Story: Interest groups
Page 2 – Economic interest groups
Economic interest groups lobby to gain economic advantage for their members. Those representing businesses also often seek to limit government regulation of their particular industry.
In the 19th century groups were often formed to push for the provision of infrastructure such as roads and railways. These groups comprised business and civic leaders from a particular town, who would lobby politicians to route communication links through their district to promote growth. Such groups were the precursors of early-20th-century progress leagues and, later, civic trusts (economic and promotion agencies for particular towns or areas).
Trade unions are the oldest economic groups. Although interest groups often remain politically neutral, the trade-union movement was aligned with the left and helped create the Labour Party in 1916. Compulsory union membership from 1936 and New Zealand’s collective wage-bargaining system meant unions became politically powerful. For example, they successfully lobbied the first Labour government to introduce universal, non-means-tested pensions in 1938. But their influence declined rapidly following the abolition of compulsory unionism in the early 1990s – membership fell from 44% of the workforce in 1985 to about 10% in 2008.
Given the strong support for the National Party among rural voters, Federated Farmers (a farmers’ interest group) has been viewed as something of a training ground for aspiring candidates for political office. National’s longest-serving prime minister, Keith Holyoake, was Nelson president of the Farmers’ Union (a precursor to Federated Farmers) between 1932 and 1941.
Federated Farmers represents a number of farmers’ and producers’ groups, including dairy, meat, wool, apiary and grain. It was formed in 1945 from a merger of the Farmers’ Union and the Sheepowners’ Federation – founded in 1899 and 1910 respectively. Federated Farmers addresses a range of issues that have an impact on farming communities, such as council rates, waste management and telecommunications. It has been aligned with successive National governments.
Worried by public support for prohibition, publicans, brewers and retailers formed the National Council of the Licensed Trade in 1918 to promote their interests. The council lobbied the government to protect the liquor industry, and successfully campaigned against the prohibition referendum in 1919.
As general secretary of the National Council of the Licensed Trade in the 1930s, Percy Coyle personally knew all the parliamentarians. He forged warm friendships with leading officials and cabinet ministers and made campaign donations. Coyle also ‘kept tabs’ on press-gallery journalists and every Christmas gifted a 136-litre keg of beer to them.
In 2011 there was no one interest group that represented the whole industry. Instead, different groups acted for particular sectors, such as the Hospitality Association, which represented restaurants, hotels, taverns and cafés. When a 2010 Law Commission report recommended drinking reforms, including lowering the drinking age and raising alcohol excise taxes, the groups lobbied the government for less radical measures.
Business New Zealand
Business New Zealand (formed in 2001 by a merger of the Employers’ Federation and Manufacturers’ Federation) represents a number of regional business organisations at the national level. Business New Zealand conducts analysis and advocacy on a range of issues that concern employers, including tax rates, compliance costs, the minimum wage, employment law changes, and health and safety.
New Zealand Business Roundtable
The New Zealand Business Roundtable was created in 1976 and represents approximately 50 chief executives and directors of some of the country’s largest companies. It was one of the most influential interest groups between 1984 and 1993 when successive governments introduced a broad agenda of free market reform.
Some companies are so large that they employ their own lobbyists. In 2006 Telecom allegedly spent $30 million trying to persuade the government to protect its broadband monopoly from competition – a process called ‘unbundling’. While Telecom ultimately failed to stop unbundling, former MP Richard Prebble described the company as the best lobbyists in Wellington.
There are many other economic interest groups. The Road Transport Forum was formed in 1997 to promote the road transport industry. Its success is demonstrated by the fact that in 2011 over 90% of all New Zealand freight went by road.
Formed in 1895, the Insurance Council of New Zealand has 25 member companies. It has helped to make the local insurance market one of the least regulated in the world. The New Zealand Food and Grocery Council lobbies on food legislation and other issues affecting grocery manufacturers and suppliers.