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|37th Minister of Finance|
2 November 1990 –1993
|Prime Minister||Jim Bolger|
|Preceded by||David Caygill|
|Succeeded by||Bill Birch|
|Member of the New Zealand Parliament |
|Preceded by||Colin McLachlan|
|Succeeded by||David Carter|
|Born||13 December 1950|
Taranaki, New Zealand
|Relations||George Pearce (great-grandfather)|
Ruth Richardson (born 13 December 1950) served as New Zealand's Minister of Finance from 1990 to 1993, is credited for being the first Finance Minister to have published a modern public sector balance sheet. Following the work of the preceding Labour Government that initiated the financial reforms and passed the necessary legislation, she supported and carried on the reforms, and extended them in a significant way with the fiscal responsibility Act 1994. [ citation needed ]And more than the Labour ministers who initiated the reforms, she advocated for the merits of modern accounting and financial systems subsequently introduced modern accounting to the national government. These Public Financial Management reforms were part of her wider economic reforms that helped to take New Zealand out of its economic and financial crisis, including the Mother of all Budgets as the first budget was called. This first budget formed the catalyst of her economic reforms known in the media as 'Ruthanasia', as they were widely unpopular at the time with huge, controversial changes following the works of the previous labour government. The successful reforms have been thoroughly researched and documented in academia and held up as a model reform program.
The Minister of Finance, originally known as Colonial Treasurer, is a senior figure within the Government of New Zealand and head of the New Zealand Treasury. The position is often considered to be the most important cabinet post after that of the Prime Minister. The Minister of Finance is responsible for producing an annual New Zealand budget outlining the government's proposed expenditure.
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 "Ruthanasia".
Ruthanasia, a portmanteau of "Ruth" and "euthanasia", is the pejorative name given to the period of free-market policies conducted during the first term of the fourth National government in New Zealand, from 1990 to 1993. As the first period of reform from 1984 to 1990 was known as Rogernomics after the Labour Party Minister of Finance, Roger Douglas, so the second period became known as "Ruthanasia", after the National Party's Minister of Finance, Ruth Richardson.
Richardson was born in southern Taranaki on 13 December 1950. Her family had a long history in the area, and her great-grandfather George Pearce had served as MP for Patea from 1908 to 1919. Her father was active in the National Party's Patea branch. Richardson was brought up as a Roman Catholic, and after finishing primary school, was sent to Sacred Heart College, a Catholic girls' high school in Wanganui.[ citation needed ]
Taranaki is a region in the west of New Zealand's North Island. It is named after its main geographical feature, the stratovolcano of Mount Taranaki.
George Vater Pearce was a New Zealand politician of the Reform Party.
Patea is a former New Zealand electorate in south Taranaki. It existed from 1893 to 1963.
Richardson decided on a career in Parliament at an early age, before she even left high school. Sir Roy Jack, a National Party MP and a friend of her family, advised her to study law, which she did. Richardson gained a law degree with honours from the University of Canterbury. After graduating, she worked for the Department of Justice, again following Sir Roy Jack's advice. In 1975, Richardson married Andrew Wright, a colleague from the Department.[ citation needed ]
The New Zealand Parliament is the legislature of New Zealand, consisting of the Queen of New Zealand (Queen-in-Parliament) and the New Zealand House of Representatives. The Queen is usually represented by her governor-general. Before 1951, there was an upper chamber, the New Zealand Legislative Council. The New Zealand Parliament was established in 1854 and is one of the oldest continuously functioning legislatures in the world. It has met in Wellington, the capital of New Zealand, since 1865.
Sir Roy Emile Jack was a New Zealand politician of the National Party. He was a cabinet minister and Speaker of the House of Representatives.
The University of Canterbury is New Zealand's second oldest university.
Richardson's first attempt to break into politics came when she challenged Sir Roy Jack for the National Party nomination in the 1972 election. His Waimarino electorate was to become Rangitikei because of post-census boundary changes. Besides alienating her from her old mentor, she also created considerable irritation in the higher ranks of the party, which frowned on challenges to sitting MPs who sought renomination. The party was especially hostile when the challenge was made against long-serving MPs such as Sir Roy Jack. George Chapman who chaired the selection said that "The tensions were tremendous, but Roy was finally confirmed as the candidate."She was a member of the non-partisan political lobby organisation the Women's Electoral Lobby.
The New Zealand general election of 1972 was held on 25 November to elect MPs to the 37th session of the New Zealand Parliament. The Labour Party, led by Norman Kirk, defeated the governing National Party.
Waimarino was a New Zealand parliamentary electorate that existed from 1911 to 1954, and from 1963 to 1972. It was rural in nature and was represented by four Members of Parliament.
The Women's Electoral Lobby (WEL) in New Zealand was a non-partisan feminist lobby organisation founded in 1975. From the 1970s to the 1990s it worked for greater participation of women in local and national politics. WEL educated and supported women to stand for election, lobbied and advocated for women, and monitored legislation and the media to make sure women’s concerns were addressed. It supported the introduction of the proportional representation voting system in 1996 on the grounds that it would lead to greater representation of women in parliament.
In 1978, Richardson contested the National Party's nomination for the Tasman seat. She won the nomination, but in the 1978 election itself, she failed to defeat incumbent Labour MP Bill Rowling (who was leader of his party at the time). In 1980, she was invited to contest the nomination for Selwyn, an electorate just outside Christchurch which was held by retiring National MP Colin McLachlan. She won the nomination, and in the 1981 election, was elected to Parliament.[ citation needed ]
Tasman is a former New Zealand parliamentary electorate, from 1972 to 1996.
The 1978 New Zealand general election was a nationwide vote to elect the 39th New Zealand Parliament. It saw the governing National Party, led by Robert Muldoon, retain office, but the opposition Labour Party won the largest share of the vote. Reorganisation of the enrolment system caused major problems with the electoral rolls, which left a legacy of unreliable information about voting levels in this election.
Sir Wallace Edward Rowling, commonly known as Bill Rowling, was a New Zealand politician who was the 30th Prime Minister of New Zealand from 1974 to 1975. He held office as the parliamentary leader of the Labour Party.
|New Zealand Parliament|
Richardson quickly distinguished herself in the National Party caucus as a supporter of free market economics, privatisation, and trade liberalisation. This contrasted considerably with the views held by National Party Prime Minister Robert Muldoon, who favoured an interventionist approach based on significant overseas borrowing. Richardson's focus on financial matters was itself a cause for comment, as many female MPs (particularly in the National Party) had confined themselves to matters such as health and social welfare. Richardson entered parliament with a strong determination not to end up in those roles.[ citation needed ]
A caucus is a meeting of supporters or members of a specific political party or movement. The term originated in the United States, but has spread to Australia, Canada, New Zealand, South Africa and Nepal. As the use of the term has expanded, the exact definition has come to vary between political cultures.
In economics, a free market is a system in which the prices for goods and services are determined by the open market and by consumers. In a free market, the laws and forces of supply and demand are free from any intervention by a government or other authority and from all forms of economic privilege, monopolies and artificial scarcities. Proponents of the concept of free market contrast it with a regulated market in which a government intervenes in supply and demand through various methods such as tariffs used to restrict trade and to protect the local economy. In an idealized free-market economy, prices for goods and services are set freely by the forces of supply and demand and are allowed to reach their point of equilibrium without intervention by government policy.
Sir Robert David Muldoon, also known as Rob Muldoon, 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.
When National lost the 1984 election, Richardson became a member of the Opposition. Richardson stood out in National's caucus for her strong support of the radical economic reforms of the Labour Party's new Finance Minister, Roger Douglas. These reforms, sometimes known as "Rogernomics", involved the privatisation of state assets, the removal of tariffs and subsidies, and applying monetarism to control inflation. These reforms were seen by many in the Labour Party as being against the traditional policies of the left-wing Labour Party, but were also opposed by the more conservative wings of the National Party. Particularly hostile were followers of Robert Muldoon, a traditionalist conservative who opposed free market reforms as undermining state authority.[ citation needed ]
Shortly after National's electoral loss, Jim McLay replaced Muldoon as leader of the National Party, and there was a considerable rearrangement of responsibilities. People such as Bill Birch and George Gair, who McLay associated with the Muldoon era, were demoted. They were replaced by newer MPs, such as Richardson and Simon Upton, who McLay believed would help revitalise the party. This move proved fatal to McLay personally, however, as the sacked Birch and Gair allied themselves with McLay's rival, Jim Bolger. Bolger ousted McLay and became party leader.[ citation needed ]
The change in leadership was damaging for Richardson, as Bolger (and many of his allies) strongly disliked her. This dislike was due to three main factors: anger at McLay's "favouritism" towards her, dislike of her advocacy for radical free-market economic policies, and dislike of her personality (which many colleagues found "abrasive" and "condescending"). When George Gair (elevated for his role in Bolger's rise to power) retired from the position of deputy leader, Richardson stepped forward for the position. Bolger, however, made it clear that he strongly opposed Richardson's candidacy, instead throwing his support behind Don McKinnon. McKinnon defeated Richardson and became deputy leader.[ citation needed ]
Bolger did, however, make Richardson the party's spokesperson on finance. This was an attempt to pacify Richardson and her supporters, rather than an expression of confidence in her – it was well known that Bolger himself preferred the more cautious Bill Birch for the finance role. The move to defuse tension was only partially successful, and hostility between supporters of Bolger and supporters of Richardson remained. Many National politicians believed that Richardson sought to replace Bolger as leader, but even if Bolger was vulnerable, the two factions that opposed him (one led by Richardson and the other led by Winston Peters) were unwilling to cooperate. Bolger's leadership remained secure, and when his popularity rose, the window of opportunity was lost.[ citation needed ]
When Richardson gave birth during a recess in the 1980s, she had a room in Parliament set aside for her to breastfeed in (although a creche was not established until the 1990s).
When National came to power in the 1990 election, Richardson had enough support within the party to be made Minister of Finance, a role Bolger would rather have given to Bill Birch. Many people believed that the National Party would adopt more cautious, conservative policies than the radical Labour government. On coming to office, however, the new Government was confronted with a much worse fiscal and economic position than the out-going Government had disclosed. In particular, the government-owned Bank of New Zealand required a multimillion-dollar recapitalisation. The forecast budget surplus was quickly revised, upon National coming into office, to a large budget deficit. In response, the new Government announced significant cuts to social welfare benefits, and reversed National's 1990 election promise to remove the tax surcharge on superannuation.[ citation needed ]
Whilst employment law reform had been expressed in the 1990 manifesto, many National Party supporters, and some of its parliamentary caucus, were disappointed at the continuation of the policies established by Douglas. Richardson's first Budget, which she had jokingly dubbed the "Mother of all Budgets" – a term that would haunt her political career—compounded this unpopularity, as it significantly cut state spending in many areas as an attempt to bring deficits under control. As a result of the policies, which were widely known as 'Ruthanasia', Richardson became one of the most disliked politicians in the country.[ citation needed ]
While she remained Finance Minister for the whole three-year term of the first Bolger government, this was a period marked by increasing tension within the Cabinet. Tax policy was an area where Richardson and the more moderate members of the Cabinet often failed to agree even the basics.[ citation needed ]
Although National was re-elected in the 1993 election, it was by the narrowest of margins (1 seat) and many people within the party believed that Richardson's presence was damaging to the party. In addition, Bolger and his allies had still not been reconciled with her. In order to partially reflect the strong discontent in the electorate with the reform process (National arguably only won because the opposition vote was split between three parties) Richardson lost her role as Minister of Finance, and was offered the role of Minister of Justice. Richardson refused, preferring to take a role on the back-benches then called a by-election. She was replaced by Bill Birch, Bolger's original preference.[ citation needed ]
Though her period as Finance Minister was comparatively short, Richardson’s legacy in subjects such as Fiscal Responsibilityand Economic Liberty is large. Many of the reforms she championed have endured and remain an example for a modern Public Financial Management. As an example, with the first public sector balance sheet produced it was used to avoid a double down-grade to the Sovereign credit rating. In fact, New Zealand remains the only country that has introduced modern accounting and integrated its balance sheet with the budget, as a tool for its budgeting, appropriations, and financial reporting. Since these public sector reforms New Zealand has achieved and maintained significantly positive net worth, notwithstanding several chocks to the economy including the Financial crisis of 2007/08 and the Christchurch earthquake in 2011, where most comparable governments like Australia and Canada, or larger countries such as the UK and US, have a negative net worth.
Perhaps most importantly, the Fiscal transparency of the New Zealand government remains unparalleled among developed economies with The Treasury publishing monthly and annual (year end) financial statements.The Treasury is also publishing a Fiscal Risk Analysis, which means no future New Zealand government will be faced with the fiscal shock that the Bolger government experienced in 1990. The Fiscal Responsibility Act (now part of the Public Finance Act) requires the Treasury to disclose the fiscal risks facing an in-coming government prior to every election.
In 1993, Richardson was awarded the New Zealand Suffrage Centennial Medal.
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Ruth Richardson resigned from parliament in the following year, being replaced by David Carter as MP by the 1994 Selwyn by-election
She continued to be involved in politics through her advocacy of the ACT New Zealand party. ACT, established by Roger Douglas and his allies, promotes policies very close to those of Richardson. She has also a number of roles related to business and corporate governance, and served on a number of corporate boards. She is also a member of the Mont Pelerin Society, founded by economist Friedrich von Hayek.
The term Rogernomics, a portmanteau of "Roger" and "economics", was coined by journalists at the New Zealand Listener by analogy with Reaganomics to describe the neoliberal economic policies followed by Roger Douglas after his appointment in 1984 as Minister of Finance in the Fourth Labour Government of New Zealand. Rogernomics was characterised by market-led restructuring and deregulation and the control of inflation through tight monetary policy, accompanied by a floating exchange rate and reductions in the fiscal deficit. Douglas came from a background of Labour Party politics. His adoption of policies more usually associated with the political right, and their implementation by the Fourth Labour Government, were the subject of lasting controversy.
The New Zealand National Party, shortened to National or the Nats, is a centre-right political party in New Zealand. It is one of two major parties that dominate contemporary New Zealand politics, alongside its traditional rival, the New Zealand Labour Party.
Sir Roger Owen Douglas, a retired New Zealand politician, 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 1980s, when the Fourth Labour Government's economic policy became known as "Rogernomics".
James Brendan Bolger is a New Zealand politician of the National Party who was the 35th Prime Minister of New Zealand, serving from 1990 to 1997.
The 1990 New Zealand general election was held on 27 October to determine the composition of the 43rd New Zealand parliament. The governing Labour Party was defeated, ending its controversial two terms in office. The National Party, led by Jim Bolger, won a landslide victory and formed the new government.
Sir William Francis Birch, usually known as Bill Birch, is a former New Zealand politician. He served as Minister of Finance for several years in the fourth National government.
The New Zealand Party operated as a political party in New Zealand from 1983 to about 1986. Established by millionaire property tycoon Bob Jones, the party promoted economic liberalisation—it was the first political party to promote free market reforms. It failed to win any seats in Parliament, but it purportedly played a role in causing the defeat of Robert Muldoon's National government in the 1984 election by splitting the vote.
Sir James Kenneth McLay is a New Zealand diplomat and former politician. He served as the Deputy Prime Minister from 15 March to 26 July 1984. McLay was also Leader of the National Party and Leader of the Opposition from 29 November 1984 to 26 March 1986. Following his ousting as party leader, he retired from parliamentary politics in 1987. In June 2009, he became New Zealand's Permanent Representative to the United Nations. In May 2015, McLay became New Zealand's Representative to the Palestinian Authority. From May 2016 to January 2017, he was New Zealand's Consul General in Honolulu.
The 41st New Zealand Parliament was a term of the Parliament of New Zealand. Its composition was determined by the 1984 elections, and it sat until the 1987 elections.
Gilbert Colin Myles is a former New Zealand politician who entered Parliament for the National Party in 1990, then split from the party in 1991 and sat as an independent, before representing the Liberal Party, the Alliance and the New Zealand First party.
The New Zealand Treasury is the central public service department of New Zealand charged with advising the Government on economic policy, assisting with improving the performance of New Zealand's economy, and managing financial resources.
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The New Zealand constitutional crisis of 1984 was an important constitutional and political event in the history of New Zealand. The crisis arose following the 1984 general election, and was caused by a major currency crisis. The crisis led the incoming government to review New Zealand's constitutional structures, which resulted in the Constitution Act 1986.
The Fourth National Government of New Zealand was the government of New Zealand from 2 November 1990 to 27 November 1999. Following electoral reforms in the 1996 election, Jim Bolger formed a coalition with New Zealand First. Following Bolger's resignation, the government was led by Jenny Shipley, the country's first female Prime Minister, for the final two years.
The 1984 New Zealand National Party leadership election was held to determine the future leadership of the New Zealand National Party. The election was won by former Deputy Prime Minister Jim McLay.
The New Zealand National Party leadership election was an election for the National leadership position in 1986.
|New Zealand Parliament|
| Member of Parliament for Selwyn |
| Minister of Finance |