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The Rogernomics revolution 20 years on

Wednesday is the 20th anniversary of the coming to power of the David Lange-led Labour Government.

Sunday, July 11th 2004, 9:46AM

by The Landlord

Appropriately, the election was on July 14 - Bastille Day, which marks the French Revolution, and revolutionary it certainly was.

It transformed an economy from what Lange described as operating like a Polish shipyard into one of the most deregulated free market economies the industrialised world has known.

And like Charles Dickens' A Tale of Two Cities novel on the French Revolution, it was the best of times and worst of times. Certainly, it was a ripping ride.

There were booms in everything: shares, takeovers, property, foreign exchange, art, consumer spending. It was the time of the yuppie with BMWs proliferating and more champagne sold per head than in any other country. The booms turned to crashes on a scale not seen since the Great Depression.

The United States was in the grip of Ronald Reagan's free market Reaganomics while Margaret Thatcher was also pursuing Chicago School of Economics' monetarist policies. But neither went as far as New Zealand under Finance Minister Roger Douglas and his National Party successor Ruth Richardson.

It began excitingly on June 14 with a drunken Sir Robert Muldoon calling a snap election, followed a month later with Labour's landslide victory. Then, nine days before Lange took office the country was plunged into a financial and constitutional crisis over devaluation of the currency.

Because Labour had signalled, even possibly deliberately leaked, it would devalue the New Zealand dollar by 20%, there was such a run on the dollar the Reserve Bank had to suspend trading. Muldoon refused Lange's order to devalue until threatened by a mass resignation of the outgoing Cabinet.

There is debate about whether that crisis established the whole path of what followed - financial market deregulation including floating the dollar, a radical reshaping of the tax system including introducing GST, removal of subsides and tax breaks, corporatising Government trading departments followed by a huge privatisation programme, giving the Reserve Bank operational independence and opening the economy up by removing tariffs and so on. The programme of social shake-up was almost as radical and extensive.

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 5.44 - - -
AIA - Go Home Loans 7.99 5.99 5.69 5.69
ANZ 7.89 6.59 6.29 6.29
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 5.99 5.69 5.69
ASB Bank 7.89 5.99 5.69 5.69
ASB Better Homes Top Up - - - 1.00
Avanti Finance 8.40 - - -
Basecorp Finance 9.60 - - -
BNZ - Classic - 5.99 5.69 5.69
Lender Flt 1yr 2yr 3yr
BNZ - Mortgage One 7.94 - - -
BNZ - Rapid Repay 7.94 - - -
BNZ - Std 7.94 5.99 5.69 5.69
BNZ - TotalMoney 7.94 - - -
CFML 321 Loans 6.20 - - -
CFML Home Loans 6.45 - - -
CFML Prime Loans 8.25 - - -
CFML Standard Loans 9.20 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 5.79 - -
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Owner Occ 7.65 5.99 5.75 5.69
Co-operative Bank - Standard 7.65 6.49 6.25 6.19
Credit Union Auckland 7.70 - - -
First Credit Union Special - 6.40 6.10 -
First Credit Union Standard 8.50 7.00 6.70 -
Heartland Bank - Online 7.49 ▼5.65 ▼5.55 ▼5.55
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.00 6.50 -
ICBC 7.49 5.99 5.65 5.59
Kainga Ora 8.39 7.05 6.59 6.49
Kainga Ora - First Home Buyer Special - - - -
Lender Flt 1yr 2yr 3yr
Kiwibank 7.75 6.89 6.59 6.49
Kiwibank - Offset 8.25 - - -
Kiwibank Special 7.75 5.99 5.69 5.69
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 8.44 ▼6.39 ▼6.09 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
SBS Bank 7.99 6.95 6.29 6.29
SBS Bank Special - ▼6.15 5.69 5.69
SBS Construction lending for FHB - - - -
Lender Flt 1yr 2yr 3yr
SBS FirstHome Combo 5.44 ▼5.15 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.75 - - -
TSB Bank 8.69 6.79 6.49 6.49
TSB Special 7.89 5.99 5.69 5.69
Unity ▼7.64 5.99 5.69 -
Unity First Home Buyer special - 5.49 - -
Wairarapa Building Society 8.50 ▼6.19 ▼5.79 -
Westpac 8.39 6.89 6.39 6.39
Westpac Choices Everyday 8.49 - - -
Westpac Offset 8.39 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 6.29 5.79 5.79
Median 7.99 6.17 5.79 5.69

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