Why should the state own things like the health service, or the education system?
The government could simply provide some financial support, in the form of vouchers, and let people address these issues themselves.
However distasteful we might find it, let’s put aside the politics of this for a second.
We should examine whether it is a good idea. Fortunately, we have examples of privatised health and education systems around the world to explore. Sadly, the evidence tells us privatisation would be extremely bad.
Fully privatised health care exists in its most stark form in the United States.
Studies have found that both per person and as a share of Gross Domestic Product (GDP), spending is far higher in the US than in other high-income countries. Among high-income countries, the US has the lowest life expectancy at birth, the highest death rates for avoidable or treatable conditions, and the highest maternal and infant mortality.
But private systems are more efficient we are told – rather than stuffy old state systems. In a 2024 study of 10 health systems including NZ, Australia, the UK, and the US. The private systems came last in administrative efficiency. New Zealand came third. Harvard Medical School said, “Is the US healthcare system expensive, complicated, dysfunctional, or broken? The simple answer is yes to all”.
So why take a system that needs investment, and turn it into a system that makes the problems worse? Healthcare insurance is expensive, uncertain, and for those who actually need medical care – unavailable. Administratively it’s a nightmare. The only winners are those now making a profit.
The same is true of education. The UK has a very expensive and selective private education system – teaching only 6.4% of the total student population. Yet 65% of Senior Judges, 59% of top civil servants, 52% of diplomats, and more than 50% of Ministers were privately educated. It’s a passport to a club you aren’t invited to.
In Australia, the numbers of children being privately educated is growing every year, as parents enter an education arms race. In high schools, the proportion of students in public schools has declined from 66% in 1996, to 62% in 2006 and 58% in 2023.
Parents with choices move their kids to private schools. Those without get stuck in underfunded state schools.
Prime Minister Christopher Luxon has now said that privatisation is on the cards at the next election, stating “We’d take it to the election and it would be part of our programme that we’d want to talk about and be upfront with New Zealanders about”.
Clearly, the country is being softened up for such change. But let’s look at what has happened in Aotearoa with privatised services like electricity companies. Do you feel as if you have benefitted from their privatisation?
How about Air New Zealand? Or the Forestry Corporation? If firms in the private sector go bust, that’s bad news for investors. If the firm now includes your healthcare provider, that’s catastrophic for you. If it’s your child’s education provider – what does that mean for their education?
If the company providing your water supply goes bankrupt – what happens then? Those who rely on Thames Water in the UK are about to find out. Bills are going up 35%, and the Crown may be forced into a multi-billion pound bailout.
Public-private partnerships (a form of privatisation) in New Zealand have already gone massively over budget. Transmission Gully has increased in cost by hundreds of millions and was in court for years. In 1938, New Zealand was one of the first countries to establish a universal, tax-funded national health service. Our existing system has been built by generations of contributions from working people.
Eighty-seven years later what should be one of the shining examples of Kiwis working together is under threat from a government desperate to balance the books because of unaffordable tax cuts. We will all be worse off if they get their way.
