Is expenditure on Education a waste?

The New Zealand Treasury has said that less publicly funded education was an option to help the Government rein in spending and keep up education quality.

“Over the past 15 years, education spending has grown by an average 6.3% per year but an increase of more than 2.8% was not sustainable without further debt,” according to the Treasury’s recently released Long-Term Fiscal Statement.

The Statement, which looks at government spending over the next 40 years, suggested two options for reducing education spending without compromising student achievement and future workplace skills and productivity.

Option One: Improving the productivity of the education system by using limited funding more efficiently to achieve the same or better results.

Option Two: Reducing the quantity of publicly funded education services by shifting more of the cost of education services from the government to individual students and families, and targeting government support to those who would benefit most.

But the Treasury Statement said a mix of both option was essential.

“There is potential to make better use of limited resources while maintaining or improving education results by learning from international experiences, and drawing on the growing body of research about what makes a difference to student achievement,” it said.

However, productivity gains would be difficult to achieve where education providers’ inputs such as staffing, time, property and other resources were tightly regulated or continually increased in inflation-adjusted terms.

Greater productivity required more flexibility in these areas, as well as better performance incentives and institutional design.

A more targeted approach toward providing education could improve access and equity while reducing costs.

This might mean targeting early childhood education (ECE) subsidies, tertiary student support and tuition subsidies and possibly having higher subsidies for students who would complete their studies, the Treasury Statement said.

For example, while the untargeted 20 hours ECE policy had led to increased overall demand for places in early childhood centres, there was little evidence that the programme had improved access and outcomes for those who would benefit more over the long term.

-New Zealand Education Forum, Wellington