Rolling Back Government: Lessons from New Zealand

Hi Marsh,

The bad news is that New Zealand is now governed by socialists who are no doubt now working busily to reverse much of this.

I think a key paragraph to help your undertanding of this article is this-

When a reform government was elected in 1984, it identified three problems: too much spending, too much taxing and too much government. The question was how to cut spending and taxes and diminish government’s role in the economy

The reform government mentioned is the Labour (socialist) government.

The European Union, led by France, was highly critical of Irish tax policy – particularly on corporations – because the Irish had reduced their tax on corporations from 48 percent to 12 percent and business was flooding into Ireland. The European Union wanted to impose a penalty on Ireland in the form of a 17 percent corporate tax hike to bring them into line with other European countries. Needless to say, the Irish didn’t buy that. The European community responded by saying that what the Irish were doing was unfair and uncompetitive. The Irish Minister of Finance agreed: He pointed out that Ireland was charging corporations 12 percent, while charging its citizens only 10 percent. So Ireland reduced the tax rate to 10 percent for corporations as well. There’s another one the French lost!

This example is inconsistent with my perception of how Socialism is defined in Europe.

Could you explain your comment "The reform government mentioned is the Labour (socialist) government"

Is it possible the reform government was Labour-in-name-only?

Best regards,

Hi Copernicus,

Marsh seemed to be unaware that the very socialists "who are no doubt now working busily to reverse much of this" are the same (current Labour Party) social-democrats that in 1984 comprised the reform Labour Government. Same party, same (somewhat evolved) policy, mostly now-different faces. Labour won the 1984 election and served two (3 year each) terms. National reassumed power in 1990, the same year that the author of the article, Maurice McTigue, was appointed a Cabinet Minister in the new National Government. As a person with historical National Party ties, he is being generous, but factual, when he refers to "a reform Government".

The new 1984 Labour Government passed some legislation that had broad based support, like floating the exchange rate, introducing a GST tax, streamlining etc as detailed in the article.... things that perhaps the previous National Administration could have implemented . The nuclear ships issue came out of left field and was a strong exception to the reform direction. It was not a Labour election point, and there was some public debate over Labour "pulling the wool over the voters eyes".

McTigue was not elected to Parliament until June 1985 (via a by-election), to the then National opposition, and was not in a position of power until 1990 as mentioned. His references to "we" and "us" through the article should be read as referring to the country as a whole, because the reform started before he entered Parliament, although his party maintained some momentum for economic tuning.

Is it possible the reform government was Labour-in-name-only?

Good question. They certainly behaved very unsocialist-like when it came to the economy. I think the spots on this cat only showed when it came to foreign policy, which probably held more true to the left wing dogma, although I personally think that this current administration is more mellow in that field than the Lange led one. If Iraq and Afghanistan had happened in 1984-1988, I wonder if we would have any troops there as we do now.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.