Improving educational standards and improving the performance of the benefit system
You have emphasised your commitment to equip young New Zealanders with the education they need for a 21st century global economy. You have outlined priorities around improving the performance of the schooling sector, and ensuring students do not fail to achieve their potential. Our advice on a medium-term agenda to focus on these goals would include:
- In the education system, the focus should be on improving the quality of expenditure as existing baselines are adequate to achieve improved educational outcomes (ie, there is no need to increase real expenditure significantly). While there is scope to reprioritise where money is spent across the sector, the most significant value for money gains are likely to come from improving how funding is linked to performance through improved targeting, stronger accountability for outcomes and incentives for responsiveness in the early childhood, schooling and the tertiary sectors.
- In the medium to long-term, a greater proportion of degree graduates is likely to be required in the New Zealand workforce if we are to achieve a higher growth path. This will in turn require a larger proportion of school leavers to achieve at NCEA Level 3, and a rebalancing of tertiary provision from lower level (and often lower value) courses towards degree level courses. In the shorter-term, further improvements in school leavers' qualifications at all levels will therefore remain a priority.
- The current benefit system is working well for unemployment beneficiaries but has been ineffective at reducing sickness and invalid beneficiary numbers. Domestic purposes benefit (DPB) numbers have dropped moderately in response to Working for Families but are rising again. As you have signalled, a change in approach is therefore worth exploring for these groups. In particular, changes to gateways for entry onto these benefits and expectations/sanctions will be critical to making long-term gains. Financial incentives and employment support changes are worth considering.
| Policy proposals | Treasury comment | Recommendations/implementation advice |
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Schooling Improvement
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The current Education Amendment Bill and review of the school sector regulations (National Admin Guidelines) can be used as vehicles for implementing national standards, reporting to parents and truancy policy. Policy design details are critical to success - for example, ensuring that assessment and reporting is fairly benchmarked and focuses on students' progress over time, Government's approach to school sector industrial negotiations in the next 3 years should emphasise the need for greater flexibility, productivity and performance as a condition for salary increases |
School Choice - increase funding for independent schools by $10 million - set up an inter-party working group, to consider policy options that will increase parental choice and school autonomy. |
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To maximise the benefits of additional funding for independent schools, consider options to ensure that the extra funding delivers increased capacity and reduced fees. While the bulk of the $500 million signalled for school property capital will be required to fund projects that are already planned, consider using a proportion of any discretionary funding to ease capacity constraints in over-subscribed state schools rather than further upgrading existing capacity. |
| Youth Guarantee and Trades in Schools - Universal education entitlement. |
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While expanding options for students, we recommend that schools' accountability for under-18 year-olds studying for school level qualifications outcomes should be retained and strengthened. There is a risk that schools avoid responsibility for struggling students by referring them to alternative providers of variable quality. Consider proceeding with the proposal (in the current Education Amendment Bill) to abolish early leaving exemptions, while increasing schools' ability to refer students and contribute funding and support to other providers while students remain enrolled with the school. To ensure alternative programmes for teenagers are high-quality, carefully monitored, and centred on foundation skills, consider extending Education Review Office (ERO) mandate to cover these. Consider changes to industry training to prioritise increased participation by young workers, with an emphasis on foundation skills |
Student loan borrowers incentive
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