Douglas’s reforms were an economic disaster for the country

Roger Douglas is on the campaign trail and third on the ACT list. He’s been given plenty of electoral oxygen by the media to espouse ACT economic policy.

If only we did this or that, he tells us, nirvana would be just around the corner. We’d have higher standards of living, less government interference, more choice and less bureaucracy.

He’s even held some cottage meetings where unsuspecting neighbours are invited to meet and listen to Milton Friedman’s most fervent disciple. He’s not so much a snake-oil salesman as a preacher with the myopic devotion of a religious convert. Having seen the free-market light, no manner of common sense, logic or irrefutable evidence will dim the glorious glow for this true believer.

But we’ve heard and seen it all before. This architect of Rogernomics enacted these policies before as minister of finance in the 1984 Fourth Labour Government and they were disastrous.

The scale of the disaster is apparent from an OECD (Organisation of Economic Co-operation and Development) report, Growing Unequal, which was released last week.

Not that Roger would have necessarily noticed because I’m not aware of a single journalist having questioned him about the social and economic wreckage he left in his wake and which is so cruelly and accurately recorded in the report.

The report’s title refers to the dramatic growth in inequality in OECD countries and New Zealand in particular from 1985 to 2005.

The gap between rich and poor widened rapidly.

Roger Douglas told us there was no alternative to his reforms and there would be no gain without pain. What he neglected to say was that the gains would be for the wealthy and the pain for the poor. And so it was.

We have finally reached the top of the OECD but for the wrong reasons. We are second to none for growth in income inequality from 1985 to 2005 and we are also close to the top for the sharpest increase in poverty over the same 20-year period.

In the first 10 years of Douglas’s policies, incomes for the wealthy rose sharply, while real household incomes for the poor and the middle class slumped.

Has Labour learnt from this and delivered real change in the economic boom times of the past nine years? No.

In its first five years, poverty actually increased and it’s only since Working for Families that the working poor have been assisted. No relief for beneficiaries, though, who continue to suffer through Labour’s refusal to restore benefit levels after they were slashed by National in 1991.

We should be learning big lessons here. In case there was any lingering doubts among New Zealanders, the OECD report tells us the Douglas reforms were a social and economic catastrophe for the country. They were an unmitigated disaster.

Unlike most OECD reports, which National or Labour politicians will selectively use to attack their opponents, this report tells of the betrayal of New Zealanders by both major parties. Both have done their best to ignore it.

Helen Clark is embarrassed that she sat at the Cabinet table with Roger Douglas, while John Key became enormously wealthy from the type of free-market policies imposed under Rogernomics.

Labour wants to bury the 1980s. They’re ashamed they let Roger Douglas loose on the economy. The truth is that Labour’s middle-class activists went along with Rogernomics because the economic carnage was visited mainly on working-class New Zealanders. Urban liberal Labourites were kept on side by the likes of David Lange and Helen Clark, who promoted liberal social policies. The price for the likes of our anti-nuclear policy and homosexual law reform was the destruction of the welfare state.

But still neither National nor Labour is prepared to provide any real break from the free-market economic policies forced on the country by Roger Douglas. Both are still talking so-called free-trade, continuing destruction of New Zealand manufacturing, more user- pays for roads, schools and healthcare. Both parties’ proposed tax cuts disproportionately favour the rich.

Last week I mentioned some socialist-oriented alternatives on offer this election.

In addition to those is the Alliance, who have a well-organised campaign and are polling much higher than ACT across many electorates, not that you’d notice from media coverage. They also have a fully costed alternative economic programme.

So while the long, dark cloud of Rogernomics remains over the country, there are some signs of hope. For a breath of fresh air, have a read of the Alliance manifesto.