Whārangi 4: Cabinet minister
Muldoon, Robert David
Accountant, politician, prime minister
I tuhia tēnei haurongo e Barry Gustafson, ā, i tāngia tuatahitia i runga i te ipurangi i 2010.
As under-secretary, Muldoon attended meetings of the Cabinet Committee on Economic and Financial Policy, which gave him access to information he eagerly devoured. He also became chairman of the Public Expenditure Committee and, as Finance Minister Harry Lake’s proxy, sat on the Cabinet Works Committee. Senior ministers and bureaucrats came to fear his examination, and his aggressive manner antagonised them. As a result, when Prime Minister Keith Holyoake consulted cabinet colleagues on additions to his ministry after the 1966 election the consensus was to appoint Duncan MacIntyre, Peter Gordon and David Thomson but not Muldoon.
Minister of finance
Three months later, on 10 February 1967, Holyoake added a chastened Muldoon to cabinet as minister of tourism and associate minister of finance. At the time New Zealand’s wool prices had collapsed, creating a serious economic crisis. Holyoake and Lake were engaged in a major battle within Cabinet against Tom Shand, who wanted a markedly more radical approach to the crisis than the prime minister and minister of finance would accept. Eleven days later, Lake died suddenly. Holyoake refused to appoint Shand and, after Jack Marshall declined the post, the prime minister gave the position to Muldoon. He was to be minister of finance for 14 of the following 17 years.
Henry Lang, the secretary of the Treasury, found Muldoon to be an intelligent, hardworking and pragmatic minister, who also revealed considerable integrity. In time though, Lang came to dislike Muldoon’s personality, lack of imagination and unwillingness to adopt new ideas.
Muldoon believed that problems in the economy should be dealt with as they emerged, not left to an annual budget, so he introduced the practice of ‘mini-budgets’ and continual fine-tuning of the economy. The first mini-budget was on 4 May 1967, when he dampened down demand by increasing a range of indirect taxes and government charges. He also moved to cut and hold government expenditure, explaining his measures to the wider public. In November he reluctantly recommended the devaluation of the currency.
Muldoon was conservative when it came to changing the tax system, and opposed a suggestion in the Ross Committee Report on taxation that there should be a move from direct to indirect taxation. He believed that would increase costs, and the tax burden would fall more heavily on lower-income earners. He also tried to defend the welfare system, and extended it into new areas, including in 1968 a domestic purposes benefit for deserted wives and single women with dependent children. In 1968–69 he was also deputy chairman, to Marshall, of a national development conference to plan indicatively the future of New Zealand’s economy.