Government debt
When the Fourth Labour Government came into power it uncovered a fiscal crisis that had been largely hidden by the outgoing Third National Government. Government debt was skyrocketing, due largely to the costs of borrowing to maintain a fixed exchange-rate. When the result of the election became clear, Lange asked Muldoon to devalue the New Zealand dollar, which Muldoon refused to do, resulting in a constitutional crisis and precipitating some of the changes in the Constitution Act 1986.