Mother of all Budgets

The Mother of all Budgets was the nickname given to the 1991 New Zealand budget. It was the first budget delivered by the new National Party Minister of Finance Ruth Richardson and formed the catalyst of her economic reforms known in the media as "Ruthanasia".

Background

Richardson was a member of a wing of the National Party that emphasised small government and personal liberty. She worked closely with Minister of Social Welfare Jenny Shipley on the 1991 budget, which Richardson proclaimed the 'mother of all budgets'.^[1] The budget cut spending on many of the welfare state institutions established in the 1930s by the First Labour Government. The unemployment benefit was cut by $14.00 a week, sickness benefit by $27.04, families benefit by $25.00 to $27.00 and universal payments for family benefits were completely abolished.^[2] Richardson also introduced many user pays requirements in hospitals and schools, services previously free to the populace and paid for by the government.^[3] Public services such as state housing were devolved essentially into companies under government contract in all but name.

Despite promoting acceptable measures such as personal saving and fiscal prudence, the largest opposition came from the fact that cuts were focused largely on low income families which were greater in dollar terms than savings from the top 20% of families.

Outcomes

Such was the unpopularity of Richardson's policies among voters that it nearly cost National the next election.

Benefit payments remained at low levels for the following three decades, across successive governments, until a large boost in the 2021 budget by the Sixth Labour Government. The finance minister Grant Robertson referenced the mother of all budgets in his budget speech stating that the benefit increases were to "right the wrongs" of Richardson's 1991 budget and would "address the most inequitable of the changes made 30 years ago". Richardson responded in defence of her budget’s legacy, saying, "Grant Robertson's budget is overtly driven by politics and the desire to pay off Labour supporters", as opposed to her budget, which was "...driven by a desire to lift economic growth and to make employment attractive."^[10]

References