Over the past two decades, New Zealands free market reforms have had positive economic effects, says former cabinet minister and ambassador to Canada, Maurice P. McTigue.
New Zealand, currently one of the most economically free countries in the world, was not always a bastion of capitalism. In 1984, its per capita income had sunk to 27th in the world, its unemployment rate was 11.6 percent, and the nations debt had grown to 65 percent of gross domestic product (GDP).
There were price controls on all goods and services; there were wage controls, and massive subsidies to support domestic industries. One could not even buy shares in a foreign company without surrendering ones citizenship. However, in 1984 reformers were elected and began the radical transformation of New Zealands government, including:
The impact on New Zealands economy has been remarkable. The government assets that were sold off became more productive and the costs of services went down instead of costing taxpayers $1 billion every year, they produced about $1 billion annually in revenues and taxes. Similarly, tax revenues have increased by 20 percent, unemployment has fallen to 4.7 percent, and government debt has fallen to just 17 percent of GDP.
Source: Hon. Maurice P. McTigue (Mercatus Center at George Mason University), Rolling Back Government: Lessons from New Zealand,mis, Volume 33, Number 4, April 2004, Hillsdale College.
For text http://www.hillsdale.edu/newimprimis/2004/april/default.htm
For more on Privatisation Worldwide http://www.ncpa.org/iss/pri/
FMF Policy Bulletin / 1 June 2004 – 09 February 2010
