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Leader of the Opposition, House of Representatives, Wellington, Telephone 736 025 ‘ALAND NATIONAL PARTY DOMINION CouNcrL, CONFIDENTIAL TO COUNCILLORS SSEARENTIAL TO COUNCILLORS REPORT BY THE LEADER, RIGHT HON. SIR ROBERT MULDOON ON THE 1984 GENERAL ELECTION CALLING THE ELECTION SELLING THE ELECTION ly that we would have lost less Seats had we gone through F cannot believe that we would have won in November, The history of the decision goes back to December 1983 when five members of the Government Party crossed the floor of the House on issues that were neither conscience issues, where they had an absolute right to vote as they wished, nor confidence issues where they were pledged to Support the Party. ‘The Labour Party Goes not experience this probien because their Caucus rules mate it impossible for one of their members to cross the floor of the Parliament if-one member was Prepared to exercise what in effect be ef eeee eyo” Government legislation. wherere that veto would be effective would devend on the Speaker's casting vote but there is a well established precedees on this and at times that precedent would work against the Government. I was not prepared to approach members individually but I asked the Party President to speak to them on behalf of the Party. She obtained from each of them an assurance that in the election year session they Would not take this kind of action. Earlier this year it became The Prebble gil banning visits by nuclear ships would have meant the end of ANZUS. xX have this assurance from members of the favoured its Passage. The Bill was Gefeated only because T per~ Sonally persuaded MacDonell, the Independent Labour member, to h he qualifica ‘h of June, Y, the 30¢) The President, the Whips and I were Sonvinced that we had to go to the country, ‘the Deputy Leader was ales consulted. He wag at a dinner party at Government House that night. A Caucus was called when the House Fose and unanimously agreed that we should 90 to the country, Com large in our discussions, but t believe that we did think that we had some residual public support because of our actions in that respect. Mego ok Substantially right from the beginning of the campaign. Miss Waring to her credit said little. their hands ser parallel to the what television makes it today, but my appeal try tor ,2OE" against "their Lot", and it was agrced that I woula fry to match our team against their team, our policy and perfor- ie was Meanet their lack of any policy ot Performance, and thus scams that va bniit oa sie gisesn ohict had been devised some months earlier: “We're Winning®. After nearly nine years of recession, in which the principal achievement of the Government was tn maintain living standards while building in the broader based economy for future progress, it is understandable that "We're Winning” did not produce 2 universally favourable response. Snap election. It would be of interest to those who took s ferious interest in politics but it would not make much of an impression on, for example, a housewife in Glenfield. The other three Parties ran an anti-Muldoon campaign, Perceiving Sorrectly, that if they did that they would concentrate attention poy ine Source of all the ills, reay and imagined, which beset New Zealand. e¢- Little was heard during the campaign from other than the Leaders with the exception that Bolger occasionally got a@ headline while individual candidates, particularly in the provincial seats, got their due share of publicity. TE was my decision, agreed to by Dominion Headquarters, that I would commence my meetings at 7 p.m. as television had told us that they had equipment that would enable them fo put the essence of each night's meeting on the 9:30 p.m. news.if we got it early enough. after a week it was apparent that what they were going to do was put what they saw as the essence of the meeting on the news rather than what we wanted them to show. We decided during the second week that the difficulties of getting people to a meeting by 7 o'clock outweighed the benefit we were getting from television and so for the last week we changed our meetings to 7:45 p.m. Television coped and got whac they wanted from the later meetings, apparently as easily as they had from the early meetings. reer sce Sense to have a ticket only meeting for the opening meeting apart from the unfortunate accident of a policeman xemoving a man who interjected almost inaudibly, but after the disaster in Rotorua, when I was told during the afternoon that there was a waiting list of 200, only to be faced with nearly that number of empty seats inthe hall, it became apparent that the ticketing operation was not working. I do not blame the electorates, at Divisional level and at Dominion Headquarters, the organisation should have been put in place to make certain that tickets issued to €lectorates and branches were followed up, and that any tickets not distributed were overlapped by excess tickets issued where they were able to be distributed. Television fastened onto those empty orange-coloured seats at Rotorua and played that tape over and over again. It was not even the Rotorua electorate that was at fault because those tickets were distributed to surrounding electorates as well. The Wellington opening was a good meeting and those who Suggested that there was less enthusiasm than at Lange's meeting overlooked the fact that it was an address to television rather than to the hall. We have done this every time in recent elections with good effect. As in 1981 we agreed that I would concentrate on solid material. It paid off in 1981. In this election it paid off only in the last week when according to the Heylen Polls it appears that we moved public opinion from 178 against to 6% against. Even at the Wellington Opening meeting the organisation was adrift. Television wanted my entrance at 4 precise time. Hugh Templeton on the platform was not aware of that fact and so we had the embarrassing situation of the crowd being raised to a pitch of enthusiasm, while the Prime Minister was still waiting for the signal from television to enter the hall. The Hamilton meeting was a good one with a good attendance and although the news media played it down it was used by me deliberately to publicise some important detail regarding supplementary minimum prices, on the night when the Leader of the Opposition was making his opening. The Gisborne meeting was the best that I have ever had in Gisborne and it was the boundary changes rather than any defect of campaign or organisation that defeated Bob Bell. The Hastings meeting was superb, marred by the fact that although the divisional secretary was present the Mayor who chaired the meeting did not know that there are no questions at these meetings until I told him upon which he promptly announced it with a negative impact. He did not know that there was going to be a vote of thanks, let alone who was going to move it, so that the Hastings candidate had to stand up after the Mayor had closed the meeting and move a vote of thanks. This is basic organisation and was a major failing throughout the campaign. The Whangarei and Levin meetings were both one hundred percent. I could not see us losing either of those seats. It became apparent to me, however, following the Rotorua meeting, that the detailed organisation from Dominion headquarters through the divisions was inadequate. Each day, therefore, I rang the President and General Director who spoke to me together to tell them of the inadequacies of the previous night and to implore them to see that they did not continue. We never ever finally got it right. On the Tuesday of the last week I rang John Tremewan, the divisional secretary in Auckland, to confirm with him the time that I would be leaving my hotel and arriving at the St James Theatre. He was horrified when I told him that I would arrive at 7:40 p.m. At that time, two days before the meeting, he was still under the impression that the meeting was due to start at 7 p.m. - a decision which had been altered about a week previously. It turned out that the change had been communicated verbally to a Dominion Councillor in Auckland who had been asked to pass it on to the divisional secretary. In Christchurch on a very wet night I was greeted by the acting divisional chairman on arrival at the hall with the news that the hall was about two-thirds full. I blame no-one for this. It was a combination of the weather, the early 7 o'clock start, and the ticketing system which by then had been given away. We let everyone in to the Christchurch Town Hall and in the event ended up with a hail that was perhaps 80% full but with alot of opposition. At that stage of the campaign that was better than a fully ticketed ball of National supporters. We should not use ticketing in the future except at the opening televised meetings, that is, provided we have a Leader who can handle a mixed audience of about 2,000. . dt New Plymouth when I arrived at five minutes to seven I found Ewe Policemen on the door checking the tickets of everyone who entered. I told them to stop. The Timaru lunch-time meeting was, as has been the case in the past, first class, both as to attendanne and as to atmosphere, The one division where Svervthing went particularly well wae Otago/ Southland. The meetings were filled to overflowing and the arrangements were perfect. part from the original message 1 have nO regrets about my own television presentations. we deliberately went for materia) qagher than an emotional presentation and we did what we intended. qhe impact of this was seen in the move back to National during fhe last week. We expected it but ue did not realise how far behind we were, ADVERTISING quite early when they realised that other Professionals were being involved had it not been for Fred bosies Personal friendship with ar etatio advertising was the best, apart from the excessive use of the President. We make no impact when we lead our advertising with someone who is not a candidate fon Parliament, particularly in a long spoken commercial. She television commercials were bad and were not the responsibility of the agency. They were soft and unconvincing, Straight shots of think big projects, accompanied by graphs of projected earnings the very beginning. qo Labour Party's graphs, although erroneous and dishonest, were nevertheless effective. zn the Week before election day an appalling and most destructive article appeared in the Wellington “Evening Post". the headline "New National Party election advertising for this week of the campaign shows New Zealand the shape of the Party's leadership to come if the Government loses the election. The new advertisement screened on television on Monday night for the first time, featured the Deputy Prime Minister, Mr McLay, and the Labour Minister, Mr Bolger. Party sources indicated yesterday the advertise- ment was made only last Friday in an attempt to counter what National perceives as a Labour swell abroad, primarily indicated by opinion poll after opinion poll. The political line-up in the advertisement - once again lacking the Prime Minister, Sir Robert Muldoon - is the one which will take over if National is beaten by more than one or two seats on Saturday, the sources said. It was indicated to the Post today that feeling both within the Caucus and in the Party at large is such that MPs will be quite unforgiving to Sir Robert who has led National since 1974 if he loses." The article went on to describe the content of the advertisement which, I repeat, was a poor one. It ended with this quote: “Today the Labour Party's Communications Director, Mr Simon Walker, commented on the continued absence in National's advertising of the Prime Minister. That showed the Party considers him a vote loser, he said. The new advertisement which ran down Labour was born of puzzled desperation. It is certainly not going to rattle us. At present it seemed unlikely Labour would react to this divisive and desperate approach." Asked ahout the desperation claim Mr Barrie Leay, the National Party General Director said: “This was all done right at the beginning (of the campaign). There is hardly any desperation in that." If it was done in the beginning of the campaign I for one knew nothing of it and my inquiries during the last week of the campaign of the President and the General Director did not reveal that fact. ~ I know the journalist, Suzanne Carty, well enough to know that her quote of "Party sources" would be accurate. If those sources were identified, or had the courage to identify themselves, they should forthwith be removed from any office they may hold. Publication of this story was devastating to the chances of any National candidate in the circulation area of the “Evening Post". The newspaper advertising was done under pressure and did not turn out well. We were the only Party that had nothing in the first week and if the reason given to the agency, namely that we did not have the money, was correct then we should have done it anyway It was in the first week before the campaign proper started that we lost the election. me fdvertisement in the last week "Who Needs Him" should never have been published. hen Fred Dobbs saw it he tried te stop it and I had the same reaction. The President took the vier that faenough it was bad, having given it to the newspapers they would have a big story if we withdrew it. It should never have bec given to the newspapers by anyone with any political acwaes” by the Leader. That rule was broken consistently on thie occasion and we suffered accordingly. the pamphlets were. with the exception Of ,the original booklet, adequate without being inspiring. They made little impact on the campaign. if the first television commercial was insipid the second was tosses; jt Mnew nothing of it until I saw it on the screen, The as the radio, namely, that she was not a candidate fae office, Rolger's appearance was dull and I was later told thet he was ill at the time that he did it. Tabour's theme was consistent and emphasised a Government and a beader that had come to the end of their time. The othex two parties concentrated even more on the Leader. The theme wan sale~ able even though subsequent events have already shown the public that they made a mistake in buying it. ORGANISATION The organisation was patchy and it was the Labour Party that was deady for a snap election and not the National Party. ‘we had”= warning in December of last year and we should have’been further ahead with our preparations. The electorates were not told of any need for urgency. Kaipara with a selection for a new member raked up a record membership. My own electorate, Tamaki, picked oP 200 members in one afternoon and we found that wherever’ ve eieegSSed People were prepared to join and rejoin. In most electorates membership was down because of a failure tose the normal canvassing work as much as and indeed more than because the electorate had tirned against the Government. Fund raising was not difficult and business house fund raising in divisions was at a high and sometimes a record level. Donations to the central fund were, I believe, at a record level for that time of the year and with'one or two exceptions the major industries gave more than ever before. Some electorates wee better organised than in earlier elections but the majority were pening mere was no clear picture of a directive going out tren Dominion headquarters to divisions, to electorates, to branches, that we had to be prepared for an carly election. serie Probably inevitable in Government that the Party organisation, Particularly at the highest level, was concentrating excessively on policy and the alleged deficiencies of the Government rather -9- than on organisation. I do not know of any seat that was lost by Poor organisation, indeed the organisation was good in one or two where we lost by small margins, but we are going to have to do better if we are to win back some of the marginal seats that we lost. A tragedy was East Cape where I and my colleagues in the Parliamentary party had no idea how close the seat would be until aft the election. We thought it was safe when the General Director who was involved in setting the boundaries should have told us otherwise. We put an inadequate effort in there at every level. East Coast Bays was another seat that we should have won but the campaign fell into the hands of enthusiastic amateurs who believed that they could separate their candidate from the mainstream of Party’ endeavour. If Dominion headquarters agreed that Quigley should campaign in that and two adjacent seats they should not have done so. His visit was a disaster, particularly when in the businessmen's lunch organised by the East Coast Bays electorate, two of those attending went on television to say that they were voting against National. No-one did more damage to the National Party during the campaign than Quigley, not even the Leader, and Quigley may even have thought he was being helpful. THE MEDIA The media were uniformly hostile. Journalists today are trade unionists first and professionals second, with very few exceptions. The pressure that we deliberately put on television earlier this year had some effect in getting a better balance than was the case in 1981 and some of their bias needed to be quite clever. The campaign in Wellington Central was killed in the early stages by a "Close-up" presentation which showed Rosemary Young Rouse as a toffee nosed rich wife, and Fran Wilde as the struggling solo mun. I believe the contrast was deliberately contrived by television. I had to struggle with the television crews every day in order to get positive material from my campaign recorded. I did this with some success because they were aware that I had a number of formal complaints registered with the Corporation. This kind of approach should not be necessary, but there is little that we can do about it. The print media were particularly bad and some members of the Parliamentary Press Gallery are today openly biased towards the Labour Party. Even the Editors have little ability to control them let alone the proprietors of the newspapers. By far the best newspaper in this respeet is the Christchurch Press and the other totally independent agency is Eric Benton's SOPAC. All of the rest are suspect including both radio and television. It may be that public opinion will pull them around somewhat. during the term of a disastrous Labour Government, but their personal attitudes are not likely to change. ee = i00e Private radio is much better and Radio Pacific today has moved from the extreme left into our corner. The Board of BCNZ, every- one of whom was appointed by the National Government, including one Dominion Councillor, have been a bitter disappointment as has the Chairman. They have totally failed to eliminate political bias from their employees. THE RESULTS Social Jones National Labour Credit Party The actual result out 365 433 78 124 of 1000 polled. If there had been no Jones Party and its voters went back to their original allegience (with new add 52 27 45 voters split on the — —_— _— —_ 1984 pattern) 417 460 123 124 We would have lost less seats but we would have lost comfortably. It is important to note that Social Credit plus Jones Party 202 was no more than Social Credit 1981 210- A detailed analysis would give different results electorate by electorate and Jones Party votes did lose us some seats, but not, I believe, the election. It follows that we cannot win simply by getting Jones Party voters back. We must take votes from Labour. Some of them are there to be taken and we can take them. Of Labour voters 38 came from National, 57 from Social Credit and 48 were new voters. We did get some back. Of National voters 24 voted Labour in 1981, 26 Social Credit, and 27 were new voters. Labour polled best with new voters with National second and Jones Party close behind third. These votes are volatile for the next election. . Labour polled 21 more new voters than national and that 2.18 on the 1981 result was enough to change the Government. Why did they get them? Unemployment? - that was consistently the No. 1. issue in the polls. Note that the post election poll shows unemployment as the only issue on which the new Government polls badly. Young people who have jobs know plenty who do not. Yet unemployment was high in 1981 and in 1984 it was diminishing. In 1981 however, we had not had it so long and we failed to sell the 25% drop in unemployment this year. The young people do not focus on our propa ganda. Labour took 38 from us and we took 24 from them. The 38 are hard to pinpoint. We had the same leader. Perhaps Lange appealed more i) =li- than Rowling, perhaps it was the reconciliation theme, or perhaps again it was three more years of high unemployment and the threat of it for the voter and his friends and family. Those who came from Labour to us in some cases saw the reality of the new major projects e.g., in New Plymouth, or our action at Marsden Point e.g. Whangarei or maybe Lange and his policies - defence and ANZUS or lack of economic policy turned them. The net movement between Labour and National of 1.4% would haye been enough to change the Government on its own. 7 The collapse of Social Credit, giving Labour 57 and National 26, a@ net change of 3.1%, would also have been enough to change the Government. It is more difficult to guess reasons here as the 1981 xyeason for voting Social Credit is relevant. Possibly the declinir impact of Beetham was part of it. We believe we know why 44 went from National to the Jones Party. We can guess that education or defence took 16 from Labour to the Jones Party, and 40 protest voters from Social Credit went that way as well. We know that we antagonized many special interest groups from doctors through teachers to railwaymen. On the basis of all of the above a case can be made that as in every country of our type except the State of Queensland where Joh governs with about 308 of the first count vote, the time had finally come for the Government in power in 1975 to go out. The xeasons are not as simple as that. The way back is even less simple and will be influenced by the performance of the new Government. THE CHANGE OF GOVERNMENT A great deal of inaccurate material has been written and spoken with regard to the change of Government and particularly the events leading up to devaluation of the New Zealand dollar, the results of which should bring down the Lange Government at the end of its first term. Prior to the announcement of the election the dollar was under no Pressure whatsoever. Our external credit was on the top line and, as I pointed out during the campaign, we were borrowing abroad at the lowest rates of any country, including specifically Australia. This was to some extent due to the fact that the Assistant Secretar of the Treasury, John Cook, who handles these matters, is a world renowned expert who, because we are not under pressure, goes on the market when it is right, regardless of whether we need'the funds or not, and invests them to our best advantage until such time as they are needed. He is one Treasury officer whose advice I never once over-ruled. Immediately the election was called funds began to move out of New Zealand. My first report from the Reserve Bank referred to the perception in the business community that an incoming Labour Government would devalue. It was excessively alarmist. This was ? . = 12 = before Mr Douglas inadvertently released a paper in which he advo- cated a devaluation. His views and the views of his colleagues eno wet mown. His subsequent’ denial, and the denial of Mr Lange had little effect, and the drain on the dollar continued throughout the election campaign, although at a lower rate than initially about 10% on average of the rate of the first day which caused such a panic in the Reserve Bank. The measures I adopted slowed the outflow down. It became apparent that the movement was being faused by legitimate payments being made early and receipts being held out of the New Zealand dollar. This inevitably put pressure on the cash position of those who were. taking these steps and the end of June saw a minor crisis in the banking system. ghe first advice of Treasury and the Reserve Bank was to devalue, or alternatively, take defensive measures. I opted to take defensi: gould. be held in the event of our winning the election or alterma- tively in the event of an incoming Prime Minister making a firm statement with me that the dollar would not be devalued. In either of these events the turn-around would be rapid, as indeed proved & be the case. If you pay your overseas accounts early and you do not remit your overseas earnings you quickly run short of cash t< pay the wages. Contrary to some allegations, Cabinet was informed and consulted on this matter. On the Sunday after the election I was informed that Treasury and the Reserve Bank wished to consult with me acd i arranged that for the Monday morning. The banks closed for foreign exchange dealings that day on my authorisation but as a Reserve Bank decision. When we met I was given the current posi- tion in general terms but no recommendation was made to me. °y then rang Mr Lange, who was due to see the Secretary of the Treasury and the Governor of the Bank later that morning and recommended te him that we make a joint statement that we would not devalue, He said he would give me an answer later that day. My first information that my proposal had been rejected was a felevision news item of Griffin, the Radio New Zealand reporter, Saying to the television camera that Mr Lange had rejected my advice. I was under the impression that we could hand over the Government and that a new Minister of Finance would devalue although it was clear to me when Griffin spoke that the devaluation was now inevitable. The following morning I learned from Mr McLay that an obscure clause in the Civil List Act, apparently unknown even to such an expert as Professor Quentin Baxter, provides that no-one can become a member of the Executive Council until the Writ is returned and he thus becomes a Member of Parliament. jE was the duty of the outgoing Government at that point to take instructions from the incoming Government. The effect of this exchange of views was, however, to cement in the public mind the fact that the outgoing Government did not wish ERe devaluation to take place and indeed saw no need for it, and that the incoming Government was not prepared to even try to avoid it, In the long run this fact will be important and valvable to us. — 13. = ghe Position of our reserves was such that we could have made the statement and waited a day or two to see whether it had the effect of turning the position around. No xisk would have been involved in doing that. ‘We had 9 days' reserves at the rate of outflow of fhe last week and a month at the rate for most <2 June and July following my initial policy measures. Tt appeared likely in any case that most of the current payments that could flow out had gone prior to the election although the Reserve Bank had not com- piled statistics on this, an extraordinary lapse for which I have already criticised them. The incoming Government also took Treasury advice on removing interest rate restrictions with the results that we have now seen. fhe combined effect of these two moves will bring us into double figure inflation, and I believe a 5% quarter, by the second quarter of next year, unless strong measures are taken to hold wages down, an event which is unlikely. Toeg yyenat happened in Britain between November VoG7 and February aces whereas in New zealand at the same tine oun November devaluation had been preceded by budgetary measures during the year which were biting at the time of the devaluation. We had a remove tre Gevaluation; Britain's was a failures whech helped to remove the Labour Government of Harold Wilson and instal Ted Heath. The first weeks of the Lange Government saw the renunciation of other promises, such as the promise to remove sales tax from various commodities, accompanied by some rather desperate policy announce- ments in respect of such things as ANZUS and the South African Consulate, designed no doubt to attempt to pacify the left wing, which clearly opposes the devaluation and ive results, and it is simple practical politics that any Party which, in this as a poimenetudes the social content from its policy eef1 remain highty Tenent Opposition. after its initial blunders se is highly likely that the Lange Government will attempt to go to the ghposite extrems in the future. On policy mattece the inevitable impact of the actions of the incoming Govermene will as it becomes felt over the next six-nine months bring voters flooding back to the National Party, including, 1 believe, many, or even most of those, in the business community who left uo during the last two years. The farmers are likely to move at least as rapidly when the full effects of the devaluation and the freeing up of interest rates and wage increases become apparent to thes, THE WAY AHEAD faking a line through our experience of the Kirk/Rowling Government it is too early for us to begin to put together election policy. The Labour Party last year and this year casa che reasoning that Sau if they announced economic policy the Government could either steal if or knock it over. A similar situation exists today, but leaving it until late in election year is leaving it too late. Last time we defined the issues in 1974 and highlighted them throughout 1975 with the Government on one side and the National Opposition on the other. That achieved the biggest turn-around in New Zealand's political history, and the timing seems appropriate again. Some regard should be had, however, to the possibility of an election at the end of 1986 so that we should be looking at the issues privately if not publicly about the middle of next year when the first impact of the new Government's policies is clearly apparent. hg Policy Committee should, however, continue to meet regularly and branches and electorates should be encouraged to chansel information on public attitudes to the Policy Committee. This will Pe even More important now as we are not represented in Caucus by members from considerable slices of territory. It should be emphasised that what is required is the views of the public, both members and non-members, rather than the personal views of those making the report. It is Probably too late to do much with member- ship this year in the aftermath of the election defeat but next year members will be easy to get. Z believe that this Council should consider setting up an ad hoc committee on organisation, chaired by the President, with memboc- ship of the divisional chairmen, the Leader, Deputy Leader and a back-bencher to review the whole of the Party's organisational performance and structure. ab sp Mob ercd, , ge have to accept th® fact that Over much of the country our Party crganisation is nowhere near as strong as it used to be in years past. In a number of electorates, and my own is one, organisational strength, membership, and finances have been kept up well. The greatest decline has probably been in seats that have not been held by National for some years. We need the members and we need the money. Members in safe Labour seats talk to uncommitted voters prpmarginal seats. They should not be written off as unnecessary. I believe that it was a mistake to cease stating our total members ship publicly. Even at a low point we can greatly outnumber all of our opponents, including the fictitious figures put out by the Jones Party. Organisation should, however, start from the top and by that I mean Dominion Headquarters, and it would be the task of the ad hoc committee that I referred to, to see that that is done, and for the Dominion Executive to continue to monitor its progress, i regret to say - and this view is widely shared in Caucus’ that the General Director has not been strong on organisation. ‘It is hard to see how a General Director with wide personal business interests and a deep interest in day-to-day Government policy, i i istration or the organisational Taam fold that the finances of the Party are in good shape but that the financing of the headquarters building is not. I have not seen details of either of these matters for a considerable time and I believe that the September Dominion Council should have in front of it a full statement of all aspects of the Party's finances. Fortuitiously, as in 1958, our opponents immediately upon becoming the Government, have given a the Geepon which, properly goods will see a further change of Government. after three years. We Must use that poser with care and in gue Eine supplement it with Positive alternative Policies on specific issues. Ip ghe meantime, both in che Caucus and in the Party organisation, we must accept the fact that our Opponents are the Labour Government: and, in Public, only the Labour Government , Our internal differences of opinion should be dealt with in private,