Fran O'Sullivan: Lange chronicle falls short

Labour Weekend has been a fitting time to take in a trio of television documentaries which provide contrasting perspectives on the 1980s/1990s economic reform agenda - the winners and the losers.

Tom Scott's Reluctant Revolutionary, screened on Saturday night, marked the 20th anniversary of the election of David Lange's Labour Government in 1984 - and a whirlwind of economic policy reform which fundamentally changed the country's social fabric.

Two decades on, Scott's documentary concentrates on the policy battle that brought the Lange Government to its knees - the role of a prime minister increasingly captive to the views of his speechwriter, Margaret Pope (later his wife), over that of Sir Roger Douglas, his finance minister.

The story has been told before. What gives it its power is the willingness of Douglas and other ministers who fell out with Lange to talk years later about the effects of his betrayal of Cabinet collective responsibility.

The clash of strong egos - Lange's and Douglas' - made a climbdown on either side impossible. Douglas' admission that he could have tried is poignant.

Scott enjoyed access to the 1980s players: Douglas and his then associate finance minister, Richard Prebble, fellow Cabinet ministers Michael Bassett and Russell Marshall, former Reserve Bank Governor and State Services Commissioner Rod Deane, former prime ministerial secretary Ken Richardson, former Prime Minister's Department head Gerald Hensley and former Defence head Denis McLean.

Much of the material on which Scott's saga is based was covered in a 20th anniversary retrospective of the fourth Labour Government held at Parliament this year.

But the documentary failed to pierce the policy victors' perspectives and much was left unquestioned.

I was irked by the simplistic portrayal of the constitutional crisis that emerged after Lange's election when Sir Robert Muldoon as the outgoing prime minister initially refused to order a devaluation.

Why did Scott not have the wit to ask former National Cabinet Minister Jim McLay - whom he interviewed - why the Muldoon Government did not earlier go ahead with a devaluation itself?

Treasury papers released years later showed that quite a bit of what was ultimately developed as Economic Management, the briefing paper presented to the incoming Labour Government, had been presented to Muldoon in previous post-election briefing papers.

Devaluation had been recommended while Muldoon was still in office. Why did his Cabinet ministers lack the courage to confront their prime minister in this area?

The other issue - which should have been put on the table - was the fact that informed players knew they would make a bundle by getting cash overseas.

Douglas had left a policy paper which tipped a devaluation in a public place during the election campaign. Which of the speculators had inside knowledge on this score? Which Reserve Bank senior official leaked that a devaluation was necessary to a select few within the Press Gallery during the election campaign?

To what extent the currency crisis was manufactured has never been addressed sufficiently. Muldoon had concerns on this score but, as the vanquished politician who had run up much of the overseas borrowing, he was discredited.

The second crisis which Scott failed to penetrate was the sharemarket crash which provided Douglas with another opportunity to try to get his flat tax package in place.

Douglas indicates that it was almost inevitable the sharemarket would get out of whack once New Zealand's rigid controls were lifted as people groped with their newfound freedom. But how true is that?

The reality is that those who sounded warnings about "paper shufflers" and debt-funded wealth, such as former Securities Commission chairman Colin Paterson, were shouted down by Cabinet ministers who did not want to burst the financial bubble that obscured the impact their policies were having on many New Zealanders.

The Government's own Bank of New Zealand, which was working with tax-dodge designers to help wealthy New Zealanders and companies avoid tax, and the Development Finance Corporation, were each lending too much against paper assets or as third- party risks.

Surely Scott could have challenged Douglas' view. What might or should Douglas have done to avert a financial meltdown? Where, too, was the interview with then Treasury Secretary Graham Scott, which could have drawn out his reservations over Douglas' flat tax package?

Again Treasury papers later released by David Caygill, Douglas' successor as finance minister, pointed to the department's fear of a huge structural deficit if the package was implemented. These concerns were made known separately to Lange before he publicly scuttled Douglas' proposals while his minister was in London.

The final area which was disappointing was Scott's inability to confront Pope on her role. It is almost as if he was too busy congratulating himself in getting her on film - and she did share some interesting insights - to put the hard questions over the propriety of her actions.

Effectively, she ended up talking for Lange, who presumably was too ill to take part in the documentary.

In contrast, it was almost a relief to view Alister Barry's openly one-sided perspective of the same period - even if your own perspective is basically a free-market one.

Barry's documentary, Someone Else's Country, made an impact when it was screened on the film festival circuit in the mid-1990s. Ruling elites panned the two-hour documentary because it was antithetical to their view of the 1980s/1990s economic reform agenda.

It is a pity it took nearly a decade before state-owned television finally had the courage to show the 1996 documentary, screened on TV1 yesterday.

Business pages of daily newspapers typically do not shed much insight into the lives of those who fall by the wayside through the major restructurings of the state or public sectors.

But Barry's take of the economic reform agenda was shared by many New Zealanders - not just unions whose members lost jobs in state-owned companies as they were corporatised - or the left of the Labour Party which stood ineffectually on the sidelines as the right faction of Lange's Cabinet had its way.

The impact of the Douglas revolution on Maori did not feature in Scott's documentary. But would there have been such a focus on the Treaty of Waitangi if Labour had not ridden roughshod over those who lost jobs through corporatisation (some 70,000 jobs went) or put state assets on the block?

Barry's documentary relies on interviews with many of those who were either discredited or pushed from public life in the reform era. He does not talk to the victors.

He also highlights the financial crisis which provided the platform for National's Ruth Richardson to take over in 1991 where Douglas left off.

In retrospect, it is almost laughable to view Richardson solemnly declaring the Government would have to implement spending cuts to make up for a Budget blowout it inherited from Labour (Richardson was still sporting a Budget surplus - it was just less than the $4 billion-plus number Caygill had indicated) and the $600 million it spent bailing out the BNZ (which was a loan).

New Zealand First Leader Winston Peters summed up the style as: hijack, ambush and speed.

Now for the future. Last Labour Weekend National leader Don Brash's bid for the party leadership was heating up as he prepared to challenge Bill English.

One year on, Brash has demonstrated he can fire up the public's imagination sufficiently to snatch a poll lead on Labour. But there has been little new since his attack on Maori privilege at Orewa in January.

Brash wants to raise the living standards of New Zealanders, to close the income per capita gap between workers and professionals here and in Australia - the first port of call for many New Zealanders seeking better conditions and lifestyle.

His challenge is to produce economic policies which will lead to that result, rather than a new raft of policies that reduce the living conditions for some New Zealanders to the benefit of elites.

In footage screened this weekend, former National ministers talked about the need to free labour markets and reduce wages to competitive levels to attract foreign investors.

They were needed to provide equity for the raft of New Zealand companies that were devastated by the sharemarket crash.

It will not be a simple matter to reverse that trend - particularly as Australia is now bent on dismantling union privileges which this country demolished years back.

Talk from National, however, is that Brash cannot afford to scare the horses by putting all his policy plans on the table before the next election. Has anything really changed?

* Alister Barry's In a Land of Plenty screens on TV1 tonight at 10.05 pm.