Question 6: What sort of policies did the government adopt in the 1980s and 1990s and how did those policies affect working people?

8 Jun

The economic and social policies adopted in the 80s and 90s included anti-union laws, benefits cuts, reduced access to education, health, housing and other social services and large scale unemployment and poverty. The promised surge in growth and incomes never followed.

The deep attacks on our rights and living standards began under the Rogernomics policies of the Third Labour Government from 1984-1990 (named after the then Minister of Finance, now ACT MP, Roger Douglas). These were guided by rightwing economic theories that promoted so-called free markets and private property above all else. These are commonly referred to as “neoliberal” economic policies.

Financial markets were deregulated, domestic industry protections removed, $10 billion worth of public enterprises like Telecom and the BNZ privatized, progressive income taxes for higher income earners replaced by GST on consumption. Taxes on wealth and property were largely eliminated. All important state sector appointments went to people from the same right wing big business elite – whether in the Treasury or Social Welfare departments. State Owned Enterprises were made to mimic the profit first behavior of their private sector counterparts. The Reserve Bank was freed from democratic controls to impose crippling interest rates. The dollar was floated to allow big business to move their money where and when they liked. The New Zealand dollar became the victim of international speculators who sent it on a roller coaster ride in value as the world’s eleventh most traded currency. The Reserve Bank used high exchange rates to squeeze inflation, and squeezed the life out of agricultural and other exporters in the process. The Labour government effectively outlawed strikes outside of the contract negotiation period.

The National government from 1990 to 1999 completed the job. They cut the value of benefits and tightened access rules. The Employment Contracts Act (ECA) launched a full scale attack on worker rights resulting in major losses of pay and conditions in subsequent years. Before the ECA, around 720,000 workers had protection under awards or collective agreements; by 1996 that number had dropped to 350,000. The ECA made multi-employer bargaining illegal and union recruitment very difficult.

The deregulation fervor affected all areas of life. It was claimed it would improve “efficiency” and business was best left to decide its own rules. One result is the multi-billion dollar debt that home owners, councils and the government is landed with as a consequence of the “leaky homes” scandal.

(Part of a series of extracts from “Exposing Right Wing Lies” by Mike Treen, Unite National Director)


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