New Zealand Reform Party - Opposition and Coalition

Opposition and Coalition

The Reform Party, still led by Coates, continued in opposition. The worsening economic situation left the United Party government struggling, and in 1931, the Labour Party withdrew its support in protest at certain economic measures. The Reform Party reluctantly agreed to support the United Party government, as the depression had raised fears of major gains for Labour if an election were held. United and Reform established a coalition government, with United's George Forbes remaining Prime Minister but Reform's Downie Stewart becoming Finance Minister.

In coalition, the two parties suffered only minor losses in the 1931 elections. As the depression failed to dissipate, however, the government became more and more unpopular, and support for the Labour Party soared. Clashes between Gordon Coates (who still led Reform) and Downie Stewart over economic policy eventually prompted Downie Stewart's resignation, earning the government a new critic and hurting its popularity still further. In addition, some of the coalition's measures to revive the economy were condemned by some as "socialist" — the Democrat Party, founded to fight this "socialism", cost the coalition a certain amount of support. In the 1935 elections, the coalition to suffered a massive defeat to the Labour Party, winning only nineteen seats to Labour's fifty-three.

Shortly after losing the 1935 elections, Reform and United resolved to merge completely, creating a united front against Labour. The new group was named the National Party, and has remained Labour's principal opponent ever since.