“The Neoliberal Trojan Horse of Individual Savings Accounts” - 18 July 2025
Douglas and MacCulloch's Radical Privatisation Fantasy - Another Assault on Māori Health Equity
Kia ora, whānau. Here we go again - another recycled neoliberal nightmare dressed up as economic salvation. Former Finance Minister Roger Douglas and University of Auckland economics professor Robert MacCulloch have resurrected their 2016 proposal for individual savings accounts to replace our public health and welfare systems1. This is nothing but the same old neoliberal playbook wrapped in fresh packaging, and it threatens to further devastate Māori health outcomes in a system already failing tangata whenua.
Roger Douglas trying to make himself relevant again
Background - The Neoliberal Architects Strike Again
Roger Douglas needs no introduction to those who lived through the devastation of Rogernomics. The man who gave us the economic reforms that fundamentally challenged the notion of security of tenure and embedded individual responsibility rhetoric into our social policy framework is back with University of Auckland's Robert MacCulloch2. MacCulloch, who has been pressured by political and business elites to close his blog, claims this proposal will prevent an economic "car crash"3. The real car crash is the systematic dismantling of collective healthcare provision that this proposal represents.
Douglas and MacCulloch's plan centres on redirecting income tax from earnings up to $60,000 into individual savings accounts for healthcare, pensions, and risk cover. They claim this would be "not at all like the US system" but rather "more like France where everyone is covered"1. This is a dangerous misrepresentation that ignores the fundamental equity problems with medical savings accounts and the unique challenges facing Māori in accessing healthcare45.
A Privatisation Assault on Collective Health
The Douglas-MacCulloch proposal represents a fundamental attack on the collective provision of health and welfare services. By requiring individuals to save for their own healthcare, pensions, and risk cover, this model abandons the principle of shared responsibility that underpins universal healthcare. The proposal specifically targets income tax on earnings up to $60,000 - precisely the income bracket where many Māori whānau find themselves due to structural inequalities in employment and education.
The timing of this proposal is particularly insidious. It comes as New Zealand faces mounting pressure from privatisation advocates in the health sector and after decades of underfunding that has left public health services struggling6. The Waitangi Tribunal has found that the Crown has breached the Treaty of Waitangi by failing to design and administer the primary health care system to actively address persistent Māori health inequities7. Now Douglas and MacCulloch propose to further abandon collective responsibility for health outcomes.
The Neoliberal Mythology Exposed
The Singapore Deception
Douglas and MacCulloch claim their model is inspired by Singapore's healthcare system, but they conveniently ignore the fundamental differences. Singapore's system operates within a highly regulated, government-controlled framework where the Ministry of Health publishes transparent pricing and exercises tight control over hospital costs8. More importantly, Singapore's system has been criticised for failing to provide adequate financial protection and being inequitable9.
The evidence from countries that have implemented medical savings accounts is damning. Research shows that MSA schemes have generally been inefficient and inequitable and have not provided adequate financial protection4. In China, MSAs have yielded mixed results, while in South Africa and the United States, they have failed to address coverage gaps and have led to adverse selection109.
The "Choice" Fallacy
MacCulloch claims the system would give people "choice" over their healthcare providers, allowing them to "choose their preferred public or private supplier"1. This is classic neoliberal mythology - the idea that market mechanisms automatically improve outcomes and that individual choice is inherently good. The reality is that choice in healthcare is meaningless when you lack the resources to exercise it effectively.
For Māori whānau, who experience considerable inequity in access to primary health care and face cost barriers to seeing a GP or collecting prescriptions, individual savings accounts would be catastrophic5. The research is clear: 22% of Māori experience a cost barrier to seeing a GP, and 14% report a cost barrier to collecting prescriptions5. How will individual savings accounts address these existing inequities?
The Compound Interest Myth
Douglas and MacCulloch lean heavily on the "miracle of compound interest" to justify their proposal. They claim individuals could save around $21,000 annually - $9,450 into health accounts, $7,350 for superannuation, and $4,200 for risk cover1. This is economic fantasy divorced from the lived reality of most New Zealanders.
The proposal assumes that people earning up to $60,000 can redirect their entire income tax into savings while maintaining their current living standards. This ignores the immediate needs of whānau struggling with the cost of living crisis, housing unaffordability, and existing health inequities. For many Māori whānau, the idea of saving $21,000 annually is laughable when they're already struggling to afford basic healthcare.
The Māori Health Equity Disaster
Treaty Breaches and Structural Racism
The Douglas-MacCulloch proposal would exacerbate the very Treaty breaches that the Waitangi Tribunal has identified in our health system. The Waitangi Tribunal found that the Crown has breached the Treaty of Waitangi by failing to design and administer the current primary health care system to actively address persistent Māori health inequities7. Moving to individual savings accounts would abandon any pretense of collective responsibility for addressing these inequities.
The proposal ignores the systematic racism that pervades our healthcare system. Research shows that neoliberalism has overwhelmingly contributed to Indigenous health inequities through increased disparities in wealth, privatisation of health services, and emphasis on personal responsibility11. The Douglas-MacCulloch proposal would intensify all these harmful effects.
The Intergenerational Trauma of Individual Responsibility
The emphasis on individual savings accounts represents a fundamental assault on Māori values of collective responsibility and whakapapa. Indigenous populations are collectivistic and have higher rates of external locus of control, yet neoliberal ideology promotes personal autonomy and responsibility, often resulting in classist social derision11.
This individual responsibility model ignores the historical and political influences on wealth distribution and the ongoing impacts of colonisation on Māori health outcomes11. When Māori whānau can't afford to maintain adequate savings in their health accounts, they'll be blamed for their own ill health - a cruel extension of the victim-blaming that already pervades our health discourse.
The Privatisation Trap
The proposal's claim that it would maintain public provision as a "safety net" is fundamentally dishonest. Once middle and higher-income earners are directed toward private provision through their savings accounts, political support for public health services will evaporate. This is the classic neoliberal strategy of hollowing out public services and then claiming privatisation is the only solution12.
The evidence from other countries shows that private healthcare provision leads to a two-tier system that favours the wealthy6. In New Zealand, private hospitals already do 70% of elective surgeries, and Māori are half as likely to hold private health insurance1314.
The International Evidence of Failure
Medical Savings Accounts Don't Work
The international evidence on medical savings accounts is overwhelming: they don't deliver on their promises and create significant inequities. Research examining MSAs in China, Singapore, South Africa, and the United States found that MSA schemes have generally been inefficient and inequitable and have not provided adequate financial protection4.
In Singapore, supposedly the model for this proposal, MSAs have been criticised for failing to provide adequate financial protection9. The system works only because it's embedded in a highly regulated, government-controlled framework that bears little resemblance to the free-market fantasy that Douglas and MacCulloch promote.
The French System Misrepresentation
Douglas and MacCulloch claim their system would be "more like France where everyone is covered"1. This is a dangerous misrepresentation. France's healthcare system is characterised by strong public insurance coverage (79% of health expenditure) with complementary private insurance, but it faces significant challenges in terms of equity and efficiency15.
The French model relies on high public spending and strong regulation, not individual savings accounts16. The suggestion that individual savings accounts could replicate French outcomes is economic fantasy that ignores the fundamental role of collective provision in achieving universal coverage.
The Political Economy of Neoliberal Capture
The Establishment's Agenda
MacCulloch's claim that this proposal represents independent economic thinking is undermined by his own admission that he's been pressured by political and business elites to close his blog3. The fact that he's now promoting a proposal that would benefit private healthcare providers and financial institutions raises serious questions about whose interests this serves.
The proposal emerges at a time when private healthcare providers are experiencing unprecedented demand and building a massive expansion of private hospitals613. Individual savings accounts would represent a massive transfer of public money to private providers and financial institutions.
The Rogernomics Playbook
Douglas's involvement in this proposal is particularly telling. As the architect of Rogernomics, he transformed New Zealand from a regulated economy to one of the most open in the world17. The reforms he championed led to rising poverty and unemployment, with Māori and Pacific peoples bearing a disproportionate burden1718.
The current proposal represents a continuation of the same neoliberal agenda that has failed tangata whenua for decades. It's the same playbook: claim that market mechanisms will improve outcomes, ignore the evidence of failure, and blame individuals for structural problems.
Implications for Māori Health Outcomes
Deepening Health Inequities
The Douglas-MacCulloch proposal would catastrophically worsen Māori health outcomes. Māori experience considerable inequity in access to primary health care, with 22% experiencing cost barriers to seeing a GP and 14% facing cost barriers to collecting prescriptions5. Individual savings accounts would make these barriers insurmountable for many whānau.
The proposal ignores the structural factors that drive Māori health inequities, including differential access to healthcare and differences in the quality of care received19. Moving to individual savings accounts would abandon any systematic approach to addressing these inequities.
The Abandonment of Collective Responsibility
Individual savings accounts represent a fundamental abandonment of the collective responsibility that underpins universal healthcare. For Māori, whose worldview is grounded in collective responsibility and whakapapa, this represents a profound assault on cultural values.
The proposal would effectively privatise the costs of health inequities, forcing individual whānau to bear the financial burden of structural racism and colonial violence. This is not just economically unjust - it's culturally violent.
Rejecting the Neoliberal Poison
The Douglas-MacCulloch proposal for individual savings accounts represents everything that's wrong with neoliberal approaches to healthcare. It ignores the evidence of failure from international MSA schemes, misrepresents the French and Singaporean systems, and would catastrophically worsen Māori health outcomes.
This proposal is not economic innovation - it's the same old neoliberal playbook that has failed tangata whenua for decades. It prioritises individual responsibility over collective provision, market mechanisms over equity, and private profit over public health.
The real "car crash" isn't our current system of collective provision - it's the systematic dismantling of public services that proposals like this represent. We need more investment in public health, not less. We need stronger collective provision, not individualistic savings accounts.
The choice is clear: we can continue down the neoliberal path of privatisation and individual responsibility, or we can recommit to collective provision and universal healthcare. For Māori health equity, there is no choice - we must reject this neoliberal poison and fight for genuine universal healthcare.
The Māori Green Lantern understands these are tough economic times for whānau, so please only consider a koha if you have the capacity and wish to support this kaupapa. HTDM: 03-1546-0415173-000.
Kia kaha, kia māia, kia manawanui.
Ivor Jones The Māori Green Lantern