As teachers prepare to leave the classroom on strike, The New Zealand Initiative proposes a potential solution to the seemingly impossible impasse.
Dr Eric Crampton argues in his Policy Point Biting education bullets that Minister Hipkins is in a thoroughly unenviable position.
He says providing a pay increase sufficient to attract and retain the best teachers would blow out the budget if offered to all 60,000 existing teachers. Every 10% increase in teachers' salaries costs about $400 million; a 25% increase would cost a billion and match the entire PHARMAC budget.
Paying more to attract new staff while allowing principals to award higher salaries to their best teachers could square the circle. It would allow the salary increases needed to attract and retain the best teachers, without requiring large cuts (or tax increases) elsewhere.
About the author
Dr Eric Crampton is Chief Economist of The New Zealand Initiative