Douglas said that, on the contrary, the Fourth Labour Government, in which Douglas was Minister of Finance between 1984 and 1988, was a model for reform, arguing it made the case for the changes it made by publishing the policy documents that led to reform, like Treasury’s famous “Economic Management”.
“No Government has published as much as we did prior to undertaking reform,” Douglas said.
The Herald put Douglas’ comments to Roche, who said that he “certainly didn’t mean to offend or criticise Sir Roger, who revolutionised our economy”.
“The point I was trying to make was that Sir Roger’s reforms were more a big bang that reflected the critical economic issues at the time. I’m talking about changes that are more evolutionary,” he said.
Douglas has in the past made a virtue of his attitude to reform, which tended to involve faster and more radical change than modern governments. In his 1993 book, Unfinished Business, Douglas said when making change it was important to, “[d]efine your objectives clearly, and move towards them in quantum leaps, otherwise the interest groups will have time to mobilise and drag you down”.
Douglas told the Herald the scale and speed of the change he undertook was necessary, and said that it was “unbelievable” to argue that it was not.
He also said that the evolutionary change described by Roche would not have worked. He used the example of farming subsidies, which the Fourth Labour Government removed in its first term.
He said it would have been unfair to take subsidies away from farmers while leaving protections in place for manufacturers and other parts of the economy — the only fair thing to do was to share reform throughout the economy, he said.
Today, Douglas still believes the argument he made at the time, that deregulation and opening New Zealand’s markets removed “privilege” from the economy, which allowed a select few to enrich themselves and their businesses thanks to a lack of competition — the cost of this , Douglas reckons, was carried by New Zealand taxpayers and consumers, who suffered higher prices.
“We took away government handouts to a select few which people have to pay taxes for — is that disruptive?” Douglas said.
Douglas thinks the Government’s health system, which resulted from a review of the former District Health Board system by Roche and Heather Simpson, would do well to draw on the lessons of a report commissioned by the Fourth Labour Government and partly implemented by the Fourth National Government, which introduced greater private involvement in healthcare and controversially ushered in things like charges for hospital stays.
He said competition was the only way to improve productivity in the health system and that the public service would work better if it faced harsher consequences for failing the public, much like a company faces consequences when it fails its customers.
“Competition is just as important in government as it is in markets,” Douglas said.
Thomas Coughlan is Deputy Political Editor and covers politics from Parliament. He has worked for the Herald since 2021 and has worked in the press gallery since 2018.
