Mother of all budgets? more like mother of poverty

#opinion

Lets no longer guild the lily – the impact of Ruth Richardson’s policies were far from beneficial to a great many New Zealanders, Maori included. In 1991, New Zealand’s Finance Minister Ruth Richardson delivered what she called the “Mother of All Budgets.” For many, it was the beginning of a new economic era. For others-particularly working-class families, Māori communities, and beneficiaries-it marked the beginning of a social unravelling that continues to affect Aotearoa to this day.

Richardson’s economic policies, branded as “fiscal responsibility” and “structural reform,” were part of the larger neoliberal wave that swept through New Zealand under the Fourth Labour Government and accelerated under National. These reforms may have pleased credit rating agencies and international investors-but they devastated vulnerable communities, slashed the social safety net, and entrenched inequality.It was austerity over wellbeing and Richardson’s 1991 budget aggressively cut public spending. Welfare benefits were slashed by up to 25% for some recipients. Unemployment, sickness, and domestic purposes benefits were all targeted. This left many already struggling families without enough to live on. The immediate outcome was a dramatic rise in poverty-especially child poverty. Over the following decade, New Zealand saw rising food insecurity, poor health outcomes, and increases in homelessness. Today, many of the systemic issues we face-housing insecurity, intergenerational poverty, and Māori overrepresentation in negative social statistics-can be traced back to that moment of fiscal brutality. When it comes to The impact on tamariki research shows that children who grow up in poverty are more likely to suffer from poor mental and physical health, experience lower educational achievement, and have reduced life opportunities. Richardson’s policies exacerbated these issues by reducing the income support that many families relied on. In Māori communities-already disadvantaged by colonial land dispossession and institutional racism-the reforms compounded existing inequities. Generations of tamariki Māori were raised in the shadow of economic policies that viewed social support as a cost, not a collective responsibility. Then there were the cuts to Social Services such as public health, education, and housing systems also felt the squeeze. While privatisation and deregulation were meant to increase efficiency, what they often did was reduce access and increase inequality. Waiting lists grew. State housing stock shrank. Mental health services deteriorated.

These cuts hit Māori and Pasifika populations hardest, as they were-and still are-more likely to rely on public services. The legacy is plain to see: chronic underinvestment in infrastructure and persistent inequities in health and education outcomes. A legacy of labour market insecurity was where Richardson championed labour market deregulation and reductions in the minimum wage. The Employment Contracts Act 1991 dismantled collective bargaining and eroded workers’ rights. This led to greater casualisation of labour and the rise of low-paid, insecure work-conditions that still plague many workers today, particularly rangatahi Māori. While some sectors enjoyed growth, the benefits were unevenly shared. Income inequality widened. Wealth became concentrated. And working New Zealanders were told to tighten their belts-while corporate profits soared. Perhaps the most damaging legacy of Richardson’s policies is the shift in values they represented. Where New Zealand once prided itself on egalitarianism and collective care, her reforms introduced a transactional, individualistic model of citizenship. Needing help was framed as failure. Welfare became stigmatised. The state retreated, leaving charities, whānau, and hapū to pick up the pieces. In recent years, governments have tried to patch up the damage-with initiatives like child poverty reduction targets, increased benefits, and greater Māori-led service delivery through initiatives like Whānau Ora. But the scale of the harm done by Richardson’s economic experiment is still being felt.

Undoing the damage means more than just increased funding. It means reimagining a society that values collective wellbeing, invests in people, and recognises that the economic system must serve the people-not the other way around. Ruth Richardson’s policies reshaped Aotearoa-but not for the better. They deepened inequality, undermined social cohesion, and punished the poor for structural failings. As we look ahead to designing a fairer, more inclusive economy, we must learn from the pain of the past-and ensure that “fiscal responsibility” never again comes at the cost of human dignity.

Laud all you want but times were tough for many, and remain tough still.

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