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Insights 31: 26 August 2022
Webinar report launch: Every life is worth the same - the case for equal treatment
The Dominion Post: Eric Crampton on age differences account for a portion of inequality
Podcast: Oliver Hartwich and Greg Harford on the cost of doing business

Lessons from the Celtic Tiger
Roger Partridge | Senior Fellow & Chairman |
Last month, Ireland taught the All Blacks a thing or two about rugby. Yet New Zealand has even more to learn from the Irish about productivity and prosperity.
Until the early 1990s, we were running neck and neck with the Emerald Isle in prosperity’s most meaningful measure: GDP per capita.
Now, Ireland ranks near the top of the OECD league tables. We languish in the bottom half. Ireland’s GDP per hour worked is US$120. The OECD average is US$54, and New Zealand sits at just US$42. Since 2010, Ireland’s labour productivity has increased by more than 66%. NZ’s has increased by just 8%. Earlier this week, Xero reported Kiwis would need to work 10 more hours per day to match Ireland’s output.
With tepid productivity growth, Kiwis have had to find other ways to eke out improvements in their standards of living. Working longer hours, improving labour market participation and strong immigration flows have all played a role.
But as the Xero statistics show, we cannot catch Ireland by hard work alone. There aren’t enough hours in the day. And with record low unemployment levels, our labour market participation rate is already among the highest in the world.
The immigration tap has also been turned off. The Government appears to believe it can force productivity improvements by constraining the supply of labour and encouraging firms to invest more in their existing workforces. Yet there is no economic evidence for this belief.
Nor are there any signs the policy is working. Instead, the policy is contributing to a trifecta of economic woes. It is choking economic growth. It is fuelling an inflationary wage-price spiral. And it is harming the country’s international competitiveness.
Ireland’s economic success was not achieved by such wishful thinking. Instead, the Irish have relied on attracting foreign direct investment to turbocharge their economy.
A recent survey of offshore investors cites Ireland’s business environment, education system, quality of life, and tax regimes as the top drivers of Ireland’s attractiveness to foreign investors.
In contrast, New Zealand has one of the most hostile FDI regimes in the world. Meanwhile, our education system is in long-term decline, business labours under a growing regulatory burden, and housing affordability has tarnished our once-vaunted quality of life.
The Celtic Tiger may be a mythical creature, but to emulate Ireland’s economic transformation requires real solutions to New Zealand’s problems, not imaginary ones.

In June next year, The New Zealand Initiative will be leading a delegation of business leaders to Ireland to see first-hand the ingredients of Ireland’s economic success.

Hoskin vs. Hosking
Dr Michael Johnston | Senior Fellow |
The more things change, the more they stay the same.

Jean-Baptiste Alphonse Karr coined this well-known aphorism in his 1848 novel Les Guêpes (The Wasps). Teaching Council Chief Executive Lesley Hoskin would do well to bear it in mind as she contemplates the future of education.

Teachers need to be registered by the Teaching Council to practice. One of the requirements for registration is to show that they are developing their use of te reo and tikanga Māori.

Hoskin was recently interviewed by Mike Hosking on Newstalk ZB. Hosking put it to Hoskin that, given all of the problems besetting our education system, it might be better if teachers focussed on more fundamental things like literacy.

Hoskin agreed that literacy is important. However, she asserted, our education system is ‘holistic’.  “We’re … working with students to learn to be successful in the world as it is today. It is complex, it is relational, it is emotive, it is all kinds of things”, she said.

The world has certainly changed since Karr wrote Les Guêpes. Many things, however, remain the same. Like today’s world, the world of 1848 was complex and relational. No doubt it was ‘emotive’ (whatever that may mean). It was certainly “all kinds of things”.

The last three decades have seen a resurgence of Māori language and culture. This is to be celebrated.

Te reo and tikanga Māori have an important place in our education system. But insisting that all teachers focus on learning te reo Māori, irrespective of the communities they serve, is a distraction. 

New Zealand faces an acute teacher shortage, especially in mathematics and science. The state of literacy and numeracy is, frankly, a disgrace.

One way to address the shortage is to employ teachers from overseas. But having to learn a new language will be a deal-breaker for many, especially when they can earn more in Australia.

Attracting mathematics and science graduates to teaching is difficult enough already. They have far more lucrative prospects available. Requiring prospective teachers to learn te reo Māori will make it even harder.

Primary school teachers are already overburdened and stressed. We desperately need them to focus on more effective ways of teaching reading, writing and numeracy. Additional requirements, like learning te reo Māori, will not help them to do this.

The future is, and has always been, uncertain. Sound education in reading, writing, science and mathematics will set up young people well, whatever the future may bring.

The more things change in education, the more children’s needs stay the same.

I trust you mate
Dr Matthew Birchall | Research Fellow |
We can learn a lot from Australia. Routinely ranked among the best places in the world to call home, the lucky country has a climate to die for, a robust economy, and a culture that celebrates winning.

It is also at the forefront of attempts to reinvent parliamentary democracy.

Last week, it was revealed that former Prime Minister Scott Morrison had secretly appointed himself to five portfolios during the coronavirus pandemic: home affairs, treasury, health, finance, and resources. Mathias Cormann, who can be forgiven for thinking that he was the only Minister of Finance in Canberra, reportedly had ‘no idea’ that he shared the role with ScoMo.

At least Greg Hunt was kept in the loop. ‘I trust you mate but I’m swearing myself in as health minister too’. How wonderful to have such a hands-on and engaged boss.

Critics have been quick to denounce Morrison’s power grab. A crack in the fortress of democracy was how the veteran Australian broadcaster Stan Grant put it.

Yet maybe Morrison was on to something. After all, what better way to transform government than to rewrite the rules? Don’t like the sound of a gas-drilling plant off the coast of New South Wales? Easy, appoint yourself resources minister and be done with it.

Just as interesting is the global reaction to Morrison’s travails. Here’s my take on what transpired in foreign chancelleries.

Hungary and Poland greeted the news from down under with glee. Another victory for illiberal democracy trumpeted Viktor Orbán. No one quite knows what Putin thinks, but there’s a good chance he nodded along in approval. Constitutional backsliding is one of his specialities.

Xi Jinping and the Communist Party of China failed to see what all the fuss was about. Wasn’t Morrison the People’s Leader? The pressing question in Beijing was why he relinquished power after losing an election – or why he held one at all.

Joe Biden couldn’t remember who Scott Morrison was, although he noted that his good pal seemed very agreeable when they last spoke. He reminded international observers that Americans like their constitution.

The idea also struck a chord with politicians at home. For some, the prospect of combining all decision-making powers in one person was the big appeal. For others, it was the opportunity to better micromanage the economy.

Who cares about constitutional niceties in any case?

Just trust me, mate, I’m a good bloke.

On The Record

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