The book's subtitle – The New Zealand experiment – a world model for structural
adjustment? is more revealing of its contents than the title. The New Zealand
experiment was a rapid and radical liberalisation of the economy incorporating:
substantial freeing-up of financial, labour, external trade and foreign exchange
markets, large reductions in the direct government intervention in every economic
and social sphere, all combined with general fiscal and monetary
restraint. Specific elements have included: substantial cuts in nominal levels of
welfare benefits; removal of trade protections and subsidies; an Employment
Contracts Act which emasculated the unions and thence collective bargaining;
privatisation of most state enterprises (including all the utilities, railways,
forestry and the HMSO-equivalent government publisher); corporatisation of
hospitals and government research organisations; and statutory independence
for the central bank (which was legislated to focus thereafter on inflation control
only). So in just a decade New Zealand, one of the original homes of the welfare
state, went from having a more regulated and subsidised economy than Britain,
to being more like a stereotypical USA of the South Pacific. What may also surprise
JSP readers is that the programme was initiated by a Labour government
(1984–90). The National, traditionally Tory government (1990–present) did
however significantly accelerate the process.