How to make a problem worse by spending money

Dr Michael Johnston
Insights Newsletter
11 November, 2022

Spending money does not, on its own, fix problems. It matters how that money is spent.

Perhaps you think that is obvious. Unfortunately, it doesn’t seem so obvious to the government.

Last weekend, the Prime Minister announced an additional $189 million for early childhood education (ECE). The money will be spent on subsidies for families.

At least some of the subsidy will be offsetting the effects of inflation. At the same time as inflation has been pushing people into higher tax brackets, it’s also been pushing people out of eligibility for ECE subsidies.

So, an inflation adjustment makes sense. But there is an underlying problem. The sector simply does not have enough teachers.

There has been widespread commentary from the leaders of ECE bodies on the urgent need to address teacher supply.

Without more teachers, the new funding, even if it’s just offsetting the effects of inflation, will increase pressure on an already strained ECE sector. That will mean longer waiting lists and reductions in quality.

There are ways that a portion of the $189 million could have been spent to increase teacher supply.

The preferred approach of the ECE sector is to increase ECE teachers’ salaries to match those of kindergarten teachers. There is a strong case for doing that, but it won’t be enough on its own.

We could and should train more ECE teachers. That solution will have a lag time, however, and there’s no guarantee that enough people will be interested.

We might also wonder whether 50% of ECE teachers really need to be qualified. But that is a topic for another day.

A third approach would be to make it far easier for ECE centres to recruit internationally.

When an ECE centre advertises a teaching position at present, most applicants are international. Unfortunately, the process of recruiting them is bureaucratic, expensive and time consuming.

First, international applicants must apply for their qualifications to be assessed by NZQA, at a cost of $445. Then they must apply to the Teaching Council for registration. Only then can they apply for a visa.

ECE centres can’t wait for all that to happen. They need teachers now.

We should trust ECE centres to make pragmatic recruitment decisions and release them from red tape. This approach wouldn’t even cost anything. In fact, it would likely save money.

Sometimes the best solution to a problem is also the cheapest.

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