Making a Difference
Shoal Bay Press, $29.95,
When Ruth Richardson announced last year that she was leaving Parliament, journalists at the press conference asked if she was bitter. “I do not have a bitter bone in my body,” she replied and this book is proof of that. She is generous throughout in expressing gratitude to her personal staff, her electoral supporters, the civil servants she had to deal with and her friends and family. It is a gracious contribution to our growing political literature ‑ a literature not notable for graciousness.
Its first three quarters are detailed political autobiography and its last section is reminiscent of Sir Roger Douglas’s Unfinished Business in that it outlines where Richardson thinks we should go in various pivotal policy areas. Readers will search in vain for startling revelations or any shred of bitchiness. Nevertheless, for all who have lived through the extraordinary politics of this past decade and for all who wonder at the intricacies of policy formulation this is a truly fascinating read.
Richardson was never likely to have a smooth ride within the National Party. She was a radical and an activist “driven by a desire to change the political landscape”, while most of her National Party colleagues saw themselves as pragmatic conservatives, content to juggle public opinion and pressure groups and simply to hold the reins of power. Additionally, the older echelons of the National Party have never been truly at ease with women in politics except behind the tea urns. Sir Robert Muldoon, for instance, recognised that he had trouble on his hands with “the beady‑eyed little lady” from her very first caucus meeting after the 1981 election. When he asked her what she wanted to achieve in politics she told him her goal was to eliminate inflation. He was not amused.
Richardson decided at the age of 15 to enter Parliament and did 15 years later. How many 15‑year‑olds are so focussed and achieve their ambition? She knew from the beginning she would ruffle feathers. In her introduction she acknowledges that “politicians like me may be right or wrong, successful or unsuccessful, but we see ourselves as agents of change. Our political lives are often short, but they do not go unremembered. For good or ill we make a difference”. Indeed she did.
Richardson’s first years in Parliament, 1981‑84, were in effect the protracted death rattle of the Muldoon administration. As economic indicators turned against him he became increasingly cranky and tyrannical. “Think big” did not create the 400,000 jobs promised by Bill Birch and instead greatly inflated the overseas debt. The wage and price freeze broke every known rule of orthodox economics (and the Treasury’s heart). But even though three government members, including Richardson, bravely crossed the floor of the House on the move to extend the freeze to cover interest rates, Muldoon got the legislation through by threatening two disaffected Labour members and the two Social Credit MPs with a snap election if they didn’t support him. Richardson had earlier against her better judgment been steamrollered into voting for the Clyde dam ‑ “a decision I regret to this day” ‑ and wasn’t again going to be pressured to vote against her convictions and conscience.
One little vignette from this time I find disturbing. Bachelor Jonathan Hunt, the Labour Chief Whip, had granted Richardson a parliamentary pair to breastfeed baby Lucy. “But Jonathan had not counted on the cattiness of his female colleagues.” The pair was withdrawn, “much to Jonathan’s abiding embarrassment”. Whatever happened to sisterhood? I can well imagine that they disliked her politics, but they could surely not have doubted the genuineness of her feminism. She was, for instance, a foundation member of the Women’s Electoral Lobby. And in any case, denial of a pair was surely detrimental to the baby rather than anyone else. This is not a pretty incident in the history of women in the House.
The opening flourishes of the Fourth Labour Government must have been a kind of torture for Richardson. Here was a supposedly socialist administration doing so many things her free‑enterprise spirit had yearned for and her National Government had notably failed to do. Douglas in 1994 abandoned the wage‑price freeze and exchange controls, floated the dollar, deregulated the banking sector and instructed the Reserve Bank to commence a monetary policy aimed at bringing down inflation. Douglas further gladdened Richardson’s heart by abolishing export incentives to the manufacturing sector along with direct subsidies to farmers and he reformed tax policy by lowering income tax rates and increasing the relative contribution of indirect tax by introducing the goods and services tax.
“No‑one of my philosophical persuasion” she writes, “could cavil at the courage, direction and purpose shown by Douglas in his first term as Finance Minister. It was a remarkable performance from a man who inherited the most badly run economy in the western world.”
But her colleagues, if you remember, did cavil endlessly. The National Government in office (1975‑84) had wandered far from the party’s philosophical roots and in opposition after 1984 the party took a considerable time to sort out where it had gone wrong and where it should be going. Ideological clarity had never been the party’s defining characteristic and in defeat settling old scores for too long took precedence over a spring‑cleaning of ideas. Richardson admits that the National Party in opposition opposed the Labour Government on almost every element of the reform programme. “We chose a muddled middle course that was full of contradictions.” After the 1987 election Richardson was determined to iron out some of those contradictions. That Labour was returned to power helped her, for she was able to point out to some of her more recalcitrant colleagues that the thinking of the electorate had apparently moved further than theirs.
Jim McLay’s ousting by Jim Bolger in March 1986 saw Richardson, Ian McLean and Doug Kidd demoted after only two months on the front bench. She did, however, retain her role of education shadow minister, where she beavered away diligently. In the light of National’s 1987 election debacle she can now express satisfaction that she had little to do with its confused taxation and economic policies which were rejected emphatically by the electorate. I had forgotten (had you?) that she then put her hat in the ring to be Bolger’s deputy. That must have put the frighteners on him: an ideological purist and a lady to boot! Don McKinnon won the deputy’s job (by only one vote, Richardson tells us) and Bolger offered her the job of finance spokeswoman. She accepted on two conditions ‑ that Simon Upton be made her associate and that Muldoon be relegated to the back benches. She now graciously concedes that McKinnon has made a better deputy than she would have. He has been “the peacemaker, the healer who keeps the team together”. Conciliation was hardly Richardson’s forte and she knows it.
Labour’s second term in office (1987‑90) was bedevilled by the Lange‑Douglas falling out. Nevertheless, Richardson gives credit where she thinks it is due. She notes, too, that she was particularly proud that she persuaded her colleagues to support both the Reserve Bank Act and the Public Finance Act, which Douglas begat but David Caygill birthed. The two members of her caucus she found hardest to convince were Bolger and Birch. “Both had instincts deeply rooted in the hands‑on economic management of the Muldoon era and their journey away from that style of management was a slow one.”
On the matter of her own changes of personal style she is candid and even humorous. She quotes a joke along the lines: “What’s the difference between Richardson and a rottweiler? Lip gloss.” In other words, despite the successful efforts of her personal staff to feminise her appearance and smarten up her wardrobe, the lady herself never lost sight of the fact that these were only means to her ends ‑ a more productive economy with less government meddling in it.
The process of getting her colleagues into line on a more open labour market policy is told in vivid detail. For policy wonks (President Clinton’s phrase) this chapter is a classic. “The ups and downs of this saga stand as a good example of the capriciousness, the zig‑zags, the manoeuvring, the tricks, the blind chance and the sheer confusion that constitutes so much of policymaking within a political party.” And then politicians wonder why the public distrusts them!
The 1990 election gave New Zealand its first woman finance minister and gave Douglas his true heir. If New Zealanders thought that bringing back National meant bringing back anything like Muldoonism they were to be disappointed. The new chatelaine of the economy looked forward not back.
Before the election she had warned her colleagues against making costly promises for fear of what they would find when the books were opened. What they found, of course, was that the Bank of New Zealand was in a parlous state and needed bailing out to the tune of $600 million. One of her more interesting revelations is that “the only minister who objected to the package was Winston Peters. In his view we should have let the bank fall over”. What an irony given that Peter’s subsequently set himself up as the champion of BNZ small shareholders. Peters is one of the very few people in politics of whom Richardson is openly contemptuous. In an effort to break up what she saw as “the Jim and Bill duopoly” she persuaded Bolger to initiate regular front bench strategy sessions “but Winston rarely bothered to attend”.
Given the fiscal situation on becoming Minister of Finance Richardson decided there was only one feasible strategy ‑ “a sustained assault on government spending”. She found ready allies in the Treasury, of course, and they worked for her with a will. She in turn defends Treasury officials against all charges of inhumanity. “Nothing could be further from the truth. They have played a major role in transforming the New Zealand economy from an object of national shame to a source of national pride.”
The benefit cuts were perhaps what Richardson and Jenny Shipley were (and are) most vilified for. In her words, “we believed independence and self‑reliance needed to be encouraged; that low‑income workers should not be penalised compared with those on benefits; and that state assistance should be directed to people in genuine need”. It was because it acted on these beliefs that National paid a huge political price in the 1993 election and then decided to sacrifice Richardson to placate those baying for a scapegoat. But I’m getting ahead of myself.
The solid central core of this book is an account of what Richardson did and why she did it. It is an unemotional telling of the reasoning behind policy initiatives. What she makes plain is that like Douglas she simply outworked and out‑thought most of the cabinet. Like him she couldn’t rely on charisma to sway colleagues, so had to argue and convince intellectually every step of the way.
The 1991 “Mother of all Budgets” gave the cartoonists a field‑day, and locked Richardson into the popular imagination as a wicked witch or at very least a bloodless hair‑shirt wearer. What she makes abundantly clear, however, is that her budget process was quite transparent. All ministers were not only consulted but fully informed, and the “cabinet was very much an accessory before, rather than after, the fact”. She also reveals the accidental way in which the unfortunate label “Mother of all Budgets” arose (it was a journalist’s invention, not her own). But in this, as in so much else, she is unbitter and blames no‑one for burdening her.
While Richardson was utterly confident that the government was following the correct economic strategy, some in her caucus were not so convinced. In the political fallout from her budget the churches led the charge of heartlessness, and academic economists of a Keynesian kind preached the unwisdom of cutting the spending power of beneficiaries in a recession. She knew she might have to wait months or even years before an upturn in the economy took place, but she never wavered in her view that what had been done was not only necessary but right. Others, however, did waver in the face of unremitting pressure from superannuitants. The Prime Minister, according to Richardson, did not seek a policy review through the cabinet. “He called a press conference and unilaterally announced that the government was abandoning the income test for superannuation announced in the budget.” No doubt he fancied a second term in office.
But the cabinet minister who most hankered for a return to Muldoonism was, Richardson says, neither Bolger, nor Birch, but Wyatt Creech. Richardson found her working relationship with him “one of the less attractive aspects of my job as Finance Minister”. She admits, too, that because Creech did not support her fiscal strategy “I found it wise to send him as little information as possible”. The National Government in its first term was hardly the perfect exemplar of the doctrine of collective cabinet responsibility.
As the 1993 election approached, Richardson had intimations of political mortality even though the economy continued to grow. “I had long known that Jim would not keep me on as Minister of Finance out of sentiment.” Cementing in the gains of her and Douglas’s reforms became her chief preoccupation and she wanted to do for fiscal policy what had been done for monetary policy with the Reserve Bank Act. She did in fact get her Fiscal Responsibility Bill through the House ‑ but as a backbencher not a minister ‑ and it was her finale.
She left with her head held high. “The economy was buoyant. Unemployment was falling. We were headed for a budget surplus. We were repaying our debt. I could hardly have left politics on a higher note.”
The last section of Richardson’s book is prescriptive rather than descriptive. Like Douglas before her she feels there is unfinished business on our way to an enterprise culture. Her wish-list bears a striking resemblance to Douglas’s, except in one respect. Whilst acknowledging that a universal superannuation scheme is an increasingly heavy albatross for taxpayers to bear in the circumstances of our ageing population, she does not share his advocacy of compulsory savings for old age. “Compulsory savings would be a tax by another name and would cut across one of our cardinal principles of economic management: maximum freedom of choice.” Instead, to make the scheme sustainable, she advocates further raising the age of entitlement to 70 and indexing the level of superannuation to the consumer price index instead of the average wage. Furthermore, she recommends we emulate Australia and other countries in making eligibility both means‑ and asset‑tested.
Interestingly she and Douglas share a perception of producer boards as anachronistic sacred cows. Farmers, she thinks, should receive proper market signals for their activities and “if the producer boards think they can beat all comers there is a simple test for that hypothesis ‑ the market”. And yet she and Douglas both failed to muster the numbers round the cabinet table.
Both Richardson and Douglas share a distaste, too, for the current state of the welfare state and both emphasise their wish to empower the poor and enhance both their life chances and their life choices. In Richardson’s view the welfare state has failed. “It set out to reduce poverty and ended up increasing poverty. It set out to provide a safety net and ended up creating a dependent underclass. It set out to allow people to live in dignity and ended up creating ghettos where lawlessness and hopelessness are rife.” Even those who most vehemently disagree with the medicine she prescribes are unlikely to disagree with that diagnosis.
Richardson’s chapter on educational reform is entitled “Making the Consumer Sovereign”. I can hear the teacher unions sharpening their pencils and their barbs already. She argues that what parents wanted from the Picot report, Tomorrow’s Schools, was greater control as consumers. What the Labour Government’s education reforms gave them instead was greater responsibility for running cake stalls and cutting school lawns. Parents are now often finding board of trustee work increasingly onerous: that wasn’t what they had in mind at all. Richardson quotes liberal philosopher John Stuart Mill with approval. In nineteenth-century Britain he supported enforced universal education, but argued: “If the government would make up its mind simply to require for every child a good education, it might save itself the trouble of providing one”.
Richardson sees increasing the skills and improving the education of New Zealanders as the golden path to full employment. If in fact New Zealand ever does reach the blessed state of sustainable high productivity and education, with low unemployment and inflation, then it will be owed mainly to the virtuous twins of economic rationality ‑ Douglas and Richardson. Given that so much calumny has been heaped upon their heads I wonder shall we ever remember to say thank you? The National Party was quick to blame Richardson for its near defeat in the 1993 election. If it does well in the first MMP election it will be largely on the basis of improving economic indicators. I hope the party is gentlemanly enough to acknowledge that she made a difference.
Margaret Clark is professor of politics at Victoria University of Wellington.