{"story":["The Great Depression hit New Zealand hard. Export prices collapsed, farmers struggled with their mortgages and urban unemployment soared, and discontent erupted in riots (see Depression riots). In September 1931 the United and Reform parties combined to form a coalition government, and Labour, now the official opposition, won 34% of the vote at the election that December. When Labour's leader, Harry Holland, died in October 1933, he was succeeded by Michael Joseph Savage, an Australian-born former brewery cellarman who had held the Auckland West seat since 1919. NZHistory contrasts the 'hard-line' Holland, who had scared middle-class voters, with the soft-spoken Savage, who personified Labour's diluted socialism, or 'applied Christianity'. In 1927 Labour had dropped land nationalisation and recognised farmers' right to freehold, and its promise of cheaper credit and guaranteed prices helped it break into rural strongholds that had previously been closed to it. An alliance with the Rātana movement, begun in 1932, did much to win it the support of most Māori.","The general election was held on 27 November 1935. In Auckland, Labour supporters roared 'off with his head' as each government defeat was confirmed on the results boards outside newspaper offices. Labour won 46% of the vote; NZHistory gives the Coalition 33% and Te Ara 34%. Labour took 53 seats, and with two Rātana members elected in Māori seats it held 55 of the 80 seats in Parliament. Savage became prime minister on 6 December, with Peter Fraser as his second in command. The new government immediately paid a Christmas bonus to the unemployed and to people on charitable aid, and in 1936 followed what Savage's biographer Barry Gustafson calls 'a landslide of legislation'. The Reserve Bank was brought under state control, the Industrial Conciliation and Arbitration Act was amended to provide a 40-hour working week and compulsory union membership, commercial broadcasting was nationalised and dairy farmers were paid guaranteed prices. It also began to nationalise the Bank of New Zealand, coal mines and domestic air services, raised wages and spent more on public works. Te Ara notes that an economic recovery was already under way when Labour took office.","In 1936 the government planned for private builders to put up 5000 state rental houses, partly to reduce unemployment. On 18 September 1937 most of the Cabinet helped David and Mary McGregor move into the first of them, at 12 Fife Lane in the Wellington suburb of Miramar, and Savage carried a dining table through a cheering crowd. By 1939 state houses were being finished at a rate of 57 a week, with 10,000 applicants on the waiting list. The cornerstone of Labour's welfare programme was the Social Security Act 1938, which introduced universal free health services and extended benefits for the aged, sick and unemployed (see Social Security Act). At the 1938 election Labour's share of the vote rose from 46% to almost 56%, the highest won by any party since 1908.","Savage had been diagnosed with colon cancer in August 1938 but delayed surgery until after the election, and he had the operation on 4 August 1939, a month before New Zealand went to war (see New Zealand declares war on Germany). He was also under attack from the Labour MP John A. Lee, who was expelled from the party at its conference by 546 votes to 344. A little more than 24 hours later, early on 27 March 1940, Savage died at his home in Wellington. His body lay in state at Parliament for two days, and on 30 March a special train began carrying it to Auckland, a journey of 28 hours with 20 stops at which crowds of up to 12,000 filed past the casket. NZHistory estimates that 200,000 people lined the route to his burial site at Bastion Point (Takaparawhau). Fraser succeeded him and led the country through the war, introducing conscription in July 1940 and forming a war cabinet that included two members of the opposition National Party.","Labour narrowly won the 1946 election, but voters were tiring of shortages and restrictions, and Fraser's insistence on compulsory military training left the party split. NZHistory dates the next election to 30 November 1949, and Te Ara's history of the National Party also places it in November, although Te Ara's biography of Fraser says December. National, led by Sidney Holland, won 52% of the vote and 46 seats to Labour's 34, and Holland became prime minister on 13 December, having pledged to keep most of Labour's social welfare policies. Te Ara concludes that the first Labour government set the terms of political debate for the next 40 years, and that neither its welfare state nor its mixed economy was seriously challenged until the 1980s. Its 1935 victory also created the contest between Labour and National that dominated politics until proportional representation was introduced in 1996. Gustafson calls Savage 'undoubtedly the most loved of all New Zealand's prime ministers'; for decades after his death his photograph hung in thousands of New Zealand homes, and he lies beneath the Savage Memorial at Bastion Point."],"sources":[{"title":"Labour wins power","url":"https://nzhistory.govt.nz/first-labour-government-wins-power","publisher":"NZHistory, Manatū Taonga"},{"title":"Michael Joseph Savage","url":"https://nzhistory.govt.nz/people/michael-joseph-savage","publisher":"NZHistory, Manatū Taonga"},{"title":"First state house opened in Miramar","url":"https://nzhistory.govt.nz/the-first-state-house-in-miramar-wellington-is-officially-opened-by-michael-joseph-savage","publisher":"NZHistory, Manatū Taonga"},{"title":"Funeral procession for Prime Minister Savage","url":"https://nzhistory.govt.nz/the-funeral-of-michael-joseph-savage","publisher":"NZHistory, Manatū Taonga"},{"title":"Election of first National government","url":"https://nzhistory.govt.nz/labour-pains-the-first-labour-governments-historic-term-comes-to-an-end","publisher":"NZHistory, Manatū Taonga"},{"title":"Peter Fraser","url":"https://nzhistory.govt.nz/people/peter-fraser","publisher":"NZHistory, Manatū Taonga"},{"title":"Sidney Holland","url":"https://nzhistory.govt.nz/people/sidney-holland","publisher":"NZHistory, Manatū Taonga"},{"title":"Savage, Michael Joseph","url":"https://teara.govt.nz/en/biographies/4s9/savage-michael-joseph","publisher":"Te Ara — the Encyclopedia of New Zealand"},{"title":"Fraser, Peter","url":"https://teara.govt.nz/en/biographies/4f22/fraser-peter","publisher":"Te Ara — the Encyclopedia of New Zealand"},{"title":"Labour Party – First Labour government, 1935 to 1949","url":"https://teara.govt.nz/en/labour-party/page-2","publisher":"Te Ara — the Encyclopedia of New Zealand"},{"title":"History – Liberal to Labour","url":"https://teara.govt.nz/en/history/page-5","publisher":"Te Ara — the Encyclopedia of New Zealand"},{"title":"Housing and government – State loans and state houses","url":"https://teara.govt.nz/en/housing-and-government/page-2","publisher":"Te Ara — the Encyclopedia of New Zealand"},{"title":"Health and society – Health services","url":"https://teara.govt.nz/en/health-and-society/page-4","publisher":"Te Ara — the Encyclopedia of New Zealand"},{"title":"Second World War – A more intense effort, 1940","url":"https://teara.govt.nz/en/second-world-war/page-3","publisher":"Te Ara — the Encyclopedia of New Zealand"},{"title":"Labour Party (1966 Encyclopaedia of New Zealand)","url":"https://teara.govt.nz/en/1966/political-parties/page-8","publisher":"Te Ara — the Encyclopedia of New Zealand"},{"title":"Law and the economy – Employment law","url":"https://teara.govt.nz/en/law-and-the-economy/page-4","publisher":"Te Ara — the Encyclopedia of New Zealand"},{"title":"Workforce composition – Hours of work and productivity","url":"https://teara.govt.nz/en/workforce-composition/page-9","publisher":"Te Ara — the Encyclopedia of New Zealand"},{"title":"National Party – Formation and rise","url":"https://teara.govt.nz/en/national-party/page-1","publisher":"Te Ara — the Encyclopedia of New Zealand"}]}