<P> Financial markets were deregulated and tariffs on imported goods lowered and phased out . At the same time subsidies to many industries, notably agriculture, were removed or significantly reduced . Income and company taxes were reduced and the top marginal tax rate was reduced from 66% to 33% . These were replaced by a comprehensive tax on goods and services (GST) initially set at 10%, then increased to 12.5% and recently increased to 15% in 2011 . A surtax on universal superannuation was also introduced . Many government departments were corporatised, and from 1 April 1987 became State owned enterprises, required to make a profit . The new corporations shed thousands of jobs adding to unemployment; Electricity Corporation 3,000; Coal Corporation 4,000; Forestry Corporation 5,000; New Zealand Post 8,000 . </P> <P> The wage and price freeze of the early eighties coupled with the removal of financial restrictions and a lack of investment opportunities, led to a speculative bubble on New Zealand's sharemarket, sharemarket crash of 1987, in which New Zealand's sharemarket shed 60% from its 1987 peak, and taking several years to recover . </P> <P> Inflation continued to be a major problem afflicting the New Zealand economy . Between 1985 and 1992, inflation averaged 9% per year and the economy was in recession . The unemployment rate rose from 3.6% to 11%, New Zealand's credit rating dropped twice, and foreign debt quadrupled . In 1989 the Reserve Bank Act 1989 was passed, creating strict monetary policy under the sole control of the Reserve Bank Governor . From then on the Reserve Bank focused on keeping inflation low and stable, using the Official Cash Rate (OCR)--the price of borrowing money in New Zealand--as its primary means to do so . As a result, inflation rates fell to an average of 2.5% in the 1990s, compared to 12% in the 1970s . However, the tightening of monetary policy contributed to rising unemployment in the early 1990s . </P> <P> The Labour Party was greatly divided over Rogernomics, especially following the 1987 sharemarket crash and its effect on the economy, which slumped along with the rest of the world into recession in the early 1990s . The National Party was returned to power at the 1990 general election and Ruth Richardson became Minister of Finance under Prime Minister Jim Bolger . The new Government was again thrown a major economic challenge, with the then state - owned Bank of New Zealand needing a bail - out to stay operational . </P>

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