New Zealand: The Expansion of the State in a Liberal Welfare Regime

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Internationally, New Zealand and Australia are often coupled together in some kind of an Antipodean version of the British welfare system. Yet, although they may be placed within the same “liberal welfare regime” camp, and both countries share a commonwealth heritage that has informed the development of their welfare states, there are significant differences in policy objectives, policy design, and institutional structures (St John 2004). In contrast to Australia’s federal system of government, New Zealand has a unicameral government that, until 1993, was elected via a first-past-the-post electoral system.1 This system of government proved conducive to extreme policy swings and allowed some unusual experiments to be undertaken in both economic and social policy, including attempts to use private mechanisms to achieve public objectives. Although there is now some evidence of a trend toward convergence in some components of social policy across the two countries (McClelland and St John 2006), New Zealand remains unique and worthy of examination in its own right. Accordingly this chapter focuses primarily on New Zealand in the belief that its particular experience of the public-private dichotomy may be of interest to other countries. Some comparisons are drawn with health and pensions policies in Australia to illustrate the rather different approaches to social policy that have been taken in these neighboring countries.