Education again seems to be one of those polarized and politicised topics. What a pity all those in the field (including the teacher unions) can’t sit down and come up with a few sensible compromises. I have included a chapter on Education, because it is so vital for NZ’s future in every way. This applies at both ends of the spectrum. We cannot as a country afford to turn out children from our education system who (incredibly) cannot read. And we need to turn out our children as well educated and prepared for life as we possibly can.
SCHOOLS
Teachers are generally altruistic and admirable in wanting to help young people get ahead in life. The flip side of that: they do not want young people labelled a failure early in life, as that can basically put those children off course for the rest of their lives. This has led to a number of educational polices of questionable success.
DECILE GRADING
First there was decile grading of schools. Children of well off parents generally do better at school. So where a school is in a less wealthy area, give it more funding, to even the playing field. I had a grandchild at a low decile school. The school had no Parent Teacher committee. When asked why, the headmistress explained this was a low decile school. The parents would not be sufficiently interested to go on a PTA. Turns out when they were asked, enough parents did come forward to form a PTA. Labeling the school ‘Low decile’ created an expectation of low performance, which unsurprisingly the staff proceeded to deliver.
Not only this; but the decile system resulted in our most successful schools receiving the least Government support. In so far as our future as a country depends on producing top graduates (as it surely does, especially with the Knowledge Economy), the decile system resulted in NZ financially encouraging the opposite outcome: supporting most, the least successful schools. It was announced within the last year, that education policy had decided to drop this experiment, which was not successful in my view. But then the Government, in an obvious political move to reward its voters, has increased funding to schools in decile1-7, so those schools do not need to charge parental levies. This means NZ continue deciles in a modified version.
ZONING
Then there is zoning. All schools are assumed equal (or with extra funding for lower decile schools, could apparently be assumed to be equal). Don’t publish clear information on the relative standards of different schools, because this could contradict the ‘all-schools are equal’ position. With schools all relatively equal, it is okay to require children to attend their local school, with school zoning.
School zoning has resulted in two adverse outcomes. First, children are forced to attend their local school , which may well not be of good quality. Zoning actually works against children in areas (usually poorer areas) where their local school could be better. The recent 2018-9 ‘Review of Tomorrow’s Schools found that the current NZ system ‘has failed to address the persistent disparities in educational outcomes and continues to leave some groups of learners underserved’. The Report cited evidence that ‘NZ ranked 33rd out of 38 developed countries for its overall educational inequality’. Despite this admission of significant school inequality, there was no suggestion zoning should be reconsidered.
Secondly, despite the absence of accurate published criteria on the relative quality of schools, parents are remarkable adroit at working out which schools have high standards. Those parents then break their necks to get their children into those high quality schools. How do they do that? By buying in the Auckland Grammar Zone and its equivalents. Asians have made it their mission to buy property in that zone, and to get their children into Auckland Grammar. In 2018 Census, the population of Auckland was 53.5% European; 11.5% Maori; and 28.32% Asian. In June 2016, the ERO Report records students at Auckland Grammar were 46% Pakeha; 6% Maori; and 38% Asian. The school roll is significantly more Asian that the general Auckland population.
Zoning has prevented many boys with long term family connections with the school, from attending arguably NZ’s best state school. And just to emphasise the absurdity, people buying in the Grammar Zone, after their children have completed their free outstanding Grammar education, have been able to resell their property for a decent profit- which turns out to be tax free without a capital gains tax. End result: zoning has actually indirectly financially rewarded people buying in the Grammar Zone, in addition to providing their children with NZ’s best free education.
REMOVING ZONING WOULD HIGHLIGHT POOR SCHOOLS
It seems ultimately the reason the Education authorities refuse to do away with zoning, is because it would lay bare the true view communities have of their schools. Without compulsion, parents would send their children to the school they considered best for them. Schools viewed by parents as the best, would be inundated with pupils wanting to come. And schools considered by parents to be of lesser quality, would struggle to attract pupils. That would be an embarrassing exposure of the sub-standard schools. It would leave issues of how to spread pupils among schools, given the successful schools could not accommodate all the numbers wanting to go there.
The positive way to address this situation, is to find out what parents want from their schools, and then try and have the schools change so as to deliver much more of that desired education. Then hopefully the product offered by schools, and the education sought by parents, would co-enside, and you would not need the compulsion of zoning , to spread children among schools.
LATEST REFORMS LOST OPPORTUNITY
And what about the latest Government committee’s proposed education reforms? They seek to lessen the autonomy of schools, and create more powerful central education bureaucracies. Schools managing their own affairs, produced too variable outcomes. The new central bureaucracies will presumably seek to pursue the ‘All schools are equal’ myth.
It is difficult to be convinced these changes will lift the standards of underperforming schools, except perhaps in a very few cases. Covid laid bare the indifferent standard of our Health Department bureaucrats. Why should we believe our Education Department bureaucrats are of a much superior standard? Centralising school administration is surely a backward step. It is a pity that such an important opportunity for reform, seems to have resulted in the NZ education system potentially taking a wrong turn. The children suffering most from these decisions- those living in the zones of under performing schools. These will often be children of disadvantaged families. Zoning actually impacts most adversely on the very children who would benefit to the greatest extent, from access to a good education.
WHAT COULD BE CHANGED WITH SCHOOLS?
What should happen? Acknowledge that all schools are not equal. That children do not benefit if all schools attempt similar outcomes. The initial reports on the experimental Charter schools, which were very different from standard NZ schools, were positive. Despite these Charter schools offering greater diversity in education, they were shut down- because the teacher unions didn’t like them, and the Education authorities were nervous about offering children choice. I am not necessarily advocating a return of Charter schools. What I am advocating, is creating diversity among schools. We have long had religious schools. Why not other specialties? Let some schools become specialist academic schools. Let other schools specialize in trades. Others can be schools with an emphasis on Maori issues; on Asian issues. Then there could be schools with more narrow specialties; perhaps some schools could offer education for older pupils who want to come back to school as adults; some concentrate on music, sport, art etc.
In Switzerland from an early age of around 11, children divide between academic and trade schools. Not all children are suited to an academic education. Instead of the teaching profession deciding what is good for children, teachers should enquire what parents want for the education of their children, and try to move in the direction of meeting those parent needs more. One of the few examples of where diversity has been introduced into public education: Te Reo Maori. Maori did not find what the public school system was offering their children, was what Maoridom wanted- and has creditably established its own alternative system. This example needs to be repeated many more times in the public education system.
Hopefully if NZ schools created greater diversity of offerings, and matched these with preferences within the community, we would not need zoning to force children to any particular school. Instead the choices they sought, and the offerings schools provided, might ultimately coincide better. Further: a student who successfully acquires a trade skill is a far better graduate, than a pupil who drops out of an academic stream with no qualification at all. If teachers want the best for every child (as I have no doubt they absolutely do) then perhaps school diversity is a better way to provide this, than trying to make schools all equal, when this is never realistically going to happen.
There is surely a balance. Teachers and education experts naturally should have a strong say in the way they see schools working. But parents also have views, and these parental views at present appear inadequately recognized, at least in some parts of the NZ education system. We don’t need to move to the other extreme, to a voucher based, parent driven system. But we should move to the centre of the road, where our education system gives due weight to both perspectives. Teacher does not always know best.
OVERSEAS STUDENTS
NZ will spend $12.6 billion on Education in 2019/20- up from $5 billion in 1997, and $12.2 billion in 2018/19. Current spending is 5% of Government spending; 1.8% of overall NZ GDP. This compares with an OECD average of 1.5% of GDP. We spend less per student than the OECD average, but spend one of the highest percentages of GDP on education, in the OECD. As to outcomes, for NZ 15 year olds, science and maths achievements are still both above OECD averages, but reading science and maths standings (compared to other countries) have all been in decline for 14+ years. We are ranked 33 out of 38 developed countries, for overall educational inequality. Overall, we are not overachieving, for the money we spend.
In addition to the large amount of money NZ governments spend on education each year, the sector gains at least another 10% extra revenue from international students. They are an important financial part of the NZ Educational System. An Infometrics report found there were 116,000 overseas fee paying students in NZ in 2015, paying $1.9billion in fees, and contributing $4b overall to the economy (including the sums they pay for accommodation, etc). In that year, Infometrics found there were 19,270 ordinary overseas students and 4088 Overseas PhD students at our Universities in NZ.
There is a question whether this drive at all levels of our education system, for more overseas students to help bolster the revenues of schools and Universities, is altogether ideal. There was considerable opposition from within the legal profession for example, to proposals by Auckland University, to increase the numbers of places in its Law School in 2017: apparently because this may dilute standards. Surely the primary roles of educational institutions (especially Universities) are to achieve high standards of research and teaching ; and to offer excellent educational opportunities to New Zealanders. Changing that twin focus, to add raising revenue from international students as another objective, may muddy the waters, if pushed too far. A better alternative may be to provide the Universities with higher direct Government funding, and limit the need for Universities in particular to chase such a high number of overseas students.
EUROPEANS DECLINING AT AUCKLAND UNIVERSITY
The University of Auckland provides figures breaking down its student numbers. In 2016, Overseas students made up 16% of Auckland University’s students. In 2017, 18%; and in 2018, 19% – a total of 8020 Overseas students in 2018. By far the majority of these Overseas students were from China.
The Ethnicity of the Auckland University overall student body has been as follows (some lines omitted) :
| Ethnicity | 2016 | 2017 | 2018 |
|---|---|---|---|
| European | 16,095 | 15,587 | 14,985 |
| Maori | 3183 | 3116 | 3078 |
| Asian | 16,683 | 17,607 | 18,621 |
| Total | 41,866 | 42,302 | 42,759 |
These figures include Overseas students. It is possible to estimate from the Auckland University data, that approximately 7100 of the 8020 overseas students at Auckland University in 2018, were Asian; and 900 European (mainly from USA). If you take those figures away from the total number of Europeans and Asians in the above Ethnicity table , then it appears that in 2018, of the 42,759-8020= 34,739 Auckland University students who were NZ citizens that year, 14,100 of those students in 2018 (40.58%) were NZers of European ethnicity; 3078 students (8.86%) were Maori; and 11,500 students in 2018 (33.1%) were NZers of Asian ethnicity.
Compare that to the ethnic breakdown of the Auckland population from the 2018 census- 53.5% European; 11.5% Maori; and 28.32% Asian. Europeans living in Auckland who are NZ citizens are significantly underrepresented in the Auckland University student body; Maori are underrepresented relative to their numbers in Auckland, but to a lesser extent; and Asians who are NZ citizens, are overrepresented in the Auckland student body. Not only that; the European numbers are dropping fast; and the Asian numbers increasing even faster.
The Government made the first year of student fees, free for NZ citizens, from the start of the 2018 year. It is probably too early to say if that significant change in Government assistance for students has had any effect on arresting the decline in European student numbers at Auckland University. Plenty of students have taken it up. There is little evidence so far, that it is drawing further enrollments however. Maybe more European students are attending universities other than Auckland now- I do not know. Their declining attendance at Auckland university is disturbing.
STUDENT LOAN SCHEME AND OVERSEAS DEBT
When I attended University in the late 1960’s, tertiary education was the same as other parts of the New Zealand education system- paid for by the State. I received essentially a ‘free’ education, paid 100% by the taxpayers. Presumably to help offset the cost of education to central government, student fees and associated student loans, began around 1992. Like most things political, it has turned into a complex system.
Since 1992, students have borrowed a total of $27.4 billion through the student loan scheme.
More than 615,000 borrowers have repaid their loans since the scheme began, and Inland Revenue has collected $15.472 billion in repayments.
As at June 2019, there was $16 billion of outstanding Student Loans, with a written down value (see below) of $10.731 billion.
The forecast median repayment time for borrowers who remain in NZ is 5.8 years.
In 2006, interest free student loans for NZ based borrowers were introduced- resulting in a 12% increase in borrowing that year.
In 2019, 599,678 NZ based borrowers owed $12.6billion. Their average loan was $21,024. At the same date, 108,840 Overseas-based borrowers owed $3.426 billion. Their average loan was $31,418.
Just to clarify: you do not qualify for a student Loan, if you are not either a NZ citizen, or ‘Ordinarily resident in NZ’- which generally means you have to have been living here for more than 3 years. So students who come to NZ as Overseas Students, and do a course here, do not qualify for a Student Loan. It is NZers who take out a student loan, and then go overseas without having repaid that loan, who then tend to let it go into default.
At June 2019, a total of $131million owing by NZ based borrowers was classified as ‘overdue’. But at the same date $1.349 billion was classified as ‘overdue’ from overseas- based borrowers. 77% of those outstanding overseas payments are more than 2 years overdue. The proportion of the overdue overseas payments over 5 years old, continues to increase. The Annual Report on the scheme observes (not surprisingly):’The longer borrowers are out of NZ, the less engaged they are with their student loans’. 54% of overseas-based borrowers were inactive in 2018/19.
Because Student Loans to NZ borrowers are interest free, and a percentage of loans (especially loans to overseas-based borrowers) are never repaid, there is a notional write down on new borrowing of around 42% in the government books. This is the government’s implicit subsidy of the scheme. The write down is ‘the difference between the estimated value of future repayments using current discount rates, and the amount lent’. In 2018/2019, $1.36billion was lent- and the initial write down on this borrowing (ie the expected cost to the Government on these loans over their lifetime) was $563million.
Put another way, student fees bring in revenue partly to offset the government’s costs in funding the Universities. But in order to have those student fees paid to the Universities, the Government has to provide students with a loan scheme, to help them pay those fees. That loan scheme is a major cost to the Government- around 42% of the loans made. So the Government’s net saving in university funding costs, is the amount of the gross fee income, less the major cost (almost half the amount of the loans) of providing the student loan scheme.
Like everything devised by politicians, the Student Loan scheme is messy, complicated and semi- circular. Above all, there is no inter-generational equity. Baby boomers had a free University education, and yet the generations which follow them have to pay in part for their education, and take on debt for 6 years on average. Meanwhile baby boomers receive free public healthcare, and taxpayer funded NZ Superannuation. Intergenerational equity suggests (as I have advocated above), that at the very least, Boomers should part pay more for their healthcare, and have their NZ Super means tested, even if the Student Loan scheme continues.
And while I support making student loans interest free, perhaps we should limit the interest free period to say 7 years- the median time for repayment. That would be an incentive for borrowers to repay within the average period expected, rather than allow their otherwise interest free loan to drag on indefinitely.
SUMMARY
Despite many dedicated and admirable people within its ranks, the NZ education system only gets a B or B- mark. The system at the school level, (encouraged by resistance to change among many teachers) is insufficiently responsive to parental perspectives. Aim for greater choice and diversity among schools. Water down, and ideally eventually abolish zoning. Be careful about educational institutions chasing overseas students too aggressively. Applaud Asians for their commitment to higher education, and ask why European and Maori are apparently less motivated. Put some sensible constraints on the Student Loan scheme. And charge Boomers more in other areas, to achieve more inter-generational equity.
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