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Social Credit Party (New Zealand)

One of the several logos used during the history of the Social Credit Party

The New Zealand Social Credit Party (sometimes called "Socred") was a political party which served as the country's "third party" from the 1950s through into the 1980s. The party held a number of seats in the New Zealand Parliament, although never more than two at a time. It has since renamed itself the New Zealand Democratic Party, and was part of the Alliance for some time.

The party was based around the ideas of Social Credit, an economic theory established by C. H. Douglas. Social Credit parties also existed in Canada and Australia, although the relationship between those movements and the New Zealand movement was not always good.

Table of contents
1 Foundation
2 Early history (1953 - 1972)
3 Later history (1972 - 1985)
4 Democrats
5 Alleged anti-semitism in Social Credit


The Social Credit Party was originally established as the Social Credit Political League. It was founded on 10 January 1953, and grew out of an earlier Social Credit Association. Prior to the foundation of the party, the Social Credit Association focused most of its efforts on the New Zealand Labour Party, where they attempted to influence policy. Social Credit claimed that the first Labour government, which rose to power in the 1935 election, pulled New Zealand out of the Great Depression by adopting certain Social Credit policies. Most followers of Social Credit eventually abandoned the Labour Party, however, having been strongly opposed by the "orthodox" Minister of Finance, Walter Nash and other prominent Labour Party members.

The party's first leader was Wilfrid Owen, a businessman. Much of the early activity in the party involved formulating policy and promoting Social Credit theories to the public.

Early history (1953 - 1972)

Social Credit gained support quickly, and in the 1954 elections, the party won 11.13% of the vote. However, the First Past the Post electoral system meant that the party won no seats in parliament. The party's quick rise did, however, prompt discussion of the party's policies.

It was not until the 1966 elections, however, that the party won its first representation in Parliament. Vernon Cracknell, an accountant, won the Hobson electorate in Northland. Cracknell narrowly defeated the National Party's Logan Sloane, the incumbent, after having placed second in the previous two elections.

Cracknell did not prove to be a good performer in Parliament itself, however, and did not succeed in advancing the Social Credit manifesto. Party due to this, and partly due to an exceptionally poor campaign, Cracknell was not re-elected in the 1969 elections, returning Sloane to parliament and depriving Social Credit of its only seat.

The following year, a leadership contest between Cracknell and another prominent Social Credit member, John O'Brian, ended in disaster, with brawling between supporters of each candidate. The damage done to the party's image was considerable. O'Brian was eventually victorious, but his blunt and confrontational style caused him to lose his position after only a short time in office.

Later history (1972 - 1985)

O'Brian's replacement was Bruce Beetham, who would become the most well known Social Credit leader, took over in time for the 1972 elections. Despite a relatively strong showing, Social Credit failed to win any seats, a fact that some blamed on the rise of the new Values Party. While the Values Party did not win any seats, many supporters of Social Credit believed that it drew voters away from the older party.

In the 1978 by-election in Rangitikei, caused by the death of National Party MP Roy Jack, Beetham managed to defeat National's replacement candidate and win the seat. Beetham was more successful in parliament than Cracknell had been, and gained Social Credit considerable attention. He also put forward a New Zealand Credit and Currency Bill, intended to implement many Social Credit policies. The Bill was criticised by some of the more extreme Social Credit supporters, who claimed that it was too weak, but was nevertheless strongly promoted in parliament by Beetham. The Bill quickly failed, although this was not particularly unexpected - it had been put forward primarily for the purpose of drawing attention, not because Beetham believed it would succeed.

Beetham retained his seat in the 1978 general election. He was later joined by Gary Knapp, who defeated National Party candidate Don Brash in the 1980 by-election in East Coast Bays (caused by the resignation of the sitting National MP). Knapp, like Beetham, was highly active in parliament.

Led by Beetham and Knapp, Social Credit became a popular alternative to the two major parties. Political scientists debate how much of this was due to Social Credit policies and how much was merely a "protest vote" against the established parties, but one poll recorded Social Credit with as much as 30% of the vote.

By the 1981 elections, the party's support had subsided somewhat, and Social Credit only gained 20.55% of the vote. As expected, the electoral system did not translate this into seats in parliament, but Social Credit did retain the two seats it already held.

During that parliamentary term, Social Credit's support was damaged by a deal between Beetham and National Party Prime Minister Robert Muldoon. In exchange for Social Credit support for a controversial construction project, Muldoon undertook to back Social Credit in certain matters. This did considerable harm to Social Credit's popularity, as Muldoon's government (and the construction project itself) was opposed by most Social Credit members. To make matters worse, Muldoon did not deliver on many of his pledges, depriving Social Credit of any significant victories with which to mitigate its earlier setback.

In 1983, Beetham suffered a minor heart attack, causing him to lose some of his earlier energy. He also became, according to many Social Credit supporters, more demanding and intolerant. This reduced Social Credit's appeal to voters.

In the 1984 elections, Beetham lost his Rangitikei seat to a National Party challenger. Knapp retained his East Coast Bays seat, and another Social Credit candidate, Neil Morrison, won Pakuranga. Despite still holding the same number of seats, Social Credit won only 7.6% of the total vote in 1984, a substantial drop. Some commentators attributed this to the New Zealand Party, a right-wing liberal party that opposed Muldoon's government. The New Zealand Party may have taken some of the protest votes that Social Credit once received.


At the party's 1985 conference, the Social Credit name was dropped, and group became the New Zealand Democratic Party. The Democrats did not retain any seats in the 1987 elections. Although several Democrats were elected to parliament as part of the Alliance, the Democratic Party has not had independent representation in parliament since 1987. The Democrats currently exist as an independent party (see the main Democrats article for more detailed information).

Alleged anti-semitism in Social Credit

The early Social Credit movement was associated by some people with anti-semitism. The reasons for this are debated, but are traced by some people to comments made by C. H. Douglas, originator of the Social Credit idea. Whether Douglas was indeed anti-semitic is likewise debated. Another possibility is that Social Credit's hostility to bankers and financiers struck a chord with allegations by anti-semites who believed that Jews controlled the banking sector.

According to various groups that combat anti-semitism, such as the Anti-Semitism and Xenophobia Today group, there were indeed anti-semitic elements within New Zealand's early Social Credit movement. Many supporters of the movement, however, claim that the anti-semitic charges were politically motivated, and were an attempt to discredit the movement. Others claim that if there was anti-semitism within the party, it was a result of a "self-fulfilling prophecy" - if the group was considered (rightly or wrongly) to be anti-semitic, anti-semites would be quick to join it, thus making the original accusations true.

If there was indeed anti-semitism within the early Social Credit movement, it had been lost by the early 1970s. The Anti-Semitism and Xenophobia Today group claims that Social Credit's anti-semitic members transferred their allegiance to the Australian-based League of Rights, whose leader had been involved with the Social Credit movement in Australia.