NEW ZEALAND’S ECONOMIC POLICY 1984-1988
THE EFFECTIVENESS OF NEW ZEALANDÆS ECONOMIC POLICYù1984-1988
This research examines the effectiveness of the economic policy of the government of New Zealand during the 1984-1988 time period. Labour Party dominance has been traditional in New Zealand, although a National Party (conservative) government ruled from 1975 to 1984. The government in power in the 1984-1988 period was a Labour Party government headed by Prime Minister David Lange (of Scottish heritage, with a name given the Scottish pronunciation of Long-ee). The Minister of Finance during the second-half of the 1984-1988 period was Roger Douglas, a major player in the economic events of the day.
The New Zealand economy has traditionally been characterized by predominantly private sector ownership and operation. Nevertheless, government through the late-1980s had participated in some major industries, and government through that time had regulated economic activity to a somewhat greater degree than was true in many other market economy countries.
The New Zealand economy functioned relatively well under this system prior to 1974. In 1973, the United Kingdom became a member of the European Economic Community, and that action spelled economic trouble for New Zealand. Prior to 1974, New Zealand products enjoyed a protected status and guaranteed access to the British market. Trade with Britain and Australia provided almost the entire basis for the New Zealand economy. Subsequent to 1974, however, New Zealand products were placed on a declining quota basis with respect to the British market. As Britain become ever more integrated into the European Economic Community, New ZealandÆs British markets gradually disappeared. By the mid-1980s, New ZealandÆs products no longer enjoyed any special status in the British market, and the once sound New Zealand economy had developed serious problems.
Unfortunately, the National Party controlled government in New Zealan…