Trajectories of the welfare state in Australia and New Zealand since 1980

Australasian capitalism, and with it the New Zealand and Australian welfare states, has undergone fundamental restructuring since the early 1980s. Importantly, the impetus for restructuring was, in both cases, driven by Labour governments. Neo-liberal programmes of economic deregulation, corporatization and privatization, combined with transformations in labour relations and cuts to social welfare entitlement, characterized developments in both countries from the early 1980s into the 1990s. Viewed from afar, these changes are often presented as sharing an essential unity – being driven by the same imperatives, taking similar institutional forms, and having converging consequences. This is partially true, but it conceals important differences in restructuring between the two countries. Deploying a comparative method, this paper analyses the similarities and disjunctures in New Zealand’s and Australia’s experiences of transforming the welfare state. It suggests that the main differences in restructuring – a more gradualist, corporatist-inspired model in the case of Australia, and a more rapid shock-therapy, top-down model in the case of New Zealand – can be accounted for by differences in the starting point, differences in the institutional context of political decision-making, and differences in the balance of social, especially class, forces.