An interesting article appeared in the Daily Signal entitled, "What Happened When New Zealand Got Rid of Government Subsidies for Farmers."
I can't vouch for the veracity of it. I wasn't living in NZ during the 1985 to 1991 period. But the very first comment post article echoes what I thought reading it.
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The most important line in the article is "going cold turkey was the right thing"
If we hadn't gone cold turkey we would have even more farm subsidies today than we did then. Because we went cold turkey that's the only Ruth/Douglas reform that hasnt been undone.
Instead of bulk funding (sorry, global finding) national had gone cold turkey on state schools we wouldn't have any state schools today. 6 charter schools achieve nothing.
If national had gone cold turkey on hospitals instead of just setting up DHBs we wouldn't be in the current mess.
If National had gone cold turkey on the dole instead of a few gentle cuts we wouldn't be paying higher rates of dole than we ever have.
And most of all, if National had the guts to go cold turkey on super - yes stopping immediately for everyone - then the economy would be far better off, and most of all the so-called "housing crisis" would end overnight (because the #1 effect of super means people don't have to sell their houses to cover their retirement.)
Living in a rural environment at the time I witnessed first hand the shock subsidy removal had on farmers.
A couple of the local golden boys committed suicide when they realised their flash harry lifestyles would be exposed as a fraud.
Others lost their farms to the bank when the subsidies were the only thing keeping the mortgage going.
The old school farmers who had no or little debt were mostly unaffected and weathered the storm.
I was a city boy with no rural experience who rented a old homestead with a couple acres for $5 a week and the old couple who owned the farm were worried if this might be to much. fabulous people who treated me and my family well.
I believe most survived the storm and were wiser for the experience.
i suspect part of labours decision to remove subsidies was also payback to the National party for wrongs done by the political farming fraternity of old.
I was fencing at the time ( still am ) and when the subsidies were dropped, the farm development dried up over night and with it our work . It did become survival of the fittest and you had to adapt or go out, work became scarce for awhile and it was about taking on whatever work you could find.Necessity the mother of invention. We hated the removal of the subsidies at the time but looking back it did the farming industry a hell of a lot good, making farmers more resilient and realizing that a farm has to make an economic return and not be so reliant on gov't feather bedding.While farming has had may ups and downs since and will continue to do so it is a much more robust industry now.
Let's not forget it was a Labour govt, and since then we've basically had two decades of socialism that has built up the parasite class at the expense of the productive.
National should have taken this initiative in the first place, and they should be doing it now, but they don't have the balls. They'd rather redistribute $80 billion of taxpayer's money and tell us to be grateful for it.
A weak leader and consequently a weak party, they haven't had a decent rep in the house since Ruth Richardson. For sure no one ever with the courage of Douglas.
Douglas - commie admirer of Lee Kwan Yew?
Sure SMPs and other subsidies were bad, but NZs 80million welfare bill is far far worse and Douglas didn't cut one cent - that was all Ruth.
Imagine where NZ would be now if Key's government had gone "cold turkey" on just one welfare program each term. First term welfare; second term education; third term health; and fourth term super. And that's pretty much it.
Reforms and revisions and market provision are basically all useless. The only thing that ever makes a lasting difference is full cold try key cancellation -ideally with zero notice. Why? Because that's the only way the country learns NOT to rely on government!
The ONLY Richardson/Douglas reform that lasted was this one precisely because it was cold turkey. Every other program that was only cut or reformed is now wasting more money that ever.
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