Roger And Ruth Do The NHS
By Francis Reid
On Monday 7 April the right of centre think-tank Reform released a report claiming that the NHS, education, and transport services need to be “liberated” from bureaucracy. The report was apparently written with the help of the former New Zealand finance ministers Sir Roger Douglas and Ruth Richardson. Reform argue that Britain can learn a lot from New Zealand. I agree with this statement fully – Britain should learn that the right wing policies currently advocated by the likes of Reform do not work.
I am a postgraduate student in England, and I grew up in New Zealand when Roger Douglas, and then Ruth Richardson, “liberated” New Zealand from low unemployment, social cohesion, and good public services. Roger Douglas was the finance minister for the (right wing) Labour government of 1984-1990. Under his guidance income tax was lowered, many tariffs removed, and public services slashed. This resulted in dramatically increased unemployment.
The New Zealand National (conservative) Party was forced, under Douglas’s right wing Labour administration, to move even further to the right to differentiate itself from the Government – that’s right IDS, you are not alone in history! In 1990 Ruth Richardson and the National Party were elected, perhaps because New Zealand wanted to reject Labour’s monetarist policies. In any case, the laissez-faire economic reforms continued. Welfare payments were the particular target of National. Income tax was further lowered. In 1992 unemployment peaked at 15%.
During the 1990s the centre left politicians in New Zealand were sharply divided between those who thought Labour’s policies in the 1980s had been good and necessary, and those who thought the market reforms had gone too far. Eventually the New Zealand Labour Party was able to move beyond its right wing past and return to its natural centre left political position. It was duly elected to government in 1999. One of Labour’s first policy changes was to increase the top taxation level from 33% to 39% and to invest this money in improved public services. Since 1999 New Zealand has enjoyed strong and sustained economic growth and unemployment has dropped to levels comparable with the pre-1984 era.
So what can Britain learn from New Zealand? New Zealand had 15 years of economic policy that has been described as like “Thatcher on steroids”. The result was prosperity for the top five percent of income earners, and hardship for the majority. There was increased efficiency in the provision of health and education – for the minority who could afford to pay the fees of private hospitals and schools. Crime skyrocketed; public services crumbled; and the economy as a whole stagnated.
Richardson and Douglas – the neo-liberal evangelists – have been consigned to the pages of history in New Zealand. Unwanted in their home country, they have taken up lucrative foreign consultancies. They are keen to tell the world about what they “achieved”.
Brits may grumble at having to pay an extra penny on the pound thanks to Gordon Brown and the NHS. Nobody likes paying tax. By reading between the lines of Reform’s report, however, the British should learn that the neo-liberal alternative is far worse. Britain should learn from New Zealand’s mistakes.