Letter: New Zealand's welfare state has been reined back, not ruined

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The Independent Online
READERS might be forgiven for forming the impression from your article 'What happens when you scrap the welfare state?' (13 March) that New Zealand's social safety net has been swept away because governments have pursued a brand of extreme free market ideology.

No society can improve the opportunities for its people, let alone protect its vulnerable members, if its economic underpinning is weak, and being eroded further. That was the situation in New Zealand.

For decades it had suffered a sustained relative decline in terms of employment, productivity and income. In 1955, the New Zealand average income ranked eighth relative to other countries; by 1987 it was 23rd. This erosion occurred despite heavy borrowings to maintain living standards: net public debt as a percentage of gross domestic product increased sevenfold between 1973 and 1987.

It was to reverse this decline that successive New Zealand governments took steps to restore economic vitality, and so deliver the means to support a fair and caring society. At times, the decisions were difficult, but they were judged necessary to restore economic health.

The government's approach was to trim costs to a more sustainable level, while ensuring that those in real need continued to receive support. In no area of social policy was there a wholesale withdrawal by the state.

New Zealand still has one of the most comprehensive systems of social assistance in the world. There is an extensive benefit system for those unable to support themselves, free hospital care, extensive primary health care subsidies, free access to primary and secondary education and heavy subsidisation of tertiary education.

Dealing with problems accumulated over decades is inevitably a slow process. However, there are clear indications that the country is on track for sustainable growth. The economy grew by 4.2 per cent in the year to September 1993, compared with an average of only 1.1 per cent for the previous decade. Inflation was a mere 1.4 per cent during 1993 and has remained well below 2 per cent for three successive years.

The New Zealand government believes that stronger economic performance, of which these are but the early signs, is the best foundation for lifting the quality of life of all its people.

J P Larkindale

Acting High Commissioner

New Zealand High Commission

London SW1

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