Maurice P. McTigue is a Distinguished Visiting Scholar at the Mercatus Center at George Mason University.  Previously he was a member of the New Zealand Parliament and New Zealand’s ambassador to Canada, and was closely involved in New Zealand's deregulation of labor markets, deregulation of the transportation industry, and restructuring of the fishing industry through conservation incentives.  He also served as Minister of employment, Minister of State Owned Enterprises, Minister of Railways, Minister of Works and Development, Minister of Labour and Minister of Immigration.

Professor McTigue spoke at the Center for the Study of Government and the Individual on August 5, 2004 at our dinner conversation event.  He pointed out that since the 1930's and 40's when New Zealand was third in the world in per capita income his country had fallen in rank to 27th by the 1980's. Also, the country had experienced 23 years of deficit spending and the government's share of domestic product (GDP) had grown to 44%. The government controlled foreign exchange to the extent that it was against the law to increase prices, workers pay and/or worker bonuses without government permission. It took ten years to reform the system. There was too much spending, too much taxing and too much government.

The reformers asked the question - "What did the public get for its expenditures?" and found that the response too often was "nothing" or "we don't know."  The priority was to find out, through outcome results, the degree to which the government was diminishing the problem in each service area.  They asked three questions in each service area

1. What are you currently doing?
2. Does it succeed in eliminating the problem?
3. What should you be doing?

The review team became outcome focused! With this kind of accountability focus they moved to reduce 5000 employees to 53 in the Transportation Department, 1700 employees to 17 in Forestry, and 28000 employees to only the minister (Maurice McTigue) in the Department of Labour. Much of this was done by purchasing services from the best provider (contracting out). The reforms succeeded in reducing the size of government employees by 66% and the government financial take of GDP from 44% to 27%. They kept the existing level of services by doing it with the best provider. By selling off government owned business, production went up 70% and the cost of service went down. State owned enterprises became profitable enough to pay taxes (fees) to government and were able to return 1200 million dollars to the people.

The reformers learned to be cautious with subsidies because they created dependencies. They reduced the seventy cents of every dollar going to thirty cents and abolished school boards and replaced them with parent boards. In 30 months public schools improved in quality to the extent there was little difference in quality between the public schools and the private schools.

Finally, the government included a new writing of the country's statutes from a document 23” thick to one of 320 pages!  You can listen to the audio or watch the video of McTigue's presentation available on the CSGI website.