Black Budget (New Zealand)
Encyclopedia
In New Zealand
, the term Black Budget refers to the government budget
of 26 June 1958 in which Finance Minister Arnold Nordmeyer
increased taxes on beer
, tobacco
, car
s and petrol.
The second Labour government
took office in 1957, the 32nd Parliament. Within a year, the government was confronted with a balance of payments
crisis caused by the collapse of the price of butter in Britain
(at the time New Zealand's largest export market). Nordmeyer's colleagues were reluctant to cut government spending or break expensive election promise
s, so Nordmeyer was left with little option but to raise taxes.
The budget increased social security benefits and hurt least those taxpayers on lower incomes and with dependent children. However, it was very unpopular, not least with Labour
's traditional working-class supporters. The term 'black budget' is believed to have been coined by union leader Fintan Patrick Walsh, but was taken up by the National Party
opposition, and became the commonly used term for the budget.
The government's popularity never recovered from the budget, which is generally believed to have cost it the 1960 election
. Nordmeyer was forever tainted by the 'black budget', which gave him a reputation as a puritan
ical 'wowser' who was opposed to simple working class pleasures such as beer and cigarettes. Despite this, he became the leader of the Labour Party in 1963, but was replaced by Norman Kirk
less than three years later.
In 2010, DB Breweries
ran an advertising campaign attributing the creation of one of its brands, DB Export Gold to the increased taxes on beer introduced by the 'black budget'. However, the brewery was forced to pull the campaign from Television and Internet in February 2011 (though Newspaper ads are unaffected) after the New Zealand Advertising Standards Authority partially upheld a complaint laid by Progressive Party
leader Jim Anderton
that the campaign was "unethical, inaccurate and distorted history".
New Zealand
New Zealand is an island country in the south-western Pacific Ocean comprising two main landmasses and numerous smaller islands. The country is situated some east of Australia across the Tasman Sea, and roughly south of the Pacific island nations of New Caledonia, Fiji, and Tonga...
, the term Black Budget refers to the government budget
Government budget
A government budget is a legal document that is often passed by the legislature, and approved by the chief executive-or president. For example, only certain types of revenue may be imposed and collected...
of 26 June 1958 in which Finance Minister Arnold Nordmeyer
Arnold Nordmeyer
Sir Arnold Henry Nordmeyer, ONZ, KCMG , born Heinrich Arnold Nordmeyer, was a New Zealand politician. He was leader of the Labour Party for three years while it was in Opposition.-Early life:...
increased taxes on beer
Beer
Beer is the world's most widely consumed andprobably oldest alcoholic beverage; it is the third most popular drink overall, after water and tea. It is produced by the brewing and fermentation of sugars, mainly derived from malted cereal grains, most commonly malted barley and malted wheat...
, tobacco
Tobacco
Tobacco is an agricultural product processed from the leaves of plants in the genus Nicotiana. It can be consumed, used as a pesticide and, in the form of nicotine tartrate, used in some medicines...
, car
Čar
Čar is a village in the municipality of Bujanovac, Serbia. According to the 2002 census, the town has a population of 296 people.-References:...
s and petrol.
The second Labour government
Second Labour Government of New Zealand
The Second Labour Government of New Zealand was the government of New Zealand from 1957 to 1960. It was most notable for raising taxes on alcohol, cigarettes and petrol, a move which was probably responsible for the government lasting for only one term....
took office in 1957, the 32nd Parliament. Within a year, the government was confronted with a balance of payments
Balance of payments
Balance of payments accounts are an accounting record of all monetary transactions between a country and the rest of the world.These transactions include payments for the country's exports and imports of goods, services, financial capital, and financial transfers...
crisis caused by the collapse of the price of butter in Britain
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
(at the time New Zealand's largest export market). Nordmeyer's colleagues were reluctant to cut government spending or break expensive election promise
Election promise
An election promise is a promise made to the public by a politician who is trying to win an election. They have long been a central element of elections and remain so today...
s, so Nordmeyer was left with little option but to raise taxes.
The budget increased social security benefits and hurt least those taxpayers on lower incomes and with dependent children. However, it was very unpopular, not least with Labour
New Zealand Labour Party
The New Zealand Labour Party is a New Zealand political party. It describes itself as centre-left and socially progressive and has been one of the two primary parties of New Zealand politics since 1935....
's traditional working-class supporters. The term 'black budget' is believed to have been coined by union leader Fintan Patrick Walsh, but was taken up by the National Party
New Zealand National Party
The New Zealand National Party is the largest party in the New Zealand House of Representatives and in November 2008 formed a minority government with support from three minor parties.-Policies:...
opposition, and became the commonly used term for the budget.
The government's popularity never recovered from the budget, which is generally believed to have cost it the 1960 election
New Zealand general election, 1960
The 1960 New Zealand general election was a nationwide vote to determine the shape of the New Zealand Parliament's 33rd term. It saw the governing Labour Party defeated by the National Party, putting an end to the short second Labour government.-Background:...
. Nordmeyer was forever tainted by the 'black budget', which gave him a reputation as a puritan
Puritan
The Puritans were a significant grouping of English Protestants in the 16th and 17th centuries. Puritanism in this sense was founded by some Marian exiles from the clergy shortly after the accession of Elizabeth I of England in 1558, as an activist movement within the Church of England...
ical 'wowser' who was opposed to simple working class pleasures such as beer and cigarettes. Despite this, he became the leader of the Labour Party in 1963, but was replaced by Norman Kirk
Norman Kirk
Norman Eric Kirk was the 29th Prime Minister of New Zealand from 1972 until his sudden death in 1974. He led the Parliamentary wing of the New Zealand Labour Party from 1965 to 1974. He was the fourth Labour Prime Minister of New Zealand, but the first to be born in New Zealand...
less than three years later.
In 2010, DB Breweries
DB Breweries
DB Breweries is a Singaporean and Dutch brewing company operating in New Zealand. It was founded in 1930 by Sir Henry Kelliher and W Joseph Coutts with the purchase of Levers and Co. and the Waitemata Brewery Co. in Otahuhu. The company mainly produces pale lager...
ran an advertising campaign attributing the creation of one of its brands, DB Export Gold to the increased taxes on beer introduced by the 'black budget'. However, the brewery was forced to pull the campaign from Television and Internet in February 2011 (though Newspaper ads are unaffected) after the New Zealand Advertising Standards Authority partially upheld a complaint laid by Progressive Party
New Zealand Progressive Party
Jim Anderton's Progressive Party , is a New Zealand political party generally somewhat to the left of its ally, the Labour Party....
leader Jim Anderton
Jim Anderton
James Patrick Anderton, usually known as Jim Anderton , is the leader of the Progressive Party, a New Zealand political party. He has served in Parliament since 1984. He served as Deputy Prime Minister from 1999 to 2002 and is currently also the sitting Father of the House, the longest...
that the campaign was "unethical, inaccurate and distorted history".
External links
- Arnold Nordmeyer in the Dictionary of New Zealand Biography
- The Oxford Illustrated History of New Zealand, edited by Keith Sinclair.