Fran O'Sullivan: Parata takes the fall for Treasury policy

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Finance Minister Bill English should have explained the rationale for the Budget backdown and any fiscal implications. Photo / Mark Mitchell
Finance Minister Bill English should have explained the rationale for the Budget backdown and any fiscal implications. Photo / Mark Mitchell

Hekia Parata has been hung out to dry for a $172 million Budget back-down on a pet Treasury policy that was basically foisted on her.

Parata is a polarising character. Her supreme self-confidence annoys many and her reluctance to engage with the teachers and parents on the class size affair definitely exacerbated tensions.

But National's "Steel Magnolia" should not have been left to face the music on her own this week.

It is unfathomable that Finance Minister Bill English was nowhere to be seen when Parata announced "her" decision. Despite the Education Minister's bravura ("the buck stops with me") she had obviously been guided by senior Cabinet ministers, particularly John Key, to make a categorical backdown in the face of widespread opposition.

As Finance Minister, English should at the very least have joined Parata to explain the rationale for this Budget backdown and any resultant fiscal implications.

After all, the policy was formally announced on May 16 as part of his fourth Budget. It would inevitably have been canvassed during Cabinet committee meetings leading up to Budget day.

Any potential political fallout should have been discussed behind closed doors and the Government's PR people should have made sure that Parata had the answers to inevitable questions on how individual schools would be affected.

That's just Government 101.

But there is a more fundamental reason why English should have fronted. It was the Treasury which authored the policy which essentially rates teacher quality as a more critical factor than class size. Not only did this feature in the post-election briefing; it was subsequently strongly promoted by Treasury Secretary Gabriel Makhlouf through a Listener article, then followed up by a controversial speech to the business community and a subsequent article in the Dominion Post.

It is notable that Makhlouf has all along been selling the rationale for the policy shift - not Parata.

In its February post-election briefing Treasury noted, "Increasing student/teacher ratios, and consolidation of the school network, can free up funding that could be used to support initiatives to enhance the quality of teaching."

These comments sparked controversy.

Treasury went on to further seed debate by giving the Listener's Ruth Laugesen the opportunity to exclusively interview Makhlouf and release via her some of the background papers behind Treasury's thinking. Wrote Laugesen, "Compact, sleek and as relaxed as a cat, the new Secretary to the Treasury has pounced on teacher quality as the big idea that Treasury will push under his leadership."

Laugesen related how Treasury was already in hot water after the release of its February post-election briefing. There had been an immediate public backlash at the suggestion of bigger class sizes.

But Makhlouf put this in context by saying, "if you're going to spend an extra dollar in the education area it's better to spend it on quality teaching than classroom size".

In his business speech, Makhlouf said "we've never said that class size doesn't matter. Far from it. But we are in a world where governments, like households, have to make trade-offs and use their resources where they get the best results. Very modest increases in class size, say on average one or two students per class across the system, would be unlikely to have a significant impact on achievement. Class size matters, but the quality of teaching matters more.

"Our advice on schooling in our briefing to the incoming minister has created quite a bit of debate. I am pleased it had that effect."

Makhlouf used his subsequent piece in the Dom Post to explain why Treasury was "putting on its hard hat and wading into the education debate".

The answer was simple. High quality teachers produce better performing students who go into the workforce and make a significant contribution to economic grown. If we lift student achievement to match the top OECD countries we could raise GDP by 3-15 per cent by 2070."

From all of this it is obvious Parata was presented with a fait accompli. She followed the Treasury line and s backed a trade-off between class size and teacher quality.

Her Budget speech notes acknowledged the tight economic environment and said "we will fund the improvement in teaching quality by making a small change to teacher student ratios ... to free up $43 million on average in each year over the next four years".

Parata is the one left wearing embarrassment over a failed policy, not Makhlouf, who can retreat to his bureaucratic tower, nor English, who has yet to front up.

If Parata wants to survive as a Cabinet minister she needs to show more steel, not allow herself to be manoeuvred into a fait accompli by public servants and develop a stronger political nose to navigate Wellington bureaucracy. And never again "take one for the team".

- NZ Herald

Fran O'Sullivan

A columnist for the NZ Herald

Fran O'Sullivan has written a weekly column for the Business Herald since its inception in April 1997. In her early journalistic career she was a political journalist in Wellington and subsequently an investigative journalist who broke many major business stories including the first articles that led to the Winebox Inquiry in both NBR and the Sydney Morning Herald. She has specific expertise in relation to China where she has been a frequent visitor since the late 1990s. She is a former Editor of the National Business Review; has twice been awarded Qantas Journalist of the Year and is a multiple winner of the Westpac Financial Journalism Supreme Award.

Read more by Fran O'Sullivan

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