Saturday, April 12, 2008

Rolling Back Gov't: Lessons from New Zealand

When a reform government was elected in New Zealand in 1984, it identified three problems: too much spending, too much taxing and too much government.

We asked some fundamental questions of government agencies. The first question was, “What are you doing?” The second question was, “What should you be doing?” Based on the answers, we then said, “Eliminate what you shouldn’t be doing” - that is, if you are doing something that clearly is not a responsibility of the government, stop doing it.

When we started this process with the Department of Transportation, it had 5,600 employees. When we finished, it had 53. When we started with the Forest Service, it had 17,000 employees. When we finished, it had 17. When we applied it to the Ministry of Works, it had 28,000 employees. I used to be Minister of Works, and ended up being the only employee.

Some of the things that government was doing simply didn’t belong in the government. So we sold off telecommunications, airlines, irrigation schemes, computing services, government printing offices, insurance companies, banks, securities, mortgages, railways, bus services, hotels, shipping lines, agricultural advisory services, etc. In the main, when we sold those things off, their productivity went up and the cost of their services went down, translating into major gains for the economy.

We achieved an overall reduction of 66% in the size of government, measured by the number of employees. The government’s share of GDP dropped from 44 to 27%.

Read more from Maurice P. McTigue (formerly a member of New Zealand's Parliament, and also Minister of Employment) here.

10 Comments:

At 4/12/2008 9:54 PM, Anonymous Anonymous said...

Amazing. A conservative dream come true. Pinch me.

 
At 4/12/2008 10:04 PM, Anonymous Anonymous said...

Simply amazing.

I can't wait to hear the excuses why we couldn't do this here in the US or on the state level.

 
At 4/12/2008 10:06 PM, Anonymous Anonymous said...

It gives me hope.

 
At 4/13/2008 5:25 AM, OpenID sethstorm said...

Thankfully that kind of thing will not scale here. Over there, the population is far less, the objectors easily dealt with.

 
At 4/13/2008 3:02 PM, Blogger juandos said...

"Over there, the population is far less, the objectors easily dealt with...

You know this how libstorm?

 
At 4/13/2008 9:55 PM, Anonymous Anonymous said...

I think that this may be a little out of date. The CIA Factbook estimate for NZ govnermental expenditures in 2007 is about 44% of GDP.

This compares to US govnermental expenditures of maybe 33% of GDP. (20% Federal and 13% State and Local).

 
At 4/13/2008 10:41 PM, OpenID sethstorm said...

Perhaps the population figures could be quite telling. With a population last stated as ~4.1 million*, mostly European(69.8%)*, and an economy that has gone towards being a "free market", there hasn't been much room to object. They took the path of Thatcher, and today we have this result. Unfortunately you're not likely to get a spot in that "paradise" due to strict immigration laws.

That's far from the diversity of the US, and the various groups at odds with each other. There are immigrants of many types and cultures, as well as the indigenous that exist here.

This time around, it does not look good for the remnants of Reaganism. For some regions who haven't seen a good day since 1980(much less even get out of 2003), it will bring an end to a failed philosophy.

* Source: CIA World Factbook

 
At 4/14/2008 11:29 AM, Anonymous Anonymous said...

So now the free market is a failed philosophy? Sheesh.

 
At 4/14/2008 1:21 PM, Blogger juandos said...

"So now the free market is a failed philosophy?"...

Yep but only in the minds of socialists with a tenuous grip on reality...

 
At 4/14/2008 3:27 PM, OpenID sethstorm said...

No, I was referring to the implementation brought upon by Reagan.

 

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