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Insights 32: 2 September 2022
Webinar: Dr Bryce Wilkinson and Prof Des Gorman in conversation with Dr Oliver Hartwich
Report: Every life is worth the same – The case for equal treatment
The Australian: Oliver Hartwich on how voodoo economics guide NZ workplace relations

The shocking absence of accurate diagnosis for health policy
Dr Bryce Wilkinson | Senior Fellow |
Accurate diagnosis is vital in medicine. Patients want better outcomes.

Accurate diagnosis is critical for effective public policy, for the same reason. All too often it is not sought. A misdiagnosis that supports a politically preferred end can be a tragic mistake.

In her Waitangi Day Speech this year, the Prime Minister told Māori that they die younger than everyone else because they are Māori.

In 2018, the then Director-General of Health informed a Treaty of Waitangi Tribunal hearing that “the impact of personal and institutional racism is significant on both the determinants of health and access to and outcomes from health care itself”.

These are assertions of racist causation with a material effect on health outcomes. What evidence supports them?

Earlier this year, the Ministry of Health responded to my twin requests for the most authoritative empirical evidence it had in support of the above statements.

I examine those responses in my report, Every Life is Worth the Same: The Case for Equal Treatment, that The New Zealand Initiative published this week. Des Gorman, professor of medicine at Auckland University, wrote the foreword.

Regrettably and disturbingly, I found obfuscation on a grand scale. Unequal group average outcomes are conflated with inequity and racism. Correlation is taken to be causation. Materiality is merely asserted.

What about the remedy? The Pharmac Review Panel proposed that Pharmac’s spending be skewed to favour the needs of “priority populations”, notably Māori.

That approach treats Māori lives as being of higher value than those not in a priority population. The report illustrates how this might be quantified. It also shows how even Māori might end up worse off.

Official documents justify this racially polarising approach for health care generally. Their main grounds are relatively poor average health outcomes for Māori, ‘equity’, and the Treaty.

Non-Māori outnumber Māori by 40% in the bottom decile of according to New Zealand’s Deprivation Index. To favour Māori over others in this decile violates horizontal equity. To favour Māori in better-off deciles over non-Māori in the lower deciles violates vertical equity.

Nor is the international empirical evidence on such “affirmative action” policies encouraging.

People who do not care for accurate diagnosis cannot care much if their remedy does not work.

Finding remedies that work for all is critical. The previous government’s social investment approach had that focus. The current racially polarising approach does not.

Credit where credit is due
Dr Michael Johnston | Senior Fellow |
The New Zealand Initiative has been a trenchant critic of the way literacy is currently taught in New Zealand’s schools. The Ministry of Education has, for far too long, promoted manifestly ineffective approaches.

Today, though, we have occasion to be celebratory. But first, some background.

The currently predominant ‘whole language’ and ‘balanced’ methods don’t work for many children. The research evidence is clear: What works best for the greatest number of children, is structured literacy. This approach systematically teaches children to map spelling to sound. It also takes account of broader insights from the science of learning.

The New Zealand Initiative report, Reading with the Light Switched On, by Steen Videbeck, combines accounts from classroom teachers with a summary of scientific research on reading. The report, released late in 2021, presents strong evidence in favour of a structured literacy approach.

Lest our readers think that all we ever do is complain about what’s wrong, I’m delighted to say that we may be on the verge of a new era in New Zealand education. The Ministry has released an action plan for literacy, communication and mathematics.

Like most Ministry publications, the plan is long on buzzwords and short on detail. Still, it does signal a Common Practice Model for effective teaching in these three key areas. Associate Minister of Education Jan Tinetti was recently interviewed on Q&A. Importantly, she confirmed that the model will use a structured literacy approach.

Literacy education is not a party-political issue. Throughout the years of the Clark and Key governments, six successive Ministers of Education presided over declining performance in international literacy assessments.

Now, the incumbent government is embracing a new approach, based on what research tells us will work. It is working already in places like England and South Australia. National’s education spokesperson Erica Stanford has also argued strongly for this approach.

There will, of course, be devil in the detail. It will take a substantial investment in professional development to turn this ship around. But turn it we must. The investment will yield ample returns in educational success for young people.

The New Zealand Initiative will be vigilant as the new plan is rolled out. We won’t hesitate to call out any backsliding or watering down.

But for now, credit where credit is due. Congratulations to Jan Tinetti for heralding a much-needed change in direction for literacy education in New Zealand.

A cunning plan
Roger Partridge | Senior Fellow & Chairman |
Like a slowly downloading webpage, is a whole-of-government strategy to solve the interminable housing crisis starting to take shape?

Recent reports predict house prices nationwide could fall from their late 2021 peaks by up to 20%. Not much compared with the massive increase in the median house price since the start of the pandemic. Or so you might think.

But that’s to forget the Reserve Bank of New Zealand’s contribution to housing affordability (now one of its multiple policy targets). I’m not referring to the house price inflation triggered by the Bank’s massive money printing machine over the last two years. But rather to today’s 32-year high 7.3% inflation rate.

While nominal house prices may be falling, high inflation means real house prices are plunging. A 20% fall in nominal prices equates to an inflation-adjusted fall of more than 25%.

Yet, that’s only after taking into account this year’s inflation. Another year or two at 7% or so and the fall in real house prices would approach 40%. Put that in your median-income to median-house-price multiplier and smoke it!

The cunning plan may have a second strand. The Government’s immigration policies – including the closed border during the peak of the pandemic – have doubtless caused skills shortages across the economy. But immigration settings over the past 2 ½ years also mean demand for new housing from migrants has slowed to a trickle.  

Meanwhile, the number of New Zealanders who believe the country is heading in the wrong direction is contributing to a massive exodus of would-be homeowners overseas, decreasing demand for new houses even further.

At the same time, rising mortgage interest rates and the cost-of-living crisis are tempering potential purchasers’ willingness to pay.

And all this while the supply of new housing is at record levels.

Reserve Bank Governor Adrian Orr has bemoaned the need for monetary policy to be supported by fiscal policy if inflation is to be tamed. But perhaps he’s focussing on the wrong one of his multiple policy targets.

He could hardly complain about the help he is getting from Government policy settings in making housing more affordable.

The only pity will be the decreasing number of Kiwis left in the country to enjoy it.

On The Record

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