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Ruthanasia, a
portmanteau A portmanteau word, or portmanteau (, ) is a blend of wordseuthanasia Euthanasia (from el, εὐθανασία 'good death': εὖ, ''eu'' 'well, good' + θάνατος, ''thanatos'' 'death') is the practice of intentionally ending life to eliminate pain and suffering. Different countries have different eut ...
", is the pejorative name (typically used by opponents) given to the period of
free-market In economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any ot ...
policies conducted during the first term of the fourth National government in
New Zealand New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and over 700 smaller islands. It is the sixth-largest island coun ...
, from 1990 to 1993. As the first period of reform from 1984 to 1990 was known as
Rogernomics In February 1985, journalists at the '' New Zealand Listener'' coined the term Rogernomics, a portmanteau of "Roger" and "economics" (by analogy with " Reaganomics"), to describe the neoliberal economic policies followed by Roger Douglas. Dou ...
after the Labour Party
Minister of Finance A finance minister is an executive or cabinet position in charge of one or more of government finances, economic policy and financial regulation. A finance minister's portfolio has a large variety of names around the world, such as "treasury", ...
,
Roger Douglas Sir Roger Owen Douglas (born 5 December 1937) is a retired New Zealand politician who served as a minister in two Labour governments. He became arguably best known for his prominent role in New Zealand's radical economic restructuring in the 19 ...
, so the second period became known as "Ruthanasia", after the National Party's Minister of Finance, Ruth Richardson.


Background

Ruthanasia and Rogernomics can be viewed as complementary reform packages implemented by successive governments which were aimed at liberalising the New Zealand economy. The packages came after a period of intense protectionism and fiscal control, particularly under the administration of Sir
Robert Muldoon Sir Robert David Muldoon (; 25 September 19215 August 1992) was a New Zealand politician who served as the 31st Prime Minister of New Zealand, from 1975 to 1984, while leader of the National Party. Serving as a corporal and sergeant in th ...
's National government between 1975 and 1984. Muldoon's protectionism had culminated in a three-year wage and price freeze imposed by Muldoon, who simultaneously held the posts of Prime Minister and Minister of Finance, in an attempt to suppress rampant inflation.


Conflict with manifesto

Ruthanasia was controversial as the National Party had fought the 1990 election on a manifesto promising "The Decent Society" and implicitly repudiating the radicalism of the
Fourth Labour Government The Fourth Labour Government of New Zealand governed New Zealand from 26 July 1984 to 2 November 1990. It was the first Labour government to win a second consecutive term since the First Labour Government of 1935 to 1949. The policy agenda o ...
. The Prime Minister, Jim Bolger, defended the move on the grounds that he had been badly misled in the run-up to the
1990 File:1990 Events Collage.png, From left, clockwise: The 1990 FIFA World Cup is played in Italy; The Human Genome Project is launched; Voyager I takes the famous Pale Blue Dot image- speaking on the fragility of humanity on Earth, astrophysicis ...
election as to the actual state of the New Zealand economy. He was told by officials on Sunday afternoon, the day after the election, of two unrelated financial crises: ''the country's broke .... and the largest bank .... was bankrupt''. Bolger said that his "electoral honeymoon lasted seventeen hours". So he immediately summoned Don McKinnon, Bill Birch and Ruth Richardson to Wellington. The partly state-owned
Bank of New Zealand Bank of New Zealand (BNZ) is one of New Zealand's big four banks and has been operating in the country since the first office was opened in Auckland in October 1861 followed shortly after by the first branch in Dunedin in December 1861. The ...
required an immediate injection of capital to avoid insolvency as a result of the poor performance of a NZ$2.8bn loan portfolio in Australia. The bank held 40 per cent of the commercial paper (loans to businesses) in New Zealand. Secondly; the outgoing finance minister
David Caygill David Francis Caygill (born 15 November 1948) is a former New Zealand politician. Caygill was born and raised in Christchurch. He entered politics in 1971 as Christchurch's youngest city councillor at the age of 22. He served as a Member of Pa ...
's projection of a modest fiscal surplus was inaccurate, and the country instead faced a fiscal deficit of NZ$3.7bn (4.8%) for 1991–92 if current fiscal policies continued. Current net public debt was 52% of GDP (43% after Telecom sale).


Focus

Where Roger Douglas had deregulated the industrial, financial, fiscal and agricultural sectors of the New Zealand economy, Ruth Richardson, under the auspices of a National (predominantly conservative) administration, was able to focus on social services and labour relations. These were sensitive areas which the preceding Labour administration had not been willing to reform in light of its traditional working class constituency. Richardson and the then Minister of Social Welfare,
Jenny Shipley Dame Jennifer Mary Shipley (née Robson; born 4 February 1952) is a New Zealand former politician who served as the 36th prime minister of New Zealand from 1997 to 1999. She was the first female prime minister of New Zealand, and the first woma ...
, immediately reformed the Social Welfare programme in the "
Mother of all Budgets The Mother of all Budgets was the nickname given to the 1991 New Zealand budget. It was the first budget delivered by the new National Party Minister of Finance Ruth Richardson and formed the catalyst of her economic reforms known in the media as ...
" by reducing available unemployment, sickness and welfare benefits across the board. In 1991, the National government enacted the Employment Contracts Act (ECA), which effectively demolished New Zealand's post-war industrial relations framework, replacing collective bargaining and compulsory union membership in many sectors with the concept of the individual employment contract. Whilst the ECA did not directly address unions, the practical effect of removing the requirement for employees to be members, and allowing those employees who did want union membership to choose ''which'' union they wished to join, dramatically reduced the bargaining position of the unions in the New Zealand economy. This reform of labour laws had already been outlined in the 1990 National manifesto.
Ken Douglas Kenneth George Douglas (15 November 1935 – 14 September 2022) was a New Zealand trade union leader. Early life Douglas was born in Wellington in 1935. His parents were Marjorie "Maj" Alice ( Farrow) and John Atholwood "Atty" Douglas. He w ...
, then president of the New Zealand Council of Trade Unions, recalled in the 1996 documentary ''Revolution'': Roger Douglas, minister of finance in the preceding fourth Labour government, said (after his retirement from politics): "Ruthanasia" came to an end after the 1993 election, when National's majority was reduced from 18 (out of 99 seats) to 1. Jim Bolger responded by replacing Richardson with Bill Birch. Bolger then acknowledged both the benefits and unpopularity of Ruthanasia in his televised announcement of Richardson's removal:


Long-term consequences: 1993–2008

Internal party ideological tensions also led to the secession of
Winston Peters Winston Raymond Peters (born 11 April 1945) is a New Zealand politician serving as the leader of New Zealand First since its foundation in 1993. Peters served as the 13th deputy prime minister of New Zealand from 1996 to 1998 and 2017 to 2020, ...
from the National Party caucus and the formation of
New Zealand First New Zealand First ( mi, Aotearoa Tuatahi), commonly abbreviated to NZ First, is a nationalist and populist political party in New Zealand. The party formed in July 1993 following the resignation on 19 March 1993 of its leader and founder, Win ...
in 1993. Peters was viewed as an acolyte of Rob Muldoon's protectionist economic policies and had a substantial support base amongst New Zealand's
senior citizens Old age refers to ages nearing or surpassing the life expectancy of human beings, and is thus the end of the human life cycle. Terms and euphemisms for people at this age include old people, the elderly (worldwide usage), OAPs (British usage ...
and their related lobby organisations. Peters' erstwhile prominence was due to the other consequence of Roger Douglas and Ruth Richardson's New Right economic policies, which fuelled a movement for electoral reform in New Zealand after Sir Geoffrey Palmer convened a
Royal Commission on the Electoral System The Royal Commission on the Electoral System was formed in New Zealand in 1985 and reported in 1986. The decision to form the Royal Commission was taken by the Fourth Labour government, after the Labour Party had received more votes, yet it wo ...
in 1985–1986. In two electoral reform referendums, the general public endorsed the
Mixed Member Proportional Mixed-member proportional representation (MMP or MMPR) is a mixed electoral system in which votes cast are considered in local elections and also to determine overall party vote tallies, which are used to allocate additional members to produce ...
electoral system as a response to what they perceived as an unaccountable New Right government. Jim Bolger believes that, had his government not instituted such unpopular policy prescriptions, MMP may not have passed. After Richardson's resignation, National retained power for six more years against a divided Labour Party and splintered opposition, hampered by its own legacy of economic retrenchment. While several MPs seceded to form non-viable centre-right satellite parties before the 1996 general election National retained power by going into coalition with Winston Peters and New Zealand First. It eventually proved unpopular, and party rightists launched a coup against Jim Bolger in December 1997. As a consequence, Peters abandoned the National/New Zealand First coalition, splitting his party. National then governed for a further year, with the support of post-split ex-New Zealand First MPs, but the 1999 general election saw
Helen Clark Helen Elizabeth Clark (born 26 February 1950) is a New Zealand politician who served as the 37th prime minister of New Zealand from 1999 to 2008, and was the administrator of the United Nations Development Programme from 2009 to 2017. She was ...
lead a centre-left coalition to victory. She would remain Prime Minister for most of the next decade, as National was paralysed by factional infighting over ideology and direction. When National won office again after the 2008 general election, National sought to shift towards the
centre Center or centre may refer to: Mathematics *Center (geometry), the middle of an object * Center (algebra), used in various contexts ** Center (group theory) ** Center (ring theory) * Graph center, the set of all vertices of minimum eccentricity ...
and projected an image that it had eschewed "radical" New Right
industrial relations Industrial relations or employment relations is the multidisciplinary academic field that studies the employment relationship; that is, the complex interrelations between employers and employees, labor/trade unions, employer organizations, ...
and
welfare Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specifical ...
reform. Jettisoning Richardson's legacy. As for Richardson herself, she became a member of
ACT New Zealand ACT New Zealand, known simply as ACT (), is a right-wing, classical-liberal political party in New Zealand. According to former party leader Rodney Hide, ACT's values are "individual freedom, personal responsibility, doing the best for our natur ...
, her philosophical successors. A 2015 Treasury report said that inequality in New Zealand increased in the 1980s and 1990s but has been stable for the last 20 years although another 2015 article said that New Zealand's rate of rise of inequality had been the highest in the OECD, and that New Zealand's inequality had previously been low by OECD standards. The 1991 budget had profound social effects, child poverty rose from 15% in 1990 to 29% in 1994 while violent crime peaked between 1990 and 1997. Income inequality also accelerated, New Zealand's GINI index rose from 0.30 in 1990 to 0.33 in 1996 and thereafter 0.34 at the turn of the century. Poorer New Zealanders saw their standard of living fall from their 1984 level. Unemployment also remained high for much of the decade, from 11% in 1991 to 6% in 1996 and then up again to 8% following the
Asian Financial Crisis The Asian financial crisis was a period of financial crisis that gripped much of East Asia and Southeast Asia beginning in July 1997 and raised fears of a worldwide economic meltdown due to financial contagion. However, the recovery in 1998– ...
.


See also

*
Mother of all Budgets The Mother of all Budgets was the nickname given to the 1991 New Zealand budget. It was the first budget delivered by the new National Party Minister of Finance Ruth Richardson and formed the catalyst of her economic reforms known in the media as ...
*
Economy of New Zealand The economy of New Zealand is a highly developed free-market economy. It is the 51st-largest national economy in the world when measured by nominal gross domestic product (GDP) and the 63rd-largest in the world when measured by purchasing po ...
* Politics of New Zealand


References

{{Economy of New Zealand Political history of New Zealand Political terminology in New Zealand New Zealand National Party 1990s neologisms 1991 in New Zealand 1990s in New Zealand