Ruth Margaret Richardson (born 13 December 1950) is a retired New Zealand politician of the National Party who served as Minister of Finance from 1990 to 1993. Her 1991 budget, which she dubbed the "Mother of all Budgets", formed the catalyst for her party's economic reforms known in the media as "Ruthanasia".
Richardson was a lawyer by profession. She was elected as the Member of Parliament (MP) for Selwyn in 1981. Following the National Party victory in the , Richardson was appointed as Finance Minister in the fourth National Government. She supported and carried on the free-market reforms initiated by the preceding Labour Government, and extended them in a significant way with the Fiscal Responsibility Act 1994. Richardon's economic restructuring, including privatisation of state assets and cuts to social welfare, contributed to New Zealand emerging from its fiscal problems. However, critics have noted the wide-ranging effects on New Zealand's social fabric including child poverty and wealth inequality, which were both severely exacerbated.
Richardson was dismissed as Finance Minister following the ; she resigned from Parliament in 1994. She later joined ACT New Zealand.
Early life Richardson was born in southern Taranaki on 13 December 1950. Her family had a long history in the area, and her great-grandfather George Pearce had served as MP for from to 1919. Her father was active in the National Party's Patea branch. Richardson was brought up as a Roman Catholic, and after finishing primary school, was sent to Sacred Heart College, a Catholic girls' high school in Wanganui.
Richardson decided on a career in Parliament at an early age, before she even left high school. Sir Roy Jack, a National Party MP and a friend of her family, advised her to study law, which she did. Richardson gained a law degree from the University of Canterbury. After graduating, she worked for the Department of Justice. In 1975, Richardson married Andrew Wright, a colleague from the Department.
Richardson's first attempt to break into politics came when she unsuccessfully challenged Sir Roy Jack for the National Party nomination in the . His electorate was merged into because of post-census boundary changes. Besides alienating her from her old mentor, she also created considerable irritation in the higher ranks of the party. National had long frowned on challenges to sitting MPs who sought renomination, and was especially hostile when the challenge was made against long-serving MPs such as Jack. George Chapman, who chaired the selection, said, "The tensions were tremendous, but Roy was finally confirmed as the candidate." She was a member of the non-partisan political lobby organisation the Women's Electoral Lobby.
In 1978, Richardson contested the National Party's nomination for the Tasman seat. She won the nomination, but in the 1978 election itself, she failed to defeat incumbent Labour MP Bill Rowling (who was leader of his party at the time). In 1980, she was invited to contest the nomination for Selwyn, a National safe seat just outside Christchurch which was held by retiring MP Colin McLachlan. She won the nomination, and in the 1981 election, was elected to Parliament.
Early parliamentary career
Richardson was influenced by the neo-liberal thought of Milton Friedman and Friedrich Hayek. She quickly distinguished herself in the National Party caucus as a supporter of free market economics, privatisation, and trade liberalisation. This contrasted considerably with the views held by National Party Prime Minister Robert Muldoon, who favoured an interventionist approach based on significant overseas borrowing. Richardson's focus on financial matters was itself a cause for comment, as many female MPs (particularly in the National Party) had confined themselves to matters such as health and social welfare.
When National lost the 1984 election, Richardson became a member of the Opposition. Richardson stood out in National's caucus for her strong support of the radical economic reforms of the Labour Party's new Finance Minister, Roger Douglas. These reforms, sometimes known as "Rogernomics", involved the privatisation of state assets, the removal of tariffs and subsidies, and applying monetarism to control inflation. These reforms were seen by many Labour as against traditional Labour policy, but were also opposed by the more conservative wings of the National Party. Particularly hostile were followers of Muldoon, a traditionalist conservative who opposed free market reforms as undermining state authority.
Shortly after National lost government, Jim McLay replaced Muldoon as leader of the National Party and he appointed Richardson education spokesperson. In February 1986 there was a considerable rearrangement of responsibilities in the opposition. People such as Bill Birch and George Gair, who McLay associated with the Muldoon era, were demoted. They were replaced by newer MPs, such as Richardson and Simon Upton, who McLay believed would help revitalise the party. This move proved fatal to McLay personally, however, as the sacked Birch and Gair allied themselves with McLay's rival, Jim Bolger. Bolger ousted McLay and became party leader.
The change in leadership was damaging for Richardson, as Bolger (and many of his allies) strongly disliked her. This dislike was due to three main factors: anger at McLay's "favouritism" towards her, dislike of her advocacy for radical free-market economic policies, and dislike of her personality (which many colleagues found "abrasive" and "condescending"). When George Gair (elevated for his role in Bolger's rise to power) retired from the position of deputy leader, Richardson stepped forward for the position. Bolger, however, made it clear that he strongly opposed Richardson's candidacy, instead throwing his support behind Don McKinnon. McKinnon narrowly defeated Richardson by just one vote and became deputy leader.
Bolger did, however, make Richardson the party's spokesperson on finance in recognition of her strong showing for the deputy leadership. This was an attempt to pacify Richardson and her supporters, rather than an expression of confidence in her – it was well known that Bolger himself preferred the more cautious Birch for the finance role. The move to defuse tension was only partially successful, and hostility between supporters of Bolger and supporters of Richardson remained. Many National politicians believed that Richardson sought to replace Bolger as leader, but even if Bolger was vulnerable, the two factions that opposed him (one led by Richardson and the other led by Winston Peters) were unwilling to cooperate. Bolger's leadership remained secure, and when his popularity rose, the window of opportunity was lost.
Richardson gave birth during a recess in the 1980s, she had a room in Parliament set aside for her to breastfeed in (although a creche was not established until the 1990s).
Minister of Finance
When National came to power in the , Richardson had enough support within the party to be made Minister of Finance, though Bolger preferred Bill Birch for the post. Many people believed that the National Party would adopt more cautious, conservative policies than the radical Labour government. On coming to office, however, the new Government was confronted with a much worse fiscal and economic position than the out-going Government had disclosed. In particular, the state-owned Bank of New Zealand required a multimillion-dollar recapitalization. The forecast budget surplus was quickly revised, upon National coming into office, to a large budget deficit. Economic and Social Initiative As part of the December 1990 ‘Economic and Social Initiative’ white paper, welfare benefits were substantially reduced. Announced on 19 December 1990 and taking effect from 1 April 1991, the changes included weekly cuts of $14 to the Unemployment Benefit, up to $25 for recipients aged 18-24, $28 to the Domestic Purposes Benefit, and $27 to the Sickness Benefit. The abolition of the Family Benefit cut a further $6 per week from family incomes, while single parents under 18 were no longer eligible for the Domestic Purposes Benefit. Following a backbench revolt over proposed cuts to Carer’s Benefit, Richardson shrank from cutting the Invalids Benefit. GP subsidies were also reduced, prescription drug fees rose, and the government abandoned a GP contract scheme introduced by the previous Labour government to reduce doctors fees. The fact National had not forshadowed such a drastic welfare reform caused dismay among many party supporters. Several notable National MP's, such as Michael Laws, Cam Campion, Gilbert Myles, and Hamish MacIntyre crossed the floor to vote against the government on several occasions.
Mother of all Budgets In July 1991, Richardson delivered what became known as the “Mother of all Budgets”. The phrase originated from an offhand remark to a journalist making a phone inquiry prior to its release, in which she stated it would be "the mother of all budgets". The comment was captured by a Television New Zealand news camera and quickly became associated with the harshness of the National government's economic policies. The term would come to haunt her career.
The 1991 Budget was no less far-reaching than the 19 December 1990 package. Reforms in tertiary education owed nothing to National's 1990 election commitments. Despite a promise to abolish tertiary fees entirely, they were retained and effectively deregulated, allowing institutions to set their own fee levels. The public health system underwent a major restructuring, with a separation between funding and provision. Area Health Boards were abolished and replaced by Crown Health Enterprises, while newly established Regional Health Authorities purchased health services under contract to the Crown. This effectively corporatised the public health system. A $50 overnight charge schedule was introduced for persons using the public hospital system. In housing, the government introduced market rents for state housing tenants. This resulted in soaring rents for many tenants, which in some cases tripled. A contuation of asset sales, particularly the sale of New Zealand Rail, attracted further criticism. In October 1991, Bolger sacked Minister of Māori Affairs Winston Peters after he openly condemned government policy. Peters had been a primary opponent of Richardson.
The most controversial issue for the National government, however, was retirement income. In 1989, the previous Labour government had introduced a Guaranteed Retirement Income (GRI), which abolished the 80% average national income threshold, indexing it to prices and wages. In practice, this was a modified continuation of the previous National Superannuation scheme. In 1985, Labour had introduced a Superannuation Surtax to claw back some of the entitlement from retirees. National pledged to abolish the surtax in the 1990 election, promising to do so within the first 100 days. Instead, National abolished the surtax, but introduce an abatement scheme and included GRI in the Social Security Act. This effectively transformed GRI into a state benefit, causing outrage across the country. After a series of concessions, National abandoned the policy, with one exception: the Surtax returned, was increased from 20% to 25%, and the exemption lowered. This episode soon became emblematic of the perceived dogmatic extremism of Richardson and cost the government dearly.