ANALISIS DE PRUEBAS DE ACEPTACIÓN

Upon its election in July 1984, the Fourth Labour Government embarked upon a process of reform that fundamentally affected New Zealand’s economy and society, replacing the erstwhile social democratic regime with a “textbook case of neoliberalism” (Baragwanath, 2003: 105). It immediately set about deregulating interest rates and removed

international capital restrictions, agricultural subsidies and tax incentives and, in 1985, it floated the New Zealand dollar. Over the next ten years, domestic market regulations were reformed in favour of contestability and competition, import quotas were eliminated and successive governments established a timetable for reducing tariffs to zero by 2006 (Dalziel, 2002).

This process of structural adjustment was accompanied by a corresponding reinvention of public management focusing on local government (Ateljevic & Doorne, 2000; Boston, Martin, Pallot & Walsh, 1996; Bush, 1995; Kelsey, 1995), and culminated with the

establishment of a middle-tier of regional government in 1989. Taken together, the twin thrusts of these reforms were an acceptance of market forces as a guiding philosophy of

national development, and a consequent programme of privatisation and restructuring of state-owned assets and activities (Simpson, 2003). The direction of these reforms was conditioned by a nexus of influences, and included key figures in the Labour Government, Treasury and influential business lobbyists. The gravity of this influence was, in turn, permitted by New Zealand’s ‘thin’ policy-making institutions in conjunction with the rushed circumstances created by the 1984 general election. Baragwanath (2003: 112) argues that the vast scale, scope and speed of change represents much more than simply the views of one person, or the idle whim of one political party. Rather, it represents a confluence of a number of internally- and externally-driven influences at a critical juncture in time, which created the requisite conditions for radical structural change to occur (or, rather, to be permitted to occur).

Price stability was designated the sole statutory objective of monetary policy in 1989, while in 1991 labour legislation was radically transformed from a corporatist, union-based framework to a decentralised, individual-based contracts system under the Employment Contracts Act. This pattern continued with the enactment of the Fiscal Responsibility Act

(1994), which prohibited budget deficits over the medium term. In addition,

approximately US$10 billion worth of state-owned assets were privatised between 1988 and 1999, while all the remaining central government trading departments were

restructured along the lines of private sector corporations. Social welfare support

entitlements were significantly reduced in 1991, while income tax rates were cut in 1996 and again in 1998 (Dalziel, 2002: 32). During this time, New Zealand’s economy was rapidly transformed from one of the world’s most rigid and centralised to one of the world’s most free and unfettered (Simpson, 2002).

New Zealand’s transformation from social democracy to neoliberalism reflected an

international trend discernible elsewhere. In adopting a neoliberal policy framework, New Zealand mirrored the international rejection of Keynesianism occurring in the 1970s and 1980s across the West. This transformation was exemplified most notably in the rise of ‘New Right’ conservative governments in the USA, Canada, Britain and West Germany (Baragwanath, 2003; Brohman, 1996; Shone, Horn, Simmons & Moran, 2005; Shone & Memon, 2008; Telfer, 2002). New Zealand, however, went further and faster than any

other country in its restructuring programme; both “out-thatchering Thatcher” in its embrace of market neoliberalism and significantly revamping its governance structures (Haggerty, 2007: 223). Hence, the decision to initiate reforms is not what marked New Zealand’s reform programme as unique, but rather its extent (Baragwanath, 2003). The unique nature of New Zealand neoliberal ‘experience’ is perhaps best described by Henderson (1996: 13), who notes:

In no other OECD country has there been so systematic an attempt at the same time (1) to redefine and limit the role of government, and (2) to make public agencies and their operations more

effective, more transparent, and more accountable. It is this important extra dimension, as well as the range and scope of reforms – that have more obvious counterparts elsewhere – that gives the New Zealand programme its special character.

4.4.1 Regional Futures and the Withdrawal of Agricultural Protectionism

Agriculture was the first target of the neoliberal reforms. New Zealand economic policies traditionally reflected farming’s central role in the economy (Kelsey, 1995). In 1984, agriculture still contributed 60 per cent of exports and seven per cent of GDP, and had remained the major foreign-exchange earner. While other industries had received both input subsidies, such as cheap finance and farm development incentives, and a

supplementary minimum price (SMP) for output. Between 1984 and 1987 these were withdrawn. The 20 per cent devaluation in 1984 was expected to help compensate for the phasing out of SMPs, but the dollar rapidly appreciated after it was floated in March 1985. User charges were imposed for most government research and, as a result of corporatisation, for utility services (Kelsey, 1995: 95).

Many farmers who had invested at inflated land prices or expanded production during the SMP-driven boom were left over-exposed. As interest rates increased, farmers reduced on-farm expenditure on fertiliser and maintenance and cut stock numbers to service the debt. According to Kelsey (1995: 95), in the 1985/86 financial year, sheep farmers’ terms of trade at the farm gate fell to as low as 56 per cent of the base year of 1974/75, which itself was not a particularly good year. The decline was such that by 1985:

A great number of influential policy-makers, including the Minister of Finance, were looking upon New Zealand’s traditional

agriculture as a ‘sunset industry’, although most of the

propounded alternative industries found their own sunset after the 1987 financial crash (Bremer & Brooking, 1993: 125).

As noted in Chapter One, the net result of these changes in agricultural policy meant that in New Zealand the peripheral economies of regional and rural areas were faced with the effects of the reform process with more immediacy and greater acuity than their larger urban counterparts. These conditions were further reinforced by waning business confidence in the rural sector and investment decisions becoming increasingly directed toward the major centres of commerce. With smaller regional centres facing declines in the profitability of primary production and a workforce migrating to the main centres, tourism was perceived as a suitable means by which to stem this outbound flow of capital investment and labour (Shone et al., 2005: 87). This pattern of regional decline is a classic reflection of the relationship between core urban centres and peripheral regional or rural areas, and appears to contradict the assumption of ‘trickle-down’ economic benefits associated with the theories of right-wing economics (Shone & Memon, 2008). Thus, in New Zealand, as in many peripheral economies internationally, tourism is identified as a suitable mechanism for economic diversification and as a promising generator of foreign exchange.