The Reform Party and the remnants of the Liberals eventually combined to form the National Party which, in 1949 wrested power from Labour. With McCarthyite rhetoric, National branded the more militant unionists as Communists and succeeded in breaking much of the power of the unions during the violent and emotional 1951 Waterfront dispute - variously described as a strike and a lock-out. From the late 1940s until the mid-1980s, National became New Zealand's natural party of ­government, disturbed only by two three-year stints with Labour in power. The conservatism always bubbling under had now found its expression. Most were happy with the government's strong-arm tactics, which emasculated the militant unions and the country settled down to what novelist C.K. Stead viewed as the Kiwi ideal: "to live in a country with fresh air, an open landscape and plenty of sunshine; and to own a house, car, refrigerator, washing machine, bach , launch, fibre-glass rod, golf clubs, and so on." While the egalitarian myth still perpetuated by many Kiwis may never have existed, by most measures New Zealand's wealth was evenly spread, with few truly rich and relatively few poor.

The exception at least in economic terms were Maori, many now migrating in huge numbers to the cities, especially Auckland, responding to the urban labour shortages and good wages after World War II. By the 1970s the deracination of urban Maori was creating social unrest which, left unchannelled, resulted in high Maori unemployment and a disproportionate representation in prisons. Increasing contact between Maori and Europeans exposed weaknesses in the pakeha belief that the country's race relations were the best in the world. Pakehas took great pride in Maori bravery, skill, generosity and good humour, but were unable to set aside the discrimination which kept Maoris out of professional jobs.

On the economic front the major changes took place under Walter Nash 's 1957-60 Labour government, when New Zealand embarked on a programme designed to relieve the country's dependence on exports. A steel rolling mill, oil refinery, gin distillery and glass factory were all set up and an aluminium industry was encouraged by the prospect of cheap power from hydroelectric project on Lake Manapouri . When Keith Holyoake took over at the helm of the next National government, Britain was still by far New Zealand's biggest export market but was making overtures to the economically isolationist European Common Market. New Zealand was becoming aware that Britain was no longer the guardian she once was. This was equally true in the military sphere, where New Zealand began to court its Pacific allies, signing the anti-Communist SEATO (South-East Asia Treaty Organization) document, and the ANZUS pact, which provided for mutual defence of Australia, New Zealand and the US.