Rogernomics: The 1984 Reforms

How New Zealand went from one of the most regulated rich economies to one of the most open after 1984, through reforms led by finance minister Roger Douglas.

In 1984, New Zealand began radical reforms.

Before

Heavy regulation, import controls and farm subsidies.
A fixed exchange rate and a currency crisis.

Rogernomics

Named after Finance Minister Roger Douglas, reforms included:

Floating the dollar in 1985.
Removing farm subsidies.
Cutting tariffs.
Corporatising and selling state firms.
A broad GST in 1986.

Farm subsidies

Removing subsidies was painful, but farmers adapted and became more efficient.

Costs

Unemployment rose and some communities suffered.

Legacy

New Zealand became one of the world’s most open economies.

The subsidy cut

A sheep farmer who once received government payments had to cut costs and diversify when subsidies ended.

Thinking removing farm subsidies destroyed farming

Farmers adapted and became more efficient.

Key takeaways

Reforms began in 1984.
The dollar floated in 1985.
Farm subsidies were removed.
New Zealand became very open.