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July 23, 2008 | by  | in Online Only |
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Unedited Roger Douglas Interview. Full transcript. July 23rd 2008.

I sat down with Sir Roger Douglas, former Labour Party Senior Cabinet Minister, Minister of Finance, founder of the ACT party, current ACT electoral candidate in Hunua and the main proponent of the economic reform policies of ‘rogernomics’ in the 1980’s.  An abridged version will appear in print next week for all those who are too lazy to educate themselves.  The full interview follows after the jump. And its hot off the press due to the large interest thats been indicated. So go away grammar nazis.

Why did you decide to stand for election again, after so long?

I think the primary reason and there are others, is that, National is likely to win the election. I think that without a strong ACT coalition partner, not a lot is likely to change. That’s the basic reason.

So does that also explain why you have returned to the ACT party?

Well, I never really left it. I’ve always been a member, its just that I wasn’t as active after 2000 when I stepped down from the presidency, and I haven’t been as active since the presidency.

But it is true you stood down as the ‘patron’ in 2004?

Aw, I think both Derek and I felt that the title of patron didn’t mean much, and in a funny way it was a token thing and it got in the road. I don’t think patrons really have any place in political parties, maybe in other organisations but not in political parties.

In the past you have decried populism within the ACT party, and also politics itself. Rodney Hide was not your choice for leader, after Prebble – do you feel comfortable working under him?  

Look I’m comfortable working under Rodney, late last year, early this year he asked me to get more involved. I went to a retreat with quite a lot of the older ACT supporters as well as the newer members, we got on well and, well you know one thing led to another I guess.

So there’s no underlying tensions…

No, No!

Your fine working under him?

Absolutely, I mean we are working well together, we have reasonably well defined roles, and Rodney is getting on with the job of leader which includes being parliamentary leader, and I’ve been largely involved in putting together a candidate team, we’ve got well over sixty candidates now. We are in fairly good shape to fight the election, and we are about to go into the next phase, and I worked comfortably with Rodney in putting together the twenty point plan. So, no problem there.

Are you expecting a high list position?

I would anticipate that I’m going to be placed relatively high yes. I’m not sure I was seeking that initially, but once you make the commitment you get carried along with it a bit so,  you know I’m happy with wherever they are going to place me but, I would anticipate its going to be in the top six, just where about I don’t know.

It is undeniable that in New Zealand’s political history you are a polarising figure, particularly in the eighties. If you are elected, how do you see yourself operating in an MMP environment?

I don’t think theres any problem, I think ive only been a polarising figure because ive actually done things people who doing things draw both criticism and significant support, and I’m not backing off from any of that. So if I was back there in parliament, I would be putting policy and ideas on the table. If they are polarising I guess so be it. But I don’t think putting ideas on the table should in fact be polarising.

Politics should be about the competition of ideas, and the tragedy at the moment is that no political party has a plan for New Zealand on the table. The truth is I’m ambitious for New Zealand I want new Zealand to do well. This present labour government have not been ambitious for new Zealand, they have looked at the politics first and the substance ninth or tenth and that’s led us down the drain. The problem has been that in order to win National has largely said “me too”. We need Political parties who are actually going to put policy on the table.

Does that mean the ACT party will be heavily ideological if elected?

No, I would say. I wouldn’t call it that. Practical – take a look at our twenty point plan. It’s a practical plan to take new Zealand from where it is now – about 30th in the world up into the top ten over a period of ten to fifteen years, you aren’t going to do it immediately, but without the right policy framework you aren’t going nowhere.

Are you not concerned at all about any bad blood in the house?

(Laughs) What kind of bad blood is there?

Tensions between various other politicians…

Like who?

Well for starters Helen Clark and Michael Cullen…

Oh look, im not worried about Helen Clark or Michael Cullen, we are not going to agree anyway. How can I agree with them anyway! They are tearing the country apart! They have reduced our labour productivity to a third of what it was, multifaceted productivity is down to one seven of where it was. I’m not going to worry about what Michael Cullen or Clark think. They think as highly of me as I think of them.

What is the single biggest issue facing New Zealand at the moment and how would you remedy it?

The level of government expenditure. This government has increased government expenditure over and above inflation. That’s about 17 billion a year. But in more practical terms, that’s $200 a week per family in New Zealand. The lives of families in new Zealand would be dramatically changed if the government had not taken that money from them and flushed it down the toilet because that’s essentially what they did. They wasted it.

There’s a whole lot of families out there that I used to represent, in Otara, who would feel a lot better about their lives today if they could keep that $200. This is supposed to be a government that cares about those kinds of people. They don’t care. They are chardonnay socialists. And in some ways I have nothing but contempt for them. Because they have usurped the people they claim to represent. They don’t even mix with those people. I’d mix with those people a lot more than they would.

The Labour Candidate in Hunua, Jordan Carter – I interviewed him a few weeks ago for this series – stated that you were back from the metaphorical grave – do you have any response to Jordan Carter on that?

No Comment.

No Comment at all?

No.

Do you think the ACT party’s commitment to social liberalism is as strong as it should be?

Look I think the answer to that is have a look at our twenty point plan. The twenty point plan is a practical document which could move this country ahead in all areas.

But can we trust the ACT party to vote ‘yes’ on social liberalisation issues? For example it split 5 to 4 in favour of civil unions, and opposed prostitution law reform 5 to 4. Hide and Roy also both supported the Marriage Act (gender clarification) Amendment Bill.

I’ve always felt that in those areas it should always be a free vote. Parliament is always going to made up of a wide range of people with wide views, some of my best friends voted in different ways to what I did – the homosexual law reform for example. You know, it’s a conscience issue and I’m happy with that. In fact, this is a passing comment about the Labour party; one of the things is that it has moved from being an open church as it largely was in my day, to a situation where unless you conform to Helen Clark’s view of the world then you are out. So you’ve seen people who are maybe not particularly liberal on social issues pushed down the list. And I just think that’s wrong.

Do you think Rogernomics was entirely successful?

Absolutely.

Is there not anything at all you would have done differently?

We could have gone a bit faster.

And a bit further?

Aw, if I could have. And I guess where I fell out ultimately with Lange – and there were other reasons –  was that, we needed to do more in the social policy area, we needed to do more with health and education and welfare. It was really in those areas along with the flat tax that Lange took fright. And I think that its significant to reflect that if you look at New Zealand today and you ask what doesn’t work, its two or three things. The first one and the most significant is what the government runs.

What ever doesn’t work in New Zealand the government runs. The second is that a lot of what does not work is in those social policy areas. Our hospitals are crumbling all around us. In some ways it’s been recognised elsewhere. I mean the UK, the Labour party in the UK is now looking at leasing public hospitals to the private sector. So, things that we left undone are still the problem areas.

How important was the nuclear free legislation as an issue to counter-weighting the economic reforms of the eighties?

I know a lot of people have paid attention to this, but for me, it didn’t really play a part on what I would have proposed anyway. So it’s hard for me to make a judgement. Did it make it easier? Possibly. But did it change what I proposed? No.

Do you think that it made it easier for the public to accept the reforms?

Ill leave that to the historians. I’m not a historian. And the answer is that I don’t honestly know. Maybe it helped within the labour party more than anywhere else, I’m not sure that it necessarily helped with the wider public. Maybe it helped the group in the labour party who didn’t like what I was doing, it made it easier for them to swallow. I’m not even sure about that. I didn’t see them stop opposing me because of it. Ill leave all that to the historians.

How different would New Zealand be if the flat tax rate that Cabinet signed off in 1987 had been implemented?

Significantly it would have meant that New Zealand’s tax rate would have been half of Australia. You would have seen a lot of Australians who probably would have liked to be earning their incomes in New Zealand dollars. I think in terms of investment and probably as a result of that, in terms of output productivity it would have made a big difference.

Were you very upset at the way that policy panned out?

Oh absolutely. That’s really when the party split asunder. We went from five to six points ahead in the polls, and we’d just had the sharemarket crash, to twelve or fifteen percent behind, and the only reason we went from behind ahead to behind was that Lange decided we weren’t going ahead with the flat rate of tax. He decided that without reference to cabinet. He decided that despite promising to me that we would discuss it at a Cabinet priorities committee. He did that despite the fact that he said to both Palmer, Prebble and myself that he would support the package. Because I’d told him that if he wasn’t happy about it we shouldn’t go ahead with it in December. So, he didn’t really upset me, he just… wrecked the government.

So you would consider that the beginning of the end?

I think it was yes. I think the truth was that everyone, in the caucus, well not everyone, but a majority of the caucus tried to patch it up. It was not popular to do that, and it took them to until December. But the reality was that after that it was impossible for Lange and I to work together. And whilst I generally had the majority he had enough sway to stop things happening in the way they should have.

That segues nicely into my next question. How important do you think your re-election to cabinet was to Lange’s resignation?

I think that’s what finally convinced Lange to go. It had to be didn’t it. I was elected on the Thursday and he announced he was going to step down from the prime ministership on the Sunday, so two or three days after. I don’t think that when caucus voted they saw that as a consequence or they were hoping for some magic to re-appear. Obviously from his point of view it was incredibly significant. He obviously didn’t want me around the table. He told me once before that my continuation as finance minister would be the death of one of us. And well (pause) you know… maybe he really believed that. I can never tell what’s going on in other peoples minds.

Do you think you had the strong support of the majority of Caucus?

I think I definitely had, in terms of going back in cabinet? I had a majority or I wouldn’t have been elected. It depends on how you define strong. There were about twenty people who were opposed to it. Which is a significant number.

So why did you never stage a coup?

Aw, just because people wanted me going back into cabinet, doesn’t mean they wanted me to be prime minister. And the truth is I never really wanted to be prime minister. I never really said I’m going to stand, im going to go round and lobby to be prime minister, you can go back and ask all of them. I didn’t see myself in that position.

Did it ever cross your mind at all?

Well obviously I stood against Lange and Palmer and Lange put the vote forward in 1988 in December, the vote should have been in January 1989, and Id definitely decided I would have stood against them. Whether I would have gone around and lobbied, is another question. I’d never seen myself in that period as prime minister. But it was necessary for me in a symbolic way to hold my hand up. If I had looked back now, with a bit of hindsight, possibly I might have done it in a serious way. The only way I possibly could have had a chance of winning, because I had around twenty supporters, and there were about twenty supporters who were opposed – key Lange supporters, would have been to put up a strategy. I would have had to say you’re fifteen points behind; here is a new strategy that we could use to win. I was capable of doing that but it just didn’t dawn on me at the time. I wasn’t really seeking it.

Why has John Ansell left the ACT team?

Well, I still talk to John. I think John probably from his point of view found there were frustrations, he wanted to control from woe to go. The problem in politics is you’ve always got that fine balance about aiming for perfection and when possibly 95% will do, and sometimes 95% is enough, you have a trade off there between speed to market and perfection. In order to get perfection you might need to wait another month. But that month might be critical, and you have to ask yourself would people notice perfection? Did they notice? Most people are like me. They don’t notice.

Id see something and say its great, but in John’s eyes it could be perfected by doing this or that. I’m sorry to lose him, hes a genius. And im hoping – I spoke to him yesterday – that he can do things for us. But, the other factor, and I don’t know if John really recognised, is the issue of the best use of his time. When you have a creative genius – which he is, you want him to work on projects that matter. Little projects aren’t as critical. Your better to keep him away from them really. He’s an expensive man, you want him working on the top level stuff not the run of the mill stuff. It was a pity, and I think he still believes in what we are about. I think he also found the working environment not absolutely to his liking, he wasn’t reporting to any one person. That’s a bit of a problem with our organisation. We are looking for a campaign manager, which would have made things a lot easier if we had a full time campaign manager which we didn’t have.

Why does New Zealand need an ACT party? Why is ACT any different to the neo-liberal agenda of the National party?

Because ACT is the only party in New Zealand that has a plan. No other patry has a plan that will move New Zealand forward significantly. To answer that question I’d need to look back a little bit. Fifty years ago I was at university like you are. Fifty years ago, none of us had contemplated working anywhere other than New Zealand. And why was that? Because New Zealand had the third highest living standard in the world. We would earn more here by remaining in New Zealand than going to Australia. We thought that Tasmania was that funny little place down the bottom and we felt sorry for them. Today its entirely different. At least fifty percent of university students contemplate working offshore once they graduate. You need to ask yourself why has this happened. Why over the last fifty years have we drifted from third to thirtieth.  The other day Greece slipped past us, and South Korea is at our doorstep.

Apart from the Government between 1984 and 1993 the whole of that fifty years you’ve had government who haven’t had the guts to do what’s right. And hence our slogan. The 1984 – 1993 which covered my period was the only period in those fifty years where you’ve had government that actually tackled the problem first and foremost and then looked at the politics. The rest of the time you’ve had governments that only wanted to manage and let things dangle; The lost years of Holyoake; Kirk wanted to do things but had no idea about economics. Muldoon who understood a bit of it, but who was a control freak and only did a couple of years ok, and then, well, I’ll be kind… he went totally off the boil. Then you had those nine years of significant change. And then you had Bolger for six years who just drifted like Holyoake had. Then you had Clark and Cullen with their peculiar agenda, their total lack of understanding, even though Cullen arrogantly thinks he understands the economy. He probably technically does, but in terms of application he’s a disaster. He’s allowed public expenditure to get out of all proportion, and the waste is just endemic.

So the consequence of that, apart from the years of 1992 – 2000 our productivity has been relative to other countries abysmal. We had higher productivity than Australia in 1992 – 2000 largely due to the changes Ruth and I made. During those years we were catching up. But apart from that we are going backwards. One of the other significant reasons is that you’ve had a public who have rewarded politicians who have lied to them. And the students are a typical group. They might be bribed again. I dunno. I hope not. I hope they’ve learnt their lesson. And the public have responded to politicians who’ve scratched every itch. So Winston Peters goes up in the polls when he becomes a racist. And I hate that.

End of Interview.

Conrad Reyners

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About the Author ()

Conrad is a very grumpy boy. When he was little he had a curl in the middle of his forehead. When he was good, he was moderately good, but when he was mean he was HORRID. He likes guns, bombs and shooting doves. He can often be found reading books about Mussolini and tank warfare. His greatest dream is to invent an eighteen foot high mechanical spider, which has an antimatter lazer attached to its back.

Comments (20)

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  1. Lukas Schroeter says:

    Hi Conrad

    Great interview.

    Lukas

  2. Chris says:

    A genuine NZ hero. Jonathan Hunt is in the order of NZ – one of our 20 greatest living people – and he’s not?

  3. Yahan says:

    Excellent interview with a living legend, well done Conrad.

  4. Gibbon says:

    Well done Conrad.
    Nice.

  5. Friend of ginga ninja says:

    A good interview ginga ninga, but I think you refer to a segue, not a segway…I presume.

  6. How right you are! Fixed. Thanks :) I bloody hate transcribing :(

  7. mike a. says:

    when Sir Roger refers to productivity being higher in the 1990s than Australia’s I think he means growth in productivity

  8. miked says:

    “we’ve got well over sixty candidates now. ”

    Wow, every single one of ACT’s members is running… good on them :)

  9. James Sleep says:

    Good interview, Conrad!

    James

  10. Michael Oliver says:

    Fascinating stuff. Kudos, Conrad.

  11. Spiros Kappatos says:

    Overall a very good and balanced interview providing a useful insight into Sir Roger and ACT, and some of the defining issues confronting the NZ electorate. Spiros

  12. Reuben says:

    Excellent interview, some valuable insights I would have never picked up.
    Besides that, some great one liners “So, he didn’t really upset me, he just… wrecked the government.”

  13. Lint Remover says:

    Bloody brilliant interview! good to see sir rog blatantly ignore jordan carter like the irrelevant rubbish that he is

  14. Jasmine says:

    Good interview. However, I don’t agree with Roger Douglas when he talks about students thinking about working offshore..obviously there are concerns and it is a significant issue, but I’d rather New Zealanders go off and see the world, expand their visions and realise theres much more to the world than just New Zealand. A small vision is not going to help the country grow. I think a lot of the problems in New Zealand are linked to so many in this country having a small, narrow perspective. And as for his comment about how the mindset was different 50 years ago..I don’t suppose that has anything to do with the fact that travel was a lot more different than then it is today? Its a lot more affordable and realistic for people to travel internationally today than it was 50 years ago.

    Just my two cents

  15. multistar says:

    yeah with a flat tax we might even have a reason to come home some day

  16. KeepRight says:

    Great!

  17. Although there might be a lot to disagree with in Roger’s responses, there is very little spin – that man is blunt because he has a strong idea of what he wants to do, and he won’t bullshit us on it. However, the one area in which he does spin and evade is the social liberalisation question, and that’s worrying. But he does paint a fascinating portrait of our economy over the last fifty years.

  18. peteremcc says:

    Jasmine, the problem isn’t people going overseas for holidays, it’s them not coming back!

  19. Jasmine says:

    I wasn’t referring to people going on holidays. I was talking about New Zealanders going overseas and being exposed to new ideas, societies and learning from that. Yes, some people aren’t going to come back to NZ. Thats just what happens. I’m not saying its not a problem, but there are plenty of people who will end up coming back once they start families ie John Key. Do you think he’d have gained so much by working in NZ and not going to Singapore and London? FYI, not a Key or National supporter, but its certainly a point in his favor, that he’s had international experience.

  20. Harold says:

    The interview and comments seem devoid of more informed reflections on Roger Douglas’s legacy

    First there is his obsession with govt expenditure. Many of the countries he would have us envy, those way above us in the rankings, have far higher government expenditure. The first issue about government expenditure is ‘efficiency’. Yes, in general, bureacracies can be inefficient or become inefficient and there are overheads in administration; but that occurs to varying degrees in many organisations with some of the largest and most wastefull occurring in the commercial sector (the MBA program at Stanford used examples of New Zealand management as cases studies of inefficiency; and parts of New Zealands bureacracy sets a world wide benchmark; no accident compensation scheme on earth can compare with ours for efficiency).

    There are many examples, apart from the obvious ones of health and education, where government expenditure out performs any private alternative. Only a handfull of New Zealanders could buy their own ‘streets’ to run in or a large estate to run over. It is far more efficient to have a Mt Victoria reserve, or a Hagley park to run through. Our public spaces are priceless; lets appreciate the value we do get for government expenditure.

    The second issue is about allocation ; allocation of the nation’s resources. Are they being used optimally? A tax cut in Singapore might go into investment or savings. The last large tax cuts in New Zealand went disproportionately into SUVs, and ‘hairspray’ consumption (and off course fueled our addiction to real estate). Every medical specialist in the country is pointing out how much we could gain if more was spent in their area. Many of these cases are far better established than our need for greater consumption of petrol, where a lot of the tax cuts in New Zealand would go, If only some of these cases were true, then a shift from government to private consumption would make us worse off.

    Again on procductivity, lets check with some better respected and more contemporary economists. It was in mid 1987 after three years of Rogernomics, that New Zealand’s productivity started to lag behind Australia’s. The simple solutions of the 80s, when we did shed many inefficient departments and production, and simply cut expenditure, are no longer adequate in the complex world of today. The so called productivity gains during the 90s were a symptom of contraction and consolidation. As factories shed staff, it appeared that productivity increased. There was low capital investment in new plant, as the policies Roger Douglas espoused had led to our wages falling as we became a low wage, long hours, economy. A study by the IMF into the reasons for our poor performance found that low capital intensity explained 75% of the gap between our productivity and pay and Australia’s.

    Had Roger Douglas’s flat tax been implemented, there would have been far fewer students reading Salient or taking holidays in a more backward South Pacific basket case.

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