NZ Initiative – Bulk Funding Schools

By   /   July 15, 2017  /   28 Comments

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On 6 July, the  “NZ Initiative” – a re-branded right-wing think-tank previously known as the NZ Business Roundtable – released a propaganda-piece entitled, ‘Amplifying Excellence: Promoting Transparency, Professionalism and Support in Schools’. The so-called “report” advocated more sly “free market” forces unleashed onto our constantly-changing education system.

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On 6 July, the  “NZ Initiative” – a re-branded right-wing think-tank previously known as the NZ Business Roundtable – released a propaganda-piece entitled, ‘Amplifying Excellence: Promoting Transparency, Professionalism and Support in Schools‘. The so-called “report” advocated more sly “free market” forces unleashed onto our constantly-changing education system.

The title of the  “report” sneakily implies our education system is not transparent; is un-professional; and our schools un-supported.

Amongst the several vague recommendations was this one;

True to New Zealand’s self-managed school landscape, the government largely lets school boards and principals get on with leading their schools. However, in other respects, school leaders can be hamstrung by bureaucratic restrictions; for example, the Ministry prescribes how school leaders should spend parts of their teaching resource budgets.

Recommendation 6: Effective leaders should be trusted as true professionals and granted total budget autonomy to lead their schools.

“Total budget autonomy” is code for bulk-funding – a favourite agenda from the New Right.

Bulk-funding had previously been introduced as part of National’s “Ruthenasia reforms” in the 1990s. It was done away with by the Labour-Alliance government in 2000.

In June last year, then-Education Minister Hekia Parata attempted to resurrect the corpse of Bulk Funding under a new guise, “Global Funding“;

The change would set a “global budget” for each school, delivered as cash instalments for school expenses, and a credit system for salaries.

According to the documents, this would mean:

• Principals would determine the split between cash and credit, with the flexibility to make adjustments during the year.

• Unspent credit would be paid out at the end of the year and a process for recovering credit overspends would be established.

• Teaching staff salaries would be charged against the “credit” portion at an average rate.

• Non-teaching staff salaries would be charged against the “credit” portion at actual cost.

The global budget system would not be the same as the controversial bulk funding of teacher salaries that sparked protests 20 years ago, the proposal said. The documents said: “This is a significant difference from historical bulk funding proposals which would have seen schools charged the actual salary.”

The reaction was predictable, and Post Primary Teachers’ Association (PPTA) president, Angela Roberts, spoke for many when she warned;

“It is bulk funding. It is minor technicalities that make it something different, and I think it’s very cynical of the ministry to think that they can con people with a change in language.”

The schools get to decide how they spend that, how many teachers they purchase effectively and how many teacher aides. So schools will be incentivised through the averaging out to have cheaper teachers or fewer teachers because they can cash that money up.

Bulk funding was resoundingly rejected by the community 20 years ago because everybody understood the cost would be borne by the school when the government couldn’t be bothered putting more money into the system.”

Opposition to Parata’s Bulk-Funding-In-Drag plan was met with heated opposition by parents, teachers, school principals. Donna Eden, a teacher with 20 years’ education experience explained why she was so vehemently opposed to “Global Funding”;

“Teachers really don’t like bulk funding, so much so that they have been out of the classrooms meeting and rallying. And they’re talking to anyone who will listen about how our kids will be worse off.

And they will.

Why? Well, it will mean bigger classes and fewer teachers. It will mean our kids have less time with their teacher because instead of sharing him or her with 15 other children there will be 30 or more classmates needing the attention of their kaiako. It will mean less support for the kids that need it. It will mean fewer teacher aides for fewer hours.

It will likely mean untrained teachers in the classroom because they will be cheaper to pay.

It will mean winners and losers, and that, my friends, is not okay. Every child deserves the best, all of them, all over our country.

It’s simply that schools will be given a lump sum of money. And from this lump sum they will pay teachers’ salaries (which are currently centrally funded, meaning they don’t cost schools) and for everything else (think the power, water, supplies, first aid supplies, the caretaker, the office staff , support staff like teacher aides, any class room resources…)

There will be a separate pool of money for maintenance – property repairs and the like.

Why is it bad news?

[…]

Firstly, because there is no new money. It’s just moving around the money that is already there. And it’s already not enough.

For the first time ever school operations grants, the cash that keeps schools running, have been frozen.

While costs rise, this budget won’t keep up. This means cuts to what schools can offer. It will start with trimming the extracurricular stuff. It won’t stop from there.

Hekia Parata is looking to remove the caps to class sizes and the guaranteed teacher funding this brings. It will mean that classes will get bigger – they will have to in order to stay within budget.

It’s like trying to do the grocery shopping with the usual budget when you have four extra people staying for the week. It just won’t stretch; something will have to give.

If it comes down to a choice between paying the power bill and paying a teacher, it is principals and boards of trustees that will have to decide who goes. What a horrible decision to have to make.”

On 18 November last year, Parata caved to mounting public pressure and announced that National would not proceed on it’s “Global Funding” policy;

“I have therefore recommended, and Cabinet has agreed, that the global budget proposal not proceed. The global budget was a mechanism for payment, not for determining the level of funding, so this decision will not affect the core purpose of the review.”

The successor to Ruth Richardson’s Bulk Funding, Parata’s “Global Funding”, was quietly returned to the Historical Rubbish Bin of Very Bad Ideas.

Barely a year later and the NZ Initiative/Business Roundtable has attempted to breathe life back into Bulk Funding/Global Funding. This time referring to the model as ‘Total Budget Autonomy‘. (No doubt  Crosky-Textor or some other tax-payer funded spin-doctor will come up with some new clever, shiny name.)

But it’s still a pig. Perhaps with a new shade of lipstick. But a pig still.

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The question is, why the Neo-libs keep beating the same drum?  Why keep trying to implement a policy that has been tried; failed; and almost no one wants.

More importantly, the evidence is that Donna Eden’s fears are well-based and grounded in reality.

New Zealand has had bulk-funding in another area of the State Sector – and it has proven to be a dismal failure;

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Analysing budget short-falls and DHB deficits two years ago, Fairfax journalist Stacy Kirk wrote;

Specifically, [Treasury]  documents say DHB underfunding will put pay increases for public sector health workers, including nurses and doctors, at risk.

Cost pressures mean DHBs have not been fully funded to cover wage increases for the 40,000 workers whose contracts are up for renegotiation shortly.

Ms Kirk reported Treasury officials as saying;

“The fiscal strategy presents some tough choices for Budget 2015, there are a number of fiscal pressures across the social sector, and Ministers will need to review options and trade-offs to determine an appropriate Budget package.”

The Treasury document that Ms Kirk quotes makes this observation on funding DHBs;

There are material cost pressures affecting the Ministry-managed NDE [non-
departmental expenditure] service lines that need to be managed as part of
this process. These cost pressures will include demographic demand growth,
wage and price inflation, and other factors. As for DHBs, it is unlikely that
these pressures can be fully funded, so we will be looking to the sector to
deliver substantial efficiencies. To maintain current levels of service
provision, it is likely that a reasonably large injection of new funding will
be needed – in addition to the $275 million already agreed for DHBs – or
Ministers will need to make choices on what services are to be altered or cut back.

Note this bit; “…cost pressures will include demographic demand growth, wage and price inflation, and other factors. As for DHBs, it is unlikely that these pressures can be fully funded, so we will be looking to the sector to deliver substantial efficiencies”.

Treasury’s admonition that “it is unlikely that these pressures can be fully funded” for DHBs is borne out by the number of Boards that are in deficit – and  worsening. A forecasted $58.7 million deficit has blown out to $89.9 million. Half of DHBs either in the red, or perilously close to it;

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In the case of Capital and Coast DHB – currently $28 million in deficit – it is noteworthy that there financial woes started in the mid-1990s;

In 1995-96 Capital Coast Health reported a deficit of $26m, which the following year grew to $70m. Chief financial officer Tony Hickmott said the $68m debt hole left by the construction of the regional hospital in 2008 had contributed to deficits for the past 10 years.

Increased demand for services, high labour costs, increased complexity of patients, and the increasing and ageing population had compounded the issue.

Building construction. Labour costs. Demand for services. Increased complexity. Increasing population. Each one of those factors can easily be translated into the education sector which also requires building upgrades or building entire new class-rooms; growing students rolls; increasing special-needs; and rising population due to National’s exploitation of migration to create the illusion of economic growth.

Now add Bulk Funding/Global Funding/’Total Budget Autonomy’ into the mix for schools.

How long would it be before schools found themselves in precisely the same precarious  financial woes that our DHBs are currently suffering?

As things currently stand, parents/guardians are having to dip more and more into their pockets to pay “school donations”, to make up for obvious shortfalls in the Vote Education budget;

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Of course, the National government still claims – without a hint of self-awareness of the Big Lie – that education is still free in New Zealand;

It’s free to go to a state school — but the school can ask for donations towards their running costs.

But at least one school – St Heliers – is unashamedly upfront in why school “donations” are necessary;

A donation is requested of parents to contribute towards the shortfall in funding from the Government.

Even with direct Ministry funding, schools are still having to make up a “shortfall in funding from the Government“. This dire situation has been compounded by National’s decision to freeze school operational funding this year;

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The above Herald story goes on to report;

The targeted approach means more than 1300 schools will get less money than they would have received, had that money been used for a general increase.

The difference ranges from a few hundred dollars up to $24,000.

About 816 schools will get more, and information on a further 242 schools is suppressed for privacy reasons because fewer than five students are at-risk.

Now imagine the funding constraints that  schools would have to deal with if Bulk Funding/Global Funding/’Total Budget Autonomy’ was re-introduced for their sector.

But we don’t have to imagine, do we? Because half the District Health Boards in this country have already shown us what would be in store for schools throughout the country.

Which is something that the  NZ Initiative/Business Roundtable seems to have studiously over-looked when they compiled their rubbish report, ‘Amplifying Excellence: Promoting Transparency, Professionalism and Support in Schools‘.

Never under-estimate the ability of the New Right to suggest policies that that been tried, tested, and failed. Just keep repeating the experiment over and over and over again.

One day the result will be different.

Of course it will. Just ask Albert Einstein.

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References

NBR:  Roundtable and NZ Institute morph into new libertarian think tank

NZ Initiative: Amplifying Excellence: Promoting Transparency, Professionalism and Support in Schools

Victoria University: The Bulk Funding of Teacher’s Salaries – A Case Study in Education Policy

NZ Herald:  New funding system for schools including a ‘global’ salary criticised

Radio NZ:  Teachers fear ‘bulk funding in new guise’

The Spinoff:  A teacher tells you what you need to know about bulk funding

Fairfax media:  Education Minister signals end of school bulk funding and decile systems

Fairfax media:  DHBs ‘considerably’ underfunded – and more deficits predicted

Treasury NZ: Treasury Budget 2015 Information Release Document July 2015

Fairfax media:  DHB deficits blowing to $90m. Health sector dying ‘by 1000 service cuts’ – Labour

Fairfax media:  Capital & Coast DHB’s debt hole deepens as boss admits 20 years of deficits

Fairfax media:  Parents prop up schools to tune of $250m

NZ Herald:  School costs – $40,000 for ‘free’ state education

NZ Herald: Parents fundraise $357m for ‘free’ schooling

NZ Herald: Parents paid $161m for children’s ‘free education

NZ Government: Education – school fees

NZ Herald: ‘At risk’ school funding revealed – with 1300 to lose out under new model

Other Blogs

Save our Schools:  Parata backs down on bulk funding plans

Chris Trotter: Morbid Symptoms – Neoliberalism’s Room for Manoeuvre Keeps Shrinking

Previous related blogposts

Can we afford to have “a chat on food in schools”?

Cutting taxes toward more user-pays – the Great Kiwi Con

The Legacy of a Dismantled Prime Minister

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28 Comments

  1. CLEANGREEN says:

    EDUCATION = NACTIONAL = CORPORATISATION.

    Is this “brighter future”??!@#$%^&*()_

    Good research Frank as they march us to complete total control of corporatism.

    NZ Inc’, – the final goal.

  2. savenz says:

    Great post. The short of it, is that the far right business and their conduit the National Party, ACT and The Maori party have not given up the idea to take people’s taxes, give it to a few people at the top of organisations like Schools and Hospitals with zero rules on spending and let them ‘sort it out using neoliberal and austerity principals’.

    Inevitably it will lead to chaos, more unequal schools and hospitals, unsafe schools and hospitals (think of Grenfell with social housing having intermediaries controlling the spending on their priorities not the tenants) lower wages of staff, and saving money through short changing the public, while demanding more “donations” or money scams from them (parking charges in hospitals).

    At the same time the National party has skyrocketed migration and working visas making sure there is much more pressure on public services, schools, hospitals, police, justice system, social welfare, state housing, superannuation.

    Apparently this is so we have a rock star economy, however if there is such a rock star economy due to migration, where are the increased taxes from the migrants and subsequent spending on public services?

    In fact we are going backwards, more government debt and less services with the National party Keystone politician yokels in charge. And then their passing of the buck, so that they can pretend the austerity budgets and rising costs are nothing to do with their policies.

    • Wensleydale says:

      But we do have a rock star economy. It’s just that the rock star is Ozzy Osborne — a doddering, drug-addled, vacant-eyed zombie who can barely string together a coherent sentence.

      (And I say that as a lifelong Black Sabbath/Ozzy Osborne fan.)

  3. Sam Sam says:

    The only way these kiddy touchers know how to make money is by interrupting the nourishment of students and suck on the tax payer tit first. Whole industries have sprung up around this narrative and these charlatan educators claim that you can make money if only you follow them down the trickle down road.

    • Interesting you say that, Sam.

      Whilst I have no objection to private educators putting up their shingle to set up a private school – it appears that so-called “free enterprise” which abhors state intervention in business activities, is only too happy to hold out the hands for tax-payer funding for Charter Schools.

      Without tax-payer subsidies, Charter Schools would simply not exist.

      The irony is that Charter Schools are a product of the ACT Party, which noisily opposes subsidies.

      Hypocrisy 101 in it’s most distilled, purest form.

      • Sam Sam says:

        And it’s pretty much Spottles, Compus and Serco that absorb the bulk of government contracts. Learning to navigate this politicool landscape is essential.

        • In Vino says:

          Excellent Post, excellent comments. Sad to say, the New (becoming geriatric now) Right still seem to have their fangs deep in the throat of NZ society. Despite their obvious deceit and failures.

      • mpledger says:

        In the US, charter schools took a bite out of the private education market, especially at the low end. So when charter school came into existence here the private school went crying to government and they got given a hand out too. Give, give, give to the rich and the corporations; take, take, take from the poor.

        • Sam Sam says:

          My gym membership is a type of charter school model. In my gym are professional advisors who obviously take there job seriously. So if I need advice on how to be overweight, Mrs Parata is the first person I’ll call. Why whole industries have sprun up around Act and National party policy I have no idea why. If you can afford professional advice there are a multitude of ways to do that. You don’t go to policy makers for that. You should go to professionals for that.

  4. Historian Pete says:

    What will never change is the greed of the wealthy to take an ever greater share of the resources for the exclusive use of their progeny. They already have an advantage with their private resources available for their local schools. But that is not enough. Hence the bulk funding in disguise.Between them and this greed for an ever greater unequal opportunity for education stands the teachers who see this resource grab for what it is.And of course there will be a gradual worsening of their pay and conditions. Incidently, St Heliers Primary was the third school I taught in in the distant past, the first and second being in Otara. Quite a contrast!

  5. Cassie says:

    Great work as always Frank.

    But instead of asking “WHY” they are still pushing it, you need to fast forward your mind, connect all the dots and quickly arrive at the correct conclusion:

    IT IS THEIR DELIBERATE INTENT TO DUMB DOWN EDUCATION.

    1) It’s part of a much larger agenda – complete control +dumbing down of future society.
    This phenomenon has not only been happening in NZ , but for much longer in America & UK & other countries.

    Here is the litmus test :

    Has literacy been improving , or declining over past decades?
    Ans= DECLINING. Kids have for years been leaving school with poor grammar skills, poor comprehension skills & spelling ability. It’s getting worse too. (So much so that now these young people need Apps to correct their spelling & grammar for them in the workplace!)
    What about basic maths skills needed for life? – Similar story. Many can’t even add up or subtract , multiply or divide simple sums without using a calculator.

    Schooling is a FAILURE.

    All the myriads of discussions about education in the media are just for muddying the waters, & make people believe “Govt” are concerned about improving schooling …-which they ARE NOT because the simple Truth (above) that schooling has been a failure for some decades now is ALWAYS
    BEING CAREFULLY IGNORED.

    These days kids learn all sorts of irrelevant useless material, most of which is SOCIAL ENGINEERING & just plain wrong (eg in “sex -ed”. How many parents know what they are “teaching” kids today, you’d be horrified!)

    Bulk funding is about Total control to ensure that schools do the bidding of these Communist/liberals who are ENGINEERING a future society of mindless robots that can’t think for themselves.

    Yes it is COMMUNISM. Don’t believe me?
    Have you heard of “core maths”? They are “screwing” with kids minds by teaching them that any answer is ok, as long as you show the steps by which you arrived at it. They are replacing simple logic with “convoluted” so that even parents are baffled & have no clue how to help their kids do sums.

    Here is even a video of a Chinese woman in America revealing that “Common core” is the SAME as in Communist China.!

    https://www.youtube.com/watch?v=ilaSvC9PGKk&t=1s

    Do some investigation into “common core”.

    Let me just say, also that “charter schools” is part of SAME agenda.
    Ditto “No child left behind” (the latter meaning – lowering the standards overall so that – no child is left “behind”. That’s right. Everybody “passes”, even if they leave school barely able to string 3 sentences together correctly.

    In fact “Tomorrows Schools” was the beginning of dumbing down agenda.

    They will KEEP rolling out their agenda. No one can stop them.

    Also one needs to know that those who are teaching today, are themselves victims of “dumbed down” schooling and they don’t even know that by implementing all these curriculum changes etc -they are just FURTHERING the main agenda.
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    As a side note, You have surely noticed how “The News” on TV these days is just a joke- just a cheap magazine show. No real journalism in the media anymore……
    It’s because they are catering to the already dumbed down populace who think that nothing’s wrong with it.

    • The Other Mike says:

      Where do you get the “Communist/liberals” plot meme? It’s the RW that’s trying to produce drones…. witness Mont Pelier and Hekia with her sly plan for Bulk funding.

      Progressives come from a well educated society – which everyone except NACT wants – and intends to properly fund.

    • Bulk funding is about Total control to ensure that schools do the bidding of these Communist/liberals who are ENGINEERING a future society of mindless robots that can’t think for themselves.

      Yes it is COMMUNISM. Don’t believe me?

      ?!

      Say what?

      • John W says:

        Senator McCarthy is not dead but has a spirit wafting around – still.

        Please define your ” communism” so to avoid confusion of meaning applied.

        This is NZ.

        • Is that comment directed at me, John?

          • John W says:

            Certainly not Frank. Your article is refreshing bordering on inspirational in its detail. After many decades in Education I appreciate separation of wheat and chaff.

            My apology and error not addressing Cassie. The reply button orders remarks according to time or posting.

            Using Communism as a bogeyman is a typical American ploy aimed at the fearful and ignorant. Hence the request as to what meaning is expected to be taken.

  6. WILD KATIPO says:

    Ah yes , the good old NZ Initiative/Business Roundtable.

    Hiding in the background , quietly overseeing the neo liberal dismantling of our society , working tirelessly for their London based directors.

    And they will never quit, – they are well heeled and have all the time in the world to plan and lobby their next money / power grab. You can see how they operate , by lobbying National in particular… you can see where National gets its ideas.

    So there it is for all to see… a National govt that gets its ideas from a shady , dodgy right wing think tank that in turn takes its orders from London.

    And that London based organization is none other than the Mont Pelerin Society .

    And the New Zealand Initiative / Business Roundtable is simply one of many branches around the globe of that Mont Pelerin Society.

    And if we in New Zealand truly wished to discover , and then overturn much of the neo liberal right wing in this country we would start by bringing this group into the light and asking them some hard questions about electoral interference , how much they donate to National and just what sort of ideas they ply National with after donating that money.

    It would be like overturning a rotten log and watching the beetles scuttle for cover …well done Frank for putting the spotlight on them. Please do a few more articles like this for peoples greater understanding of just who has been unduly influencing NZ politics against the greater wishes of the voting populace.

  7. WILD KATIPO says:

    Oh ,.. just glimpsed the NZ Herald … and they have an article on the ‘alt right’ in New Zealand.

    How quaint.

    The media go after a numerically small , disparate group of ( usually ) young , online , easily identified , politically powerless and transiently united small groups that really have no political clout or influence whatsoever and with even less ability to create negative large scale social harm , – while RIGHT UNDER THEIR VERY NOSES we have had the Mont Pelerin Society based New Zealand Initiative that has been shafting and destroying the lives of New Zealanders and surreptitiously influencing politics in this country with its far right wing ideology’s for the last 3 decades.

    New Zealand media at its finest.

    If I wasn’t such a positive chap I would despair.

    • OncewasTim says:

      ^^^^
      It’d be interesting to go into how much the likes of OH and others have contributed to the measures they expect of the rest of us too
      ….and how and why the immigration status of same (going forward).

      Bullshit and Jellybeans, emperors and clothes

  8. Pete says:

    I heard the author of that latest NZ Initiative report being interviewed and saw her on tv.

    Whether the blinding light of the right wing ideology made her seem so dumb or maybe it is just that she is dumb.

    It is almost impossible to believe that someone who had been to university could demonstrate such little knowledge or common sense about teaching and learning.

    Anyone who criticises my comments as being a personal attack rather than addressing the issues could have a point. In reality though someone who presents a supposedly serious paper for a supposedly serious organisation which has so much piffle should have no expectation of being treated as anything but a cretin.

  9. Otto Mann says:

    The New Right are waning in their influence. But that won’t stop them from last-gasp desperate efforts to renew their efforts to corporatise society and reduce the State.

    They’re on a hiding to nowhere. As much as I loathe Trump and view his supporters here and in the US as naive fools, his ascendancy is a clear signal that people have had enough and are looking around for alternatives.

    The next decade will see neo-liberalism rolled back and outfits such as the NZ Initiative consigned to the dustbin of history.

  10. Andrea says:

    Up it pops, every time ‘our ageing population’. Of course it is! It’s what people do!

    Shorthand for – it takes so long to get to the front of the queue for even the simplest procedure that you’ll be ten years into your super before you get the first call. If you’re lucky you may be able to sign up as a far-too-patient with some health care centre – if your town can support one or more GPs and you never need emergency treatment.

    Wasn’t there a piece today (Herald, I think) about how much we, the innocent taxpayers are shelling out to keep the closed/abandoned schools sort of maintained? Crazy.

  11. Philg says:

    Great work Frank. Thankyou. If only this information could be on the MSM! Instead we have Hoskins…

  12. John W says:

    National standards are accompanying a rise in youth suicide.. The pressure is on and in the face of shrinking employment and rising expense / penalty of attempting tertiary education, hopelessness and anxiety in youth has at least trebled by accounts of school counselors and health support services.

    Do you know what a fiddle cube is.

    Educators generally do not agree with bulk funding nor National standards. They are are fiercely opposed on educational and student health grounds.

    Right wing think tanks are wired ideologically is ignoring people and public good. They are populated accordingly.

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