You are subscribed as | Unsubscribe | View online version | Forward to a friend

Insights 44: 24 November 2023
Newsroom: Dr Eric Crampton on the untapped potential of NZ's deep geothermal energy
New Research Report: Class Divides? - Dr Michael Johnston and Ben Macintyre
The Australian: Dr Oliver Hartwich on the disparity between NZ's self-perception and its current state

Initiative applauds new coalition’s clarity and reforms
Dr Oliver Hartwich | Executive Director |
The outcome of New Zealand’s recent coalition negotiations marks only the beginning of the next three years of government. But the principles and policies outlined in the agreements suggest the country now has a reformist administration ready to rebuild the economy, refine regulations, and expand choice in social services.   

As a public policy think tank, The New Zealand Initiative welcomes the clarity around priorities like stimulating economic growth after recent disruptions and years of questionable policies.  

Underpinning the Government’s agenda are laudable guidelines for decision-making. We applaud the coalition’s pledge that policies will be grounded in clearly defined problems, rigorous cost-benefit analyses, and the pursuit of efficiency.  

The coalition’s self-imposed requirements to base proposals on empirical evidence rather than ideological positions reflect values at the heart of our work.  

After too many years of ad hoc and reactive policies, it is reassuring to see disciplined practices codified upfront. 

Drilling down into specific policies in the coalition agreement reveals close alignment with The New Zealand Initiative’s research.  

The pledge to scrutinise spending and pare back bureaucracy accords with our advocacy for fiscal discipline and accountability.  

We are happy to see the introduction of targets for the public service, and we hope to see more transparency and accountability around them. 

We also note that the coalition agreement contains steps towards liberalising New Zealand’s restrictive foreign investment rules. We could not agree more with these changes. 

The stated aim to inject more competition into social service delivery through initiatives like charter schools also mirrors our research into choice-based models. The return of the social investment approach is equally welcome. 

On education, we agree with the Government’s refocussing on the basics in numeracy and literacy, the rewriting of the curriculum and a new standardised, robust assessment of student progress.  

Our emphasis on lifting productivity growth through regulatory reforms is shared and now propelled by the proposed Regulatory Standards Act and a dedicated ministry for deregulation and regulatory reform. 

Restoring Reserve Bank independence with a single price stability mandate reflects the Initiative’s advocacy. Considering a single decision-maker model for monetary policy could also promote accountability.  

Abolishing Fair Pay Agreements and Labour’s resource management framework in favour of approaches grounded in property rights aligns with our research.  

Using property rights to guide RMA reform and exploring financial incentives for councils through GST-sharing have both featured in our writings for many years. Our work on empowering local government aligns with the coalition’s proposed city deals. 

Focusing Commerce Commission market studies on regulatory barriers implements our recommendation.  

Discontinuing the clean car discount accords with our argument it does not reduce emissions within the ETS.  

We also recognise our prescriptions behind changes to Pharmac funding rules and Medsafe approval processes for new medicines. 

We are thus happy to see many of the Initiative’s policy proposals and philosophical positions reflected in the coalition agreements.  

We wish the new Government success in implementing this ambitious reform agenda. 

Class Divides: Streaming in our schools
Benjamin Macintyre | Research Assistant |
Many readers will remember being in streamed classes at school. Perhaps you were in a top English class but a lower maths class.

Streaming is commonplace in New Zealand schools and has been for a long time. But recently, influential critics have called for a ban.

Responding to these calls, The Initiative’s new report, Class Divides: The impact of streaming on educational achievement and equality, explores both the local and international evidence on the educational effects of streaming.

We found a lack of data on the prevalence of streaming in New Zealand schools. We know from PISA (Programme for International Student Assessment) data that it is widespread. But, the Ministry of Education doesn’t have specific information on which schools stream, how those that do stream go about it, or its effects in the New Zealand context.

Critics argue that streaming exacerbates educational inequality. In New Zealand, they have claimed that it negatively affects Māori and Pasifika students, who are disproportionately placed in low streams. There is evidence that these critics have a point.

Māori and Pasifika students are, unfortunately, frequently stereotyped as poor learners. Māori and Pasifika students placed in low streams can easily come to believe that the stereotype applies to them, as individuals.

This phenomenon is known as stereotype threat. When students who are subject to negative stereotypes are placed in low streams, it can undermine belief in themselves as capable students. They can become demotivated and disengaged. In this way, a stereotype can become a self-fulfilling prophecy.  But stereotype threat can be counteracted with clear learning goals and formative feedback.

In favour of streaming, it is easier for teachers to pace instruction to students at similar stages of learning. That is particularly important in subjects like mathematics. For example, before students can understand fractions, they must thoroughly understand division. If prerequisite knowledge is not solidly learned before attempting to build on it, students can become overwhelmed and confused, and be left behind.

Debate about streaming is often emotive. Proponents and critics alike have dug trenches.  The debate has been raging for over a century.

In Class Divides, we argue that the evidence on streaming is more nuanced than those on either side of the polarised debate would suggest. Rather than a ban on streaming, our report calls for a systematic study of streaming in New Zealand’s classrooms. Schools could then retain, modify or abandon streaming in the light of evidence.

Yes, Minister. It’s Utopia.
Eric Crampton | Chief Economist |
One of my grad school professors recommended Yes, Minister for better understanding the British public service.  

The series was superb. Permanent Secretary Sir Humphrey Appleby wanted the public service left to its own devices, regardless of incoming Minister Jim Hacker’s preferences.  

Each episode seemed to feature a different lesson from our seminars in Public Choice – the branch of economics that studies political decision-making.  

One of the show’s writers later revealed that public choice theory had been an inspiration. And that they had always run scripts past appropriate sources. Some plots were inspired by those insiders’ stories.  

Yes, Minister has a darker successor. It feels bleaker because it seems closer to local reality. 

Australian series Utopia, almost a decade old now but a more recent find on Netflix, follows the ‘fictional’ Nation Building Authority.  

NBA Chief Executive Tony desperately wants to build sensible infrastructure projects and to block costly boondoggles. His Operations Manager, Nat, is superbly competent.  

But even the ideal public servants have little chance.
The Minister wants announceables, regardless of whether anything is ever delivered. So the NBA suffers a whirlwind of changing Ministerial priorities. If the big project that will take years to complete was announced last month, why hasn’t anything been announced this month? Just announce something and backfill the details later.  

The few competent NBA staff are hamstrung. Every rebranding, team-building exercise, or website re-imagining pushed by political operatives is a perfect reason for the team to fail to accomplish anything. Process must be followed to every absurd conclusion. Incompetent staff cannot be fired or even encouraged to do their jobs. But they can be promoted to other agencies.  

The true face of public sector evil isn’t Sir Humphrey. Beverly, from the NBA’s HR Department, is the stuff nightmares are made of. 

Utopia’s writers seem worryingly well-informed about Australia’s public sector. I understand it also makes uncomfortable viewing for Wellington’s lanyard-wearers.  

And it seemed to predict much of what Dominic Cummings later said about his time as Chief Advisor to the British Prime Minister.  

Utopia’s public sector is fundamentally darker than Yes, Minister’s. If real need arose, Sir Humphrey could mobilise the public sector. Utopia’s would invent new agency logos while the world burned around them, ignoring the futile pleading of those who wish for better but have no agency. 

An incoming government should watch both carefully – and then change the script. 

On The Record

Initiative Activities: To listen to our latest podcasts, please subscribe to The New Zealand Initiative podcast on iTunesSpotify or The Podcast App.
All Things Considered
Copyright © 2024 The New Zealand Initiative, All Rights Reserved

Unsubscribe me please

Brought to you by outreachcrm