Principal Economic Changes Brought About By the 4th Labor Government of New Zealand

They were largely driven by Roger Douglas, the then finance minister (Wallace, 2014). The government took the country through sweeping economic reforms. The economic system of the country was transformed from one that was highly state-dominated, regulated, as well as protected, to one that was liberal, highly competitive, and opens (Easton, 1989). The most significant economic reforms that the government enacted were that it devalued the country’s dollar, eliminated agricultural subsidies, put in place a GST (goods and services tax), and deregulated the economy. Australian Dollar’s Devaluation The government was voted into office largely because of its promise to devalue the dollar: a promise that the government actualized. Such pitfalls motivated the government to put an end to the subsidies in mid-1984, illustrating the classical relationships between environmental integrity, farming economies, and agricultural subsidies.

Notably, prior to the elimination of the subsidies by the government, New Zealand had thriving agricultural production owing to the subsidies (Collins & Keesing, 1987). New Zealanders practiced intensified agriculture using subsidized pesticides, fertilizers, and related agricultural inputs. The elimination of the subsidies angered farmers in the country. Some of the farmers protested against the government, afraid that their farms were exposed to the bankruptcy risk. Typical consumers avoided buying durable, as well as high-end, services along with goods. Owing to the tax, many national financial difficulties cropped up, undermining the stability of the government over time. Economic Deregulation Over the years, the government enacted several reforms aimed at actualizing economic deregulation. It set out on liberal market reform programs. Notably, previously, the country’s economy had been stringently regulated (Dillon, 2010).