FORMER New Zealand minister for finance, Ms Ruth Richardson, has been in Dublin this week in a bid to convert Irish civil servants and Ministers to the world of economic miracles.

Ms Richardson, who was New Zealand minister for finance from 1991 to 1993 certainly has a story to sell.

Between 1992 and 1995 real economic growth in New Zealand averaged 4.1 per cent a year. Unemployment has fallen from 10.9 per cent at its peak in 1991 to 6.1 per cent, while employment grew by 13.2 per cent between the last quarter of 1991 and the third quarter of 1995.

Fresh from Switzerland and The Hague, Ms Richardson told The Irish Times that all 11 senior Irish departmental secretaries found the parallels between the countries "highly relevant".

"Our populations are the same size, both economies are based on agriculture and are export and trade oriented," she said.

New Zealand is one of the top performers in the Organisation for Economic Cooperation and Development (OECD).

Underlying inflation only briefly exceeded a year on year rate of 2 per cent in 1995. Since 1992, annual inflation has averaged 1.7 per cent. This is partly because average weekly earnings have been rising at less than 3 per cent a year.

One of the secrets is that the government has also run fiscal surpluses for the past three years, Ms Richardson said.

This is one of the main messages she will be bringing to the Minister for Finance, Mr Quinn, when she meets him this week.

In addition, the surplus for this financial year is expected to be 3.3 per cent of gross domestic product.

New Zealand is one country that would meet the Maastricht criteria for inflation and fiscal deficits.

The gospel according to Ms Richardson is simple. The labour market must be totally flexible, meaning no national wage agreements and instead local bargaining based on productivity. This also applies to civil servants and state owned bodies.

"Irish unemployment is scandalously high. Unemployment is a political choice as a result of maintaining labour market rigidities," she argues.

Subsidies, particularly to farming must be abolished. "Agricultural subsidies must come to an end they are a nonsense and an obscenity," she said.

"The Common Agricultural Policy is similar to Communism. It is an economic obscenity. Paying people for produce that is not worth it is the same as governing without consent."

Debt must also be dramatically reduced. New Zealand net public debt is forecast to be down to 33 per cent of GDP at the end of this financial year, from 47 per cent in the middle of 1991.

Irish debt at around 89 per cent of GDP is "dangerously high", according to Ms Richardson.

"The only way to get rid of it is by running fiscal surpluses."

She is also disparaging about the "Irish grant mentality". Brussels won't be writing cheques forever, she warned.

"We had to go through the pain of adjustment. Ireland too must prepare to stand on its own feet. There is no room for complacency. The transfers are a temporary aberration and the country must learn to deal with shocks pre emptively."

Ms Richardson recommends imposing cuts on welfare payments. New Zealand has introduced means tested child benefit and pensions.

"We've targeted the families that need it most. It was ludicrous that I used to get the same benefit as someone on one tenth of my salary," she insisted.

The state pension, which 75 per cent of New Zealand's pensioners receive, cannot drop below 65 per cent of the average weekly wage, she said. "We have saved a huge amount by targeting and brought fairness and affordability into the system.

But cuts in basic unemployment benefit have also increased. But for Ms Richardson this is a reflection that "people are paid what they are worth." That might be a line Mr Quinn would find difficult to swallow.