Throughout its three terms it was led by Robert Muldoon, a populist but antagonistic politician who was sometimes described as the National Party's best asset and worst liability.

This was enormously expensive, costing NZ$2.5 billion per annum by 1984,[1] but nevertheless far more popular than Labour's alternative of a Singaporean Central Provident Fund-style set of individualised compulsory savings.

The control of inflation was an important goal for Muldoon, who always aimed to uphold the living standards of working and middle class New Zealanders.

As note by Brian Easton, the tax relief for a young family "could be up to $13 a week more than for a married man without children, on the same income."

"[2] The Disabled Person's Community Welfare Act (introduced in 1975 under the Third Labour government) was further implemented in 1978, including a non-taxable $8 a week allowance for parents supporting physically or mentally handicapped children.

In July 1982 the Judicial Committee of the Privy Council held that Lesa (and by extension all other Samoans born prior to 1962) could apply for New Zealand citizenship.

Robert Muldoon continued his Labour predecessor Prime Minister Norman Kirk's policy of arresting and deporting Pasifika overstayers which had begun in 1974.

[6] Since the 1950s, the New Zealand government had encouraged substantial emigration from several Pacific countries including Samoa, Tonga, and Fiji to fill a labour shortage caused by the post–war economic boom.

[7] The economic crisis of the early 1970s led to increased crime, unemployment and other social ailments, which disproportionately affected the Pacific Islander community.

He criticized the Labour government's immigration policies for contributing to the economic recession and a housing shortage which undermined the New Zealand "way of life."

During the 1975 general elections, the National Party had also played a controversial electoral advertisement that was later criticized for stoking negative racial sentiments about Polynesian migrants.

The raids were also criticized by elements of the New Zealand Police and the ruling National Party for damaging race relations with the Pacific Island community.

By 1979, the Muldoon government terminated the Dawn Raids since the deportation of illegal Pacific overstayers had failed to alleviate the ailing New Zealand economy.

[10] In 1977, Ngati Whatua Māori occupied Bastion Point on the Waitematā Harbour, Auckland, in protest at the lack of settlement with the government under the Treaty of Waitangi for their claim to the land.

The third Labour government had blocked a proposed tour by the South African Springbok rugby team, but this had been opposed by many New Zealanders, who felt sport and politics should not mix.

Following this, Muldoon signed the Gleneagles Agreement stating that governments would take steps to prevent sporting contact with South Africa.

However diplomatic ties with Argentina were cut and New Zealand loaned HMNZS Canterbury to Britain for service in the Indian Ocean to free up HMS Amazon for action in the Falklands.

The 1975 election was widely seen as a contest of personalities: Labour Prime Minister Bill Rowling vs National Party leader Robert Muldoon.

The tour of apartheid-era South Africa's rugby union team was opposed by many New Zealanders, who believed that it gave support to apartheid.

Muldoon had refused to make the New Zealand Rugby Football Union call off the tour, while the Labour opposition had actively opposed it.

Muldoon gambled that while the Tour would cost him votes in the cities, these would be mostly in Labour-supporting seats while swinging voters in smaller towns such as Taupō would support his stance.

Its situation was made more difficult by the presence of several 'rogue MPs', including Marilyn Waring and Mike Minogue, who were openly dissatisfied with Muldoon and with the government's performance.

National's position was further weakened with the formation of the New Zealand Party, led by maverick property developer Bob Jones.

The New Zealand Party supported free markets and a less paternalistic approach to governance – principles that many perceived to align closer to National's founding policy platform.

The contrast between the older, more cynical and ill-tempered Muldoon compared to the youthful, witty David Lange who led the Labour Party, further hindered National's chances of re-election.