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  • Robert MacCulloch

I wrote an article on education for the National Business Review today, which you can read at the link below, or underneath if you prefer:

National Party leader Judith Collins has released a “Tech 2030” plan. She believes it would help make our tech sector “bigger than our dairy sector in 10 to 15 years”. It’s hard to imagine a more unrealistic goal. Why? First, the OECD note that our school children’s long term change in maths performance … shows one of the strongest decreases amongst [the 38] participating countries”, maths being the foundational subject of the technology age. Second, none of our universities are close to being in the world’s top 50, according to the QS Rankings. Australia has five. Singapore has two, at 11th and 12th places, and its’ population of 5.9 million is not too different from ours. As a result, our best students are now leaving the country straight after finishing school to study abroad. NZ isn’t retaining talent.

Faced with a skill shortage and sluggish productivity growth, the government has hit upon a formula to “solve” the problem. A decision has been made to curtail low-skilled migrants and go searching abroad for people who are wealthy or have special expertise, especially related to technology. The precise shape of the new policy is still being fleshed out, with the help of the Productivity Commission.

Sure, a window did open up in 2020 to attract top talent from abroad at the height of the pandemic, but that opportunity has gone. Last year the flagship government economic initiative was the wage subsidy scheme. Our universities did not qualify. There have now been mass redundancies of teachers across the sector, coinciding with the precise time when re-training and upskilling should have been the focus.

The shift in immigration policy to limit overall numbers and favour higher skilled applicants was defended on the grounds that NZ’s population has been increasing too fast, putting pressure on infrastructure. The other underlying reason was carefully swept under the carpet. Kiwi education isn’t cutting the mustard. Are locals on the way to doing more unskilled jobs and foreigners the skilled ones? Probably. Whatever one’s views on immigration, the upcoming changes have at least partly been forced upon us by the failure to properly educate our youngsters.

When did it start going wrong? When specialized school maths teachers were not paid the necessary premium to reflect their scarcity. And when universities were told by the Key government to raise cash from overseas students, rather than look to the government to help them build up their capability to do excellent teaching and research. In 2012, the former Vice Chancellor of the University of Auckland, Stuart McCutcheon, wrote an article in the NZ Herald arguing that such a policy put the institution at risk of “events such as epidemics interrupting the flow of international students”. Such a suggestion was no doubt met with belly-aching laughter from the National Party cabinet. Scare-mongering nonsense … was it?

And when McCutcheon wrote “If we really want a top quality university in this country then we have to be prepared to invest in it”, he was dead right. Labour has deepened the mistake, by restricting vital support when it was most needed.

This happens at a time when it has become better understood that a large chunk of inequality is due to a race between education and technology. Demand has shifted in favour of educated workers. In nations and times when governments invested heavily in schools and well-regarded public colleges, like the University of California system at campuses like Berkeley, a powerful engine of economic mobility was started. However, the US experience these past decades has shown that when investment in quality higher education stalls, lagging behind what is needed to keep up with technological advancement, inequality hugely rises.

Whilst university graduates, on average, receive a big pay premium compared to non-graduates, the return to low quality degrees is very small. In many countries, there has been a proliferation of poorly taught, ambiguous programmes which have resulted in students getting thrown into debt and wasting years of their lives. The problem has been exacerbated by growing populations which have caused crowding in classes. In such cases, apprenticeships and practical training are better choices. Programme quality has become crucial in the sector.

Although there’s much folklore about how many of the world’s most successful people haven’t been to university, it’s not true as a general rule. A clear majority of the richest people in the US have high quality College degrees. Although Bill Gates and Mark Zuckerberg were Harvard drop-outs, the world’s richest man, Jeff Bezos, and his former wife, the world’s third richest woman, MacKenzie Scott, both graduated from Princeton, him in engineering and her in English. Whilst Kiwi Nick Mowbray dropped his studies to start Zuru, the late Michael Erceg was a top Auckland University maths student who did a PhD at Stanford before his billion dollar liquor success. Graeme Hart became a tow-truck driver after leaving school, though did end up doing an MBA. Rocket Lab founder, Peter Beck, didn’t attend university, but is more an advertisement for quality training programmes in the sense that he was a tool-making apprentice at Fisher and Paykel and later worked at Industrial Research Limited, which was a Crown Institute.

All told, had National and Labour been working on fixing the declining state of school maths teaching and shooting at least one of our universities into the top tier, we would most likely be on a sustainable path to both higher productivity and lower inequality. The last budget, which increased benefits, as well as the signalled changes to immigration, address symptoms rather than the cause of our economy’s weaknesses.

  • Robert MacCulloch

We're at a cross-roads. The deepest thinkers and strategists in the United Kingdom have come to a stark conclusion that was expressed today in the lead article on the front page of The Times by the new Health Secretary:

Sajid Javid told MPs this afternoon that he views July 19 as the “end of the line” for

lockdown restrictions as he said the nation must learn to live with coronavirus.

NZ and Australia, by contrast, are still pursuing an elimination strategy. The two approaches are polar opposites. Meanwhile, the British Press, and others, have begun to savage the Australian approach. The Guardian reports:

The outbreak has renewed questions about Australia’s stuttering vaccination

programme and limited quarantine facilities, both of which are responsibilities of the

federal government ... Australia has one of the lowest vaccination rates of any

developed country, with less than 5% of the population fully vaccinated, and it has only

one dedicated quarantine facility, using hotels for other returned citizens.

Similar observations apply to NZ. How's this going to end? Something has to give.




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Robert MacCulloch