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It’s only a few days before the ballot box closes and our future is sealed for another three years. Polls indicate that National will beat Labour, but it will require an alliance with ACT (and possibly the Peters Party) to get into power. ACT’s leader, David Seymour, has said repeatedly that he will force National to do a handbrake turn to the right. 

He was only two years old when Roger Douglas first unleashed his cut-throats from Labour’s Trojan horse, so he is too young to remember the damage done in the name of fiscal rectitude, and he certainly never felt the effects himself. 

Seymour, Luxon and Peters bluster about “taking our country back” and getting “our country back on track” without answering the implicit questions; “From whom?” and “To what?”

If we look at the last neoliberal scourge, from 1984 through the ‘90s, the answer is devastating. Let’s have a look at some stats:

Between 1978 and 1984 before Roger Douglas got the knife out, the average growth rate in New Zealand was 2.7 percent, not much different to Australia’s at 2.9 percent. But between 1984 and 1992, while Australia’s growth held at about 3.0 percent rate, New Zealand’s dropped to 0.4 percent before recovering in the 1990s with an average annual growth rate of 3.3 percent until 1998. Meanwhile Australia’s rate rose to 4.24 a year over the same time. According to historian David Grant, New Zealand’s economy in 1998 was nearly 25 percent smaller than it would have been if it had grown at the same rate as the Australian economy after 1984. 

Douglas claimed again and again that selling public assets would repay state debt and stimulate the economy, but in fact overall economic growth slowed. The level of overseas debt trebled between 1984 and 1991 from $16 million to nearly $55 billion.

Government debt started falling from 1987 but that was offset by private sector offshore borrowings which rose by $57 billion. New Zealand’s total overseas debt grew from $46 billion to $102 billion between 1987 and 1999. 

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When privatisation started in 1988, the government owed about $39 million, but by June 1990, it owed $44.3 billion – $5.3 billion more.

Between 1985 and 1990 New Zealand’s GDP fell by 0.7 percent, the worst of any industrialised country, while unemployment more than doubled. So had reported cases of child abuse, and New Zealand’s youth suicide rate was the highest in the OECD.

Unemployment shot up. In September 1993, there were 254,700 registered as out of work, around 11 percent of the working population, of which 57,600 were classified as long-term unemployed. Incarceration rates exploded from seven per 100,000 in 1985 to 13 per 100,000 in 1993, a rise of nearly 100 percent.

Between 1984 and 1998, there were 53 hospital closures around New Zealand, another 10 closing in 1990. In 1984 there were 14,733 medical and surgical beds available in public hospitals but by 1999 there were only 8,955. In 1993, there were 64,717 citizens waiting for a public hospital bed, but by 1999, there were 181,383. In 1990, 57 percent of the state health budget went to public hospitals but by 1998, only 46 percent. 

All this flogging off of state assets was supposed to boost overseas investment, but by 1990, investment had dropped to a sixth of that in 1984, when the New Zealand economy was supposed to be a basket case, going from $2,430 million dollars to just $46 million dollars in six years. 

Despite the economic chaos that left most New Zealanders shell-shocked, gross domestic product shot up, which successive right wing governments crowed about. But the benefits went only to the wealthy. Between 1984 and 1990, real disposable income of the top quintile rose 6.4 percent while the bottom quintile fell 0.3 percent. Grant notes that New Zealand got the prize for the fastest rate of increasing wealth disparity of any other OECD country. 

Financial institutions made like robbers’ dogs. The five overseas owned banks in New Zealand – ANZ, ASB, National Bank, Westpac and BNZ – controlled 98 percent of the country’s banking assets and were making an enormous profit. A KPMG survey in May 1999 showed  these banks profiting by $1.6 billion, up from $1.2 billion in 1998. More than $1.3 billion dollars, or 80 percent of the profits had gone to Australian owners and shareholders. That was an increase of 33 percent on the previous year. ANZ announced in May 1999 an after-profit annual operating profit of $139 million, an increase of 20 percent. At the same time, customers were being gouged; income from customer fees rose 15 percent from $135 million to $156 million.

So let’s return to those questions. Luxon wants to “put our country back on track” to austerity for the benefit of his rich patrons, Peters wants to “take our country back” from New Zealanders he doesn’t like, and Seymour wants to return to the good old days of ignoring Maori, throwing more people in prison, creating more homelessness, and gutting government to effectively run the country. All out of the Trump playbook. Yay!

It’s time to reflect on the irreducible fact that there is nowhere in the world where modern neoliberal economics has improved any economy in any country for any citizenry except for the already rich and powerful. 

 

Finn Flynn is a former journalist who has returned to New Zealand after more than a decade living in the US. He has witnessed the rapid decline of the so-called greatest country on Earth, from the buoyancy of Obama’s “audacity of hope” to the paralysing cynicism of Trump’s sulphuric politics. New Zealanders shake their heads in disbelief at America’s slide without realising that they too are on the same slippery slope to failure.


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