Roger Douglas

Early life and background

Douglas was born on 5 December 1937. His family had strong ties with the trade-union movement, and actively engaged in politics. His grandfather, William Theophilus "Bill" Anderton, (1891–1966), was a left-wing Methodist local preacher and small business owner in Birmingham, England, who migrated to New Zealand with his wife in 1921. Anderton served as MP for Eden from 1935–1946, then as MP for Auckland Central from 1946–1960. He was Minister of Internal Affairs in the 1957–1960 Second Labour Government, establishing the Arts Council.

Roger Douglas's father, Norman Vazey Douglas, (1910–1985), a former trade union secretary, served as MP for Auckland Central from 1960–1975, and as opposition spokesman for labour, education, and social security from 1967–1972. Roger's brother Malcolm Douglas was briefly Labour MP for Hunua 1978–1979. Douglas grew up in a state house in Ewenson Avenue, One Tree Hill, Auckland. He attended Ellerslie Primary School, excelling in arithmetic and sports. Douglas attended Auckland Grammar School between 1950 and 1955, where he was a prefect and an avid cricket and rugby player.

Douglas had a summer job at the Auckland accounting firm Mabee, Halstead and Kiddle, accepting a job there at the end of 1952. He gained a degree in accountancy from Auckland University College in 1957. Afterwards, he was hired by Bremworth Carpets in South Auckland as company secretary. He married Glenis June Anderson and moved to Māngere in 1961, becoming President of the Manukau Labour Electorate Committee. He began to run the Bremworth division individually after the company's sale to UEB in the mid-1960s. He also served as campaign manager for successful Labour candidate Colin Moyle in 1963.

Political career

After some experience in local body politics as a member of the Manukau City Council between 1965 and 1969, where he had been instrumental in the plans to purchase the land where the Manukau City Centre now stands, Douglas began his career in national politics in 1969 when he won election to parliament as the Labour Member of Parliament for Manukau. He gave his maiden speech in the Address-in-Reply debate on 7 April 1970. He devoted the greater part of his speech to the case against foreign investment in the domestic economy. His case for external protection of the domestic economy and government involvement in investment was characteristic of the Labour Party of the time. Douglas became involved in the party's policies on industry and economics. He served as the MP for Manukau from 1969 to 1978, and then for Manurewa from 1978 to 1990.

Cabinet Minister (1972–1975)

Labour under Norman Kirk won the 1972 election, and the Labour parliamentary caucus elevated Douglas, then aged 34, to Cabinet rank. Thus, Douglas became the youngest Cabinet minister in 50 years. His father, and parliamentary colleague, Norman Douglas, then 62, failed to win a place in the ballot for Cabinet, and did not hide his bitter disappointment. On the day of the ballot, Kirk was so concerned by the extremity of Norman Douglas's reaction, and its effects on his son, that he called Douglas's mother to enlist her help. Kirk told his secretary, "It should have been the best day of Roger's life but instead it was the worst".

During the Third Labour Government, Douglas served as Postmaster-General and Minister of Broadcasting until the unexpected death of Kirk in 1974. Kirk's successor Bill Rowling appointed Douglas Minister of Housing. He remained Minister of Broadcasting until 1975, when the portfolio was disestablished. Douglas was Minister of Housing and Minister of Customs until Labour's defeat by the National Party under Robert Muldoon in the 1975 election.

Douglas was the most junior member of Cabinet, but soon earned a reputation for hard work and competence. His appointment as Minister of Housing in 1974 marked him publicly as a talent in the Cabinet. It was a significant and, in political terms, a sensitive portfolio.

As Minister of Broadcasting, Douglas devised an administrative framework to allow for the introduction of a second television channel. It replaced the monopoly New Zealand Broadcasting Corporation with two competing publicly owned television channels, Television One, and Television Two (later called South Pacific Television) a corporation to manage public radio, Radio New Zealand, and a new Broadcasting Council. After public consultation, the scheme was implemented on 1 April 1975. However, the government of Muldoon merged the three broadcasters into a single Broadcasting Corporation of New Zealand in 1977, with the two television channels being merged into Television New Zealand in 1980.

Douglas was an early and enthusiastic promoter of the government's plans for a compulsory contributory superannuation scheme that would supplement the old age pension. In 1972, while still in opposition, he introduced a private member's bill that provided for a form of compulsory superannuation. In Cabinet, Rowling, who was then Minister of Finance, and Douglas were largely responsible for a 1973 White Paper setting out the government's proposals for superannuation. As well as augmenting individual provision for retirement, the scheme was intended to be a source of capital for investment in the domestic economy. The scheme became law in the form of the New Zealand Superannuation Act 1974.

Opposition (1975–1984)

Douglas was critical of Labour's performance in government between 1972 and 1975. Labour's defeat in the 1975 election was the greatest electoral reversal since 1928. A Labour majority of 23 seats in a parliament of 87 members became a National majority of the same number. The Third Labour Government attempted to cushion economic contraction by borrowing abroad, but while it held unemployment to the level it had inherited, the rate of inflation trebled to an annual rate of 15 per cent and a surplus in the balance of payments became a deficit, exacerbated by the 1973 oil crisis. Labour lost credibility as an economic manager by 1975.

A series of scandals and misadventures, incompetence among some ministers, and Rowling's inability to counter Muldoon's populism contributed to the defeat. The nature of the defeat widened a division that already existed between the older and younger members of the Labour caucus.

In opposition after 1975, Douglas became successively Labour's spokesperson on housing, special projects, consumer affairs and transport. In 1980, he published a series of proposals for future economic development under the title an "Alternative Budget". The proposals were not Labour policy and their publication was seen by the party leader Rowling as a challenge to his authority. Rowling demoted Douglas from the parliamentary front bench and he lost his responsibility for transport. In 1981, he became spokesperson for trade and industry.

Douglas argued that the Labour Party's approach to economic policy was fragmented and based on unrealistic promises. He also believed that the party leadership should be revitalised, and supported David Lange's unsuccessful bid for the leadership in 1980. In informal Labour caucus politics, Douglas became a member of the so-called "Fish and Chip Brigade", which included Rowling's leading caucus opponents. He identified his closest colleagues as Richard Prebble, Mike Moore, and Michael Bassett.

The failure of Lange's leadership bid, continuing dissatisfaction with Labour's approach to economic policy, and his difficult relationship with leading figures in the party led Douglas to declare his intention to retire from Parliament at the 1981 general election. Lange was among those who persuaded him to reconsider. Lange believed that Douglas was a moderniser. He saw Douglas as sometimes obstinate and limited, but in Lange's view he had drive, and the ability to break from the traditions that had kept Labour so long in opposition. In March 1983, after Lange became leader of the Labour Party, he made Douglas the Labour spokesperson for finance.

Minister of Finance (1984–1988)

Labour returned to power in the election of 1984 and formed the Fourth Labour Government. Lange became Prime Minister and Douglas became Minister of Finance. At Douglas's request, Lange appointed two senior ministers as associate finance ministers: David Caygill, who was also Minister of Trade and Industry, and Richard Prebble, who was also Minister of Transport. Douglas and his associate ministers became known as the "Treasury Troika" or simply the "Troika".

Soon after the election, the outgoing government carried out the devaluation that Douglas supported. The heads of Treasury and the Reserve Bank advised that devaluation was the only way to stop the currency crisis that followed the announcement of an early election.

The unsettled political climate around the early election and the currency crisis gave Douglas a powerful position in the Cabinet. Lange said in 1986 that the economic and political climate in 1984 gave Douglas influence he would not have had if the government had been elected in November 1984 and presented its first budget in June 1985. "When the crisis hit in July 1984, it was Roger Douglas who, above all, had thought through the economic issues – so when the Cabinet needed to fall back on an economic philosophy, it was Douglas who had one."

Labour promised during the election campaign to "open the books", largely as a challenge to Muldoon's supposedly secretive and ad hoc approach to economic management. Douglas responded by agreeing to the publication of Treasury's briefing to the incoming government, which appeared under the title Economic Management.

Douglas took a limited part in the Economic Summit Conference that began on 11 September 1984 because he was already at work on his first budget. He saw the summit as preparing the country to accept change, but noted the possibility that it might heighten expectations of continued consensus and involvement. He later stated that he had taken up the finance portfolio with a plan for economic restructuring already in mind, and described the budget he delivered in November 1984 as "an amalgam of what I had originally envisaged and fresh options presented in briefing papers and in debate with fellow ministers and Treasury officials."

Lange and Douglas (1984–1989)

The conflict between Lange and Douglas mirrored the inconsistency at the heart of the government. Lange's talk of consensus and inclusiveness during the 1984 general election campaign echoed Labour's social-democratic history. Douglas personified radical change.

Lange strongly supported the 1984 budget, and promoted it to party and public. Douglas and Lange were a formidable political combination, both in Cabinet and in public, where Lange's humour and rhetoric complemented the determination and single-mindedness embodied in Douglas's commitment to economic restructuring.

Lange valued Douglas's doggedness in the government's first term of office, when "urgency was needed and boldness was at a premium", but believed he was limited by an inability to accept or understand interests that were not in tune with his. In 1986, the two took opposing sides in Cabinet debates about the establishment of a royal commission on social policy, which Lange saw as an intellectual counterweight to Treasury. At the beginning of 1987, relations between the Douglas and Lange offices were strained when Douglas and his ally Richard Prebble persuaded Cabinet to reject Lange's wish to accept the resignation of the Minister of Māori Affairs, Koro Wētere, following the Māori loan affair.

Douglas shocked Lange in April 1987 by telling him that his preferred option for the 1987 budget included a rise in GST from a rate of 10% to 15%, the extension of user charges in public health and education and the sale of most government assets, and the eventual achievement of a flat rate of income tax at 15 per cent. Lange wrote that "it was an unaccustomed addition to the burdens of office to have the finance minister take leave of his senses". After discussions with Lange and senior colleagues, Douglas did not pursue his proposals.

In the 1987 election campaign, Douglas underlined the need for continuing radical reform, while Lange said that radical economic reform was largely complete. Douglas's appeal to commercial interests was reflected in the large amounts of money (including $250,000 given by Auckland businessman Alan Hawkins) he collected for the campaign from the business community. He did not convey the money he raised to the Labour Party organisation, but chose to manage it himself, allocating funds for purposes like television advertising.

ACT New Zealand

In 1993, Douglas co-founded the Association of Consumers and Taxpayers with Derek Quigley. Douglas and Quigley intended the Association to serve as a pressure-group promoting the Douglas economic policies. Shortly afterwards, in 1996, the country switched to using the MMP electoral system. MMP gave smaller parties a much better chance of entering Parliament, and encouraged the Association to establish the ACT New Zealand Party. The nascent party's manifesto was based upon a book written by Douglas entitled Unfinished Business. Douglas served as ACT's first leader, but soon stood aside for Richard Prebble (his old ally from their days in the Labour caucus).

Douglas remained a strong supporter of ACT, although he became somewhat unhappy with the party's alleged lack of focus on pure economic policy. In particular, Douglas criticised what he saw as populism within the party, claiming that some of its MPs seemed more committed to grabbing headlines than to developing policy. When in April 2004 Prebble announced his decision to retire, Douglas spoke out in favour of Stephen Franks and Ken Shirley as possible successors – the other main contender in the leadership race, Rodney Hide, had a reputation for advocating the style that Douglas condemned. Hide won the leadership and headed ACT until his resignation in April 2011.

On 2 December 2004, both Douglas and Quigley announced that they would step down as patrons of ACT. They stated as the reason that they wished to have more freedom to disagree with the party publicly.

On 21 February 2008, Douglas renewed his involvement with ACT by signing a letter inviting supporters to the 2008 ACT conference, and appearing in television and newspaper interviews endorsing ACT for the 2008 general election. At ACT's 2008 annual conference in Auckland, Douglas announced his intention to stand for Parliament again, as an ACT candidate. The announcement that he would run in the newly created electorate of Hunua came on 8 June 2008.

ACT assigned Douglas the number three slot on its party list.

Douglas finished a distant third in Hunua, taking only 9.6 percent of the vote. However, ACT leader Rodney Hide was reelected as the member for Epsom, allowing ACT to enter Parliament under MMP. A party that falls below the five-percent threshold can still qualify for MMP if it wins at least one electorate seat. ACT's 3.65 percent of the party vote entitled it to five seats, allowing Douglas to re-enter Parliament as a list MP. ACT gave confidence and supply to National. Prime Minister-elect John Key had previously said that he would not give Douglas a Cabinet position, but Douglas indicated a wish for a review of this stance.

Career outside politics

In early 1992, Douglas gave a schedule of speeches on economics in Russia, which was transitioning from a command economy to free-market capitalism, as part of a privatisation advisory committee organised by the World Bank. Later in 1992, Douglas was appointed to the inaugural board of the Auckland Warriors by the Auckland Rugby League. He later served as chairman before being replaced in 1996.

During his absence from national politics, Douglas held senior positions at a number of prominent companies, such as Ron Brierley's BIL, which he briefly served as Executive Chairman. He also served as the managing director of Roger Douglas Associates, an international consulting firm.

Honours and awards

In 1977, Douglas was awarded the Queen Elizabeth II Silver Jubilee Medal, and in 1990 he received the New Zealand 1990 Commemoration Medal. In the 1991 New Year Honours, he was appointed a Knight Bachelor, for public services.

Legacy

In 1997, in a back-handed compliment, the founders of the annual award for "The Worst Transnational Corporation operating in New Zealand", as voted by "four or five eminent judges – academics, community leaders, artists, even sportspeople", named it the "Roger Award" after Douglas.

Douglas and his policies were and remain controversial and polarising. His supporters contend that he was responsible for rejuvenating the New Zealand economy while his opponents argue that Rogernomics was responsible for a vast increase in inequality between rich and poor, among other things.

Helen Clark, a later Labour Prime Minister, denounced Rogernomics as "a ghastly period" and led Labour back into power by abandoning its legacy. However, political analysts suggest that she did not significantly alter the paradigm created by Rogernomics. By and large, governments since the 1980s have retained or reinforced the policies promoted by Douglas in the years 1984 to 1987, including low levels of import-protection, "credible" monetary and fiscal policies, deregulated financial markets and limited subsidies and other interventions in the economy.