The New Year brings promise and opportunity for Oregon. Though we face challenges, we can look to New Zealand, a country of similar size and population, for guidance on turning around a wayward economy.
The Honorable Maurice P. McTigue, a former New Zealand Member of Parliament and Cabinet Minister, states that his country “became addicted to ‘big government’ programs, and we at one point had the most socialistic economy in the developed world. By the mid-1980s, my country was an economic basket case.”
Initially led by the Labour Party, the New Zealand government took bold steps. McTigue notes, the country “slashed its income tax rates by 50 percent, and eliminated capital gains taxes, excise taxes, sales taxes, death taxes, and tariffs. Further, it “privatised billions of dollars of government assets, and moved two-thirds of its bureaucrats into the private sector.” The result was a strong and growing economy.
After the reforms, two economic freedom indexes ranked the New Zealand economy as one of the most free and open economies in the world. Recently it ranked above the United States. McTigue states, “reformers did not use government regulations to reestablish free markets; rather, they enforced rule of law, property rights and let competition in the market take care of the rest.”
McTigue currently works with the Mercatus Center near the nation’s Capitol. Oregonians interested in a prosperous New Year should look at the principles employed by McTigue and his New Zealand colleagues.
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