Political Causes
The Coalition Government failed to make the right political decisions to pull New Zealand out of a Great Depression, instead they impacted civilians lives negatively.
On March 11th 1932, the New Zealand Government announced specific economic measures and expenditure cuts they were making:
- “A ten per cent cut in the wages and salaries of civil servants”
- “A reduction in pensions of £599,925 (over one million dollars)”
- “A reduction in spending on education of £369,950 (over $700,000)”
- “The termination of the family allowance”
- “Miner’s pensions to be reduced by 2s 6d (25 cents)”
- “A reduction in widow’s pensions from £1 ($2) for the first child and 10s ($1) for each other child to 15s ($1.50) and 7s 6d (75c) respectively with a maximum of £3 ($6) per week”
- “That subsidies on voluntary bequests to hospital boards should be discontinued and subsides to the Jubilee institutes for the blind be withheld in the meantime”
- “That children be not admitted to schools until they were 6 years old”
Edwards, James, Riot 1932, Whitcombe and Tombs, 1974
The Government tried to cope with the sudden fall in export prices aiming to maintain New Zealand’s funds and trying to cut expenditure. Prime Minster George Forbes of the United Party was leading the Government. The Government had to adopt a deflationary policy to balance the budgets. By 1931 the Untied Party had formed Coalition Government alongside the Reform Party, Gordon Coates was leader of the Reform Party and became Minister of Public Works. Forbes decided to make the economy accommodate Britain’s persistence in slashing costs. More cuts were made and they were felt in numerous areas of New Zealand’s society, particularly in education, old age pensions and the health system. In education the teacher’s wages were significantly slashed and the age in which children started their education was increased from 5 to 6. This unfortunately led to an oversupply of teachers and to compensate with the oversupply many teacher colleges were closed. Kindergartens were also shut down. The old age pension was reduced, war veterans and widows pensions had also been cut. In the health system dental clinics were shut down and in many hospitals nurses’ wages were cut and a substantial amount of staff members were laid off. Poorer and cheaper bandages were being ordered for hospitals and used, the price in which they bought hospital food was to be less and patients were to be discharged as soon as possible. These expenditure cuts were starting to have an adverse impact of people’s health and the service of health care they were receiving. This further reduced the ability of spending power among the New Zealand population. The Coalition Government also tried to increase farming production in an effort to compensate for falling prices. This backfired by devaluing the New Zealand currency and reducing the Government expenditure. The Government tried to manage by creating retrenchment policies, which included cutting pay for state servants and cutting government staff members. The goal of the Government was to balance their budgets instead they added more state servants into the unemployed rate. The Arbitration Court in 1931 had its wages reduced by 10%, public service wages were also slashed by 10%, and their wages were reduced once again in 1932. The minimum wage rates were terminated completely. They also ceased compulsory union membership to the Arbitration Industrial Court in 1932 in which gave more power to the employers. They also fired many of their public workers and then rehired them on a basic wage rate which had been fixed for those who were unemployed. The Coalition Government thought that their changes in policy and expenditure would improve the economy of New Zealand but instead it increased further poverty and unemployment within the New Zealand society and reduced the pensions of many people who needed the wages. This brought many people pain and suffering, angering many within society evoking them to take action against the Government. As a threat of what would come, in March 1931 a number of people marched on the streets and parliament. They claimed that further action would be taken if the Government continued to cut wages. The Government failed to listen to these threats by not taking them seriously and in doing so foolishly lead the unemployed to be so angered they rioted. The Government called this help “tightening the belt” which it actually meant strangling the economy and the people of New Zealand till they could not take it anymore.
- “A ten per cent cut in the wages and salaries of civil servants”
- “A reduction in pensions of £599,925 (over one million dollars)”
- “A reduction in spending on education of £369,950 (over $700,000)”
- “The termination of the family allowance”
- “Miner’s pensions to be reduced by 2s 6d (25 cents)”
- “A reduction in widow’s pensions from £1 ($2) for the first child and 10s ($1) for each other child to 15s ($1.50) and 7s 6d (75c) respectively with a maximum of £3 ($6) per week”
- “That subsidies on voluntary bequests to hospital boards should be discontinued and subsides to the Jubilee institutes for the blind be withheld in the meantime”
- “That children be not admitted to schools until they were 6 years old”
Edwards, James, Riot 1932, Whitcombe and Tombs, 1974
The Government tried to cope with the sudden fall in export prices aiming to maintain New Zealand’s funds and trying to cut expenditure. Prime Minster George Forbes of the United Party was leading the Government. The Government had to adopt a deflationary policy to balance the budgets. By 1931 the Untied Party had formed Coalition Government alongside the Reform Party, Gordon Coates was leader of the Reform Party and became Minister of Public Works. Forbes decided to make the economy accommodate Britain’s persistence in slashing costs. More cuts were made and they were felt in numerous areas of New Zealand’s society, particularly in education, old age pensions and the health system. In education the teacher’s wages were significantly slashed and the age in which children started their education was increased from 5 to 6. This unfortunately led to an oversupply of teachers and to compensate with the oversupply many teacher colleges were closed. Kindergartens were also shut down. The old age pension was reduced, war veterans and widows pensions had also been cut. In the health system dental clinics were shut down and in many hospitals nurses’ wages were cut and a substantial amount of staff members were laid off. Poorer and cheaper bandages were being ordered for hospitals and used, the price in which they bought hospital food was to be less and patients were to be discharged as soon as possible. These expenditure cuts were starting to have an adverse impact of people’s health and the service of health care they were receiving. This further reduced the ability of spending power among the New Zealand population. The Coalition Government also tried to increase farming production in an effort to compensate for falling prices. This backfired by devaluing the New Zealand currency and reducing the Government expenditure. The Government tried to manage by creating retrenchment policies, which included cutting pay for state servants and cutting government staff members. The goal of the Government was to balance their budgets instead they added more state servants into the unemployed rate. The Arbitration Court in 1931 had its wages reduced by 10%, public service wages were also slashed by 10%, and their wages were reduced once again in 1932. The minimum wage rates were terminated completely. They also ceased compulsory union membership to the Arbitration Industrial Court in 1932 in which gave more power to the employers. They also fired many of their public workers and then rehired them on a basic wage rate which had been fixed for those who were unemployed. The Coalition Government thought that their changes in policy and expenditure would improve the economy of New Zealand but instead it increased further poverty and unemployment within the New Zealand society and reduced the pensions of many people who needed the wages. This brought many people pain and suffering, angering many within society evoking them to take action against the Government. As a threat of what would come, in March 1931 a number of people marched on the streets and parliament. They claimed that further action would be taken if the Government continued to cut wages. The Government failed to listen to these threats by not taking them seriously and in doing so foolishly lead the unemployed to be so angered they rioted. The Government called this help “tightening the belt” which it actually meant strangling the economy and the people of New Zealand till they could not take it anymore.
The Government created a Scheme of “no pay without work” which shocked many of the unemployed and made them feel like second-class citizens.
Prime Minster George Forbes announced in January 1931 that all those who were on the unemployment benefit would not receive any money without work. This idea was called Scheme 5. Men were sent away from their families or wives to work on farms, forestry projects or participate in other work schemes that the Government had created. The areas in which men were made to live were dubbed “slave camps” as conditions were horrendous for men. In these camps they lived off of mere food rationings of bread, treacle or sometimes inedible meat. A good nights sleep was also out of the question, workers were forced to sleep on beds made from old sacks provided by local farmers. The Government payed the unemployed men less than the rate they would have received in regular jobs and gave farmers these men to work as state paid labourers. The Government made a bad decision because now farmers would then fire their own employees and start taking in the state paid labourers. This would then give the farmers an opportunity to exploit the scheme by saving money instead of having to give wages to their employed. The Government was inconsiderate for turning a blind eye to this exploitation because they should have been stopping the rise of the unemployment and not adding to it. The farmers were just trying to save money like the rest of the country. Prime Minister George Forbes in the Auckland Star 13th of April 1932 replied to all these allegations of unfairness as conjecture by saying “The Government and The Unemployment Board… is continuing to provide to the fullest extent of its resources unemployment relief in return for work preformed”. That the idea of the government giving unemployed money “without requiring work” was a absurd ideology. This is a Labour Party poster from 1931 showing Richard Seddon overlooking on men doing farm work in a job usually performed by horses. This poster showed the work the Government created for the unemployed to participate in to earn their benefit. These men had to participate in hard physical labour that made life miserable for them, this poster is comparing the men to horses. Basically suggesting that the Government is making them do hard labour a horse would usually do, providing harsh conditions for the men. To be eligible for the unemployment relief you had to be able to pay the unemployment tax. Maori people were considered to poor to be able to pay this tax. So not everybody was taken on by the scheme, which made those unemployed with no benefit even more desperate. Scheme 5 increased many peoples anger over being treated like second-class citizens. The unemployed would have felt like they were put in a poverty abyss that they would never get out of. They would provide for their families by leaving them and performing hard labour jobs just for pay regardless of their previous occupation and would have diminished their hope in the ending of the depression.