Social Credit Party (New Zealand)

This article is about the origins of the political party advocating the social credit system. For the party registered in the 2014 elections, see New Zealand Democratic Party for Social Credit.
Social Credit Party
Founded 1953
Dissolved 1985 (1985)
Preceded by Real Democracy Movement
Succeeded by New Zealand Democratic Party
Ideology Social credit
Political position Centre-left

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 Parliament of New Zealand, although never more than two at a time. It has since renamed itself the New Zealand Democratic Party, and was for a time part of the Alliance.

The party was based on the ideas of Social Credit, an economic theory established by C. H. Douglas. Social Credit movements also existed in Australia (see: Douglas Credit Party & Australian League of Rights), Canada (see: Social Credit Party of Canada), and the United Kingdom (see: UK Social Credit Party) although the relationship between those movements and the New Zealand movement was not always good.

The Social Credit Association

Before the founding of the Social Credit Party in 1953, there was the Social Credit Association. The association focused most of its efforts on the Country Party and New Zealand Labour Party, where they attempted to influence policy.

The Social Credit Movement decided to set up a "separate political organisation" the Real Democracy Movement in 1942, but the RDM got only about 4,400 votes in the 1943 election. [1] Roly Marks had stood as a monetary reform candidate on behalf of the Real Democracy Movement in the Wanganui electorate in 1943, and was later made a life member of the League.

M J Hayes stood for the Waimate electorate on behalf of the Social Credit Association in the 1951 election, receiving 374 votes and coming third. [2]

Social Credit claimed that the first Labour government, which was elected at the 1935 election, pulled New Zealand out of the Great Depression by adopting certain Social Credit policies. Several followers of Social Credit policies eventually left the Labour Party, where their proposals (for example, those of John A. Lee for housing) were strongly opposed by the "orthodox" Minister of Finance, Walter Nash and other prominent Labour Party members.

In 1940 Lee, who had by then been expelled from the Labour Party, and Bill Barnard formed the Democratic Labour Party. However the new party got only 4.3% of the vote in the 1943 general election, with both Lee and Barnard losing their seats.


The Social Credit Party was established as the Social Credit Political League. It was founded on 10 January 1953, and grew out of the earlier Social Credit Association.

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)

Vernon Cracknell, leader 1963-70, MP for Hobson 1966-69.

Social Credit gained support quickly, and in the 1954 elections, the party won 11.13% of the vote. The party failed to win seats in parliament under the first past the post electoral system. The party's quick rise did, however, prompt discussion of the party's policies. In 1960 P. H. Matthews replaced Owen as leader.

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, a region that had been a stronghold of the Country Party. 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. Partly 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'Brien, ended in disaster, with brawling between supporters of each candidate. The damage done to the party's image was considerable. O'Brien was eventually victorious, but his blunt and confrontational style caused him to lose his position after only a short time in office. He split from Social Credit to found his own New Democratic Party.

Later history (1972–1985)

O'Brien's replacement was Bruce Beetham, who would become the most well known Social Credit leader. Beetham 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.

Bruce Beetham, leader 1972-85, MP for Rangitikei 1978-84.

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.[3]

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. A year later, it officially dropped "Political League" from its official name, becoming merely the Social Credit Party.

During that parliamentary term, Social Credit's support was damaged by a deal between Beetham and National Party Prime Minister Rob Muldoon. In exchange for Social Credit support for the Clyde Dam, a controversial construction project and part of Think Big, Muldoon undertook to back certain Social Credit proposals. This did considerable harm to Social Credit's popularity, as Muldoon's government (and the project itself) were 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, Denis Marshall. 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, an economically 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. It was from this election that the term "Crimplene Suit and Skoda Brigade" was coined for Social Credit (by defeated National Party Pakuranga MP Pat Hunt).

Democrats (1985-present)

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 in the 1990s, the Democratic Party has not had independent representation in parliament since 1987.

The Social Credit name did not vanish immediately, however. In 1986, the year after the party was renamed, Bruce Beetham was removed from the leadership of the Democrats and replaced by Neil Morrison. Beetham was extremely bitter about his dismissal, and led a short-lived splinter group which readopted the Social Credit label. It failed to win any seats, however, and quickly vanished.

Before the 2005 election the Democrats renamed themselves to the New Zealand Democratic Party for Social Credit, reincorporating the Social Credit name.

Alleged anti-Semitism

While some people associated with the early international Social Credit movement were anti-Semitic, there is no indication that the New Zealand movement displayed this to any significant degree or for any significant period of time.

The history of anti-Semitism and the New Zealand Social Credit political movement was unique to the history of the country. Anti-Semitism has largely been absent in New Zealand, even in the Victorian period, as evidenced by the election without comment of a Jewish premier (Julius Vogel) in the 1870s. The early Social Credit movement diverged from its international brethren. In New Zealand, Social Credit concentrated solely on the economic theories of the international movement without its attendant racial theories.

The New Zealand faction of the League of Rights, unlike similar organisations in Australia and the United Kingdom, was structurally and historically unrelated to Social Credit. In the late 1960s and early 1970s, it began to infiltrate Social Credit in order to have a wider platform for their views. This attempt was curtailed when it became identified and those members of the party were purged by Beetham.

Electoral results

Election candidates seats won votes percentage
1951  1 0 374 0.03
1954 79 0 122,068 11.13
1957 80 0 83,498 7.21
1960 80 0 100,905 8.62
1963 76 0 95,176 7.94
1966 80 1 174,515 14.48
1969 84 0 121,576 9.07
1972 87 0 93,231 6.65
1975 87 0 119,147 7.43
1978 92 1 274,756 16.07
1981 92 2 372,056 20.65
1984 95 2 147,162 7.63




Parliamentary Party Leader

Deputy Parliamentary Party Leader

Members of Parliament


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  1. "Social Credit Political Action". Papers Past. 4 February 1942.
  2. Norton, Clifford (1988). New Zealand Parliamentary Election Results 1946-1987: Occasional Publications No 1, Department of Political Science. Wellington: Victoria University of Wellington. p. 370. ISBN 0-475-11200-8.
  3. Calderwood, David (2010). Not a Fair Go: A History and Analysis of Social Credit’s Struggle for Success in New Zealand’s Electoral System (PDF) (M.A. Political Science thesis). University of Waikato. p. 1. Retrieved 18 April 2015.
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