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Insights 11: 6 April 2023
NZ Herald: Michael Johnston on how a content-rich curriculum would help our children learn
Podcast: Oliver Hartwich and Matthew Birchall on the history of NZ's infrastruture
LEANZ Webinar: Eric Crampton and Lianne Dalziel discuss disaster recovery and resilience

Productivity growth – the key to future wellbeing
Dr Bryce Wilkinson | Senior Fellow |
Who really cares about the wellbeing of future generations? Those who do should care greatly about productivity growth.

Nothing really compares to productivity growth for making the good things in life more affordable.

Last week, Statistics New Zealand reported that labour productivity here grew at an average annual growth rate of 1.3 percent between 1996 and 2022. For Australia it was 1.9 percent.

What does this mean and how much does it matter?

What it means is that, on average, firms in Australia could afford to pay workers 63 percent more (relative to prices) in 2022 than in 1996. New Zealand firms could only afford to pay 40 percent more.

If that does not change, in 2055 workers in Australia could be earning three times what its workers were earning in 1996. Workers in New Zealand would earn fractionally more than twice their 1996 level.

Productivity growth matters because New Zealanders naturally want higher incomes. The daily open-ended demands for more money from government illustrate this. Income gaps must be closed, poverty alleviated, crime reduced, spending on arts, science, culture, crime, health and education boosted, infrastructure improved and the environment made cleaner.

Productivity also matters because workers who want higher incomes can move to Australia. That is not so good for all those clamouring for more money from New Zealand governments.

What is behind the difference with Australia? On the data, the big difference is that Australia is attracting more investment per worker. More capital per worker, if spent well, means higher worker productivity.

Specifically, capital per worker in Australia doubled between 1996 and 2022, whereas in New Zealand it only rose by 44 percent.

The implication is that New Zealand is more hostile to investment, and thereby worker productivity.

New Zealand’s restrictions on incoming foreign direct investment illustrate this hostility. The OECD ranks our regime as the most restrictive of its 38 member countries. By 2021, on UNCTAD’s figures, the accumulated stock of foreign direct investment in Australia was 60 percent higher per capita than New Zealand’s. Ireland had attracted over fourteen times more per capita than New Zealand.

The next government would do workers and future generations a favour by making our regime more attractive.

Well trained teachers are the key to helping children with dyslexia
Dr Michael Johnston | Senior Fellow |
National recently announced a series of education policies that it will take to the election in October. 

One is to a develop a much more structured and knowledge-rich curriculum. Another is to require regular testing of primary students in literacy and numeracy, to identify and assist those falling behind.

National would also focus teacher training and professional development much more tightly on science-informed methods. That means adopting a structured approach to teaching – one that recognises the limitations of human memory and attention.

Guy Pope-Mayall from the Dyslexia Foundation of New Zealand (DFNZ) was interviewed on Newstalk ZB about the likely impact of these policies on young people with dyslexia.

I found the interview odd. Pope-Mayall criticised National’s policy platform, calling it “an old-school approach”. Curiously, though, he went on to tacitly endorse its key elements.

Pope-Mayall identified inconsistent teaching across schools as causing difficulty for some dyslexic children. National’s policy to strengthen the curriculum would bring much greater consistency. It would provide a common framework for education, to be followed by all schools.

Another issue Pope-Mayall identified, was that dyslexic children are often not diagnosed soon enough. He commented, "We certainly need early intervention and also early identification, and then we need the right interventions.”

Quite so. National’s testing policy is explicitly designed to identify children struggling with literacy learning as early as possible. Children making insufficient progress can be given further diagnostic tests to see whether they have dyslexia.

But what are the “right interventions” that Pope-Mayall mentioned, when dyslexia is diagnosed? A preponderance of research evidence shows that structured teaching of literacy provides the best assistance to dyslexic students.

Pope-Mayall recognised that. He called structured literacy “a dyslexia friendly approach”. In fact, structured literacy is not only dyslexia-friendly, but also the most effective way to teach literacy to all children. And structured literacy is just what National wants to introduce.

Pope-Mayall made a final point. Teachers usually have very little training in structured literacy. Again, he is right.

And again, National’s policy platform would help, by emphasising structured learning in teacher training and professional development. This, in my view, is the most important of National’s policy announcements.

A strong curriculum and plenty of data would provide important support for teachers. But training teachers in structured literacy is the best way to ensure that children, especially those with dyslexia, learn to read and write.

The Great Harbour Crossing Announcement
Dr Matthew Birchall | Research Fellow |
The Super City is saved. The government has unveiled five exciting options for a second harbour crossing, which means that Aucklanders will no longer have to endure bumper-to-bumper traffic and road rage when they cross New Zealand’s most famous bridge.
The precise details of the new bridge may still be shrouded in mystery, but it’s already being hailed as “transformational” and “visionary” by people who love buzzwords.
And with a final decision set to be made in June, there’s simply no time to waste on trivial things like determining the actual need for a bridge or how it might be paid for. The marketing campaign needs to begin now, so everyone can get hyped up about the new addition to Auckland’s cityscape before the election.
Transport Minister Michael Wood claims that the bridge, which won’t begin construction until 2029, is a “future-proofed solution” to Auckland’s traffic problems. Of course, he also admitted that he can’t predict the future, but who needs a crystal ball when you have a bridge?
Admittedly, none of the government’s options have had a business case done yet, and the price tags seem to be astronomical. But these are just mere details. Let’s lean in and revel in the warm and fuzzy glow of a big announcement. This is all about getting Auckland moving.
While it’s true that similar options in the past may have had costs well in excess of benefits, this time we can be assured that things will be different. All it takes is a can-do attitude and a willingness to throw billions of dollars into the Waitematā Harbour.
And let’s not forget the political football that comes with grand infrastructure announcements. It’s what makes election year so captivating! The politicians get to buy now, and the public pays later.
After all, who cares if the project ends up being a giant boondoggle, or if it costs taxpayers billions of dollars that could have been spent on things like healthcare or education? The important thing is that the politicians get their photo op and their soundbites, preferably while in hardhats and hi-vis vests.
And if it turns out that the new harbour crossing was a bad idea after all, well, you can always add it to the bonfire and talk about bread and butter instead.

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