Architect of NZ's Think Big projects and ex-finance minister dies

Sir Bill Birch, a former senior minister in two National Governments, has died at 92.

His most senior role was Minister of Finance from 1993 to 1999 in the fourth National Government, serving Prime Ministers Jim Bolger, who became a close friend, and Jenny Shipley.

He also served in the third National Government, where, as Minister for National Development, he oversaw the construction of a string of energy projects that came to be known as “Think Big”.

In a statement, Prime Minister Christopher Luxon paid tribute to the late politician.

“Sir William Birch was a giant of the National Party and delivered more for our country than he would ever take credit for,” Luxon said.

“His close to 30 years in Parliament coincided with a period of significant reform as we modernised our economy and grappled with who we are as a country. Throughout, Sir William maintained his legendary diligence and work ethic, knowing that the sacrifices of public life were worth it to leave a better country for future generations.

“On behalf of the Government and the National Party, I express my deepest condolences to his family and thank them for sharing him with all of us for so many years.”

Birch entered Parliament in 1972, representing the Franklin electorate. He served until 1999, though his electorate changed names and boundaries to Rangiriri, Maramura and Port Waikato.

He entered Parliament the same year as Bolger, and the pair forged a strong political partnership.

Speaking as he left Parliament, Birch said when he entered there was “no Canterbury Crusaders, no Super 12, no professional rugby, no Sky TV, not even any colour televisions.

“Star Wars was another five years away.

“There were no cappuccinos, no bars, no cafes. There were pubs and cafeterias.”

Labour was in government in 1972. While Robert Muldoon won the election for National in 1975, Birch had to wait until the government was re-elected in 1978 to get a position in the Beehive (which finished construction in 1977).

Birch was made Minister of Energy and Minister of Science and Technology, and Minister of National Development. It was this later portfolio which began Birch’s association with Think Big, an association that would follow him his entire political career.

With the world suffering high oil prices, Think Big was an attempt to reduce dependence on imported oil and broaden the basis of exports. It was also designed to take advantage of the potential for cheap energy generation. Muldoon wanted 50% energy independence by 1987 and hoped for 410,000 additional jobs.

Many of the projects, like the Clyde Dam, still exist today. However, the projects came at massive fiscal and environmental cost.

The National Development Act, passed to ensure the projects could progress with minimal legal obstruction, became a byword for executive overstretch. It was repealed by the next Labour Government and set in motion the events that would lead to the creation of the Resource Management Act.

Bill Birch and Jim Bolger at a function celebrating their 20 years in politics, November 1992.

But it was the fiscal consequences of Think Big that caused Birch the most trouble. Public debt ballooned from just over $4 billion at the start of Muldoon’s premiership in 1975 to nearly $22b by the time he left office in 1984 – about $70b in today’s money, or roughly 30% of GDP at the time.

Though the Government was not insolvent, the wider economy was a mess. When the oil price fell, Think Big looked fiscally reckless and economically unsound. Birch’s reputation was temporarily tainted by it.

Birch and Bolger formed a partnership in caucus. Both were reformers, keen to move on from the Muldoon years, but they did not have the zeal for reform of the likes of Ruth Richardson.

Birch (far left, seated with Jenny Shipley) photographed with Bolger's Cabinet. Photo / NZ Herald

When the fourth Labour Government introduced the Reserve Bank Act, giving the Bank operational independence and explicitly stating its primary mandate for price stability, Bolger and Birch hesitated to support it. Richardson eventually won them around. Along with most of the National Party, Birch voted against some of that Government’s social liberalisation measures, including the decriminalisation of male homosexuality in 1986.

Birch returned to government in the 1990 landslide. The fourth National Government continued the reforms of its labour predecessor, and Birch was at the centre of many of them.

As Minister of Labour, Birch introduced the Employment Contracts Act, which made individual contracts the default, and ended unions’ legal monopoly on representation. The law significantly weakened unions’ power in the economy, which has never fully recovered.

Birch was, however, never fully behind Richardson’s fiscal policy, which charted a path back to surplus on the back of severe cutbacks in public spending, most notably, a reduction in benefit rates.

After National scraped back into power in 1993, Bolger replaced Richardson with Birch as Finance Minister. Birch kept other portfolios and earned the nickname “Minister for Everything”.

Birch had a reputation for hard work. An anecdote, retold in the recent Juggernaut 2 podcast by The Spinoff, recalled an official arriving at midday for a meeting they’d been told started at 12 o’clock only to discover Birch had meant 12 o’clock midnight.

In 1994, the Government posted its first operating surplus since 1979; in 1995, the Government posted its first surplus under the new OBEGAL measure.

Bill Birch, as Treasurer, with his granddaughters and Prime Minister Jenny Shipley en route to Parliament's debating chamber for the reading of the Budget. Photo / Mark Mitchell

After the first MMP election in 1999, Bolger negotiated to form a Government with Winston Peters’ NZ First Party. Peters demanded a finance role. In order to give it to him, Bolger copied the Australian method of having a separate Treasurer and Finance Minister, with Treasurer being the senior of the two roles.

Brich was privately unhappy with the move and had publicly criticised Peters’ economic policies as like “dipping into a chocolate box” because “their policies are all soft in the centre”.

When the coalition broke down and Peters quit the Government, Birch took the Treasurer role too.

Jim Bolger and Bill Birch on the Harris Saddle, Routeburn Track, 1992.

He retired from Parliament in 1999 and was knighted the same year. His wife Rosa, with whom he had four children, died in 2015.

In his 1999 speech, he described his nearly three decades in Parliament as moving forward with economic and social trends towards liberalisation.

“The period I’ve been involved in has been about New Zealand finding its feet and the making of modern NZ.

“The country we have now is rather more like the NZ of myth.

“It’s a place where people get things done for themselves, and where the country is self-reliant.

“There is concern for the other person, but not the stifling reliance on the government.

“It’s more realistic, it’s healthier, it’s different. We’re not a perfect country yet.

“But if you think about it, we’re a damn sight better placed than in 1972.”