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Insights 27: 28 July 2023
Webinar event, 4pm, 1 August: Blessing or Bloat? Non-academic vs academic staffing
TVNZ Breakfast: Eric Crampton on election policies to remove GST from food
NZ Herald: Matthew Birchall on how NZ's roading problems can't simply be patched over

Reforming teacher education without carrots or sticks
Dr Michael Johnston | Senior Fellow |
Politicians are naturally drawn to top-down solutions. For one thing, they afford Ministers the illusion of control. For another, they promise quick results.
Ministers for Education from the Australian states have agreed on a major overhaul of teacher education. Their consensus follows a report identifying a range of deficiencies. These include failures to follow scientific evidence on how children learn, to prepare teachers to teach literacy effectively, and to set new teachers up to be capable classroom managers.
The Australian Ministers settled on a top-down solution.
A new organisation, the Initial Teacher Education Quality Assurance Board, will oversee universities’ teacher education programmes. It will have the power to strip universities of accreditation to deliver these programmes if they don’t use evidence-based approaches.
In addition to this stick, there are also carrots. Universities that comply will receive funding incentives.
Following the Australian announcements, New Zealand is considering its own teacher education situation. Education Minister Jan Tinetti is seeking advice from officials on whether the Australian developments are relevant to New Zealand.
National’s Erica Stanford is already clear that change is necessary. In the New Zealand Herald, Stanford was quoted as saying, “Every school that I go into, without doubt, brings up initial teacher education as a huge problem.”
Stanford is right. Teacher education in New Zealand needs serious attention. The problems identified in the Australian report are problems here, too. But is Australia’s top-down, carrot-and-stick approach really the way to go?
New Zealand should consider a bottom-up approach before rushing to follow Australia’s lead.
A key lever for reforming New Zealand’s teacher education programmes is the Standards for the Teaching Profession, set by the Teaching Council. Teachers must meet these standards to practice.
The current Standards are vague and weak. They do not mandate knowledge of the science of learning. They are silent on effective literacy instruction. They say nothing about classroom management skills.
If the Standards required all teachers to demonstrate an ability to apply evidence-based practice in the classroom, universities would quickly come on board. If they did not, their graduates could not be certificated as teachers.
A forthcoming New Zealand Initiative report will lay out a strategy to reform professional standards for teachers. The aim is to amplify existing pockets of quality, rather than directly imposing change from above.
While less politically impressive, and although they take time to yield results, bottom-up policy solutions are usually more durable.

Time for a new approach to Foreign Direct Investment
Roger Partridge | Senior Fellow & Chairman |
New Zealand prides itself on being an open trading nation. When it comes to trade in goods and services this claim is certainly true. Few countries embrace free trade as unequivocally as we do.

It is a different story when it comes to capital. Our country’s screening regime for foreign direct investment is the most protectionist in the OECD. Where countries like Ireland and Singapore actively pursue foreign investment, it can seem like our Overseas Investment Act is designed to keep it out.

Our attitude to FDI is a short-sighted form of self-harm. International data shows that FDI benefits domestic economies. Countries that invite international investment typically boost their competitiveness. This comes not just from the foreign capital but the accompanying technologies, management expertise, and access to overseas markets.

Not surprisingly, other developed economies like the UK, Ireland and France do not even have laws with “character and competence” and “sensitive land” requirements like our regime.

And why would they? With plenty of laws to regulate corporate conduct, does the UK need (for example) to ask Apple and its board and senior executives to prove their character and competence before permitting Apple to invest in a British technology company? Why, then, do our laws?

Equally, why wouldn’t France welcome a foreign company investing in one of Bordeaux’s thousands of vineyards? With planning laws that protect the environment, what need does France have of an additional “sensitive land” test like the one that dominates NZ’s regime?

Instead of broadly discouraging foreign investment by making it subject to bureaucratic approval like we do, other developed countries typically adopt a narrow national security focus. Foreign investment is permitted – or, rather, welcomed – unless the investment raises national security or public order concerns.

So, foreign investors buying land to build a data centre, acquiring an MDF plant, or a radiata pine forest would simply get waved through. But, if a foreign company wanted to buy one of the country’s telecommunications networks, then the acquisition would first need to clear a national security hurdle.

Simplifying overseas investment would bring other benefits. Instead of tying up resources in the bureaucratic monstrosity the Overseas Investment Act has created, New Zealand could unleash them in competing with Ireland’s Investment Development Agency to attract FDI down under.

A competitive offering will require more than a simplified FDI regime. But repealing the Overseas Investment Act would be a good place to start.

Why 'Wellington' can be sure it knows what is best for us
Dr Bryce Wilkinson | Senior Fellow |
Everyone knows that Wellington’s CBD will thrive when those who know best ban cars.
People will love coming into the CBD to buy bulky products, such as a microwave, to cart home on the handlebars of their bicycles. Buses are an option too, in between shortages and strike action, but bicycles are better for us. Wind, rain and steep hills heighten the experience.
Delivery firms will love supplying CBD businesses. Motorised roller skates could flourish.
Well, everyone knows this, except a few neoliberal economists and other equally misguided people.
Some deluded economists think that allowing people choice in transport options, and in what to supply and buy more generally, is good. The choice process produces useful information about availability, preferences and cost.
These economists are even silly enough to think that an exchange between a willing buyer and a willing seller must be mutually beneficial. They appeal to TradeMe transactions.
They seem to think that the prices discovered by such voluntary processes can usefully inform our plans and reveal our affordable options.
All right-thinking people know these neoliberals are hopelessly wrong-headed.
Price discovery is flawed. It is flawed because people are not fully informed. We do not really understand our choices. We get confused.
It is also flawed because humans are flawed. We make mistakes. Sometimes we are irrational. Choice confuses us.
That is why politicians and officials who do know what is best for us must step up. Our wellbeing drives everything they do.
Government saves us from ourselves by taking as much of what we have earned as possible. Whatever it took last year is not enough – after all, we still mess up.
More and higher taxes are the only moral options. What could be more moral than a majority voting to tax a minority more heavily?
Since voluntary price discovery is flawed, prices imposed by government are best.
Zero prices are the ideal – free medicines, free childhood education, interest-free student loans and much else. Free is good.
All right, all right, it is not really free. You worked to pay the taxes. But it feels free and that is good for your wellbeing. Even better if others are paying more. Fairness demands nothing less.
Look at it this way. If government does not exist to save us from ourselves, why do we have so much of it?

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