Dr Michael Bassett

Dr Michael Bassett

Newspaper Columns

Roger Douglas's 70th birthday

Roger Douglas's 70th birthday was celebrated in fine style in the Beehive on 5 December 2007, amidst a huge crowd. Amongst a number of speeches, I made these comments:

I have been asked to say a few words about Roger Douglas' time as a minister between 1972 and 1975. I was elected to Parliament on 25 November 1972 where I joined him in the Labour caucus. It would be nice to tell some funny stories about Roger who was the youngest minister in a rather lack-lustre government. But it wasn't a particularly funny time. Roger has been heard to say of the Third Labour Government that it was the worst government in the post-war period. With recent experience he has begun qualifying that judgment.

A few days off 35, just half his present age, when he entered Norman Kirk's government as Postmaster-General and Minister of Broadcasting, Roger later became Minister of Housing and Minister of Customs in Bill Rowling's 15 month ministry following Kirk's death in August 1974. Roger's initial portfolios weren't too arduous, so he set about reforming broadcasting big time. Colour TV was about to emerge and Roger decided that it should be enjoyed on two competing, publicly-owned channels, TV 1 and TV2. Virtue in competition, my mate said, although these days he'd probably have had at least one corporation privately-owned, possibly both? Radio NZ appeared, too, as a separate entity. Much of the modern broadcasting structure dates in broad outline back to Roger.

With time on his hands, this young well-qualified accountant read the cabinet papers carefully, and managed to learn the dynamics of government. Flush with cash for five minutes, Kirk's government then contended with imported inflation from the first oil shock of 1973, piling on to our own locally-produced inflation. It came principally from excessive government spending over many years. The accountant in Roger was sceptical about Warren Freer's efforts to control inflation with his ill-fated Maximum Retail Price (MRP) scheme in 1974 that ended in a total shambles. As New Zealand's terms of trade deteriorated at a record rate, the government shot from feast to famine at 1000 KPH. It was a pressure-cooker course for Roger in the problems of governing in adverse times. He learned a huge amount, his mind working overtime.

Possibly Roger's most useful experience for the government in which he became the driving force after 1984 was his time serving on a cabinet committee in 1974-75 studying several of the state-owned trading enterprises. His papers in the Alexander Turnbull Library provide examples of bloated organizations with no clear goals, no direction, run by mostly unimaginitive bureaucrats and know-very-little ministers. The costs of their stewardship were loosely wrapped and passed on to taxpayers like a giant Christmas present each year. By 1984 it cost the government annually many hundreds of millions in subsidies to keep the state trading organizations afloat. In 1986 10% of New Zealand's income went into keeping those trading organisations operational. The return on the government's investment in them was NIL. It had taken many years to reach this heady state.

The Kirk-Rowling government of 1972-5 gave Roger an advanced qualification in what NOT to do when growth was declining and indebtedness was piling up. He, and we, would have to endure another eight and a half years watching Muldoon repeat all the Third Labour Government's mistakes on Roger's colour TV. As a vital sideline activity, he gained practical experience in business on his own account. He read a great deal. His files tell heaps about an inquiring mind trying to find out where New Zealand had gone wrong. And he gathered friends around him who contributed to the mutual learning process. His younger parliamentary colleagues, friends like Murray Smith, then Don Brash whom he met at my place and then saw at work on the Planning Council, the late Jim Holt who was a university colleague of mine, Jim's close friend Alan Gibbs, Arthur Valabh and Geoff Swier who are with us tonight, Doug Andrew, and other friends who are also here. In later years Roderick Deane, Graham Scott, Douglas Myers, Roger Kerr, Bryce Wilkinson and others became part of Roger's wider circle of gurus.

Roger didn't just suddenly spring fully-armed from the heads of Kirk and Rowling and from Labour's folklore. The reverse. He taught himself with your help. As he gradually unravelled most of the state's interventions in the market place, floated the dollar, and pushed for the creation of state owned enterprises, he made himself the single most important political figure in New Zealand in half a century. It was thanks to his basic intelligence, his personal experience, and his willingness to learn from discussions with many of you in this room tonight. It is no accident that twenty years after he ceased to be New Zealand's Minister of Finance he is still sought out around the world for advice on how to handle reform within a democratic environment. Some of the credit for that, too, belongs to others in the room tonight.