A well-functioning education system that delivers good outcomes for all is essential to New Zealand's future prosperity and the wellbeing of its people. However, there have been a number of recent reports highlighting our declining educational performance. 

Arresting this trend will require a better understanding of the problem and potential causes. To that end, this report takes a closer look at the evidence on New Zealand students' educational achievement and examines whether a lack of funding may be playing a role. 

In particular, authors Senior Fellow Dr David Law and Policy Analyst Joel Hernandez examine the recent performance of New Zealand's education system through the lens of three international education surveys; the Progress in International Reading Literacy Study (PIRLS), the Trends in Mathematics and Science Study (TIMSS), and the Programme for International Student Assessment (PISA).

These surveys cover the mid-1990s to 2019 and provide snapshots of primary and secondary students' performance in reading, mathematics, and science every three to five years. The results help us track the performance of New Zealand students and make comparisons with other countries.

Education funding in New Zealand over time and relative to the countries is then examined using OECD data on average annual per-pupil education spending for primary and secondary students. The purpose is to see whether a lack of funding or poor value for money from that funding, is a likely key driver of New Zealand's education outcomes. Further analysis explores the relationship between per-pupil spending and achievement across countries, and how that relationship differs between high and low education spending countries. 

The analysis shows that both primary and secondary students' performance has declined over recent decades. As a result, our international rankings in reading, maths and, science have slipped, in some cases markedly. At the same time, New Zealand's per-pupil education spending on primary and secondary students has increased substantially, both in absolute and relative terms. 

It appears our additional investment has not borne fruit, and we should not necessarily expect it will in the future. Indeed, OECD analysis suggests there is virtually no relationship between per-pupil spending and achievement beyond a certain level of spending, a level New Zealand has surpassed.