25 years ago

The Press editorial is on the election of the Lange Government 25 years ago:

The election of former Labour leader on July 14, 1984, was followed by the whirlwind of Rogernomics, and few sectors of society were not affected by the changes wrought by his fourth Labour government before its implosion during its second term. With New Zealand today facing challenging economic times, as it also was in 1984, it is timely to reflect on the legacy of those turbulent years.

Critics are adamant that much of Rogernomics was unnecessarily brutal. There is no doubt that for those who lost jobs, notably in the public sector and in manufacturing, and for farmers these were harsh times. But the vast economic problems inherited by Labour left little option but the reform programme which Labour drove through.

Well there were other options, but they were bad ones. I’d hate to think what would have happened if had been re-elected.

During the Lange years and the first term of the subsequent National government many of the economic fundamentals taken for granted today were put in place. These included a public sector made more efficient through corporatisation, more flexible wage bargaining, a robust banking system and some of the most aggressive subsidy and tariff slashing policies in the world.

This set the scene for export-led economic growth, not just of the traditional farming commodities but in newer sectors such as information technology and high value clothing.

The importance of those economic fundamentals has been reinforced by the fact that they are enabling New Zealand to weather the worst of the current global recession better than many other nations, and they leave this country well placed when the economic downturn does end.

I’ve never heard a protectionist explain how NZ managed to have the lowest level of unemployment in the OECD and also the lowest level of tariffs. Tariffs do not protect jobs in the long-term – they keep resources in inefficent areas of the economy.

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