Center on International Education Benchmarking

New Zealand was among CIEB’s Top Performing Countries for 2009. This profile has been archived and is no longer being updated.

On Friday, 30 September, 1989, the staff of the New Zealand Department of Education was ushered out the door, the agency died and another, much smaller, Ministry of Education was created to replace the old, discredited Department.  But that was perhaps the least important of the changes that were ushered in that day.   Changes in the national education system were made that were more sweeping, went deeper, and were more fundamental and more sudden than any other on a national scale that we know of in any advanced industrial country at any time before or since.  All this was begun under the aegis of a Labor government without consulting their long-time allies, the educators’ unions, in a mood of utter determination as a matter of high political priority.

One might guess that these stunning changes were made in response to the utter failure of the national education system, but that was not the case.  New Zealand’s education system had a good reputation among international observers and was well regarded by New Zealanders.  The revolution in education policy came about as part of a much broader response to economic catastrophe.

This small, remote outpost of the European world had long had a surprisingly strong economy. By the end of 19th century, in fact, New Zealand had one of the strongest economies in the world, with per capita income exceeding that of the United States as the century turned.  Its great wealth was a result of its access to British capital  and its privileged trade relationship with the mother country as a supplier of raw materials, mainly wool for the thriving Yorkshire mills and frozen meat products for the British lower classes. Demand was strong, labor was scarce and wages were high.

But, as the new century progressed, things turned out badly for the Kiwis.  The largest industrial countries raised trade barriers to protect domestic producers of the things New Zealand was selling, and the special trade relationship with Britain collapsed when Britain joined the Common Market.  When the oil shocks of the late 80s produced rapidly rising inflation and unemployment, the Muldoon government enacted a wage and price freeze, and made very large investments in basic industries in an effort to insulate the economy from the rest of the world.  The results turned a recession into economic disaster.

In 1984, the new Lange labor government took a 180-degree turn, deregulating everything it could and putting in place measures that substituted market forces for government wherever possible.  It did this with conviction, speed and thoroughness.

Lange had himself been education minister in a previous government.  That experience had convinced him that the Department of Education was a prime example of a bloated bureaucracy—out of touch with the parents and communities it was supposed to serve and, at the same time, micromanaging the schools to an extent he and many others regarded as ridiculous.  He was convinced that it would be impossible for New Zealand to regain the economic status it had had a hundred years earlier unless it changed all that.  Lange turned to a highly regarded industrialist named Picot to run a task force that would come back with a plan.

Helen Ladd and Ted Fiske, in their book When Schools Compete, describe  the intellectual sources of the reforms that bubbled up in this period as follows. The Prime Minister and the Chairman of his task force were determined, as noted above, to return control of the schools to the communities they were meant to serve.  From this standpoint, the core of the reforms had to do with governance, and making sure that the schools were governed and led locally, not from Wellington.  The theory here was that parents wanted the best for their children and, if they were in charge, they would make sure that their schools were the best they could be.

While Picot was very much of this view, he was also much taken with so-called “tight-loose-tight” modern management theory, holding that good management requires top management to be very clear about the desired outcomes, giving front-line management the latitude to determine how to attain those outcomes and the right incentives to achieve them, and then holding front-line management accountable for achieving the specified goals.  The assumption driving this view was that good schools were the result of competent management, and, conversely, poor student achievement was the result of poor management.  That being so, the job of government was to make sure that schools were properly managed.

The leaders in Treasury however, who were directing the new reforms across the whole range of governmental functions, were driven by another conceptual framework, coming from the University of Chicago in the United States. They thought the reforms were about replacing the heavy hand of government with the invisible hand of the market.  The theory here was that the schools policy had been captured by the school professionals for their own benefit and, in the process had become inefficient and ineffective.  The way to fix that was to substitute the disciplines of the market for the heavy-handed bureaucracy; that would stop provider-capture in its tracks and make the schools far more efficient and effective than ever before.

Picot and the Prime Minister were, from the beginning, unwavering in their view that the government must have an important role in primary and secondary education.  The teachers and the unions, however, believed that the powers-that-be in Treasury were determined to get government out of any operational role in primary and secondary education, and to greatly reduce, if not eliminate, government’s role in funding education as well.

The Picot task force proposed the elimination of  the Department of Education and to replace it with a new, much smaller, Ministry of Education.  It also proposed two new national bodies that would have provided strong public input into national policy as a moderating influence on the advice given by the new Ministry, but the government did not incorporate that part of the Picot proposals in its own plan.  The new Ministry was to have no operational role, in primary and secondary education, but was to make policy and to distribute the funds for education to the schools.  The regional offices of the old Department were also eliminated, leaving only the schools and the national government, with no intermediary operational levels in the system.  Support functions that were previously played by district offices were transferred to commercial enterprises from which the schools purchased services.  Each school was to have its own school board, to be elected from and by the parents of the students in the school.  The board was to choose its own principal, who was to choose his own faculty.  The Picot task force proposed that each board and principal have complete, unfettered control over their budget, which was to be deposited into a local bank account for them to use as they wished.  But the unions were adamantly opposed, on the grounds that local boards would get rid of more expensive experienced teachers and hire cheaper inexperienced ones, and that boards would be inclined to get rid of teachers generally, in favor of other less expensive items in the budget.  The government compromised on this, making it voluntary for local boards to adopt “bulk funding.”  Teachers continued to be licensed and paid by the national government, according to pay scales negotiated nationally with the teachers unions.  Accountability was to be provided by an Education Review Office, which was to audit the schools’ finances and report to the public on the degree to which the schools and their boards were properly implementing the new policies and management systems.  Although the schools were expected to assess the progress of the students, there was no provision for national testing of all students at any level of the system, and so no way to hold the schools accountable against a common measure of student performance.  The whole plan, as passed, was titled “Tomorrow’s Schools.”  That program – amended  many times, but very recognizable as descended from the original – is still very much in place in New Zealand today.

When the National Party replaced the Labor Party at the next election in 1990, the emphasis shifted from the Labor government’s focus on moving the center of gravity of governance from the national level to the school level, to, instead, Treasury’s emphasis on the use of market mechanisms to make education more efficient and effective.

In the early years, government focused its energies mainly on getting the main elements of the system in place and operational.  As the system evolved, the primary focus of the Education Review Office shifted from financial accountability to operational accountability.  Given the management theory driving the reforms, they concentrated on making sure that their inspectors looked hard at whether the attributes of a sound management system were in place.  These attributes were quickly converted to checklists and formulas.  Schools that had successfully survived the inspections sold their prep kits to schools that were preparing for their own inspections and the whole procedure became, over time, rather formulaic.

The teachers unions, fearing that bulk funding would be the entering wedge of some National government’s agenda to destroy the entire public education system by voucherizing it, brought all the pressure they could on school boards and principals to forego the option to adopt bulk funding for their schools.  Although many good schools with strong boards succeeded in using bulk funding to greatly strengthen their schools and improve student performance, the unions succeeded eventually in curtailing bulk funding of schools altogether.

After more than two decades of Tomorrow’s Schools, observers divide New Zealand’s schools into three groups:  There were those, generally serving the financially better off and better educated, that were able to use the new flexibility and authority given them by the reforms to considerably strengthen their schools and improve student performance.  There were those, generally serving low-income communities with parents who had less education and fewer professional skills, that found it much harder to govern themselves well under the new regime, due largely to difficulties in recruiting good, experienced teachers, capable principals and engaged parents.  And the third group, in between, for which the reforms did not make much difference.  The evidence suggests that the first group improved in performance, the second stayed about the same, and the third slipped significantly, relative to the others.

The theory embraced by Treasury held that given the ability of parents to freely choose their schools, the good schools would gain more students and the bad ones would lose them, eventually closing altogether, thus raising the quality of education for all students.  But it did not work out that way.   The principals and boards of the best schools had no incentive to expand.  Poor families could not afford to transport their children to the high-income enclaves where the best schools were located.  Because schools were allowed to charge fees to families for most extra-curricular activities, and the best schools did a lot of this, the poorer families were also reluctant to send their children to these schools because they would be treated as second-class citizens there.  But the most ambitious families in the poorer areas were more likely to send their children to the better schools when slots were available, leaving the schools in the poorer areas in even worse shape, making it even harder for them to attract decent teachers, and so on.

One might be able to justify these increasing disparities if all boats were being lifted, but that turned out not to be the case. An analysis of the Progressive Achievement Tests in reading comprehension and mathematics from 1968 to 1990 found no change in mean. Since then, there has been “extraordinary stability” in New Zealand scores on all the international assessments, including TIMSS, IEA science, IEA reading literacy and in New Zealand’s now-defunct national assessments.  With the exception of the PISA science scores, student performance in all measured years and across all the measured subjects either held steady or declined over the whole period from 1995 to the present.  That would strongly suggest that Tomorrow’s Schools has not resulted in improving student performance overall and may have lowered it, but it has, in any case, resulted in greater inequality of student performance, raising it for the children of some better-off families and lowering it for the least well off.

Nonetheless, this nation of 4.3 million inhabitants places among the top ten countries in student achievement overall as measured by PISA.  If that is not due to the implementation of Tomorrow’s Schools, then what does account for this sterling performance?

First, New Zealand’s income distribution is among the most equal among all the OECD countries.  There is a reasonably strong correlation between income equality and national education performance among the industrial democracies. This is hardly surprising, since children in poverty tend to have parents who have little education themselves, fewer books at home, less parental supervision, more health problems, less peer support for learning, and so on.

But New Zealand children not only enjoy less poverty than children elsewhere.  They live in a country that makes a special effort to take care of its families with young children as a matter of policy.  New Zealand was among the first countries in the world to develop a national welfare system.  It began in 1898 with the Old Age Pensions Act and continued with the development of a full social security system in 1938, which provided, among other things, for a universal free health care system.  Today, New Zealand’s family benefits system is among the most generous in the OECD.  The country ranks 8 among 39 countries in percent of GDP devoted to family benefits, defined as child-related cash transfers, support payments for families with children, income support for single parents, public spending for families with children and public spending on family services, as well as support provided to families with children through the tax system.  Over 90% of three- and four-year olds in New Zealand participate in early childhood education and day care, compared to the OECD average of just over 70%.  That may be because the New Zealand government pays for over 90% of that care and education, compared to the OECD average of 80%.  New Zealand ranks number six in the OECD with regard to the number of three-to-six-year-olds in early childhood education.  That is about 90% of three-to-six-year-olds, as opposed to the OECD average of 60%. Clearly, when we combine the effect of New Zealand’s relatively flat distribution of income with the government’s efforts to support families with young children, New Zealand children begin school well ahead of their peers in most developed countries, to say nothing of those in less developed countries.

New Zealand has long had a very strong national curriculum and qualifications framework.  For a long time, this system was closely modeled on its English equivalent, but implemented in a much more egalitarian context.  At the end of fifth form in high school, students sat for their School Certificate Examination.  Most studied five subjects; the best five results counted. Those who failed either repeated the grade or left school to go to work.  Those who passed, a relatively small number, went on to the next year, at the end of which the students sat for the University Entrance examinations.  Students who failed these would go off to the local bank or to a teachers college.  Those who succeeded could stay in school for another year to take the University Bursaries A or B examinations.  The examinations were locally scored by the schools’ teachers and then moderated to make sure that the standards were the same across the country.  The exams were demanding, requiring a lot of writing, and, at the upper levels, writing of high quality, requiring strong analysis and synthesis skills.  The entire system was norm-referenced, comparing students with one another, and limiting the proportion of students who could get high grades.

When the National Party took over in the early 1990s, it introduced, amid much controversy, the National Certificate of Educational Achievement (NCEA).  The norm-referenced system just described was replaced by a standards-based system in which the pass points on the exams were set to fixed standards of achievement prior to the administration of the exam, and the schools were meant to get as many students as possible to the standards rather than simply sort students out against a fixed distribution of scores.

At about the same time, New Zealand created the New Zealand Qualifications Authority, a body separate from any ministry, with authority unrivalled anywhere else in the world to create a comprehensive Qualifications Framework, extending from basic high school leaving qualifications all the way through university doctorates and advanced technical qualifications, all within a single harmonized framework embracing the whole range of academic and vocational qualifications.  The National Certificate of Educational Achievement is nested into this framework and serves as its foundation.


New Zealand13 Data

Source: CIA World Factbook (September 2013)
and <em>OECD Education at a Glance 2013</em>


PISA 2012 Mean Scores by Country for Reading, Mathematics, and Science

PISA 2009 Mean Scores by Country for Reading, Mathematics, and Science

Source: OECD

New Zealand’s Education System at a Glance

Both employers and higher education institutions recognize these qualifications.  Education and training institutions are authorized to provide them.  Students seek them with the confidence that, once achieved, they will be honored by employers and other educational and training institutions.  New Zealand has made a massive investment in this system, not least in the development of high quality assessments for the full range of qualifications.  There is every reason to believe that this system of qualifications, built as it was on a solid prior foundation of high quality standards and assessments, has a powerful and positive influence on quality of instruction in New Zealand high schools and the incentives of students to take tough courses and work hard in school, no matter what they plan to do with their lives.

At the primary level, New Zealand’s has done world-class work in the field of reading instruction, combined with its generally high level of investment in young children, has paid off handsomely.  The internationally recognized work of Marie Clay, known as Reading Recovery, helps teachers identify the students in grade one who are having the greatest difficulty learning to read and write, and provides their teachers with the skills needed to effectively address their students’ problems using tutoring techniques.  Attending both to phonemic awareness and reading comprehension, it has greatly influenced the teaching of reading and writing not only to the students with the greatest performance problems, but more broadly.  Given the high likelihood that students whose problems are not addressed at this stage will go on to experience ever more serious problems in school across the whole curriculum, this intervention in the lives of young children in New Zealand has in all probability had far reaching effects on the outcomes for children in that country.  Recently, though, there have been questions about whether the Reading Recovery strategy can help raise the overall literacy rate for all New Zealand school children.  New Zealand’s ranking in the OECD’s PIRLS has been stagnant since 2001.

In the 2008-09 school year, the Ministry began to develop a program that would update New Zealand’s national standards for literacy and numeracy with an accompanying national assessment. The central goal of this program is the early identification of struggling students so their problems can be addressed at the outset of their education career. Between years one (first grade) and eight, both educators and parents receive regular reports about students’ numeracy and literacy skills in relation to the national standards.  On the teaching side, in 2000 and 2004, respectively, the government introduced the Numeracy Development Project and the Literacy Development Project, which support the improvement of teacher content knowledge in these content areas; the Ministry of Education reports that these programs have thus far been highly successful in terms of literacy improvement, and have identified areas for improvement for teacher training in mathematics.

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