Ruth Richardson
Encyclopedia
Ruth Richardson served as New Zealand's Minister of Finance
from 1990 to 1993, and is known for her strong pursuit of free-market economic reforms (her opponents sometimes called it "Ruthanasia
").
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
.
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 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.
Richardson's first attempt to break into politics came when she challenged Sir Roy Jack for the National Party nomination in Rangitikei
. 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. Richardson's challenge was unsuccessful.
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 elections
, was elected to Parliament.
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.
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 tariff
s 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.
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.
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.
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.
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.
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.
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 backbenches then called a by-election. She was replaced by Bill Birch, Bolger's original preference.
Though her period as Finance Minister was comparatively short, Richardson’s legacy in subjects such as Fiscal Responsibility and Economic Liberty is large. Many of the reforms she championed have endured.
Perhaps most importantly, 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.
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.
Minister of Finance (New Zealand)
The Minister of Finance is a senior figure within the government of New Zealand. The position is often considered to be the most important Cabinet role after that of the Prime Minister....
from 1990 to 1993, and is known for her strong pursuit of free-market economic reforms (her opponents sometimes called it "Ruthanasia
Ruthanasia
Ruthanasia, a portmanteau of "Ruth" and "euthanasia", is the pejorative name given to the period of free-market economic reform conducted during the first term of the fourth National government in New Zealand, from 1990 to 1993...
").
Early life
Richardson was born in southern Taranaki on 13 December 1950. Her family had a long history in the area, and her great-grandfather George PearceGeorge Pearce (New Zealand)
George Vater Pearce was a New Zealand politician of the Reform Party.He represented the Patea electorate in Parliament from 1908 to 1919, when he was defeated.He was the great-grandfather of a National Party Minister of Finance, Ruth Richardson....
had served as MP for Patea from 1908 to 1919. Her father was active in the National Party
New Zealand National Party
The New Zealand National Party is the largest party in the New Zealand House of Representatives and in November 2008 formed a minority government with support from three minor parties.-Policies:...
'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
Wanganui
Whanganui , also spelled Wanganui, is an urban area and district on the west coast of the North Island of New Zealand. It is part of the Manawatu-Wanganui region....
.
Richardson decided on a career in Parliament at an early age, before she even left high school. Sir Roy Jack
Roy Jack
Sir Roy Emile Jack was a New Zealand politician of the National Party. He was Speaker of the House of Representatives from 1967 to 1972 and 1976 to 1977, and a cabinet minister....
, 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 University of Canterbury
University of Canterbury
The University of Canterbury , New Zealand's second-oldest university, operates its main campus in the suburb of Ilam in the city of Christchurch, New Zealand...
. 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.
Richardson's first attempt to break into politics came when she challenged Sir Roy Jack for the National Party nomination in Rangitikei
Rangitikei (New Zealand electorate)
rightRangitīkei is a New Zealand Parliamentary electorate, returning one Member of Parliament to the New Zealand House of Representatives. The current MP for Rangitīkei is Simon Power of the National Party...
. 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. Richardson's challenge was unsuccessful.
In 1978, Richardson contested the National Party's nomination for the Tasman
Tasman (New Zealand electorate)
Tasman is a former New Zealand Parliamentary electorate, from 1972 to 1996.-History:The Tasman and West Coast electorates replaced the former Buller and Westland electorates in 1972....
seat. She won the nomination, but in the 1978 election
New Zealand general election, 1978
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, although the opposition Labour Party managed to win the largest share of the vote...
itself, she failed to defeat incumbent Labour MP Bill Rowling
Bill Rowling
Sir Wallace Edward Rowling, KCMG , often known as Bill Rowling, was the 30th Prime Minister of New Zealand. He was in office for just over a year, having been appointed Prime Minister following the death of the highly popular Norman Kirk...
(who was leader of his party at the time). In 1980, she was invited to contest the nomination for Selwyn
Selwyn (New Zealand electorate)
Selwyn is the name of three seats in the New Zealand House of Representatives, based around towns on the outskirts of Christchurch city. In an historical sense, the name refers to an electorate that existed between 1866 and 1919...
, an electorate just outside Christchurch
Christchurch
Christchurch is the largest city in the South Island of New Zealand, and the country's second-largest urban area after Auckland. It lies one third of the way down the South Island's east coast, just north of Banks Peninsula which itself, since 2006, lies within the formal limits of...
which was held by retiring National MP Colin McLachlan
Colin McLachlan
Colin Campbell Alexander McLachlan was a New Zealand politician of the National Party. A farmer by profession, he was the Member of Parliament for Selwyn 1966–72, Rakaia 1972–78, then Selwyn again 1978–81, when he retired....
. She won the nomination, and in the 1981 elections
New Zealand general election, 1981
The 1981 New Zealand general election was a nationwide vote to determine the shape of the 40th New Zealand Parliament. It saw the governing National Party, led by Robert Muldoon, win a third term in office, although the opposition Labour Party, led by Bill Rowling, actually won the largest share of...
, was elected to Parliament.
Early parliamentary career
Richardson quickly distinguished herself in the National Party caucusCaucus
A caucus is a meeting of supporters or members of a political party or movement, especially in the United States and Canada. As the use of the term has been expanded the exact definition has come to vary among political cultures.-Origin of the term:...
as a supporter of free market
Free market
A free market is a competitive market where prices are determined by supply and demand. However, the term is also commonly used for markets in which economic intervention and regulation by the state is limited to tax collection, and enforcement of private ownership and contracts...
economics, privatisation, and trade liberalisation. This contrasted considerably with the views held by National Party Prime Minister Robert Muldoon
Robert Muldoon
Sir Robert David "Rob" Muldoon, GCMG, CH served as the 31st Prime Minister of New Zealand from 1975 to 1984, as leader of the governing National Party. Muldoon had been a prominent member of the National party and MP for the Tamaki electorate for some years prior to becoming leader of the party...
, 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.
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
New Zealand Labour Party
The New Zealand Labour Party is a New Zealand political party. It describes itself as centre-left and socially progressive and has been one of the two primary parties of New Zealand politics since 1935....
's new Finance Minister, Roger Douglas
Roger Douglas
Sir Roger Owen Douglas , is a New Zealand politician who formerly served as a senior New Zealand Labour Party Cabinet minister. He became arguably best-known for his prominent role in the radical economic restructuring undertaken by the Fourth Labour Government during the 1980s...
. These reforms, sometimes known as "Rogernomics
Rogernomics
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 economic policies followed by Roger Douglas after his appointment in 1984 as Minister of Finance in the Fourth Labour Government...
", involved the privatisation of state assets, the removal of tariff
Tariff
A tariff may be either tax on imports or exports , or a list or schedule of prices for such things as rail service, bus routes, and electrical usage ....
s and subsidies
Subsidy
A subsidy is an assistance paid to a business or economic sector. Most subsidies are made by the government to producers or distributors in an industry to prevent the decline of that industry or an increase in the prices of its products or simply to encourage it to hire more labor A subsidy (also...
, 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.
Shortly after National's electoral loss, Jim McLay
Jim McLay
James Kenneth McLay, CNZM, QSO , generally known as Jim McLay, is a former New Zealand politician. He was Deputy Prime Minister, leader of the National Party and Leader of the Opposition for a short time. McLay is currently New Zealand's Permanent Representative to the United Nations.-Early...
replaced Muldoon as leader of the National Party, and there was a considerable rearrangement of responsibilities. People such as Bill Birch
Bill Birch
Sir William Francis Birch, GNZM , 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.-Early life:...
and George Gair
George Gair
George Frederick Gair, CMG, QSO is a former New Zealand politician. He was once deputy leader of the National Party in the Parliament of New Zealand, and was considered by many to be a possible contender for the leadership itself...
, who McLay associated with the Muldoon era, were demoted. They were replaced by newer MPs, such as Richardson and Simon Upton
Simon Upton
Simon David Upton, QSO is a former New Zealand politician and member of Parliament from 1981 to 2001, representing the National Party.-Early life:...
, 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
Jim Bolger
James Brendan "Jim" Bolger, ONZ was the 35th Prime Minister of New Zealand from 1990 to 1997. Bolger was elected on the promise of delivering a "Decent Society" following the previous Labour government's economic reforms, known as Rogernomics...
. Bolger ousted McLay and became party leader.
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
Don McKinnon
Sir Donald Charles "Don" McKinnon, ONZ, GCVO is a former Deputy Prime Minister and Minister of Foreign Affairs of New Zealand. He was the Secretary-General of the Commonwealth of Nations from 2000 until 2008.-Early life:...
. McKinnon defeated Richardson and became deputy leader.
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
Winston Peters
Winston Raymond Peters is a New Zealand politician and leader of New Zealand First, a political party he founded in 1993. Peters has had a turbulent political career since entering Parliament in 1978. He served as Minister of Maori Affairs in the Bolger National Party Government before being...
) were unwilling to cooperate. Bolger's leadership remained secure, and when his popularity rose, the window of opportunity was lost.
Minister of Finance
When National came to power in the 1990 elections, 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 multi-million 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.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
Ruthanasia
Ruthanasia, a portmanteau of "Ruth" and "euthanasia", is the pejorative name given to the period of free-market economic reform conducted during the first term of the fourth National government in New Zealand, from 1990 to 1993...
', Richardson became one of the most disliked politicians in the country.
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.
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 backbenches then called a by-election. She was replaced by Bill Birch, Bolger's original preference.
Though her period as Finance Minister was comparatively short, Richardson’s legacy in subjects such as Fiscal Responsibility and Economic Liberty is large. Many of the reforms she championed have endured.
Perhaps most importantly, 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.
Subsequent career
Ruth Richardson left parliament the following year, although continued to be involved in politics through her advocacy of the ACT New Zealand party. ACT, established by Roger DouglasRoger Douglas
Sir Roger Owen Douglas , is a New Zealand politician who formerly served as a senior New Zealand Labour Party Cabinet minister. He became arguably best-known for his prominent role in the radical economic restructuring undertaken by the Fourth Labour Government during the 1980s...
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
Mont Pelerin Society
The Mont Pelerin Society is an international organization composed of economists , philosophers, historians, intellectuals, business leaders, and others who favour classical liberalism...
, founded by economist Friedrich von Hayek.
See also
- Fourth National Government of New ZealandFourth National Government of New ZealandThe Fourth National Government of New Zealand was the government of New Zealand from 2 November 1990 to 27 November 1999. Following in the footsteps of the previous Labour government, the fourth National government embarked on an extensive programme of spending cuts...
- Ruth Richardson New Zealand Ltd