Deregulation is dead! Long live regulation!
OPINION: During the 1970s, New Zealand was one of the most overregulated countries in the world. The public service was riddled with ridiculous rules, imports were heavily licensed and wage rises were hammered out at late-night meetings between the prime minister and the Federation of Labour. The private sector was just as bad. An old boys' network ruled and open competition was frowned upon by the establishment.
Then Roger Douglas came along and everything changed. When the public service rule book was rewritten during the Rogernomics era, the public servants doing it were sent to a remote motel where they sequestered themselves and totally streamlined hundreds of pages of petty rules and regulations. Apparently they were sent to a particularly uncomfortable place to do it so they'd work as quickly as possible to get out of there.
As public and private enterprises became more efficient and profitable, "deregulation" became the buzzword. The theory was that enterprise is stultified by too much regulation, and productivity increases if you get rid of the red tape. This was definitely true in the 1970s, but has the pendulum swung back too far the other way?
Douglas and Ruth Richardson made the deregulation of the finance industry one of their top priorities. And look what happened. Despite Helen Clark's election in 1999, the new Labour government did nothing to tighten finance company rules and numerous fortunes were lost by vulnerable people.
The 1990 National government also deregulated local government and the construction industry, with catastrophic results. Wellington ratepayers have still not fully felt the fiscal pain they will have to endure to pay out all the victims of leaky homes.
And last week we learned that the Pike River tragedy happened largely because a struggling company, overestimating how much coal it could produce, was allowed to place output above everything else, including the safety of its workers.
Thanks to an act passed by the 1990 National government, the Department of Labour largely left it to individual companies to impose their own safety standards, running down their own mine safety inspectorate in the process.
So has deregulation been a total failure? No. Most New Zealanders welcome the deregulation of the wine and food industry - bars no longer close at 6pm. But as teenagers vomit in the street from binge drinking, many people are questioning if it has gone too far. Civil unions, legalised prostitution, and now gay marriage legislation has seen the bedrooms of our nation become almost fully deregulated, yet the sky doesn't seem to have fallen in.
But in sectors like industry and finance, too many lives have been lost or ruined by deregulation. We have thrown out the baby with the deregulated bath water. What little regulation there is, in the form of bodies like OSH (Occupational Safety and Health), has often been the butt of jokes for many Kiwis, even though New Zealand has an appalling workplace safety record.
Presently, our industrial legislation does not allow workers or their union to close down a mine or building site if safety standards have been breached. One of the young miners who lost their lives at Pike River was working his first day on the job. Would you walk off an unsafe job if you knew that your boss could legally fire you after 90 days if he thought you were a troublemaker?
And though deregulation has largely proved to be a costly failure, it continues. This Government is micromanaging and regulating state teachers through national standards, yet charter schools can hire untrained, unregistered teachers to teach what they like. Wait for charter schools to become the Pike River of the education sector.
So who is ultimately to blame for the Pike River debacle? Fingers have been rightly pointed at the dreadful Pike River management, the inept Department of Labour, and the ideologically driven politicians who caused it to be deregulated.
But four million New Zealanders might also like to reflect on the political environment that they happily tolerated that allowed the wholesale flouting of health and safety rules for almost 20 years in the name of deregulation. We are all guilty.
- The Dominion Post