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People Making Changes Issue 25 -
Changes in New Zealand since 1980 - Part II

- Dorothy - 21/8/97

In Part I there was an indication that moves by the Government had changed long-established institutions in New Zealand. In Part 2 we will look at more major changes.

Between 1984 and the present time the government has restructured the government departments and shed most of its business operations. Subsidies have been removed and the guiding principles in the changes have been the policies of User Pays and privatisation (called Rogernomics after Roger Douglas, the Minister of Finance who initiated the changes).

Post Offices
The post office was regarded as the centre of every small town and a social centre in major cities. Distances from city to city were measured from Post Office to Post Office. The flag flew from the Post Office - at half mast for the death of any important person. The New Zealand Post Office had three major responsibilities - telephone communication, postal services and a savings bank. It did all its own work. Nothing was contracted out. It cost the taxpayers one million dollars a week, but it provided secure and useful exmployment for 40,000 people.

In 1986 the Government began changing its trading activities to corporate structures and the functions of the Post Office were split into three State Owned Enterprises.

Telecom
In 1987 Telecom Corporation was set up to take over the telecommunication functions. In 1988 the telecommunications industry was deregulated and competition was introduced. Clear Communications entered the market offering toll calls. This was a consortium made up of U.S. based MCI, Bell Canada, the Todd Corporation, New Zealand Rail and Television New Zealand. Competition led to a reduction in charges. As Clear offered an incentive to new customers Telecom followed. It is now possible to make a toll call within New Zealand in the evenings and weekends for five dollars, with no time limit - whichever company you subscribe to.

In the year to April 1990 there were changes - 85% increase in productivity, 47% cut in staff numbers, 300% rise in profits. The wait for new phones was cut from six weeks to less than a week for most customers.

In June 1990 Telecom was sold for NZ$4.25 billion to a consortium of two U.S. based companies, Bell Atlantic and Ameritech, and two New Zealand based companies, Fay Richwhite and Freightways. One condition of the sale was that free local calls for local customers would continue.

Postal Services
These were streamlined. In February 432 post offices were closed. 118 more have been closed since then. There are over four thousand Post Shops where it is possible to buy stamps and post mail. The delivery of mail is the only monopoly now left to NZ Post. Rural deliveries now cost country people more. The possibility of deregulating the mail service is being discussed at present.

Banking
The Post Office Savings Bank has been sold to the ANZ bank. After a period of financial difficulty and help from the government the Bank of New Zealand was sold to the joint ownership of the National Australia Bank and the New Zealand Government in 1992. Trustbank has now been sold to Westpac so there are no major banks which are wholly New Zealand owned.

There are ATMs (Automatic Teller Machines) available at most shopping centres and shopping by EFTPOS (Electronic Funds Transfer Point of Sale) is gaining rapidly in popularity. This is simpler for most customers and saves the bank staff time, but of course will lead to redundancies in the banking industry.

Shipping Services and Stevedoring
The New Zealand Shipping Corporation has been sold and the workforce on the wharves cut by 50%.

Travel
Air New Zealand was sold in 1988 and is now a private company with??? Passengers flying within New Zealand no longer have to fly with Air New Zealand. The Australian airline, Ansett, has been flying the main domestic routes since 1987 offering competition and so increased services and reduced fares for travellers. Free meals are now served on all flights.

Small private airlines offer travel between the smaller centres - a service from which Air New Zealand has withdrawn except as a shareholder in some of the airlines.

Train travel
The Railways Department was changed in 1982 to a Corporation with its own board of directors. In 1986 it became a State Owned Enterprise. In 1990 there was another change. The Railways Corporation became solely responsible for disposing of the former assets of the Railways Department. It leased to New Zealand Rail Ltd the land it used. New Zealand Rail Ltd was responsible for rail freight, passenger services, and inter-island ferries. In 1993 it was sold to a consortium of Fay Richwhite and U.S, based Wisconsin Central Transporataion and Berkshire Partners In its early years as a corporation it was used to mop up unemployment and its staffing costs increased its financial difficulties. The restrictions on road use that had been in force to protect the railways were abolished and railways had to compete for freight on the open market.

Since then there have been huge staff cuts (from 21,000 to 7,000) and changes in the organisation and the services. Few passenger lines remain, mainly on the main trunk routes or scenic lines like the trip from Christchurch to the West Coast. The service to the passengers has been stepped up with fast handling of luggage, a dining car and improved comfort. Gone are the days when everyone scrambled out at the station where there was a refreshment room and hoped to be served a cup of tea in a hefty cup and a large sandwich and get it drunk before the train took off again after about a six minute stop.

Travel by ferry
Since New Zealand Rail took over the ferries there have been fewer hold-ups with strikes which so often seemed to occur at holiday time, and, in most passengers' view, increased service, a higher standard of cleanliness, and better quality food.

A fast ferry operates in the summer season, travelling between Wellington and Picton in ninety minutes.

N.Z. Rail has just been granted a permit to build a ferry terminal at Clifford Bay south of Blenheim, which would shorten the ferry journey and the road journey to the south. It would mean a serious blow to Picton if it lost the ferries and an appeal from the Picton people is be heard shortly.

Deregulation of the taxi industry
With the deregulation of this industry there are many different cabs lined up at the taxi rinks - so many that taxi drivers now have to work very long hours to earn a living wage. It is usually much easier to get a cab even at peak times.

Changes in bus transport
In Christchurch instead of the Transport Board controlling the bus services the routes are put up for tender by the Regional Council and several companies run some routes each. The familiar Big Red buses ply only some routes. The services are less frequent.

The situation is the same in a number of other cities. In Auckland, despite the fact that the system run by the Council has been so efficient and successful, the system is to be privatised amid strong objections.

Education
The schooling system has been restructured under a programme called Tomorrow's Schools which took effect in 1989. Elected Boards of Trustees make decisions about staffing and expenditure and find themselves involved in raising additional funds - easier in schools in affluent suburbs.

Since 1989 tertiary students have paid much higher fees, with more increases likely.

Polytechnics have now been authorised to offer degrees.

The Housing Corporation
This department used to rent out the State houses under the scheme begun under the Labour Government after the Great Depression. It also offered low interest mortgages to first home buyers. In 1991 it was changed to become Housing New Zealand, a limited company which must operate profitably and efficiently, just as would a business in the private sector. Rents for the state owned houses moved up to market rentals with Income Support paying an accommodation supplement to those who were on benefits.

Sale of further businesses
The Tourist Hotel Corporation (along with the rights to the Milford Track and Waitomo Caves), the Government Printing Office, State Insurance, the Ministry of Works and Development, and the Rural Bank have all been privatised.

Major changes in government control of electricity and forestry
There have been major and ongoing reforms in management of the electricity supply with the main effect noted by consumers being regular price rises.

The New Zealand Forest Service has been totally changed with some functions being transferred to the Department of Conservation and the sale of cutting rights for a number of forests.

Major restructuring of local government
In 1989 this was restructured so that the smaller local bodies were amalgamated with larger ones. Service Centres replaced the local body offices. Smaller communities felt that they lost their identity and direct involvement in their affairs.

Health Reforms
There have been so many changes in this area since 1980 with User Pays and budget restrictions that it would not be possible to discuss them in an article of this length. Suffice it to say that with the new policies the result is long waiting lists for elective surgery and an increasing number of people taking out private health insurance.

Prohibition of smoking
Following the Smokefree Environment Act 1990 the Health Sponsorship Council: Te Ropu Whakatarairanga Hauora has been set up. To try to discourage young people from smoking there have been sponsored young people's activities such as the Smokefree Rockquest and the Smokefree Stage Challenge. The Council has also organised Tobacco Replacement Sponsorships so the tobacco companies are not associated with sporting fixtures.

Smoking is prohibited on all public transport and the workplace, and No Smoking notices abound.

New Zealand based honours system
Honours are now awarded to New Zealanders under their own system of awards rather than being based on British system of awards.

Human Rights
In 1986 the Homosexual Law Reform Bill was passed. Gay people now openly state their sexual orientation and use the media to discuss any issue they see as discrimination.

In 1993 there were anti-discrimination amendments to the Human Rights Act. One evidence of the awareness of people with disabilities is the provision of wheelchair access to all new buildings and in some parks and reserves - which also helps people with prams and pushchairs.

Maori language
Kohanga reo (language nurseries) were established for the teaching of the Maori language in 1982 and the number has increased rapidly.

There are news broadcasts in Maori on radio and television and bilingual signs on public buildings.

The Waitangi Tribunal
In 1987 the Waitangi Tribunal was empowered to decide which Crown Land has Maori claimants. Since then a number of claims from Maori tribes have been settled, with the handover of land and money and the conclusion of the Sealord Fisheries deal in which in 1993 the Government financed a half share in Sealord to be handed over to Maori in exchange for Maori claims to commercial fishing under the Treaty of Waitangi.

The Employment Contracts Act 1990
Under this act employer and employees are empowered to agree on mutually beneficial terms and conditions of employment suited to the working environment. This has led to more flexibility. There is a minimum code of employment rights relating to disputes and personal grievances. Anyone negotiating a contract is entitled to be accompanied by a union representative, a lawyer, relative or friend to assist in the process

The position of women
In 1984 New Zealand ratified the United Nations Convention on the elimination of all forms of discrimination against women.

Some New Zealand women have risen to positions of prominence. Dame Cath Tizard was our first woman Governor General. Helen Clark was the first woman to become Deputy Prime Minister. There are thirty six women MPs - a record number. There are several women as Mayors of our large cities - Vicki Buck in Christchurch, Sukhi Turner in Dunedin and Margaret Evans in Hamilton. However, women's pay on the last available figures was still only about 80% of that of men in comparable employment.

Anti-nuclear legislation
The non-nuclear legislation declared New Zealand nuclear-free, by banning the establishment of nuclear power stations and the visits of nuclear-powered and nuclear-armed ships. It became law in 1987 and many Kiwis stand taller as a result. However, this will not necessarily be evident to the overseas visitor.

Inflation
When Patti was in New Zealand in 1979-80 inflation was running between 15% and 20%. With the Reserve Banks's new emphasis on price stability it has been generally below 3% since 1990.

We are told that the economy is in good shape, yet the share market has been fairly static, i.e. risen much less than the U.S., U.K. & Australia etc. There is much more poverty and much more wealth.

The price of change
Staff reduction has been a recurring theme in this article. This has resulted in greatly increased unemployment - 100,000 in 1988 (more than 5% of the workforce) and beyond 200,000 by 1991 (more than 10% of the workforce). In the most recent figures (August 1997) unemployment stood at 122,000 (6.7% of the workforce).

As a result of all the changes there is an increasing gap between the rich and the poor.

Benefit cuts
In 1990 there were cuts to benefit payments because of the growth in the number of beneficiaries. The result is suffering in the community and an increased demand for help and food parcels from charitable organisations.

The end result of the changes
As one correspondent writes, 'Coming back after sixteen years Patti is going to experience culture shock. What has changed? Just about everything. I believe that the New Zealand character has changed and become more aggressive. New Zealand is supposed to have come from twenty years behind, say UK, to (some would say) ten years ahead. It depends what you are talking about.'

We would like to know how you felt if you would write to us after your return visit, Patti.

Read the next articles on poverty in New Zealand.


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