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Insights 34: 12 September 2025
NZ Herald: Roger Partridge on a labour law reform that could work for workers
 
The Australian: Dr Oliver Hartwich on the economic twist facing New Zealanders
 
The Post: Dr Eric Crampton on the missed opportunity for faster medicine approval
The invisible architecture of prosperity
Dr Oliver Hartwich | Executive Director | oliver.hartwich@nzinitiative.org.nz
More than half of New Zealanders think the country is going in the wrong direction. Trust in Parliament, the courts and the Reserve Bank has fallen sharply since 2021. What is broken? 

The answer lies in the foundations we rarely notice. Prosperity rests on an invisible architecture. We notice air only when it is hard to breathe. We see institutions only when they fail. 

Consider trust. When you deposit money in a bank, you assume it will be there tomorrow. When you sign a contract, you expect courts to enforce it. When you buy property, you believe the government will honour your ownership. These assumptions feel natural, but they are not. 

For most of history, such certainties did not exist. Strongmen seized land. Judges took bribes. Money became worthless overnight. 

Slowly, societies built better systems. Governments accepted limits on their power. Church and state were separated. Independent courts enforced rules. Each improvement took generations to stick. 

The secret was never just having good laws. People had to understand why they mattered. Judges, bankers, politicians and ordinary citizens all had to respect limits. This shared spirit is what makes civilisation work. 

Yet success breeds forgetfulness. We stop teaching why courts must be independent, or why central banks should focus only on money. 

Then comes mission creep. The Reserve Bank, once charged solely with price stability, turns to social and climate goals while inflation surges. Judges begin to make law rather than apply it, colliding with the role of Parliament. 

Other nations have gone down this path before us. Institutions decay. Citizens lose faith. Order unravels. What took centuries to build can collapse in years. Rebuilding trust is painfully hard. 

The lesson is clear. It is not enough to have formal institutions. They must be filled with life by citizens who understand their purpose, respect their limits and care enough to defend them. 

Institutions are empty shells unless animated by that spirit. Renewing it is our task. That renewal begins with education, debate and vigilance. Schools should teach the principles of constitutional order. Leaders should recommit to clear mandates and respect boundaries. Citizens should ask more of those who hold power. 

And the best place to begin is to relearn the principles on which our prosperity was built. 

Oliver reflects on these themes further in his essay ‘Leonardo’s Legacy’. You can also watch his Da Vinci Lecture and listen to his conversation with Leighton Smith on his Newstalk ZB podcast. 
Deflating grade inflation
Dr James Kierstead | Research Fellow | james.kierstead@nzinitiative.org.nz
Grades have been inflating at universities across the English-speaking world, including in New Zealand. That was the message of my first two columns in this series.  

But why has grade inflation taken hold at our universities? And what can we do about it? That is the subject of this final instalment. 

Grades have inflated at our universities because of incentives.  

Programmes get funding based mainly on the number of students they have. For academics, getting a reputation as a harsh grader may mean you are out of a job. Many over-compensate, giving out As like lollies.  

Student feedback forms are crucial to whether academics get hired, fired, and promoted. Academics who hand out higher grades get better student feedback. That helps drive grades up too. 

All this points to two simple ways we could combat grade inflation. One is giving student numbers less weight when we hand out funding to academic programmes. Another is paying less attention to student feedback forms when evaluating academics.  

We could also make it harder for instructors to give their students easy As. We could have national exams, like Germany’s Staatsexamen, marked by independent examiners. Or we could have more cross-marking of existing exams – standard practice at British universities.  

More sophisticated solutions exist. One technique would adjust students’ grade-point averages (GPAs) depending on how difficult their classes were. A’s in tough classes would get more points than As in easy ones. Students would then be less likely to shop for easy As, and instructors would be less motivated to offer them.  

Complicated solutions like this can be hard to implement. When Duke University tried to introduce one such technique in late 1990s, it was blocked by humanities professors (who liked giving out easy As) and students (who liked getting them).  

Another difficulty is that any university that dealt with grade inflation would also then have lower grades. In any system where funding follows students, that represents a huge risk.  

Doing nothing, though, would also have costs. Grade inflation short-changes hard-working students, reduces aspiration, and undermines trust in the university system.  

That’s something universities today can ill afford. New Zealand universities would be well-advised to do something – and something fast – about the tide of undeserved As that continues to rise.  

For James’ earlier columns in this series on grade inflation, see Part 1 and Part 2.  
Yes (but we can’t) Minister!
Dr Benno Blaschke | Research Fellow | benno.blaschke@nzinitiative.org.nz
Once upon a time, “Yes Minister” gave us Sir Humphrey Appleby, scheming, obstructive, magnificently verbose, but above all, competent. He could bury a reform in procedure without breaking a sweat. A master of his craft. 

If we made that show today, Sir Humphrey’s successors would barely understand what they are obstructing. They’re not cunningly verbose. They are genuinely confused. Welcome to the modern public service, where we have replaced magnificent scheming with bewilderment. 

We’ve perfected a system in which those who don’t understand the work manage those who do. Naturally, those who do, don’t stay. 

Picture this: Two policy experts disagree on first principles. Real principles: Should we tax carbon or subsidise green energy? They research, debate, and marshal evidence. The disagreement escalates to a senior manager who boasts three degrees in management excellence and zero in the subject at hand. 

Unable to judge the substance (what is carbon, really?), our manager reaches for their toolkit. “Let’s find middle ground,” code for being wrong in a way that offends everyone equally. “Draft something we can all live with,” meaning something so beige nobody could object to it or, heaven forbid, implement it. The seasoned managers choose Option C: “Let’s take this offline,” bureaucrat-speak for “let’s bury this until I get promoted.” 

The experts watch as a decision descends, recommending “a framework for considering potential pathways to explore options.” Nobody can defend it, explain it, or remember requesting it. This explains Treasury’s new motto: “Better silent than sorry.” 

When advice finally emerges, after six committees, twelve working groups, and a workshop on workshops, it convinces nobody. But it has signatures! The experts learn quickly: Draft not for the problem, but for Sharon from Risk Management, who once vetoed a paper for using “urgent” too urgently. 

Real judgment lives at the working level, where people can still tell good policy from bad. Decisions live at the executive level, where people can only tell loud from quiet. So, workers stop offering judgment and start offering whatever creates the least noise. Ministers receive advice so neutered it could be read at bedtime. 

The bright ones leave first. They came to solve problems, not watch executives transform solutions into process maps. Those who remain master pre-emptive blandness.  

Sir Humphrey would be appalled - not at the outcomes, which he would have cheerfully engineered, but at the sheer incompetence of it all. 

Yes, Minister. No, Minister. We will form a working group, Minister. 
 
On The Record
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