Entrenched Poverty Crisis: Addressing New Zealand’s most shameful problem

This piece was originally published in The Post as part of a series on six crises facing New Zealand.

What advice would you give a 15-year-old wondering whether to aim for an arts degree at university or an industry certificate in heavy vehicle maintenance?

Your gut reaction might be to talk up the university option. The degree would confer higher social status. You might also think it would lead to a higher income (in fact, a heavy diesel mechanic, who usually graduates with little or no debt, starts out on a similar salary to a policy analyst).

For young people growing up in poverty, industry qualifications are a reliable route to a better life. Yet only about 6% of school leavers become apprentices. Nearly twice that percentage is neither in the workforce nor in education or training.

Education is a potentially powerful lever for breaking intergenerational cycles of poverty. In theory, New Zealand’s state schools make education as accessible to children living in poverty as to those from wealthier backgrounds. But in practice, New Zealand does not use the educational lever nearly as effectively as it might.

Foundational knowledge first

For several decades our schools have not reliably taught foundational knowledge. Too much curriculum content has been left to the discretion of individual schools. If it is well implemented, the knowledge-rich curriculum developed over the past three years will give all students, regardless of background, similar access to knowledge.

Universities have had a near monopoly on teacher training for the past twenty years and have done a poor job of preparing new teachers for the classroom. There is much focus on sociocultural theory, which may fascinate the lecturers, but it does little to set new teachers up for success. There is far too little focus on classroom management skills or effective instructional techniques.

An ambitious curriculum and high-quality teaching are both important components of a quality school system. They are crucial for students whose families lack financial resources or educational capital.

Families headed by well-educated adults with money in the bank can make up for shortfalls at school. Parents can fill educational gaps themselves or hire private tutors. The cultural capital typical of such families – books on the shelves and erudite dinnertime conversation – gives their children ‘hooks’ to which academic learning can readily be attached.

Children living in poverty typically have none of these advantages. Additionally, they and their caregivers often suffer from poverty-related stressors that interfere with school attendance and limit children’s bandwidth for learning at school.

Industry learning as a pathway

Industry learning is no less demanding than academic study, but it starts with practical learning, drawing in theory where it is needed to support practice. For young people not steeped in academic culture, that can make it accessible. Provided they have the same educational foundations as their university-bound peers, that is no disadvantage. But unfortunately, a snobbish equating of academic learning with social status has limited the resourcing and uptake of industry learning in schools.

Prior to the early 2000s, school qualifications comprised School Certificate and University Entrance examinations. University Entrance was the pinnacle. From Year 1 to Year 13, university gave the school curriculum its organising logic. In that environment, industry training was seen as a second-best option for students who couldn’t manage the academic track.

NCEA was supposed to change all that by esteeming and credentialling academic and industry learning equally. It failed from the very start. Students who did well in assessments for traditional school subjects could be recognised with Merit or Excellence grades. But assessments for industry training carried only one passing grade: Achieved. The implication was that excellence only matters for academic learning.

The higher status of academic learning has caused a vicious cycle to emerge. Poor esteem for industry learning limits demand despite the opportunities it offers. Lower demand leads to poorer resourcing, which reduces availability and quality. This, in turn, further reduces esteem.

A road ahead

Barriers holding disadvantaged students back from tertiary education must be addressed before they leave school. A promising initiative is now on the table.‘Industry-led’ subjects will be developed for the school curriculum. It will be the first time in New Zealand’s history, that industry learning at secondary level has been guided by formal curricula. That alone will do much to improve its status.

Industry-led subjects will contribute to qualifications on an equal footing with academic subjects, with the same range of grades available. That will give students not drawn to a university pathway something to aim for.

Industry Skills Boards will write the curricula, ensuring that they reflect the needs of industry. The Boards will need guidance from the secondary sector to ensure that they are manageable for schools and appropriate for secondary students.

As welcome as industry-led subjects are, unless schools are resourced and mandated to do things differently, they will simply adapt them to fit their existing programmes. Even well-resourced schools will not be able to deliver high-quality industry learning on their own. They will need to collaborate with industry itself and with tertiary providers. That will cost money.

More money for schools

In Budget 2026, the fees-free year policy was terminated. Some of the funding was redirected into secondary school industry learning, with Trades Academy places set to double by 2030. That is an excellent first step, but the funding mechanism, as well as the amount of funding, must be addressed.

Schools should be given additional funding for every enrolment in an industry-led subject. They could use it to hire new teachers for industry-led subjects or to pay for tertiary courses when they can’t deliver the teaching themselves.

Schools could also use the funding to establish work-integrated learning opportunities through partnerships with local employers. It is not realistic to expect school students usually to be productive in most industry workplaces. Employers might therefore need financial incentives to take them on at scale.

By the same token, employers would have a duty to train students. Schools would have a responsibility to ensure that any of their students learning in workplaces are well looked after and receive appropriate training.

Poverty is an abiding and shameful problem in New Zealand. But the solution is not university degrees for all. It is a thriving tertiary sector catering to diverse interests and aptitudes. Industry-led subjects cannot, on their own, deliver such a system. They can, however, start the ball rolling.

Michael Johnston is a Senior Fellow at The New Zealand Initiative. This opinion piece is based on his chapter in the Helen Clark Foundation's latest book, Facing Up to Our Future: Challenges and Choices for New Zealand.