Editing Rogernomics (section)

==Minister of Finance, 1984–1988==
{{main|Fourth Labour Government of New Zealand}} 
In 1984, [[Roger Douglas]] was made Minister of Finance, with two associate ministers of finance, [[David Caygill]] and [[Richard Prebble]]. They became known as the "Treasury Troika" or the "Troika", and became the most powerful group in Cabinet.<ref>{{cite book|last1=Easton|first1=Brian|title=The Commercialisation of New Zealand|date=1997|publisher=Auckland University Press|location=Auckland|isbn=1-86940-173-5|page=74|url=https://books.google.com/books?id=DYebMJhK-q8C&q=david%20lange&pg=PA74|access-date=18 July 2016}}</ref> Douglas was the strategist, Prebble the tactician, while Caygill mastered the details. With Caygill [[Good cop/bad cop|the "nice cop" and Prebble the "nasty cop]]", Douglas could sometimes appear as steering a considered middle course. Later [[Trevor de Cleene]] was made undersecretary to Douglas, with special responsibility for Inland Revenue.{{sfn|Bassett|2008|p=108}}

The key element of Douglas's economic thinking was implemented after Labour won the [[1984 New Zealand general election|1984 election]] but before it was formally sworn into office. This was the 20 per cent devaluation of the New Zealand dollar. The announcement of the [[snap election]] immediately provoked selling of the dollar by dealers who anticipated that a change of government would lead to a substantial devaluation. The result was a [[currency crisis]] that became a matter of public knowledge two days after the general election. Muldoon refused to accept official advice that devaluation was the only way to stop the currency crisis and provoked a brief [[New Zealand constitutional crisis, 1984|constitutional crisis]] when he initially refused to implement the incoming government’s instruction that he devalue. Both crises were soon settled when accepted that he had no choice but to devalue after Muldoon's National Party colleagues threatened to approach the Governor General to dismiss him.<ref>Gustafson, Barry. ''His way: a biography of Robert Muldoon''. Auckland University Press, 2000, pp. 384–395</ref> Although devaluation was a contentious issue in the Labour Party and was not part of Labour's election policy, the decisiveness with which the incoming government acted won it popular acclaim and enhanced Douglas's standing in the new cabinet.<ref>Lange, David, interviewed in [[National Business Review]], Auckland, 11 July 1986</ref>

The reformers argued that the speed with which the reforms were made was due to the fact that New Zealand had not adjusted to Britain's abandonment of the empire, and had to move quickly to "catch up" with the rest of the world.<ref name="smith">Philippa Mein Smith, ''A Concise History of New Zealand'', Cambridge University Press, Melbourne: 2005, pp. 201–216.</ref> Douglas claimed in his 1993 book ''[[Unfinished Business (book)|Unfinished Business]]'' that speed was a key strategy for achieving radical economic change: "Define your objectives clearly, and move towards them in quantum leaps, otherwise the interest groups will have time to mobilise and drag you down".<ref name="bell">Judith Bell, ''I See Red'', Awa Press, Wellington: 2006, pp. 22–56.</ref> Political commentator [[Bruce Jesson]] argued that Douglas acted fast to achieve a complete economic revolution within one parliamentary term, in case he did not get a second chance.<ref>Bruce Jesson, "The New Rights Network of Power" in ''To Build a Nation: Collected Writings 1975–1999'', edited Andrew Sharp, Penguin Press: 2005, p. 190.</ref> The reforms can be summarised as the dismantling of the Australasian orthodoxy of state development that had existed for the previous 90 years, and its replacement by the Anglo-American neo-classical model based on the monetarist policies of [[Milton Friedman]] and the [[Chicago School (economics)|Chicago School]].<ref name="smith"/> The financial market was deregulated and controls on foreign exchange removed. Subsidies to many industries, notably agriculture, were removed or significantly reduced, as was tariff protection. The top [[marginal tax rate]] was halved over a number of years from 66% to 33%, and the standard rate was reduced from 42% in 1978 to 28% in 1988.<ref name="The Politics of Greed: The Facts">{{cite journal|title=The Politics of Greed: The Facts|journal=[[New Internationalist]]|date=October 1988|issue=188|url=https://newint.org/features/1988/10/05/facts/|access-date=18 July 2016}}</ref> To compensate, the variable sales taxes that had been in effect until then were replaced by a single [[Goods and Services Tax (New Zealand)|Goods and Services Tax]], initially set at 10%,<ref name="The Politics of Greed: The Facts"/> later 12.5% (and eventually in 2011, 15%), and a [[surtax]] on superannuation, which had been made universal from age 60 by the previous government.<ref>Michael King, ''The Penguin History of New Zealand'', Penguin Books (NZ), Auckland: 2003, p. 490.</ref>