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Insights 32: 29 August 2025
Research Report: Amazing Grades: Grade Inflation at NZ universities, Dr James Kierstead
 
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NZ Herald: Dr James Kierstead on the rise of A grades at New Zealand universities
Amazing grades
Dr James Kierstead | Research Fellow | james.kierstead@nzinitiative.org.nz
In my last Insights column, I explained what grade inflation is and why it’s bad. I also surveyed research showing that grade inflation is a problem at universities in the US, the UK, and Australia.  

What about New Zealand? My report Amazing Grades: Grade Inflation at New Zealand Universities, which was released this week, shows that grade inflation is a problem here too.  

Between 2006 and 2024, the percentage of A grades (A+, A, A-) grew by 13 percentage points, from 22% of all grades to 35%. A grades spiked during COVID, with almost half (49%) of grades awarded at the University of Auckland in 2020 in the A range.  

Pass rates also went up, and are now over 90% at all our universities but one (Auckland) and above 95% at two (Lincoln and Massey).  

Is this just a matter of more students reaching higher levels of academic achievement? Probably not. In my report I looked at four possible reasons students might have gotten better, and none of them hold up.  

Is it just that the students arriving at university have gotten better? Our school system’s dismal results in PISA (the OECD’s Programme for International Student Assessment) over the past quarter of a century would strongly suggest not. 

Do more female undergraduates have something to do with it? After all, female students tend to get better grades. But though the percentage of female students did grow rapidly in the 1970s and 80s, it hasn’t grown over the past twenty years, the period in which grades have been rising.   

More funding doesn’t explain the rise in grades either. Funding per student did grow before 2019, but fell thereafter, just as grades spiked.  

What about extra support for students in the form of more staff? That idea doesn’t work either, since the number of staff members per student hasn’t grown substantially in a while.  

The upshot? Unless someone can come up with a better explanation for the rise in grades, then what we have are grade rises that are unjustified by improvements in student performance. In other words, grade inflation.   

In my final column in this series, I’ll explain how grade inflation develops, how it has gotten so bad at our universities, and what we might be able to do about it.   

To learn more about James's research, read the full report, watch the webinar and listen to our podcast.
Local government reform: curing the patient?
Nick Clark | Senior Fellow | nick.clark@nzinitiative.org.nz
When council rates rise at five times the rate of inflation, while water pipes burst and potholes multiply, something has gone very wrong.  

Council rates jumped 12% last year, the steepest increase in decades, and will on average increase 9% this year. Ratepayers are angry. No wonder there have been calls for the government to impose rates caps. 

The government’s response is the Local Government (Systems Improvements) Amendment Bill. Its intent, to refocus councils on ‘core services’ and strengthen accountability, is sensible. 

Removing the vague ‘four wellbeings’ mandate that allowed councils to justify almost any spending returns local government to its essential functions. New transparency requirements and performance benchmarking should help residents better understand what good local government looks like. 

However, the Bill’s list of ‘core services’ needs work. It captures over 80% of council spending, making meaningful prioritisation difficult.  

In our submission on the Bill, we propose a more sophisticated framework. Rather than rigid lists, councils should prioritise activities based on important economic principles: the barriers to better outcomes, the ability to charge users, and whether the function can be effectively delivered locally. This would provide clearer guidance whilst preserving flexibility as circumstances change. 

The Bill’s governance reforms are most welcome. Requiring chief executives to provide elected members with necessary information tackles a fundamental democratic deficit. Too often, officers withhold or are slow to provide information, undermining accountability and decision-making.  

Combined with standardised codes of conduct that protect councillors’ freedom of expression, these changes should rebalance power towards elected representatives. Both were recommended in my 2024 report, Making Local Government Work. 

Yet the reforms could go further. As also recommended in Making Local Government Work, Auckland’s mayoral office model should be available to all councils by providing mayors with staff accountable to them rather than the chief executive.  

Eventually, New Zealand should consider adopting a strong mayor system that combines executive and political leadership, as successfully implemented in the Germany state of North Rhine-Westphalia. 

The Bill provides necessary medicine. But rules and caps alone will not cure the patient, let alone make it thrive. The reforms need to be complemented with positive incentives (like sharing GST revenue with councils that facilitate housing development) and more democracy (like requiring ratepayer referenda for major non-core projects). 

Making local government work matters enormously for New Zealand’s future. The challenge is ensuring legitimate demands for fiscal discipline strengthen rather than weaken local democracy. 

Nick Clark's submission, Local Government (Systems Improvements) Amendment Bill, was lodged on 27 August 2025.
When more means less
Dr Benno Blaschke | Research Fellow | Benno.Blaschke@nzinitiative.org.nz
Auckland desperately needs homes. Under thirties are giving up on finding homes while politicians promise solutions. So, when the government ordered Auckland Council to allow taller buildings – up to six storeys – it looked like progress. Finally, more flats! 

The Council unveiled shiny maps showing where six-storey buildings could sprout across the city. Politicians smiled for the cameras. Problem solved, right? 

Not quite. 

Six storeys is precisely the wrong height. Three-storey buildings are cheap. Just stairs. No lifts needed. Twelve-storey towers are profitable because they spread the cost of lifts and fire systems across many flats. But six storeys? Too short to justify expensive lifts, too tall for stairs alone. Developers call it the ‘dead zone’ where little gets built. 

But wait, it gets better. Council added complications. Want to build above six floors? Your building needs a special base called a ‘podium’ (the tower above this base at around six storeys and up must now be narrower and more set back from this wider podium base) because some Canadian city did it once and it looked nice in photos. This requirement kills more projects. 

Then come the technical games. New rules to preserve sunlight mean most properties would not be allowed to reach six storeys anyway, because of the shadows they cast. They have also invented a 100-metre buffer zone along the coast for ‘flood safety’, even though existing flood rules already cover this. It is like wearing two raincoats in case one gets wet. 

This second layer is a blanket ban that removes development from the most desirable waterfront areas - harbour views, beach access, city proximity - and shoves the ‘replacement’ capacity inland where people are not queuing to build. On paper, the same number of homes stays possible. In reality, prime coastal sites get swapped for the possibility to develop less attractive areas. 

Council deserves credit for consistency: it treats desirability like a disease requiring quarantine. And so, we see a suburb with excellent train links getting less height than another that is further from everything. It is as if they threw darts at a map blindfolded. The randomness is strategic.  

Call it what it is: the dark arts of bureaucratic competence. Council fought government’s housing orders for years. Now, forced to act, they are following the letter of the law whilst strangling its spirit. They have technically allowed more housing and ensured less appears. 

The victims? Everyone under thirty trying to find somewhere to live. The winners? Anyone who already owns property and wants their house values protected. 

An Independent Hearing Panel will review this mess soon. Let us hope they can translate this masterpiece of bureaucratic obstruction into something that builds homes. Otherwise, ‘upzoning’ will be Auckland’s new word for standing still. 
 
On The Record
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