One item you may have missed from the Budget was the Equity Index for school funding.
It is one of the few areas where both Labour and National governments have agreed: that deciles are a blunt instrument for pushing against disadvantage and need to be replaced.
New Zealand has one of the most unequal education systems in terms of the gap between the highest- and lowest-performing pupils in the developed world.
Whether one focuses on inequity itself, or just the sheer waste of opportunity for so many children, education should be part of the solution to, and not the cause of, inequity. However, if education is a ladder out of poverty, the rungs are too far apart for many people.
Education outcomes vary greatly with socioeconomic background and this background remains one of the major sources of educational inequity. There are many reasons for this: wealthier parents are better able to provide financial support, books, equipment and other resources for their children's learning. They are likely to have benefited from education themselves, and so will have more experience in navigating the education system and in truly understanding its benefits.
Until now, New Zealand has relied on the much-derided decile system. This lumps schools in one of 10 (actually, 18, but that is another story) buckets, with hundreds of other schools. It is dependent not on the students who attend the school, but on those who live in the immediate area. Anyone who has watched, with bemusement, the people carriers crisscrossing town (and each other) as parents take pupils to school, knows that the two are not the same.
Deciles also seem to have become a signal or indicator for parents making choices around schools. Deciles attempt to measure the socio-economic background of the pupils the school serves in order to determine the level of extra funding they might need to push against disadvantage, but appear to be commonly misinterpreted as an indicator of the quality of education offered. This is despite there being little or no evidence of learning and progression of students against the decile rating of their school.
Research shows the variation in student progress within each of the deciles eclipses any difference between the deciles. Only some families are able to choose their school, but choosing a child's school by decile is not an effective way of ensuring they make good progress.
The Equity Index will use information based on the actual children attending schools and a diverse set of household socio-economic circumstances – almost 40, rather than the five used in the decile – from a range of sources. This allows it to account for the important nuance and detail that reflects the reality of people's lived experiences. This benefit alone gives the Equity Index two advantages.
First, it can change as the students at the school change. Second, it can support a system that accounts for gradations of disadvantage, and not create discontinuities in the system.
The Equity index is one of the few areas where teaching unions and principals are broadly supportive, as well as both major political parties, in part because it is a more nuanced measure of disadvantage, and in part because of the transparency with which the designers have worked with the sector.
As always, however, the proof of the policy will be in its implementation. It does not raise or limit overall resources, merely allocates them more effectively.
In one sense, it is a shame that one of the Equity Index's first uses was in the free school lunches programme. That is because the programme needed to be a binary choice of whether a school is in or out. To reduce the stigma of being in receipt (I vividly remember being a "free school meals boy" in the UK in the 1970s), the whole of the school has access to lunches. Because there are not enough resources to provide them to the whole country, the resources needed to be focused where they were most needed.
These two things combined to create one of the main problems the Equity Index was designed to overcome: schools on one side of a hard boundary where they had many children from disadvantaged backgrounds. The benefit of the Equity Index is that each school will have a unique value, reflecting its own circumstances.
Education is one of the many aspects the Productivity Commission will be investigating as part of its "fair chance for all" inquiry into the dynamics and drivers of persistent disadvantage.
In the meantime, the Equity Index is an important tool to help direct resources towards where they can provide the most benefit and lift educational equity for those who are from lower socioeconomic backgrounds.
• Philip Stevens is director of economics and research at the Productivity Commission Te Kōmihana Whai Hua o Aotearoa. He was formerly general manager of analysis, research and evaluation at the Ministry of Education, where he was responsible for the empirical development of the Equity Index.