Although the New Zealand legislature began to function in 1854 under an act of 1852, it was not until near the end of the century that political parties with a national outlook began to form. This development was hastened by abolition of the provincial parliaments in 1876.
From 1890 to 1912, the Liberal Party was in power. It drew its strength from small farmers and from the rapidly increasing working class in the towns. It enacted advanced legislation on minimum wages, working conditions, and old age pensions, and established the world's first compulsory system of state arbitration. A Reform Party government replaced the Liberal government in 1912; the main items in the Reform platform were the "freehold" for certain types of farmers (i.e., the right to purchase on favorable terms the land they leased from the crown) and the eradication of patronage in the public service. During part of World War I, there was a coalition of Reform and Liberal parties. The Labour Party was formed in 1916 when several rival Labour groups finally came together. This party derived partly from old Liberal tradition, but its platform on socialization and social welfare was more radical.
The Reform Party continued in office until 1928 and was then succeeded by the United Party, a revival of the old Liberal Party. In 1931, these two parties came together, governing as a coalition until 1935. In that year, after a severe economic depression, a Labour government came to power. Labour remained the government until 1949, although for periods during World War II a coalition war cabinet and later a war administration were created, in addition to the Labour cabinet. During its term of office, Labour inaugurated an extensive system of social security and a limited degree of nationalization.
After their defeat in 1935, the old coalition parties joined to form the National Party. Coming to power in 1949, this party held office until 1957, when it was replaced by Labour. The National Party returned to power in the 1960 election, and maintained its majority in the elections of 1963, 1966, and 1969. A Labour government was elected in 1972, but in 1975 the National Party reversed the tide, winning 55 seats and 47.4% of the total vote; a National Party cabinet was formed, with Robert Muldoon as prime minister. Led by Muldoon, the National Party was returned again in the 1978 and 1981 elections, but by much lower margins.
On 14 July 1984, the National Party was defeated at the polls, winning only 37 seats (36% of the vote), to 56 seats (43%) for Labour. The Social Credit Political League won 2 seats (8%), and the New Zealand Party, a conservative group formed in 1983, won most of the remaining popular vote, but no seats. David Lange formed a Labour government and was reelected in August 1987, when Labour won 56 seats and 47.6% of the vote, and the National Party won 41 seats and 45% of the vote. No other parties won seats.
David Lange resigned as prime minister on 7 August 1989 after Roger Douglas, a political foe in the Labour Party, was reelected to the Cabinet. Labour's MPs selected Geoffrey Palmer as prime minister and party leader. Palmer resigned as prime minister in September 1990 and was replaced by Michael Moore, also of the Labour Party. In October 1990 the National Party, led by Jim Bolger, won a general election victory. Bolger's government instituted major cuts in New Zealand's welfare programs. The National Party won reelection in the November 1993 general election, capturing 50 of 99 seats. The Labour Party won 45, and both the New Zealand First Party, led by Winston Peters, and The Alliance, led by Jim Anderton, won 2 seats. In December 1993 Helen Clark replaced Michael Moore as leader of the Labour Party, becoming the first woman to lead a major party in New Zealand.
The 1996 elections were the first under proportional representation. James Bolger was elected as prime minister for a third term, to lead a coalition government formed by the National Party and the First Party. The National Party won 44 seats; Labour, 37; New Zealand First Party, 17; Alliance Party, 8; and the United Party, 1.
In the November 1999 elections, the balance of power once again shifted, with the New Zealand National Party losing 5 seats and capturing only 30.5% of the total vote, while the New Zealand Labor Party gained 12 seats and took 38.7% of the vote, thus becoming the majority party. Under Prime Minister Helen Clark, a coalition government was formed between the Labour Party and the Alliance Party, which consisted of five small parties: the New Labor Party, the Democratic Party, the New Zealand Liberal Party, the Green Party, and Mana Motihake.
In the July 2002 elections (held early), the Labour Party captured 41.3% of the vote and 52 seats to the National Party's20.9% and 27 seats. The New Zealand First Party took 10.4% of the vote and 13 seats. It was the worst showing for the National Party in 70 years. Prime Minister Helen Clark formed an alliance with the United Future Party, after forming a coalition with Jim Anderton's Progressive Coalition Party. United Future claimed it would not form a coalition with the Labour Party, but would support the government.
While the Liberal and Reform Parties, and in more recent times, the Labour and National Parties, have played the major roles in New Zealand's government, many other political groups have existed over the years, with varying agendas and membership. In 2002, those with enough support to win parliamentary seats included ACT New Zealand (libertarian), the New Zealand First Party (nationalistic), the Green Party of Aotearoa (ecologist), the United Future Party (liberal), and Jim Anderton's Progressive Coalition (progressive). There were 21 registered political parties as of June 2002.