Black Budget (New Zealand)

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In New Zealand, the term Black Budget refers to the government budget of 26 June 1958 in which Finance Minister Arnold Nordmeyer increased taxes on beer, tobacco, cars and petrol.

The second Labour government took office in 1957, and within a year were confronted with a balance of payments crisis caused by the collapse of the price of butter in Britain (New Zealand's main export market). Nordmeyer's colleagues were reluctant to cut government spending or break expensive election promises, so Nordmeyer was left with little option but to raise taxes.

The budget was massively unpopular, not least with Labour's traditional working-class supporters. The term 'black budget' is believed to have been coined by union leader Fintan Patrick Walsh, but was taken up by the National Party opposition, and became the commonly used term for the budget.

The government's popularity never recovered from the budget, which is generally believed to have cost it the 1960 election. Nordmeyer was forever tainted by the 'black budget', which gave him a reputation as a puritanical 'wowser' who was opposed to simple working class pleasures such as beer and cigarettes (at this point the dangers of smoking were not widely known). Despite this, he became the leader of the Labour Party in 1963, but was replaced by Norman Kirk less than three years later.