discuss coalition terms before the election there was a mistaken perception that the Alliance would not ensure that the unpopular National government was defeated," (or so went the Alliance leaders' argument).

The truth of the matter is that the Alliance was beginning to lose momentum because its limited policies and programme were revealing themselves to working class people and middle sections in society as being incapable of solving their problems.

The right wing opportunism of NZ First needed to be contested with a clear socialist programme that put the blame for social and economic crisis were it belongs - at the foot of the capitalists - and to win over those attracted by the right's demagogy.

Moreover, it was wrong to entertain the idea of sharing power with Labour, a party responsible for the first wave of vicious neo-liberalism and which still fundamentally held onto the basic tenets of 'free market' principles.

It was the Alliance's ambiguous ideas and flirtation with Labour that lost it percentage support. Instead of offering itself as a prop to the Labour leaders, the Alliance should have struck out independently with socialist ideas. By the mid-1990s the Labour Party was almost in a state of collapse, having lost thousands of members in disgust over its pro-capitalist policies. It has lost much of its traditional mass base amongst the working class. Before the elections, Labour leader Helen Clarke was only polling slightly above the Alliance, and she was only receiving a miserable 3% support when people were asked if she should be the next prime minister.

Given the much more advantageous MMP system, the Alliance could have won scores of seats by adopting a clear alternative. It could have become a serious challenger to the two main bosses' parties. With an appeal to ex-Labour and Labour members to join the Alliance on a fighting programme that maintained all the best traditions of the Labour Party, a new mass workers' party could have come into existence.

Opportunity for a new mass workers' party lost

Unfortunately, a brilliant opportunity to build a serious socialist force in society was lost. Other political forces therefore took the initiative. NZ First emerged from the 1996 elections with 17 MPs and holding the balance of power. Part of its appeal was aimed at the Maori population who have suffered racial, social and economic discrimination for decades. The poverty conditions of many Maoris meant that they found themselves struggling with other poor minorities and immigrants and asylum seekers for scant resources and they were therefore open to NZ First's anti-immigrant propaganda. In the past, many Maoris were solid Labour supporters, and with socialist policies, the Alliance could have attracted many to their banner.

For all its 'radicalism' the NZ First opted to form a coalition government with the Nationals. Given the new government's cuts policies, many NZ First voters felt betrayed and the party's support quickly diminished.

As all the smaller parties support stagnated or fell, Labour conducted a makeover to re-win popularity. They were aided by some in the media, representing a section of the New Zealand ruling class who were alarmed at the huge fall in support of the Nationals and Labour, a party it had come to rest on. Clarke was carefully re-packaged in the media and adopted slightly more 'left' rhetoric, which after years out of office began to rehabilitate Labour in the eyes of more traditional and older supporters. The Labour leadership also probed potential electoral arrangements with the 'left', the Alliance, and the populist right (NZ First), in an opportunistic bid to secure the best position on the other side of the next general election.

Failure to capitalise on early promise led to increased bitterness and disputes within the Alliance and consequently serious losses. Two Alliance MPs defected - Alamein Kopu left and set up her short-lived Mana Wahine party, which supported the NZ First/National government, while ex-Liberal leader Frank Grover became an MP for a Christian party.

An even bigger blow came when the Green Party decided in 1999 to go it alone at the next elections. No doubt viewing the Alliance as more of a hindrance than a boost to its ambitions, the Greens decided an independent face in MMP system elections could deliver it more support.

The coalition of distinct political parties that had characterised the Alliance really came to a formal end a little later when New Labour dissolved itself. This corresponded to the continuing rightward drift of senior figures like Jim Anderton, the New Labour founder. Why maintain separate party structures when the majority of the Alliance leaders were agreed on the need to move to the so-called 'centre ground' of politics?

The urge for a new accommodation with Labour leaders, as the only 'viable' route to government, meant in practice the dropping of all meaningful opposition to neo-liberal policies. A "truce on the Left" was declared. In 1997, as a sign of "good will", Jim Anderton announced a change in the Alliance's tax policies that was "more acceptable to the Labour Party". In 1998, the Labour leader, Helen Clarke, addressed the Alliance conference. The delegates then voted unanimously to enter a "loose" coalition with Labour in government. By 1999, the relationship with Labour was "thoroughly repaired".

During this time, Labour support was steadily rising, as sections of the working class saw it as the only hope to end the National Party government. This success did not rub off on the Alliance, however, who stayed at around 7-8% in the polls. The younger working class and middle class Alliance support fell away as quickly as the party leaders shed their former radical image.

In the 1999 general election the Labour Party won 38.7%. Undoubtedly it was boosted by Clarke's limited pledges to increase spending on health and education and to reverse some of the Nationals worst neo-liberal policies.

On the contrary, the Alliance saw no return to previous poll highs. It secured only 7.7%, giving it ten seats. The Greens, standing as an independent force after years in the Alliance, managed to get over the 5% threshold and to win one seat.

Labour/Alliance coalition government

Labour and the Alliance formed a coalition government but required the support of the Greens to have a guaranteed 'supply' in parliament. The Alliance leaders claimed this represented, "the first Leftwing government in NZ since 1972".

It is not declarations however but deeds that will persuade working class people as to whether a party acts on its behalf or for big business when it is in power. On that measure, the Labour/Alliance coalition was anything but a 'Leftwing' or progressive administration.
In government, the Alliance negotiated the positions of Deputy PM and three other MPs in the cabinet. The Alliance claims it then moved swiftly to implement policies that Labour and the Alliance agreed on, but, importantly, admitted while in government, "there are many issues, particularly health and education…yet to be addressed significantly."

Alliance trumpets its greatest achievements in power were to have influenced its partners to introduce paid parental leave and the establishment of a "people's bank", a subsidy of the NZ Post Office.

Of course socialists welcome improvements for working families, but paid parental leave was a very limited measure. It lasts only 12 weeks and after enormous pressure from the bosses it was agreed to fund it out of general taxation not from the pockets of the employers.
Initially, the Labour/Alliance coalition made other small reforms, for example, re-nationalising accident compensation, lifting the minimum wage by a small amount and making state owned rents based more on means.

Even these modest measures alarmed the boardrooms and soon the Labour/Alliance partnership was put in its place by big business. The supposedly "Leftwing government" then embarked on an essentially anti-working class programme. Nothing was done to reverse the huge attacks made by former administrations on the welfare system. In fact, state spending as a percentage of Gross Domestic Product, plummeted to a 25-year low under Labour/Alliance.

No doubt the 'realists' in the Alliance would argue that once in power, faced with the overwhelming might of the big corporations, it is not possible to introduce major reforms overnight, and that the Alliance did the best it could in difficult circumstances. It is true that the world economy has become much more dominated by giant companies and that the scope for the sort of 'reforming' social democratic governments we saw in the post war period has been hugely narrowed. But this state of affairs only goes to reinforce the need to take decisive action regarding the economy. On coming to power, a genuine socialist party representing workers would immediately introduce a series of major reforms to better the lives of millions of working people. Taking into public ownership the commanding heights of the economy could only do this. As the old adage says: you cannot control what you do not own. This means nationalising the local arms of the big corporations, as well as the key areas of the national economy and the big banks and insurance houses and so on. This is the sort of action need to stop economic sabotage and disruption by vengeful capitalists.

Also, a genuine socialist government would appeal to workers and youth, not just in New Zealand, but also in Australia and throughout the region, to show solidarity: to campaign to stop attempts by capitalists to destabilise the socialist government. Undoubtedly, workers and youth throughout the region would follow the example of a socialist government in New Zealand and would struggle to also bring a socialist party representing the working class to power.

The Alliance leaders never had this course of action on their agenda and so could only tinker with the neo-liberal policies of their senior government partners, which made no real difference at all.

Third of children living in poverty

The state funded health system remained in severe crisis. Funding ceilings resulted in staff shortages and cuts and long waiting lists. Teachers went on strike for 16 months during the Labour/Alliance government, over pay and conditions. Third-level institutions are today burdened with debts, and despite the government's suspension of interest payments on student loans for undergraduates the fee system remains. Clarke boasted about cutting joblessness during her premiership. However most of the 'new' jobs are low-paid and part-time. Real levels of wage increases have actually been lower than they were under the Nationals.

In terms of social inequality statistics, we can see how little difference the Labour/Alliance administration has made to the continuing downward slide of the country. In 2000, it was estimated that a third of all children are living in poverty, and diseases and overcrowding are on the increase in Auckland's poorest areas.

The worst levels of poverty are to be found amongst the refugees and immigrants (42%), followed by the Pacific Islanders (38%) and the Maoris (28%). Labour had pledged to improve conditions for the Maori population prior to coming to power, partly to offset the renewed support NZ First had gained from this oppressed section of the population. But in the absence of policies that seriously eat into the wealth of the rich (the richest 100 people in New Zealand saw their wealth rise by $NZ12.8 billion (17.4%) from 2001-2002), this ambitious target was soon dropped when in government. Instead, the government encouraged the development of Maori businesses, opening up a gap between a rich Maori elite and poor majority.

The Labour/Alliance attitude towards the unions was just as derisory. They scrapped the Nationals employment legislation dealing with negotiations with unions and introduced their Employment Relations Act. This gives unions the sole right to negotiate collective contracts but keeps in use severe penalties for those daring to strike.

In return for allowing union leaders more access to government, restraint on the rank and file was expected and given. Following the worldwide turmoil in the air industry after S11, Ansett Airlines collapsed and threatened to drag down with it Air New Zealand, its parent company. The New Zealand Council of Trade Unions blocked any industrial action, calling instead for airline workers to "make sacrifices". Union tops also restrained militant action by nurses and teachers fighting for better pay and conditions.

The 1999-2002 government was lucky in that it held power during a time of quite favourable economic circumstances. The low value of the NZ dollar and the high prices for agricultural commodities on the world market meant a boost in export earnings. But the recession in international markets will hit the new Labour dominated coalition. Incomes on farms are expected to fall and firings in the food industry and forestry are on the up.

New Zealand capitalism has lost its once advantageous position on the world market. The country has experienced much slower growth rates than in the rest of the 'developed world'. The rise of agricultural protection and Britain's accession to the European Union damaged the New Zealand economy hugely. This was one of the factors that convinced the ruling classes to embark on a ferocious neo-liberal programme in the 1980s. However productivity and living standards have hardly risen as a result. The standard of living has fallen from 1.25 times the average standard of living in the high-income countries in 1965 to 0.6% in 2001.

Labour was maintained in power from 1999-2002 with the aid of the Alliance, and in a less direct form, by the Greens. The Alliance alienated many of its remaining supporters for throwing away its main election pledges and for helping to carry out Labour's destructive programme. After all, was not the Alliance created in the first place to resist cut backs?
The fall in Alliance support led to bitter internal wrangling and eventual splits. Matters came to a head over the government decision to offer a contingent of SAS troops to back up Bush's war on terror in Afghanistan. Jim Anderton headed a split off from the Alliance, called the Progressive Coalition. The instability caused to the coalition government as a whole by the Alliance internal rows was a key factor in persuading Helen Clarke to call early elections this year.

The inner party dispute the Alliance suffered was not over major principles or ideology. Both the Alliance and the Progressive Coalition promised to be 'responsible' partners in a future Labour government on entering the July 2002 general election race.

Alliance suffers defeat at July 2002 polls

The Progressive Coalition ran a campaign with Anderton's familiar message, "...more jobs, more skills, more investment in NZ, progress in making it secure." Yet it was unable to win more than two seats (1.8%). The rest of the former Alliance won only 1.2% of the vote and is not represented in the parliament.

The Greens received 6% (8 seats) of the vote, gaining support as a 'left' alternative to Labour (and the Alliance), just as the Greens have done in neighbouring Australia.

This is something of a sleight of hand, because while not formally a member of the Labour/Alliance government, the Greens supported it on key issues of 'confidence' and 'supply' thereby making it an accomplice to the anti-working class administration. The Greens voted for every financial package and major legislation in the 1999-2002 period, albeit with occasional noises of complaint. The party did at least oppose the sending of SAS troops to Afghanistan (the Labour/Alliance government and the Nationals were assured to pass the legislation), building its credit with young radical voters.

Overall, the Greens have not provided a fundamentally different approach to Labour's pro-market policies on many key issues facing working people, such as the joblessness scandal and economic problems. The party polled up to 11% during the election campaign but by mainly concentrating on the genetic engineering issue. As it did not provide a credible alternative to capitalist crisis, the party was not able to sustain or build on this support.

The smaller right parties successfully exploited the situation during the election campaign with a populist rhetoric that appeared to many electors to address the pressing social and economic issues. They blamed immigrants for the problems blighting working class communities, including unemployment, housing and price rises. Combined, the New Zealand First party, the Association of Consumers and Taxpayers (ACT) and the United Future Party (UFP) polled more than the National Party.

The New Zealand First party came third in the polls after Labour and the National Party, winning 13 seats (10.6%). Once again, the First party advocated anti-immigrant policies, as well as "tougher law and order". Opportunistically, the party attacks mass unemployment and welfare cutbacks, winning it support amongst Maoris. The forces of the 'Left' once more failed the poorest and most downtrodden.

The First party has therefore managed to regain much of the ground lost after its entry into the National Party dominated coalition government in 1999, when Winston Peters, as finance minister, was responsible for 'reforms' that worsened the situation for Maoris and Pacific Islanders, as well as other big sections of the working class and poor.

The UFP, which is really a loose coalition rather than a clearly defined party, played on 'law and order' issues and won nine seats (7%). Its leader, Peter Dunne, is a former Labour member of parliament, who appeals to a middle class constituency as 'safe' and 'moderate' pair of hands. The party has links to Christian fundamentalist groups.

After prolonged negotiations, Labour made a deal to share power with the United Future Party and Progressive Coalition. The Green Party leaders could hardly lend support again to a Labour administration given their avowed opposition to Labour's plan to allow genetic engineering trials.

The new government will continue with a right wing agenda, including serious attacks on civil and democratic rights that were first introduced in the aftermath of S11. The Jim Anderton rump will be even more acquiescent than the Alliance was when in government over the last three years.

The Alliance proper now faces terminal decline and possible extinction. Its leaders may be tempted to join and effectively dissolve into one of the smaller parties or even Labour.

Alliance promise turned to dust

Within the space of ten years, the promise of a new Left party in New Zealand with a mass following making its way to power has been turned to dust. This is of course not the fault of the working class and radical youth, who clearly indicated in poll after poll in the mid-1990s that they were prepared to back a credible left alternative to the 'New Right' and Labour.

Blame lies with the Alliance leaders, who failed to put forward a socialist programme to the electorate. They wanted to square the circle by attending to the interests of workers and at the same time those of big business. When this inevitably failed to win support in elections, the Alliance leaders drew the completely wrong lessons and stampeded towards the crowded 'centre ground' of politics.

Many workers will be disappointed by the course of the Alliance, but even setbacks such as this one are rich with lessons for the workers' movement, both in New Zealand and internationally. For alliances or coalitions of the Left to succeed they must first and foremost put forward a socialist programme attractive to the poor, to those in work, to women, to youth and to the most oppressed, and also to the small business people and farmers who face ruin under capitalism. New Left formations must build an independent profile, without relying on parties representing big business. They must offer open, democratic structures if they are to win over the active participation of youth and trade unionists.

History does not treat kindly those organisations that are seen to fail the working class. The Alliance paid dearly for its betrayals at the ballot box. If the experience of the Alliance teaches us anything at all it is that new Left formations can arise quickly, even gaining considerable electoral support, only to fall away again if wrong policies are pursued, especially when in power.

This does not mean that the New Zealand working class has to now wait more decades for a political fight-back against the prevailing pro-market consensus of the main parties. The long-term implications of the deal between the Labour Party and UFP could cost premier Helen Clark much support. Rumblings of discontent over the prospect of sharing power with arch-conservatives are already simmering both in parliament and amongst the electorate. The trade union leadership may delude themselves that Helen Clark's administration will be a barrier to more 'New Right policies', but the reality of more cuts and attacks on rights will be crystal clear to workers, forcing them into battle against Clarke.

The polarisation between the right and left in New Zealand society, which the July 2002 elections graphically revealed, and the big loss of support for traditional pro-capitalist establishment parties, signifies profound changes afoot. The Green Party can benefit from this mood for a while if it maintains a profile to the Left of Labour, although inevitably there will be tensions and even splits between the more Left rank and file and the leadership, who may once again feel tempted to prop up governments making attacks on working class people.

An opposition mood will develop amongst the unions and the working class as a whole, which at a certain point can mean the creation of a new Left opposition. With a clear socialist programme and working class membership, a new Left party can quickly make big gains. Providing the lessons of the Alliance experience are fully assimilated, it can become an alternative to both the big parties of the bosses and the right wing demagogues.