This post was originally published over at I have to be honest – I never knew that New Zealand had the economic troubles the author describes. After reading – I waned to share with the MSO family.



New Zealand Economic Collapse

By Harriet, Editor-At-Large Australia

Country-wide economic collapse. Do I have to bug out? One person’s experience.


Back in 1984 I lived in New Zeal and during the time the country’s economy collapsed. I was told by someone working very close to the incoming government that the country technically became bankrupt over the weekend after the 1984 elections. This meant the incoming government had no money in its coffers to do anything but stagger from day to day hoping that the news of the country’s bankruptcy wouldn’t hit the media.


We were, of course, told of dire financial problems. Over the following few weeks the country was advised that we must restructure the economy to meet the IMF (International Monetary Fund) requirements so all spending had to be cut. The previous government, despite being the supposedly right wing party, was strongly socialist believing in the government driving the economy. As a result there were huge numbers employed by the government in forestry, the electrical production and delivery systems, the railways, the coal mines, the road construction and maintenance and government even had their own printing company to put out government information and propaganda. This was expensive and the “think big” employment programs of the 1970s lead the country to bankruptcy.


One night the new government withdrew all subsidies from the farmers. We had a plant nursery and about 60% of our turnover was from servicing the farmers. Overnight the farmers closed up their check books and stopped buying anything. Within weeks the forestry employees lost their jobs. They had bought about 20% of our stock. The local town used to service the farmers and the forestry workers and all the small businesses cash-flows were similarly effected further impacting on each others cash flow as the money ceased to flow through the community. Other rural areas had the same problems and as the coal mines were shut down and the railway employees lost their jobs things became dire. Many rural businesses sunk without trace and rural communities suffered.


What made life so difficult was that socially it seemed that we were picked off one at a time. People in jobs made those who lost them feel like there was something wrong with them. This particular person lost their job as they “were not up to scratch”, or they had a psychological problem, or had some other socially undesirable characteristic. While we saw the structural dynamic behind mass unemployment it still felt like each person was individually at fault.


We were picked off one working unit at a time as each local office or workplace was closed down. The government started at the far ends of the rural and remote communities first where there was no media to hear our complaints. After about two years of “restructuring” the rural sector out of jobs the mass restructuring of the cities began.


Some people were able to reapply for their own jobs again in the SOEs – the State Owned Enterprises, as they came to be named, as they were readied for a fire sale. But over about 5 years about 30% of the working population lost their jobs at least once, and some lost them many times.


We had lived on five acres in the country. We had grown our own food and could have stayed but the psychological pain was enormous. Our business couldn’t survive and we couldn’t afford to pay for fencing – no fencing, no way of protecting your food from roaming animals.


The local rural community got nasty. People got picked on socially. This was particularly so when newcomers – those who had moved in to the community in the last 25 years, still had jobs and the old timers lost theirs. Male violence against women sky rocketed. But it was all private violence. It didn’t spill out into the streets. When a woman was raped or beaten up in the home, it was understood to be her fault, not the males.


It was not a nice place to be and we, along with many others went to the city. There was still the promise of work in the cities, though it didn’t eventuate to much. There we looked after each other much more. We were all in the same boat. There was probably violence hidden behind closed doors, but I didn’t hear about it. We struggled from week to week, sought work where we could get it and took the chance to get an education when work wasn’t available.


We were much too concerned with collecting wood and working out how to buy coal to keep warm to complain publicly and rioting would have been unthinkable. In fact the whole country restructured its economy without rioting in the streets. We worked hard at making do and doing what we could to help ourselves and help others. It was really hard – psychologically more than anything else.


So we had no rioting and no public violence though it was turned inwards on ourselves. We all ate most of the time and ate huge amounts of potatoes and carrots. We shared. We helped each other where we could. We did sometimes go cold. The children had to go to school with holes in their shoes. They didn’t have the clothes I would have liked and during growth spurts they looked as their clothes had shrunk. As I look back now I don’t know why we didn’t go bankrupt personally, but somehow we made it through. All this with mortgage interest at 18% and inflation was similar.


It was hard, hard, hard. But we didn’t think to bug out to the country – we went from the country to the city instead. We went to where we hoped we could find work. We went to where the resources were.


I do wonder from time to time why New Zealand didn’t become overtly violent and crime ridden as Argentina and Russia did. Perhaps it had to do with the basic community psyche. I’m sure someone could come up with an explanation.

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  1. Hi,
    There was no Kiwi Economic Collapse in 1984!
    An incoming centre left government in 1984 faced up to the reality that all the subsidies, government concessions and special handouts of the past couldn’t be paid for. So stopped them all – collapse prevented.
    Yes it was a tough time for the “takers” (both business and people) but the centre left government did get reelected – why, because a majority of people knew that the policies of the past were unsustainable. But life had always been tough – in the 70’s its was tough to get chocolate, but no problem for a 14yo boy to get .22 ammo for plinking go figure. Grandma’s xmas and birthday gifts were always a knitted item. My bicycle came an old man who had a sideline in refurbishing old and discarded bicycles.
    If anything the NZ experience should be a shining light of what an honest government and adaptable people can achieve together when faced with economic difficulties.
    What did I learn growing up NZ:
    Always have a sideline;
    Repair, reuse or trade any unwanted or broken item;
    Don’t count on govt. handouts for your financial wellbeing;
    Bartering is not a dirty word;
    How to shoot and dress rabbits;
    How to grow a garden.

  2. This comment is a cut and paste from the Certainly the education system will tell people there was no collapse at that time, that the collapse was averted, but we all know what preppers think about left wing rewriting of history. I wrote a fuller account disagreeing with biggles at the seasoned prepper site and if you wish to read it go there. But there is another comment I would add.

    My source for what was happening at government level subsequently was studying at a tertiary institution. An essay was set about the collapse and the paper was returned for a rewrite – as it would be failed as it was. My source went to discuss it with the lecturer who remonstrated that the evidence was that the source was wrong. (sorry about my use of the plural but I want to keep the gender of my source confidential). My source said that they were present during the discussions and that they had discussed the content of the essay with one of the leading politicians (one of the top 3 in government of the time) the night before. The politician agreed with the main points of the essay. The politician pointed out that none of the academic papers written and used in academia were written by people who were present. They were written by outsiders with a political axe to grind – left wing academics with time on their hands to write such papers. My source gave the phone number of the politician to the lecturer and urged him to call, that the politician was expecting him to check his facts with him. The lecturer backed down and gave my source an average mark instead of failing it or requiring a rewrite.

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