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Trevor Mallard To Economist Conference Group

Hon Trevor Mallard
11 August 2000 Speech Notes

Embargoed until:10.45am

Economists Conference

Thank you for the opportunity to be here today.

This year the government will be directly spending nearly $7 billion on education . We do not intend that this money goes down a black hole, but rather it provide a quality education for New Zealanders. In providing that quality education we should be:

 Looking to get value for each dollar we spend; and
 Investing for tomorrow.

Spending Well
We need to gain greater efficiency from the sector without sacrificing quality – in other words, get greater value for the dollar. We want a sharper capability in our education institutions with a focus on:

 Higher quality for better outcomes for students; and
 Reducing disparities in outcomes for different parts of the population.

This sharper focus was reflected in this year’s Budget, with initiatives focused on improving literacy, raising participation, and closing the gaps for Mäori and Pacific Island kids.

Demographic factors are slightly helpful. For example, over the next 15 years the under-five year old age group is expected to decline . This provides us with an opportunity to raise quality and participation rates in early-childhood education simultaneously without creating great pressures for new expenditure. At the same time, we need to ensure that resources move within the education system as the current peak in the student population moves through to secondary school. This is an approach I also plan to adopt with the current review of school staffing. I've asked for the recommendations to include a phased implementation plan that we can introduce over a period to complement both the economic and demographic situation of each particular year.

Policy settings also must change. We are promoting greater collaboration across the sectors. Having schools compete with each other for students, spending millions on marketing, blunts the capability within the sector and wastes valuable resources. It is inefficient and it doesn’t improve the overall quality and capability of the sector. Students have an absolute right to attend their local school and they expect a high-quality education, regardless of where they live. We can focus at the system-wide level about improving efficiency across both our school and tertiary networks. Questions we can ask include whether shared services can achieve economies of scale.

The long-term vision
This Government’s vision for New Zealand involves fostering education and training to enhance and improve the nation’s skills, so that all New Zealanders have the best possible future in a changing world. It is a vision similar to the first Labour government which based its approach unleashing the talent which until then was often unsupported. The country’s overall levels of knowledge and skill development will be at the heart of our long-term economic performance and social well being. Given the pressures on the sector from such forces as globalisation, technology and changing citizen expectations of government performance, significant progress will need to be made and sustained over time.

Central to the emerging information-based knowledge society is the growth of human capital. Both the quality and the nature of the skills that New Zealanders possess need to improve. Skill development starts in the earliest stages of life and continues through into adulthood.

The early years are important – good quality early-childhood education plays an important role in setting up the foundations for children's cognitive development, literacy and develops the social behaviours required for success in school. It's often been treated like the poor relation within the education portfolio. Indeed, when I made the decision to retain responsibility for the sector within my office, I was the first Minister of Education for more than a decade to do so. And in the last six or so years there have been five Ministers with responsibility for early childhood education. Yet early childhood education is one of the most complex policy areas I deal across my portfolio load. The most difficult is probably recognising the crossover between education and care - the intersection between education and labour market policy - as one contemplates the shape of the State's contribution towards the costs of early childhood provision.

To help guide the sector a national long-term early-childhood education strategic plan will be developed by a working group, which will be made up of stakeholders in early childhood education. The Strategic Plan will identify goals, prioritise policies and develop strategies for implementation of these policies for the next ten years. Our priority is to increase the quality of early childhood education for all New Zealand children and raise participation by Maori and Pacific peoples.

What happens in the classroom is critical to improving student learning. We are focusing on those things that the research says make the most difference in the classroom. We want to make sure that we spend the education money on the most effective areas. The research says that teaching quality is one of the most effective ways to improve learning .

The government is developing and implementing several strategies to help teachers be as effective as possible. Our commitment to improving student learning is being shown through initiatives such as the ICT Strategy, the literacy and numeracy strategy, an Education Council to develop and support the profession and the development of better classroom assessment tools.

The Education Amendment Bill No.1 has seen us promote the right for students to attend local schools and remove bulk funding. We have removed bulk funding to enable us to spread significantly more money among all schools and I am shortly to announce ways in which schools can retain the benefits of managing their staffing budgets more flexibly. All schools will have choices to sharpen their capability to improve student outcomes.

You would have heard yesterday from my associate Minister Steve Maharey about our plans for the tertiary sector so I won't focus on that for too long. But in this sector more than any other within education there is a need to move away from the die-hard competitive model promoted by the previous government to one that actually encourages institutions to complement each other and complement the labour market. Shared services and licensing courses rather than developing 30 similar versions.

Making the hard decisions
This government has a vision for this country that involves fostering education and training to enhance and improve the nation’s skills, so that all New Zealanders have the best possible future in a changing world. However, this must be tempered with the knowledge that we have limited resources. The greatest challenge for us is to make the best use of each education dollar to build quality schools and providers, raise achievement and reduce disparities.

State Services
It's a theme that traverses over to the second of my portfolios that I've been asked to discuss – state services.

We inherited a public service that had taken a bit of a battering. As a sector it was suffering from low morale and going through a bit of an identity crisis.

The role of public agencies is a difficult one. Because of the 'public ownership' they need to be more transparent and accountable than those in the private sector. And that transparency and accountability does not stop at financial matters. The public service is not like a business where there is, generally speaking, one bottom line – to make a profit for the owners.

The risk of failure extends to the risk of failing to meet the expectations of large sections of society.

Yet public administration has become dominated by a fragmentation into stand-alone administrative units and a contractualist output model for determining what those units do and how they get paid for what they do.

The desire to improve efficiency has created a certain imbalance – with financial competency taking too great a priority over other dimensions of competence – like capacity to develop and deliver services.

Some of the ongoing work to address these issues include:

 Tidying up the fragmentation within the public service, including a Crown Entities Bill which will make sense of an inconsistent set of arrangements. That bill will send a signal – that Crown entities are part of the State sector – and the Government's expectations as a result of that.

 Re-gearing the State Services Commission for a more assertive role at the centre - in values, and in anticipating what governments will need in future and how the State sector should adjust for that. The SSC will work closely with Treasury and DPMC to ensure a cohesive ‘corporate office’ approach from the centre. The obvious linking theme here is investing in our people for the future and ensuring that what we want to achieve in the economic development arena is lined up with what we are delivering in the education sector.

 Setting out clear expectations for what we want of the public service. In this area, I’ve already announced the establishment of a Standards Board.

 To build capacity within the state sector we are looking at both the capability of public agencies to reflect the communities they serve, and the capacity of the State sector to respond to anticipate and prepare for the demands of the Government and society in the medium and long-term.

Finally, I'd like to mention the Government’s Vision for Electronic Government also comes under the State Services Commission. This isn’t about investment in IT projects – it’s about how New Zealanders interact with government and participate in the democratic process using technology.

E-Government will make it easier for people to have their say; people will get better services from the government; people will be better informed and services will be better integrated.

All these positives won't mean anything if we do not address the digital divide. I am very conscious of ensuring that those people who don’t have access to technology – and those who do not want access to government by technology – receive the same level of service.

That's an area of work I am looking into from both and education and state services.

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