Chapter 4

Rogernomics and disintegration

A day after the election Lange and his senior colleagues were given the bad news. Currency traders were selling New Zealand dollars and a devaluation was urgently needed to shore up the economy. Officials advised the dollar needed to be devalued by 20 per cent immediately.

Muldoon, who was technically still Prime Minister, refused to act, but under pressure from his own caucus he agreed to the incoming Labour Government’s demand to devalue. That crisis, which was handled with aplomb by Lange and Douglas, was the launching pad for the wave of radical economic reform which became known as Rogernomics.

Annette, along with other Labour MPs, was kept well informed about the response to the foreign exchange crisis, even if at that stage in her political career she knew little about economics. As well, there was agreement that the economy Labour inherited from Muldoon had to change. Labour had campaigned on taking a new economic approach during the election.

Change is what they got, but not necessarily the change everyone, particularly Labour voters, had expected. One problem was that because Muldoon called a snap election for July, Labour was unprepared for the 1984 campaign.

Its economic policy was undeveloped and, given there had been no large-scale policy work, there was not a broad agreement within the party about what economic approach Labour should take. That was to leave Douglas initially free to develop his own free-market reforms largely untroubled by his Labour colleagues. By the time they cottoned on, it was largely too late to change direction.

In those early days Annette was part of a centre-left faction in the Labour caucus. The group included Jim Anderton, Helen Clark, Trevor Mallard and Fran Wilde among others. Immediately after the election they met in Wilde’s house in Calgary Avenue, just off Tinakori Road in Wellington.

Both Mallard and Annette had been mentored by Wilde and promoted by Anderton. In their early meetings after the 1984 election they were keen to back Anderton and Clark as candidates for Cabinet.

But as Annette’s group met so too did other factions intent on blocking Anderton and Clark making it to Cabinet. So the Cabinet elected after the 1984 election was heavily dominated by the faction loyal to Roger Douglas and his brand of free-market economic change. It was to dominate the government throughout the first term until the Douglas–Lange split began to emerge.

Initially the economic reform process went smoothly, with many in the caucus and party more focused on Labour’s anti-nuclear policy and strong record on human rights. Fran Wilde’s Homosexual Law Reform Bill, which Annette voted for, also diverted the attention of many in the party.

Annette, like many of her fellow MPs, did not fully understand economic policy as Douglas pushed through his agenda. A close colleague, Jim Sutton, did, but he is still critical of how it was handled.

‘What we did feel, I am sure, is that we weren’t consulted by the inner core of Cabinet. We had no idea what was coming in Roger’s first budget until it was lockdown time on the night,’ says Sutton.

Many MPs supported the changes. Jim Anderton was one of the few to question Labour’s new direction and he quickly challenged Rogernomics. There were also serious reservations from the wider Labour Party, but there was no rebellion. Instead a slow resentment was building up which was to dog Labour for years to come.

The introduction of a 10 per cent goods and services tax was controversial in the Labour Party. Legislation was introduced in 1985 and the new tax came into effect in April 1986. Critics argued it would have the worst effect on low-income New Zealanders, who spent all their income on goods and services, and there was vigorous debate at Labour Party conferences. While there was strong debate, most of the party’s regional conferences and its annual conference eventually supported GST, if narrowly.

Annette supported GST too, believing it made sense to replace a range of ad hoc sales taxes with a clean tax which had no exemptions. She was less impressed by the decision to introduce a surtax on the pension and it was unpopular with the public.

People were not so angry about the surtax itself but because Labour had been dishonest by not campaigning on it during the 1984 election. The National Government Prime Minister, Jim Bolger, hit the same opposition when he retained the surtax, having campaigned in 1990 to scrap it.

One of the other significant changes taking place was the reform of the State sector, including corporatising many of the government’s businesses. The creation of state-owned enterprises (SOEs), which were supposed to run like businesses, initially did not prompt large-scale worries within the Labour caucus.

Annette did not oppose SOEs and accepted the argument they would get a better return for taxpayers. She never saw their creation as a path to privatisation, although some Labour MPs, such as Jim Anderton, did. Looking back now, though, it seems clear what was planned.

There was no discussion within the caucus that corp-oratisation would lead to privatisation, not at least until the SOEs started to be sold off in Labour’s second term. Annette has no idea whether Cabinet ministers discussed privatisation at the time they were setting up the SOEs. If they did, they never shared those discussions with their fellow Labour MPs.

In part that was a reflection of how the fourth Labour Government worked. Those who had been part of the previous Labour Government from 1972 to 1975 were determined the new government would operate differently, that the Cabinet would dominate the caucus, not the other way around.

Annette, as a new MP, just thought that was the way things worked in government. The caucus had elected the ministers to the Cabinet so expected them to make decisions. Some MPs were not to be so tolerant.

One of Annette’s first memories of a whirlwind first three years in Parliament was seeing Muldoon in person for the first time. ‘I was shocked by how small he was. I was so used to him filling the entire television screen.’

In Parliament it seemed as if something new was hap-pening every day, every week, starting with the Economic Summit in Parliament. Annette was chair of the social welfare select committee and was also on the committee appointed to set up the new Ministry of Women’s Affairs. Back ‘home’ in Horowhenua, Lloyd was appointed, on Annette’s recommendation, as EQC Earthquake Commission chair by Roger Douglas, but he continued to run her electorate organisation, while Marea became her electorate secretary. The dental nurse/tutor who confessed to knowing little about the economy was also appointed to the finance and expenditure select committee, the only woman on the committee. It was chaired by Peter Neilson (Labour MP for Miramar), and included National heavyweights like Muldoon and George Gair. ‘My earliest memory of that committee was of the three Treasury representatives who appeared before it. They were nodding, blinking and winking. That’s how I still think of them, nodding, blinking and winking. I also remember Muldoon coming into the committee room, looking at me, and saying, “Who’s she?”’

Annette’s maiden speech in the House discussed the elderly, child health, dental health and mental health, and setting up the Ministry of Women’s Affairs, but they were issues in which she had only a limited role to play in her early years.

Apart from the excitement of Parliament, Annette had two main focuses — first and foremost daughter Amanda and, second, her new home and electorate in Horowhenua. She was about to develop one of her greatest strengths in all her years as an MP — her respect for her constituents, and her preparedness to go into bat for them whenever she felt it could be justified.

There was a setback almost immediately as far as Amanda was concerned. Annette was elected in July, and in August, as the school holidays began, Amanda announced she was going to live with her father. Annette seriously considered whether this was too high a price for her to pay as a mother, but she didn’t panic. By December Amanda informed her she was coming home to live — she had developed a Cinderella complex, and believed she had become little more than a skivvy for her father, his new partner and her two sons. Annette was thrilled. ‘So Amanda came home, and basically stayed another 16 years until she was 30.’ Amanda is now married, lives in Sydney with husband Tim and Annette’s grandson William (incidentally the star attraction at Annette’s valedictory in Parliament), and she has strong and loving relationships with both her mother and father.

The Horowhenua electorate became Annette’s pride and joy for the next six years until she was dumped in Labour’s landslide loss in 1990. She became the sort of electorate MP that later served her in huge stead in firstly Miramar and then Rongotai from her return to Parliament in 1993 until her retirement in 2017. Horowhenua was marginal at best, and she knew she had to work hard in the electorate to retain the seat. Lloyd and Marea Falck were pivotal figures in her work as an electorate MP, and a young boy called Darren Hughes (later an MP in the fifth Labour Government) lived next door to the Falcks and sat in awe at her feet, even though he now denies once curtsying to David Lange, claiming it was his brother who did that.

Lloyd says: ‘Every Friday I used to buy a plastic bottle of gin, and we all (not Darren) used to sit round and drink it and write letters to the editor because in those days newspapers didn’t check. So, for example, we wrote letters from so-called National supporters who claimed they were outraged that Geoff Thompson, a known Muldoon supporter, was standing for the nomination again in 1987. I think maybe we overdid it in the end. The other thing we did was to send the paper imaginary minutes of imaginary Labour branch meetings in various parts of the electorate. I can remember the Tories going apeshit when they read that Roger Douglas had been speaking at a meeting of the non-existent Manakau branch. Talk about Donald Trump!’

From the outset Annette had the knack of attracting support from her colleagues, who provided her with all the help they could.

‘I accepted every invitation in the electorate I could. I would have opened a box of chocolates if I thought it would help.’

Horowhenua landed firmly on the New Zealand political map. Annette hosted Taste of Horowhenua in Parliament’s Banquet Hall; Tourism Minister Mike Moore was ‘absolutely brilliant’, using an uncapped fund to put money into reclaiming old Foxton; Housing Minister Phil Goff found funding for new housing in Otaki and Levin; and Deputy Prime Minister Geoffrey Palmer assigned money for a new sewerage scheme in Levin.

Mike Moore laughs affectionately: ‘I used to call her Faking. You know, Annette Faye King.

‘I first met her when she became the candidate for Horowhenua. She was very dynamic. Christ, she’d put her head into my office, and say, have you got any money lying around? She got a hell of a lot of stuff out of the system for her electorate. I had resources in Sport and Recreation, and a bit in Tourism. She got some money for this local tram or something. She was a joy to work with. She asked for things. She wouldn’t take no, but unlike some of them, she didn’t hassle you. She’d ask a couple of times, but if you told her, I can’t do that, she’d accept it.

‘She has got a good way about her. People like her. She goes well in the pubs and the bowling clubs. She flirts a bit with the old guys. Women don’t feel threatened by her. Men like her.’

Her championing of Foxton became a prototype for the way she involved herself in her electorates over the rest of her career. The carpet factory in the historic town (once the so-called capital of Manawatu, and a more important town than Palmerston North) was in trouble, and Foxton desperately needed new economic and business initiatives to give the town hope. Annette developed an important relationship with Manawatu Herald journalist Anne Hunt.

‘I met her quite early on. She was a very enthusiastic supporter of Foxton, and I have to credit her for getting me into quite a few organisations and into Tourism Foxton. She was convinced we could turn Foxton from a town that was dying because the carpet factory was in trouble into a thriving historic place with its original shop frontages still intact. Anne was innovative in her thinking and wrote very good stories. I spent a lot of time with her. She was obsessive in some ways, but that was what Foxton needed at the time.’

Annette brought her ability to think outside the square into her relationship with Anne Hunt. ‘One of the things I did was to take the parliamentary local government select committee to Foxton on a road trip. We went to the old Council Chambers, which still existed at that time, and held public hearings on the Foxton river loop. The Manawatu River had been redirected so that it ran straight to the sea, and that made the loop at the back of Foxton a little backwater. The loop had silted up and residents were very keen to have more water flowing into it, to have boats on it, and generally to build some tourism around it. So I took the select committee to the town for a day, we heard submissions and then Anne wrote about it. I think it was all a unique initiative at the time.’

Annette was developing a friendly and open relationship with the media, a quality that stood her in good stead as a Cabinet minister during the Clark years and the nine years in Opposition that followed, though her relationship with the Wellington daily newspaper is now strained at best. As well as having an excellent relationship with the Levin Chronicle, Annette was enthusiastic about local radio, and supported Allen Little, who was blind, in developing the community radio station in Levin. She brought Broadcasting Minister Jonathan Hunt up to open the station in 1987. She also loved working with Ian Little, entrepreneur and broadcaster in Foxton. Ian, the owner of the Foxton radio station, brought Wellington trolley buses to Foxton, built a line for them, and ran the buses round the main streets of the town. ‘He called it the smallest trolley bus service in the world.’

Annette also enjoyed working with the somewhat eccentric Foxton mayor Bob Fraser. Both of them attended a fundraising event in Foxton for a jockey who had fallen from his horse and broke his back. One of the things for sale at the charity auction was a service to a mare. ‘Mayor Bob and I ended up getting a racehorse out of it. Sadly, it got sick and never raced. It was what they call a dog rather than a racehorse.’

But her most memorable experiences in Foxton concerned another famous or infamous local, Karl Sim, the artist and sometime forger who later changed his name to CF Goldie. ‘As Good as Goldie’, the poster said; and maybe even better, some locals claimed. He came to notoriety in the 1980s for forging and selling works by Charles Goldie, Frances Hodgkins and Colin McCahon. Sim, an old Communist, was a huge supporter of Annette. Annette used to park her electorate caravan near Karl’s studio, across the road from the Foxton Police Station, while he flew the Labour Party flag from the top of his studio. Sim was eventually prosecuted for art forgery but was sentenced to community service not to jail.

‘I really liked him. He had this awful toupee, and I always had this inclination to run my hands through it to see if it fell off. He was such a good supporter of mine.’

While Annette went from strength to strength in the electorate, she also remained caught up in the excitement of her first three years in Parliament itself and Labour’s radical economic reforms following the Muldoon era. She freely admits that on some issues she had only sketchy appreciation of what was at stake. ‘I wasn’t sure what floating the dollar meant, but GST seemed to make sense. I supported removing SMPs [statutory minimum prices] for farmers, but that guaranteed I received a hostile reception when I attended the regular Federated Farmers meetings in the electorate.’ Given the strength of the rural vote in the electorate, Annette fortunately became a good friend of Margaret Millard, later Dame Margaret, for many years president of Rural Women New Zealand, and valued her advice and support. Annette also affectionately recalls Minister of State Services Stan Rodger’s few ‘minor amendments’ to the State Sector Act that turned out to be a radical overhaul. The first three years of the government presided over by the larger-than-life David Lange provided a constant buzz.

Annette also had times of genuine discomfort, particularly over the surtax on superannuation. ‘The day it was an-nounced I was due to speak to Grey Power in Levin and I knew what was in store for me when I drove north from Wellington to attend the meeting. Luck and timing played their part again.

‘On the way to the meeting I had a nose-to-tail crash with about four cars. There was new tarseal just before MacKay’s Crossing and the tar was melting, and a car and trailer braked, and everyone else slammed on the brakes, and the tar moved and we all moved with it. The police offered to drive me to Levin to keep my appointment, and the Grey Power members were so concerned about the accident that they were especially nice to me. But the surtax was seen as a broken promise, and it became a weeping sore for our party.

‘The surtax was one of the first policies that hit me as being out of kilter with what we’d promised, mainly because I related it to my own circumstances and my parents. They’d been nothing but Post Office employees all their lives. Dad’s job was a hard job. Telegraph poles and digging. It took a heavy toll on bodies over time and they’d got their little Post Office pensions. When you look at it now, it was so modest, but they would and could have been hit by this surtax. Anything they saved — and my parents were savers like most people of that generation — the idea that they’d pay a surtax that took it off them seemed so unfair.’

Her other big worry was corporatisation, a concern that became accentuated with the splitting up of the old Post Office. The Robinson family was a Post Office family. As well as her father, who worked for it much of his life, her mother Olive and both sisters Raelene and Pauline worked at Post Office jobs. ‘Dad never forgave Roger Douglas or Richard Prebble.’

However, the public love affair with the Lange Government continued unabated into the 1987 election, but the party soon started to disintegrate after the election. Lange’s pause in January 1988 for his famous ‘cup of tea’ over Roger Douglas’s proposed flat tax rate started a downward spiral in support that culminated inevitably in landslide defeat at the 1990 election.

Annette, who attributes Lange’s change of heart over Douglas to the influence of speech writer Margaret Pope, who he was later to marry, was never close to Lange, though she says she was never a Rogernome either. ‘David Lange was a hero figure because he was the leader, but I didn’t have a personal relationship with him. I think I was more or less a dogsbody in that second three years.’

The flat-tax proposal ended the sense of unity in the government and eventually led to its demise. Tensions between Roger Douglas and David Lange began early in 1987, even though most Labour MPs were unaware of the growing rift between the two men. That only became apparent to them in early 1988 once Lange scrapped the proposal without going through Cabinet.

In the immediate aftermath of the 1987 election, Annette was euphoric. Labour had won a second term comfortably and she had lifted her majority in Horowhenua to about 1500 votes. But the dark clouds were looming large.

Annette recalls Labour Party conferences becoming more hostile events as the government grew older and union dissatisfaction with its agenda began to brim over. ‘There was lots of debate. Anger was common.’ The need for economic change post-Muldoon was clear, but Annette was increasingly concerned with the impact of economic change on small communities.

In an interview with Linda Clark on RNZ’s Nine to Noon in April 2004, Lange’s wife Margaret Pope, who was his speech writer while he was Prime Minister, said Lange lost trust in Douglas as early as March 1987 when the finance minister raised the prospect of increasing GST to 15 per cent and introducing a flat income tax rate of 15 per cent.

In a separate interview on Nine to Noon the next day, Douglas said he did not realise it at the time but acknowledged in retrospect that was when the relationship between the two men began to unravel. Douglas had gone to Lange with a radical plan of an alternative budget, which would have also included asset sales and spending cuts as well as the increase in GST and the introduction of a flat tax.

But it was rejected. Even Douglas’s own allies, Richard Prebble and David Caygill, thought it went too far. So it was shelved, but not by Douglas, who was to come back with a modified proposal later in the year.

Lange, however, was spooked by Douglas’s approach and began to lose faith in his finance minister. The two men began to become distant from one another.

Douglas said in the interview with Linda Clark he should have done more.

‘I made a mistake. I should have gone to David, but he made a mistake too. He should have come and told me of his deep concerns and so history will show that was a turning point and that we both made, I think, big errors of judgement in a sense,’ said Douglas.

Yet apart from Douglas, Lange and a few other key ministers, no one else knew there was a problem. Even Douglas himself admits at the time he did not take the falling-out as seriously as he should have.

Annette was one of those backbench MPs who had no idea her government was in trouble. In December 1987, despite Lange’s reservations, the two men shared the podium in the Beehive theatrette to announce the flat-tax proposal. She, along with a number of colleagues, went to watch the announcement.

There was no sense of a breakdown in the partnership until Lange came back after Christmas and announced ‘the cup of tea’. That was Lange’s unilateral announcement scrapping the flat-tax proposal, even though no decision had been made to proceed. Having backed most of Douglas’s economic reforms, Lange was now having second thoughts and moved to pause the Rogernomics agenda.

Sir Geoffrey Palmer, who was then Deputy Prime Minister, remembers the cup of tea announcement well.

‘Lange’s speech getting rid of the flat tax was a real problem because it hadn’t been approved, and everyone knew that and it might not hold up, but to disavow it in the Christmas period was really a breach of Cabinet collective responsibility rules and a lot of the Cabinet had trouble with that,’ Sir Geoffrey says.

The cup of tea ended any hope of rapprochement between Douglas and Lange, and the two men communicated with each other by letter even though Lange’s office was just two floors above that of his finance minister. As their relationship worsened and the government got deeper into difficulty, some Labour MPs acted.

First, there was the meeting in 1988. Annette, Clive Matthewson and Jim Sutton, all backbench MPs, tried to sort out the deepening crisis. Matthewson remembers that as well as meeting with the two together they also met Lange and Douglas on their own. The point was to simply get the men talking to one another. But it was a forlorn hope.

Sutton says they were not a formal delegation acting on behalf of Labour MPs. ‘I think we probably asked others if they wanted to be involved, and probably they would have either been so committed to one or the other that they wanted to get rid of one or they thought that the three of us could do the job and they could keep their noses clean.

‘But we thought that Labour needed both of them, Roger and David. We felt that strongly. [But] they both had their toes dug right in,’ says Sutton.

The fallout between the two men led to Douglas being dismissed from Cabinet. It started with Lange taking the state-owned enterprises portfolio off Richard Prebble after a dispute over privatisation. Prebble then attacked Lange on television, raising questions about the Prime Minister’s mental state, and he was sacked.

Annette was out of Wellington when Prebble got his marching orders. She had flown to Rotorua to make a speech but was called back by Geoffrey Palmer.

A month later Douglas too left when Lange refused to renew the contract of Douglas’s press secretary Bevan Burgess. David Caygill replaced Douglas as finance minister.

All this time the division between the government and the Labour Party got worse as party opposition to deregulation and privatisation became increasingly bitter. At the same time some backbench MPs, in caucus at least, were becoming more critical of the government’s direction, with more debate at caucus meetings and increasing challenges to Lange’s authority. Long-time MP Bob Tizard was a particular critic and his opposition to Lange was bitter. Jim Anderton, though, was the only one to take a public stand, and after opposing asset sales he left the caucus in April 1989 and set up the NewLabour Party. By this time Lange was becoming increasingly isolated.

In her 2004 interview on Nine to Noon, Margaret Pope said that during the campaign Lange had been unhappy.

‘I think the joy went out of it for David earlier that year. His campaign in ’87 was a long, long way from his best. I mean some of his performance at times was desultory,’ Pope told Linda Clark.

Annette saw none of that and believed Lange had performed well during the campaign. But Labour’s annual conference after the election was not the celebration she expected. Instead the mood at the conference in Auckland was ugly, with a lot of dissatisfaction among the unions in particular. There were scuffles outside the main conference involving Douglas and Prebble as the animosity towards the government’s economic policies overshadowed any sense of achievement at Labour getting a second term in government for the first time since the 1935–49 Labour Government.

In fact, many in the party saw Labour’s success and the fact Judith Tizard almost won the National stronghold of Tamaki as evidence the government was on the wrong track.

While Annette’s majority went up in 1987, Horowhenua was not immune from the impact of Labour’s deregulation of the economy. Farmers were affected by the removal of subsidies, with a number of them walking off the land as high interest rates also made their farms uneconomic. As well, Horowhenua was home to many clothing factories and a number went bust almost overnight as the government unilaterally removed tariffs on cheap clothing imports.

It was difficult for Annette to support the government to which she belonged but also be sympathetic to those hurt by its economic policies. She focused on organising practical help, such as providing retraining packages for those left jobless by the restructuring. At the same time, she could see the sense in what the government was doing.

Many of the clothing factories in her electorate focused on making cheap T-shirts, but they could not compete with cheaper imports from third-world countries. Nor, she believed, should they. Instead she accepted the argument that New Zealand industry had to produce goods higher up the value chain.

But no one can dismiss the impact of the reforms. Unemployment rose dramatically and, ironically, given Douglas’s argument about welfare dependency, many more people moved on to benefits. There were other consequences, too, as noted in Andrew Dean’s book Ruth, Roger and Me.

He points out that until the mid-1980s, 15- to 24-year-olds had the lowest suicide rate of any working age group. By 1988 they had the highest and by the mid-1990s the youth suicide rate had almost tripled from just over 10 to almost 30 per 100,000.

Income inequity and poverty also rose during this period and rates of home ownership — so much a debate of the 2017 election — had begun to fall as did voting in general elections. Nor did the figures indicate a significant increase in productivity. Indeed, by the end of the 1990s, Treasury could not work out why the reforms had not led to the economic benefits forecast in the mid-80s.

Annette agrees the economic changes also had negative consequences and says not enough was done to help those people hurt the most. Labour did learn its lesson and the next Labour Government under Helen Clark required ministers to provide an analysis of the long-term impact of any proposed policy change before putting it into effect.

But Annette does not believe Douglas and his followers did not care about people. It was just that they were so absolute in their belief their policies were right. They believed they would make the economy work better and help ‘build a bigger cake’. Nor was there any lack of money for social services, and when she became employment minister late in 1989 she got the money she needed.

Geoffrey Palmer points out, too, that Labour’s anti-nuclear policy helped placate some of the party opposition to economic reform, particularly in its first term in government.

Annette says: ‘Caucus was becoming more and more toxic and back-stabbing. There had been real discontent among party workers at the first post-election party conference, and Jim Anderton had been forming a new party on the side. Former Deputy Prime Minister Bob Tizard was very anti-Douglas and Prebble, and the atmosphere was increasingly unpleasant, though Geoffrey Palmer was a bridge-builder. Basically, the situation was unfixable, and we were heading for defeat.’

Despite everything that was going on around her, Annette’s personal fortunes were rapidly taking off.

In late July 1989 there was another vote for Cabinet. Annette, who was a parliamentary undersecretary by this time, was elected. Douglas and Prebble were also re-elected to the Cabinet after a year in the wilderness. So Lange’s nemesis, Roger Douglas, was back.

For the Prime Minister it was the last straw. Just days later he resigned. Palmer replaced him, and Helen Clark became Deputy Prime Minister.

These three years showed Annette had a positive future as a senior figure within Labour. After a stint as under-secretary to Phil Goff and Michael Cullen from 1987 to 1989, she took another giant step forward when she became the first member of the class of ’84 to be elevated to Cabinet. Palmer appointed her as Minister of Employment, Minister of Immigration and Minister of Youth Affairs. Given what was happening inside Labour, perhaps her most significant role was to have special responsibility for liaising between Cabinet and the party caucus.

Annette had had no suspicion Lange would stand down following Douglas’s re-election to Cabinet. But she believes Lange probably did see it as the caucus voting against him, although that is not how she viewed it at the time.

Her election to the Cabinet, unbeknown to her, was not simply a matter of MPs voting for who they believed was the best person for the job, although she was seen as a strong and capable candidate. But she also benefited from the internal politics of the caucus as Lange’s supporters tried to engineer a vote which would block Douglas and Prebble making it back to Cabinet.

While Annette was unaware of Lange’s intentions, the Prime Minister had made it clear to his supporters that if either Douglas or Prebble got re-elected to Cabinet he would stand down. Trevor Mallard, now Parliament’s Speaker, re-members it well.

‘We had this situation in the caucus where two-thirds of the caucus wanted Douglas in Cabinet and two-thirds of the caucus wanted Lange to be Prime Minister, and they were incompatible positions.’

Mallard says the tactical approach taken by Lange’s supporters was to back people — in this case Annette King and Clive Matthewson — who were seen to be most acceptable to the right but were not toxic to the left. He says he viewed Annette as ‘not a hard Rogernome’ but someone who was very much part of the centre-right of the party. ‘The exercise was to try and block Douglas and Prebble because if either of them was elected then Lange would go.’

But the tactic failed. Annette was voted in but so too was Douglas. Matthewson was unsuccessful. Lange resigned a few days later, though many of his supporters, including Mallard and Helen Clark, spent the weekend in Mangere trying to convince him to stay on.

Annette flung herself into the employment portfolio with enthusiasm and a sense of real purpose. She was able to feed off the work of former employment minister Phil Goff, who had established 21 regional employment access committees, and social welfare minister Michael Cullen, who had set up a network of district social welfare committees. Both these ministers became extremely influential during the era of the Helen Clark Government, but though they were not always in the same camp in the fourth Labour Government (Cullen more aligned to Lange and Goff to Douglas), they shared a belief along with Annette that regions could help drive their own future. Annette also developed a close working relationship and friendship with Garry Moore, who was later to become Christchurch mayor, and who was developing a fund of ideas for getting New Zealand out of the economic mire.

Lloyd Falck is in no doubt about why Annette was elevated so quickly into Cabinet, and about why she was given the unusual role of liaising between Cabinet and caucus. ‘She was highly regarded by her colleagues. She made an effort to get on with people. Even with people she didn’t like, she always got on with them. They regarded her as a confidante.’ This then was the beginning of Auntie Annette, a role she was increasingly forced into in the long nine years following the defeat of the Clark Government in 2008.

Annette was blissfully unaware of the behind-the-scenes politicking, saying she was too happy with her own success to be aware of the ramifications of the vote.

As well as being appointed Minister of Employment and Minister of Immigration, Annette was also given a particular task by Palmer. He gave her the new role of being responsible for liaising with the caucus, and he is clear about why he chose her for that role. ‘I thought that there was a lack of communication between the caucus and the Cabinet. It necessarily happens in the decision-making process and she’s got such good personal relations with everybody. She was an ideal person to be what I called a liaison person because the government was pretty grim by the nature of disagreements on economic policy,’ says Palmer.

But Annette had no more luck keeping the caucus happy than she had had trying to get Lange and Douglas to patch up their relationship in 1988.

Mallard says it was an impossible job because at that point Labour MPs knew they were going to lose the next election. ‘There was a lot of blaming of each other going on, and while there was some occasional surface unity it was a pretty damaged caucus and party at the time. It was a role that Annette, as it happened, performed quite well for a time in the Clark Government, and afterwards she was the great mother unifier during the various leadership changes in the Key Government time. But it was a hard thing to do when you had a fractured government,’ says Mallard.

The Labour Government did get a bump in the polls when Palmer and Clark took over, but it lasted about a month before its support dropped back into the doldrums. By this time privatisation was well under way and it proved a controversial policy, not just with party members. Many voters felt duped because it had not featured in Labour’s campaign.

Then in 1990 the government did the unthinkable and put Telecom up for sale despite having earlier said explicitly it would not sell the telecommunications SOE. Richard Prebble, now back as SOE minister, pushed the sale through Cabinet.

The now-defunct Evening Post, Wellington’s afternoon daily newspaper, reported the political consequences of the sale this way: ‘The sale of Telecom, in a symbolic way, will mark the Government’s final disconnection from the electorate. No asset sale seems to have provoked as much outrage as this one.’

If Labour had any skerrick of hope of holding on in the 1990 election, the Telecom sale dashed it. In reality, Labour already had no hope, although the sale probably lost the party more support.

Things became so dire that in a last-ditch effort to save the party from complete annihilation Mike Moore took over as leader just seven weeks out from the election. By now Palmer had had enough and was happy to hand on the baton. For Moore, it was a last few weeks of frenetic campaigning as he tried to turn around Labour’s fortunes. Annette speaks highly of Moore, but it was too late for Labour.

In the end Labour won 35 per cent of the popular vote — actually a good result compared with some of its recent elections — but under the first-past-the-post system only 29 MPs were elected to Parliament, almost half the 57 who had been there from 1987 to 1990. Annette lost Horowhenua, but only just, while others like Phil Goff, Judy Keall, Jim Sutton and Trevor Mallard also lost their seats. All, however, were to return to Parliament three years later.

But a government that had started with such high hopes and a sense that it would govern by inclusion and consensus — remember the Economic Summit — was bitterly divided and broken when the electorate finally put it out of its misery. The bitterness did not end with the election loss.

If some in Labour hoped the election defeat would bring an end to the division and disunity that had wracked Labour for at least three years, they were to be disappointed. In some ways Labour’s troubles were just beginning. It would take another six years before the party pulled itself together, even though it came within a whisker of winning back power in 1993.

Annette had one opportunity before Labour’s loss in 1990 to get in a good dig at Muldoon. The former PM returned to Parliament after heart surgery in February 1990 and was photographed in the New Zealand Herald entering Parliament for the Queen’s Speech from the Throne alongside the tyro Cabinet minister. After the photo appeared, Annette said to him: ‘You must have been pleased to be pictured walking into Parliament alongside a beautiful young woman.’ Muldoon muttered: ‘I wouldn’t go that far.’

There had not been much room for fun in 1990, however. In fact, the long-festering divisions of 1987 to 1990 were still alive in 2004. A cross-party group of Labour MPs and former Labour MPs, including Ken Shirley, who had beaten Annette to the Labour nomination in Tasman, and United Future’s Peter Dunne, as well as then current ministers Annette, Trevor Mallard and Jim Sutton, held a reunion dinner with friends and family to celebrate 20 years after first entering Parliament.

The venue was the Grand Century Chinese restaurant in Tory Street, a favourite dining place for members of the Helen Clark Government. The MPs were a happy bunch enjoying each other’s company and sharing old war stories in a non-threatening and non-combative environment for the night. Not all the guests were so open-minded, however, particularly after a drink or two, and one Labour supporter showed antagonism towards Shirley, a reminder that Labour defections to ACT in the aftermath of the David Lange/Geoffrey Palmer/Mike Moore governments were still an open wound for many Labour voters.

One feature of Annette’s six years as MP for Horowhenua was her championing not only of her electorate but of fairer deals for women. Women’s issues recurred frequently in her regular newspaper columns, and early on she wrote: ‘One of my main goals as an MP is to work for a fairer deal for women in Horowhenua and our country as a whole. The reality is that the job market isn’t fair.’

In February of 1990 prominent broadcaster Sharon Crosbie wrote in the Sunday Times: ‘When John Adams, Thomas Jefferson and co were drafting the Declaration of Independence, Mrs Abigail Adams pleaded with him to include women’s rights. “Remember, all men would be tyrants if they could. If particular care and attention are not paid to the ladies, we are determined to foment a rebellion, and will not hold ourselves bound to obey any laws in which we have no voice or representation,” she told her husband.’ Ms Crosbie said the election of Annette as the fifth woman in New Zealand’s Cabinet showed New Zealand was doing better, but she wondered whether it would make a difference or whether power would corrupt women too. She then quoted Annette as saying she believed it would make a difference — ‘I know when you put several women together you start being able to make a mark, because I experienced it in caucus when there were 11 of us; we can meet and discuss issues, and put a woman’s perspective on economics and employment, for example, and start to make a difference. We have had good ministers of employment, but no one has ever asked for either an employment policy for women or asked what was being done to encourage women to return to the workforce. One of the first things I did as minister was to do that.’

When Annette became employment minister, David Cohen wrote in the Evening Post: ‘Few politicians can have entered the Cabinet on such a fair wind. . . . Colleagues call [her] blessed. Old foes speak warmly of her boundless warmth and gaiety. If goodwill alone could solve the huge problem she [has] officially inherited, [she] would beat the unemployment rap overnight. The King charm is just what the Government needs.’

The death throes of the Labour Government prevented Annette from seriously ‘beating the rap’, but she gave the challenge her best, and her belief in regional self-development was to become a cornerstone of her new role as chief executive of the Palmerston North Enterprise Board after she lost her Horowhenua seat in 1990. Sadly, regional self-development could not come to fruition in the dustbowl of the fourth Labour Government. Like many of her colleagues, Annette suffered defeat and experienced a major sense of doubt about her future life. In fact, she spent the next short while lying on her bed moping. Until the phone rang from Palmerston North.