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Insights 14: 28 April 2023
Research Report: Solutions for NZ's education crisis, by Dr Michael Johnston
Podcast: The Initiative welcomes new research fellow Dr Tony Burton
The Australian: Dr Oliver Hartwich on how Australia will benefit from new citizenship rules

It doesn’t take academics to train teachers
Dr Michael Johnston | Senior Fellow |
Yesterday, the New Zealand Initiative launched a new report. Save Our Schools makes wide-ranging recommendations to rescue our failing school system.

One problem is a knowledge-poor curriculum. In NCEA, we have a qualifications system that often leads to disconnected and incomplete coverage of school subjects. We have no reliable measures of educational achievement to hold schools accountable for their performance.  We do not train teachers in a way that adequately prepares them for the classroom.

If I could wave a wand and solve just one of these problems, it would be teacher training. High-quality teaching is the most important determinant of learning – and high-quality teaching depends on high-quality training.

Most teachers do the best they can with the training they had. They are not to blame for their inadequate preparation. It is the fault of a system that gives universities an effective monopoly on teacher training.

Nearly 20 years ago, specialist teachers’ colleges were merged with universities. Teachers’ college staff, mostly ex-teachers themselves, had to complete PhDs and become academics. Universities went on to develop postgraduate programmes in teacher education.

I recently visited one of very few non-university providers of initial teacher education, New Zealand Graduate School of Education (NZGSE). I saw there an exemplary model of how we should prepare new teachers for the profession.

Teachers-in-training at NZGSE spend the bulk of their time in classrooms, gaining practice at being teachers. NZGSE teacher educators observe them frequently, provide coaching and feedback, and assess them against a long list of things that competent teachers can do. When teachers-in-training can do all of those things to the required standard, fluently and consistently, they can graduate.

But providers like NZGSE have a problem. Postgraduate qualifications are desirable to prospective teachers. And it is difficult for non-university providers to have these qualifications approved. It is expected that postgraduate qualifications will be taught by research-active academics.

It does not take academics to train teachers. What it does take, are people who know how children learn, and can impart that knowledge to teachers-in-training. People like NZGSE’s teacher educators.

We should relieve university lecturers involved in teacher training from any expectation to be ‘research-active’. That would make it easier for institutions that don’t have research-active staff to have postgraduate teaching qualifications approved.

To improve the quality of teacher training, we must break the universities’ near-monopoly on initial teacher education and open the door to competition from providers like NZGSE.

When the OCR misses the mark
Dr Christoph Schumacher | Adjunct Senior Fellow |
Annual inflation has fallen from 7.2% in the fourth quarter of 2022 to 6.7% in the first quarter of 2023. On the surface, this is good news. We seem to have passed the inflation peak, and the Reserve Bank’s OCR increase to 5.25% appears to be doing the trick. But hold on. Does this mean inflation is now under control, and the OCR is doing what it is supposed to do?
The government’s inflation value is based on the consumer price index (CPI), a basket of currently 649 items, including food, housing, health, recreation, clothing, transport, education, and communication. Although each item is weighted based on previous spending patterns, the CPI is an average over various items, which might not correctly reflect the price increase of goods that matter most to us, like groceries, transportation, and entertainment.
Annual inflation of groceries is 12.3%, fruit and vegetables a whopping 20.2%, restaurant meals 8.5%, passenger transport services an eye-watering 20.6% and entertainment 8.8%. So, while the price increase of the total basket is slowing down, many items we buy daily are not.
Now to the second part of my opening question, is the current OCR high enough to control inflation? This seems to depend on whether your employer is a commercial bank, the RBNZ or neither. ASB recently estimated the ‘neutral OCR’ – an OCR which would neither stimulate nor slow down the economy – to be 3%, so the current rate dampens our economy and might be too high. The RBNZ, on the other hand, offered a range of possible values from 2.7% to 5.4%, indicating that the OCR is about right, also fuelling speculation that it will peak at 5.5%.
GDPLive’s current Taylor Rule-based optimal OCR value is tracking at 9.4% ( The Taylor Rule does not determine a neutral OCR value but identifies the OCR value that returns inflation to agreed target values. New Zealand’s mandated inflation target range is one to three percentage points (Remit for the Monetary Policy Committee). The Taylor Rule OCR is a clear and powerful reminder that the RBNZ has no intention of meeting its obligation to keep inflation on target.
Inflation is not under control, and the OCR is not doing what it is supposed to do. In the 1990s, the RBNZ introduced the revolutionary idea of inflation targeting – later adopted by many central banks across the globe – in response to the destabilising impact of high inflation during the 1980s. It seems the RBNZ has forgotten its history.

Three cheers for ditching The Nosy Parker
Dr Oliver Hartwich | Executive Director |
Once upon a time, in a picturesque village nestled among green rolling hills under a long white cloud, there was a popular pub called The Nosy Parker. It was notorious for its silent dramas, where opinions and conflicts were expertly swept under the carpet.

Every weekend, a group of ten friends gathered there. Among them, three always covered the bill, while the other seven enjoyed their snacks and drinks for free.

Over time, the quality of drinks and meals declined. Stale beer and stringy steaks became the norm. Nobody demanded improvement, and nobody addressed the problem. That is just what happens when somebody else pays the bill.

Gratitude for the three friends’ generosity faded. Passive-aggressive comments were common, but never confronted. The tension grew, even if nobody admitted it.

But one night, the seven friends pushed too far, demanding chauffeured rides home and mocking their benefactors for never paying their fair share. That was when the trio finally had enough. They did not make a fuss. Instead, they made a plan.

Boldly, the three left The Nosy Parker and ventured across the ditch to another pub in a neighbouring land. This new pub was a revelation: well-run, clean, and serving delicious meals and drinks. Its patrons were welcoming and straight-talking, if a tad rowdy.

The three travellers were shocked at how nice this new pub was and could not help but wonder if all the rumours they had heard about the other side of the ditch were true. “Crikey!” one said, “We should have crossed the ditch sooner!”

Back at The Nosy Parker, the remaining seven friends struggled to cover their expenses. Their gatherings became dull and lifeless. The service had not improved, but prices were up even further, and the quality continued to decline.

Instead of self-reflecting, the seven blamed the trio for their misery, calling them ungrateful. If they had not left, the pub would have been better frequented. They refused to acknowledge their role in driving the three away while secretly feeling more envious of them than ever.

The trio, on the other hand, thrived in their new land. Surrounded by mates who understood camaraderie, generosity, and open communication, they raised their glasses to their new life.

The Nosy Parker, however, once bustling with laughter, now echoes with the whispers of lessons learned and opportunities lost. It was all the trio’s fault - or so they said as they stubbornly sipped their lukewarm beer.

On The Record

Initiative Activities:   
All Things Considered
  • Chart of the week: The collapse in service exports - an important context for the gaping current account deficit
  • What is an effective tax rate?
  • Ruth Richardson's taxation problem
  • Subsidies for local wood processing? Be careful of the value-added fallacy
  • A falling out of love letter to the university (….we need to talk)
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