A CHANCE TO CHOOSE

Following the February earthquake, some Christchurch schools have been ‘hot desking’ at other schools, including Shirley Boys High School at Papanui High, and Avonside
Girls at Burnside High.   Although no doubt challenging and disruptive for all involved, it’s one of many innovative solutions Cantabrians have come up with to cope with the disaster.  Earthquake aside, making more efficient use of all existing school facilities would make a lot of sense.  Running two shifts at schools could also provide much greater flexibility for teachers and students.

Now the Christchurch City Council is considering removing school zones for central
Christchurch residents as part of a plan to encourage families to live in the central city.  While the proposal has been seen by many as an interesting idea worth considering, much concern has been expressed about the impact it might have on ‘popular’ schools and the pressure it would place on their rolls.

As Shirley Boys High School principal Peter Laurenson said in The Press:

“Look at a school like Burnside. If they suddenly had an extra bunch of people who were qualified to go into the school, they could have so many children in the school that they couldn’t place them.”

True.  So does that mean those in the zones of unpopular or inferior schools should just have to stay and put up with them?  Instead, why not consider letting a popular school like Burnside set its own roll limit to fit its facilities and, if it chooses, take over the property and facilities of one of the ‘unpopular’ schools, and create a second campus with all the elements that has made Burnside so successful?

Freedom to allow schools to open, expand and close in response to demand is one of the three key features of successful school systems (such as Sweden’s) that allow parents and students to choose the school that best meets their needs.  In New Zealand, however, the Ministry of Education has always been reluctant to open new schools when there is spare capacity in existing ones nearby, or allow failing schools to close.

The key
features of school choice are set out in the Education Forum publication School Choice: The Three Essential Elements and Several Policy Options by Stanford University Professor Caroline Hoxby, along with clear empirical evidence of the benefits of such systems, especially for disadvantaged children.

The other two key elements are: having the funding follow the student, thereby ensuring
all schools are on the same footing; and independent management that frees schools from bureaucratic micro-management, and union interference, and allows them to innovate in teaching practices, pay, curricula and school organisation, including the length of school days and years.

Mr Laurenson was also concerned about the gap between students from within the zone and those who came from elsewhere:

“Suddenly you’ve got part of a school zone that has no physical or geographical relationship with the school.”

Not a strong argument.  As commenters on The Press article affirmed, plenty of children travel well out of their neighbourhood to attend their chosen school, especially the children of the better-off who can afford to bypass a failing local school and send their child to an independent school.  Some are so determined to get their child into a ‘good’ school they’ll even upsticks and move into its zone.  As families living in Epsom would report, the impact on local real estate values is obvious.  No doubt those in Burnside’s zone feel the same effects.

Christchurch has a chance now to be a trail blazer and give its citizens, especially those
from the city’s shattered Eastern suburbs, a chance to choose their children’s schools.
What could be bad about that?

EDUCATION VOUCHERS WORK

In 1992, Sweden introduced a major education reform whereby the government funds all schools – state and private, non-profit and for-profit – on the same basis.  You can call it an education voucher system, although that adds nothing to understanding it.

(Actually, the initial ‘voucher’ to non-government schools was somewhat less than to schools in the public sector.  Later, however, payments were equalised: as a Swedish minister said at a conference I attended in Stockholm a couple of years ago, “We believe in equality in Sweden!”)

Odd Eiken, the head of the Swedish education ministry at the time of the reforms, visited New Zealand as a guest of the Business Roundtable in the mid-1990s.

The reform has been an enormous success.  It is now supported by all political parties in Sweden except the communists.  Teachers and the teacher unions are also supportive.

The video below from Cato of Peje Emilsson, founder of the for-profit chain Kunskapsskolan, gives an excellent update on Swedish education.

Among the points he makes about the overall system are:

• It is very easy to set up a new school
• Schools cannot pick and choose students
• They cannot charge additional fees but independent schools operate at lower cost than government schools
• Enrolments in independent schools have grown from 1% in 1991 to 11% today.  At the upper secondary level 23% of students are in the independent sector and in parts of Stockholm the figure is as high as 50%
• About 60% of the independent schools are for-profit companies
• The independent schools are achieving better education results.  The results of the for-profit schools are better again
• Competition has improved the performance of public schools
• Kunskapsskolan combines technology and teacher involvement in new ways, putting students at the centre of learning
• All the curriculum is on the computer, so that teachers have 27-30 hours a week with students compared with 20 hours (or sometimes only 10) in public schools
• The company now has 10,000 students enrolled and employs about 800 teachers.  It is achieving about the best results in Sweden.

The Swedish system is not unique – the Netherlands, Denmark and Ireland have similar policies, and there are steadily expanding voucher programmes in the United States.  Australia has a more even playing field than New Zealand as far as independent schools are concerned.  Reports by an Inter-Party Working Group in 2009 recommended similar moves in New Zealand.

The experience of for-profit schools in Sweden is particularly interesting.  I have long thought that for-profit education may be the way of the future in the twenty-first century.  A thriving for-profit sector may hold out the best hope for revitalising teaching as a profession and allowing good teachers the opportunity to earn the rewards they deserve.

LESSONS FROM SINGAPORE

This week’s issue of The Economist contains an important special report by one of the paper’s most talented journalists, John Micklethwaite, on the role and size of the state.

He concludes that the prospects for reforming the state have improved with the fiscal crises buffeting Western nations:

… the incremental benefits of ever bigger government, even assuming it was somehow affordable, become ever smaller.  Decent-sized government can reduce inequality and poverty, but most of the evidence is that gargantuan government merely gets in the way of social progress.  A state that takes up more than half the economy begins to deliver an ever worse deal to ever more people in the middle: the extra benefits become harder to detect, the extra costs harder to hide.

The report argues that with good management the share of government spending in Britain could be reduced to 40% of GDP – a very modest goal and an outcome that would still be far too high for fast growth.

It rightly notes that the British welfare state, with high levels of social transfers and middle class churning, would remain twice the size of Singapore’s.  Unusually, for what is still a Eurocentric paper, the report devotes this section (scroll down) to observations about Asia and Singapore in particular.

Singapore is certainly a standout country.  Only two generations ago Orchard Road looked like a third world thoroughfare.  In the 1970s I was involved with the administration of New Zealand aid to Singapore.

Today, Singapore’s per capita income (PPP basis) according to World Bank figures is US$47,940, roughly on a par with Hong Kong ($43,960), well ahead of Australia ($34,040) and nearly twice that of New Zealand ($25,090).

Some New Zealanders think of Singapore as a country that reflects the state paternalism of Lee Kuan Yew who ran the island from 1959 to 1990.  It is true that there are dirigiste elements in the Singapore model, such as mandatory contributions to the Central Provident Fund which finances  much of Singaporeans’ housing, pensions and health care.  Also some outsiders dislike Singapore’s limited political democracy, proselytising of ‘Asian values’ and attitudes that they find somewhat stifling, including of entrepreneurial vigour.

But to regard Singapore as an essentially statist country is to miss the wood for the trees.  It consistently rates behind Hong Kong as having the freest economy in the world.  As Micklethwaite notes, Singapore’s success owes far more to laissez-faire than to industrial policy:

Rather than seeing foreign investment as a way to steal technology or to build up strategic industries, as China often does, Singapore has followed an open-door policy, building an environment where businesses want to be. The central message has remained much the same for decades: come to us and you will get excellent infrastructure, a well-educated workforce, open trade routes, the rule of law and low taxes.

Government spending is around 19% of GDP, the top income tax rate is 20%, the top corporate rate is 17%, Singapore has been at free trade for years, and its labour market is highly flexible with no burdensome rules on dismissals and work hours.

Many other interesting features are noted by Micklethwaite:

• Singapore’s competitive advantage has been good, cheap government
• It provides better schools and hospitals and safer streets than most Western countries
• It is near to the top of educational league tables, yet education consumes only 3.3% of GDP (less than half New Zealand’s level of education spending)
• Teachers need to have finished in the top third of their class; headmasters are often appointed in their 30s and rewarded with merit pay if they do well but moved on quickly if their schools underperform
• The quality of Singapore’s civil service is exceptional, with those at the top being paid US$2 million or more
• There is a welfare safety net to cover the very poor and sick, but much greater reliance on personal and family resources.  Lee Kuan Yew once said that the only thing that would hold Singapore back would be the development of a Western welfare state.

Micklethwaite concludes:

… arguably the place that should be learning most from Singapore is the West. For all the talk about Asian values, Singapore is a pretty Western place. Its model, such as it is, combines elements of Victorian self-reliance and American management theory. The West could take in a lot of both without sacrificing any liberty. Why not sack poor teachers or pay good civil servants more? And do Western welfare states have to be quite so buffet-like?

By the same token, Singapore’s government could surely relax its grip somewhat without sacrificing efficiency. That might help it find a little more of the entrepreneurial vim it craves.

Neither Hong Kong nor Singapore have significant natural resources.  Their geographical position has not altered: Hong Kong grew rich while China was still poor.  They do not have great natural environments but there’s not much they can do about that.  Their prosperity underlines the lesson that the institutions and policies a country adopts basically determine its success in the modern world.  Singapore has an admirable focus on its own interests; one hears little about ‘leading the world’ on climate change, for example.

Many New Zealanders are sceptical about the idea that New Zealand could catch up with Australian living standards.  I have put the question the other way round: would any competent economist not think that New Zealand could overtake Australia if it moved towards the kind of economic framework of Hong Kong and Singapore?  So far none has come forward to take this position.

THE FAIRNESS TEST

Just out from the Reform thinktank in the United Kingdom is a report The Fairness Test.  The author is Dr Patrick Nolan, formerly of the New Zealand Institute of Economic Research.

The current UK government has defined fairness as one of its three core values (together with freedom and responsibility).  The report argues that the current debate on fairness is flawed and in danger of leading policy astray:

• It is dominated by measures that emphasise existing spending through the tax and benefit system.
• It assumes that more government spending is synonymous with fairness.
• Many arguments around progressivity and inequality are based on little more than assertion.
• The role of economic growth in providing resources for redistribution is often ignored.
• The actual nature of tax avoidance and evasion (the tax gap) is poorly understood.

It concludes that:

To avoid these problems clearer thinking on fairness is needed. While there is no one single agreed view on fairness most people would accept that the extent to which government actions combat disadvantage should be central to any definition. This supports a focus on education and welfare reform. This does not support encouraging high-earners’ migration, maintaining the middle class money-go-round, increasing personal tax allowances or postponing difficult decisions.

Some specific points in the report resonate with debates on fairness and social policy in New Zealand.

On the book The Spirit Level, the report states:

There is no proven connection between the claims in The Spirit Level and the implied policy responses. The theory on equality could, for example, be used to justify a flat tax (which would equalise proportionate sacrifice).

It notes Okun’s “leaky bucket” trade-off:

Spending on welfare not only comes at a financial cost to the taxpayer but also creates other economic and social costs. This can be illustrated by the famous trade-off between equality and efficiency, which Arthur Okun described as the “leaky bucket.” Money transferred to the poor to alleviate poverty must be, as he wrote, “carried from the rich to the poor in a leaky bucket. Some of it will simply disappear in transit, so the poor will not receive all the money that is taken from the rich.” The losses are due to administration costs and incentive effects. These incentive effects are due to people who are receiving welfare having less incentive to work as they are able to reach a desired standard of living with a lower level of work effort and they may face clawback of assistance as their incomes increase.

The report rightly stresses “the dynamics of income distribution (that people will move up and down in the income distribution over their lifetime” rather than static analysis, and the importance of facilitating social mobility, eg through education.

It criticises the use of personal tax allowances, noting that they benefit primarily higher income earners and damage work incentives because they require higher marginal tax rates to replace lost revenue.  A tax-free threshold, as proposed for New Zealand by the Labour Party, would have similar effects.

Interesting points are made about welfare reform in the United Kingdom, echoing material in the recent Welfare Working Group report in New Zealand:

• The flipside to having a welfare system which provides an important social safety net is that most people can reasonably be expected to take up work if it is available and adequate.
• The welfare system is too complex. The Department of Work and Pensions’ Decision Makers’ Guide is no less than 8,370 pages long.
• One of the first initiatives the Government announced was the Work Programme, which will outsource all welfare to work services. The new commissioning framework will give providers longer and larger contracts, greater freedom and will fund welfare to work services through the savings made in reductions in benefit expenditure. Following reforms begun under the previous Labour administration, a number of benefits for people out of work (such as the incapacity benefits) have been reformed to be more active. These are the right changes.

On education, the report endorses the moves by the UK government to adopt a Swedish-type education voucher programme, saying:

The greater use of choice and competition in the education system can support fairness. Competition is not a zero-sum game where the profits made by private sector companies deprive public services of funds. This zero-sum view ignores productivity. Profits (especially when they attract new entrants into markets) can encourage competition and drive up standards and productivity. These productivity improvements can mean, for example, that the supply of services can expand even when costs are falling. Indeed, as Tony Blair has argued:

“Choice mechanisms enhance equity by exerting pressure on low quality or incompetent providers. Competitive pressures and incentives drive up quality, efficiency and responsiveness in the public sector. Choice leads to higher standards. The over-riding principle is clear. We should give poorer patients or parents the same range of choices the rich have always enjoyed. In a heterogeneous society where there is enormous variation in needs and preferences, public services must be equipped to respond.”

The Business Roundtable has discussed issues of fairness in social policy in a number of reports.  They include the books Equity as a Social Goal by Cathy Buchanan and Peter Hartley, and Middle Class Welfare by James Cox.  Both are cited in the Reform report.

FRIDAY GRAPH: PUBLIC EDUCATION – SPENDING VS RESULTS

A pitched battle is being waged in the US state of Wisconsin over collective agreements and the bloated remuneration arrangements (including pensions) of public sector unions.  Teachers are in the front line.

There have been huge increases in spending on education in Wisconsin and other US states in recent decades.  Yet spending more money has not translated into improved scores for Wisconsin’s children as this graph shows:

Click to enlarge

In 1998, according to the US Department of Education, Wisconsin public school eighth graders scored an average of 266 out of 500 on the NAEP (National Assessment of Educational Progress) reading test. In 2009, Wisconsin public school eighth graders once again scored an average of 266 out of 500 on the NAEP reading test. Meanwhile, Wisconsin public schools increased their per pupil expenditures from $4,956 per pupil in 1998 to $10,791 per pupil in 2008. According to the Bureau of Labor Statistics inflation calculator, the $4,956 Wisconsin spent per pupil in 1998 dollars equalled $6,546 in 2008 dollars. That means that from 1998 to 2008, Wisconsin public schools increased their per pupil spending by $4,245 in real terms yet did not add a single point to the reading scores of their eighth graders and still could lift only one-third of their eighth graders to at least a “proficient” level in reading.  The results for maths and science were similar.

This reflects national experience in the United States.  It would be interesting to see a similar analysis for New Zealand.

FRIDAY GRAPH: SEEKING VALUE FOR MONEY IN EDUCATION

Last week UK Secretary of State for Education Michael Gove championed the release of data showing how spending extra on schools doesn’t necessarily lead to better education outcomes.

As a Department of Education paper Improving Efficiency in Schools states, there is:

… a large variation in expenditure between the schools; ranging from just over £4,000 per pupil to over £5,000. That’s more than a £1 million difference in spending for a school with 1,000 pupils. And there are significant savings to be made, even if a school moderately reduced its expenditure. If the higher spending school illustrated in the graph (at position 90) came down to the level of the lower spending school (at position 70), they’d save £331 per pupil, or £289,294 overall (they had 874 pupils last year). 

Click to enlarge

If we look at these schools’ attainment, it is clear there is no direct link between higher spending and higher attainment. The following graph shows the same 100 schools, but also plots their exam performance (shown by the blue dots). If there was a direct link between the amount the schools spent per pupil and their performance, you would expect the blue dots to form a line following the red dots, but in fact there is no such pattern.

 

This research confirms the results of other studies and suggests the education debate should be refocused on making the system more efficient (eg through introducing greater parental choice and competition between schools, as Gove is promoting in the United kingdom), not on how much is spent.

Teachers deserve better

This year New Zealand parents and the public at large have been witness to a number of unseemly events in education as teachers, the trusted educators of our children people who should be held in high esteem by society, have hit the headlines for all the wrong reasons.

Broadly, the situation has arisen from two issues:

• Teachers’ objection to national standards – a system designed to help parents understand their children’s educational progress, and which is official government policy (remember teachers are public servants).
• Teachers demanding, and striking for, higher salaries that are completely disproportionate to other sectors, having regard also to their recent pay rises – especially in the wake of the GFC.

Of course, not all teachers are implicated, but this is the danger with a highly unionised profession – the few acting on behalf of the many spread the opprobrium around.

Here are some examples of how this is playing out in the media:

• A Dominion Post editorial slammed teachers with the headline ‘Get back to work greedy teachers’.
  
• Blogger Whaleoil was leaked documents which show that the national standards boycott campaign is paid for by the principals’ associations – which are ultimately funded by the government and the taxpayer.
  
• The Dominion Post reports a group of insurgent principals contrived to “quietly take over” a school trustees association representing 90% of school boards in a bid to silence parents who support measuring their children’s performance through national standards.
• A principal compared the Minister of Education to Hitler.

Unfortunately, this has all reflected very badly on teachers.

Meanwhile, two interesting international reports have been published. Both show that teacher effectiveness is far more important than class size (another major teacher union issue here).

In a media release announcing the launch of the Grattan Institute’s Investing in Our Teachers, Investing in Our Economy, the author Dr Ben Jensen said:

Measures to improve teacher effectiveness will deliver better value for our children’s learning outcomes, improve Australia’s economic productivity and be a better use of public funds than reducing class sizes.

Improving teacher effectiveness benefits our children. Young people who stay in school longer can expect to earn an additional 8-10% per year for each additional year of education they undertake. A 10% improvement in teacher effectiveness would improve student performance and productivity, increasing Australia’s GDP by $90 billion by 2050.  

Another report by British think tank Reform echoes the need to focus on teacher performance:

The new Government wants to improve the quality of teaching. In July 2010, the Education Secretary Michael Gove told the Education Select Committee: “The single most important thing in education is improving the quality of the educational experience for each child by investing in higher-quality teaching … There is simply no way of generating educational improvement more effectively than by having the best qualified, most highly motivated and most talented teachers in the classroom. Everything should be driven by that.”

This is absolutely the right focus.  Academic research suggests that the difference in a pupil’s achievement between a high-performing teacher and a low-performing one could be more than three GCSE grades. The Coalition is right to move on from the debate about class size, which has a much smaller impact on pupils’ achievement than teacher quality.

As reported by the NZPA, class size was one of the ‘pivotal demands’ that the PPTA have held strikes over, yet both these studies indicate that teacher quality is far more important.

However, in New Zealand we don’t even measure teacher quality in any serious way – and quality teachers aren’t rewarded properly.

The answer is improved pay arrangements for teachers so as to reward performance.

Coincidentally, my attention was recently drawn to a post on Red Alert some time ago by MP Kelvin Davis titled Performance Pay for Teachers. He writes:

Roger Kerr made the comment, “How hard can it be? Surely schools aren’t that complex?”

I’m interested in the performance pay model Roger has in mind.

Well, it’s very straightforward – see this article of mine titled Teachers Should Be Rewarded for Performance that appeared in the Otago Daily Times. Essentially I argue that performance should be evaluated not by simplistic metrics (like test results) but by the kind of evaluation processes used in most other walks of life, especially other professions.

Teaching is an honourable calling. Unfortunately unions, and rogue individuals and groups, are besmirching the profession in New Zealand. They would do better to be more reasonable with their salary demands, accept national standards as official government policy (while continuing to debate their application), and open their minds to being paid according to their performance – like almost all other professions. It is in their interests. 

Let’s hope New Zealand policy makers take note of some of the recommendations in these two useful reports.

The full Grattan Institute report is here

The full Reform report is here

Going beyond national standards

Last year I wrote this article, ‘Two Cheers for National Standards’ (Otago Daily Times, 17 July 2009).

I supported the government’s move to introduce standards for literacy and numeracy at primary and intermediate schools, saying:

Such a move is long overdue.  In 1998, the Education Forum, comprising educationists and business sector representatives, published a report Policy Directions for Assessment at the Primary School Level, authored by Professor Alan Smithers, a distinguished British education adviser.

The Forum stated that “it is strongly in favour of national assessment in primary schools.  It fully recognises that accurate information and feedback have a major part to play in improving education performance.”

In effect, the state school system is an enormous government monopoly (which would benefit from competition).   We can’t expect it to perform well without objective performance data.

The article went on to talk about ‘league tables’, judging schools as opposed to students, the flawed outcomes-based curriculum, and the problem of consistent assessment of standards.

I concluded by saying:

Finally, standards are no silver bullet for upgrading education.

Perhaps the most important reform would be moves towards greater parental choice and competition in the system, and greater school autonomy.

Teacher quality (including teacher training, professional development and certification) is also vital, as is how better teachers are rewarded and under-performing teachers dealt with.

But the government’s national standards initiative deserves two cheers.

A recent video from the Cato Institute in Washington helped extend my thinking (the section I’m referring to starts from 5 minutes 30 seconds into the clip).

It was a talk on national education standards by former high school teacher Rep. Rob Bishop (the section I’m referring to starts from about 5 minutes 30 seconds into the clip).

He began by talking about the endless series of education initiatives aimed at dealing with America’s under-performing public schools – the War on Poverty, A Nation at Risk, No Child Left Behind, and now the Obama administration’s Race to the Top.

As with so many fads and fashions in education, none has worked, or worked well.  As Bishop says, the most common reaction of any public school teacher is to think, “This too shall pass”.

He goes on to emphasise the limitations of standards and testing: “education is a subjective area, it is not an objective area.”  Moreover:

You cannot define a good school, you cannot define a good teacher, you cannot define a good education, but you know when you see it.  And as long as parents are satisfied, that ought to be the concept.

Bishop comes down on the side of parental choice – giving parents the freedom to decide where they want to send their children and rewarding schools and teachers accordingly.

He recounts a familiar objection to school choice raised by a state legislator in Georgia:

He said this idea of empowering parents may work but it won’t work in my district because the parents are too dumb.  I thought, but I did not have the guts to say, ‘they elected you didn’t they?’  I am totally opposed to that premise.  Parents are not too dumb.  Parents do care about their kids.  And even if you accepted the premise that parents are too dumb to make these decisions, the state is a poor replacement for the parent.

As far as I’m concerned those are killer arguments.

Going beyond national standards and introducing school choice – funding schools at the different levels (primary, intermediate, secondary) on the same basis according to enrolments – is the next logical education reform.  Two reports by an Inter-Party Working Group released early this year advocated such a move.

It’s not much use parents learning that their children are not achieving national standards if all they can do about it is complain to the school or stand for the board of trustees.

The real way to empower them is to provide them with the option of ‘exit’ as well as ‘voice’: to send their child to another school.  Isn’t that the option people as consumers have in practically every other area of their life?

Teacher sacked for telling the truth

A British deputy principal has been sent home after she ‘exposed shocking failures in Britain’s broken school system’. I saw the clip (below) of Katherine Birbalsingh’s rousing speech and was impressed by her forthrightness and honesty.

The Daily Mail reports:

Katharine Birbalsingh won a standing ovation at the Conservative Party conference after she delivered a damning indictment of ‘utterly chaotic’ state schools.

But she was sent home from her school in Camberwell, South London, after her speech, and has now lost her job as a deputy head teacher at the inner city academy. 

Defiant Miss Birbalsingh, 37, insisted she did not regret her strongly worded attack, in which she said teachers were ‘blinded by leftist ideology’ and refused to admit they were failing children.

She said she was surprised by the response to the speech but added: ‘I don’t regret it, it had to be said. I’m pleased I did it. ‘It was never about me; it was about a school system that is fundamentally broken. I want people to take notice of what I’ve said and demand change.’

Teachers and students in New Zealand also suffer from the problems of a state-dominated system. Greater school choice and autonomy are badly needed including with employment arrangements. Good teachers are tarred with the PPTA’s brush over excessive wage demands, and held back by their collective refusal to contemplate performance-based pay. It would be nice to hear some speak out in a similar vein.

Here’s Katherine’s speech (hat tip: Steve Blizard):

The universe of the resistant is getting smaller

On reading the announcement that Cuba, long mired in the gloom of communism, is finally taking steps to free up its economy, I was struck by several aspects of the news pertaining to New Zealand.

 1. Even Cuba is moving toward privatisation

 The Herald Tribune reported:

To soften the blow, it said the government would increase private-sector job opportunities, including allowing more Cubans to become self-employed, forming cooperatives run by employees rather than government administrators and increasing private control of state land, businesses and infrastructure through long-term leases.

A few years ago the World Bank observed: “Privatisation is now so widespread that it is hard to find countries not using the approach: North Korea, Cuba and perhaps Myanmar make up the shrunken universe of the resistant.”

Clearly the World Bank hadn’t noticed New Zealand. Indeed in recent years we’ve gone in the opposite direction with the buy-back of Air New Zealand and the railways and ferries, the establishment of Kiwibank, the renationalisation of ACC, and the Auckland Regional Council’s reversal of the part-privatisation of Ports of Auckland.

As even Cuba moves towards privatisation, why are we waiting? North Korea and Myanmar are dubious company.

2. Even Cuba’s state employees will be paid according to their performance

Instead, Cubans will soon be “paid according to results,” it said, though few details were provided. Castro has said repeatedly he sought to reform the pay system to hold workers accountable for their production, but the changes have been slow in coming.

Teacher unions in New Zealand are loudly demanding a 4% pay rise across the board, and strongly opposed to performance-based pay. Why should bad teachers be paid the same as great teachers?

Unions claim New Zealand teachers are poorly paid in comparison to their counterparts in other OECD countries but David Farrar has correctly made the point that all New Zealanders are poorly paid in comparison to other OECD countries. The solution is increasing productivity, and our overall economic performance, so that all New Zealanders will be better off. 

Yesterday’s HoS editorial had some enlightening figures about teacher salaries:

The plain fact is that the average secondary teacher salary is now more than $71,000 or $1365 a week. It has risen since 2000 by more than 45 per cent – almost twice as fast as wages in the public sector as a whole (24 per cent) and the private sector (25.3 per cent).

As the rest of New Zealand belt-tightens, to use the phrase du jour, what gives teachers the right to demand a pay increase when they refuse to be held accountable for their performance? Of course good teachers should be paid well, but rewarding poor performance is ridiculous – even in Cuba.