Prime Minister Christopher Luxon looks for Estonian inspiration

12:01 pm on 13 April 2024
Prime Minister Christopher Luxon speaking at post-cab

Prime Minister Christopher Luxon says the way Estonia has digitised government services is fantastic. Photo: RNZ / Angus Dreaver

Analysis - The prime minister is a fan of comparisons. In his quest to get New Zealand 'back on track', Christopher Luxon has often looked overseas.

"There are things that we just do brilliantly, better than any country on Earth. But I also believe that you should learn from others, because what's the point of us repeating the same mistakes if we can get some insights as to how someone else has dealt with it?" Luxon said on Monday.

In opposition, Luxon often pointed to inflation figures in countries like Australia and Singapore, to hold the government to account on New Zealand's higher consumers price index (CPI).

But at his post-Cabinet media conference on Monday, he added a new jurisdiction to his list.

"Look at Singapore, go look at Estonia, go look at New South Wales' state government, for example, that run things in very similar ways and have had great success focusing their public service and their resources on delivering these goals," he said.

"Why Estonia?," he was asked.

"I look at them, and the way that they have digitised government services and put a customer service mentality into their government public services is really fantastic. You know, they probably do that now better than Singapore."

Estonia ranked third in the 2020 UN E-Government survey but dropped to eighth place, where New Zealand was in 2020, and instead New Zealand climbed to fourth place in 2022.

But Estonia has digitised 99 percent of its public services. It provides every citizen with a digital ID, holds elections online, and is the home of tech 'unicorns' like Skype and Wise.

Digitising government services was one of the original targets set by the John Key government in 2012.

"By 2017, an average of 70 percent of New Zealanders most common transactions with government will be completed in a digital environment," the target said.

It was not part of Luxon's new public service targets, mostly because the goal had been achieved.

Person holding Estonia's e-Residency kit; a government-issued digital identity and status that provides access to the digital business environment.

Estonia offers an e-Residency kit; a government-issued digital identity and status that provides access to the digital business environment. Photo: Brand Estonia

One of the targets, however, was getting 80 percent of Year 8 students at or above the expected curriculum level for their age in reading, writing, and maths by 2030.

It is in education where Luxon is also likely looking for some Estonian inspiration.

Estonia is 15 places lower than New Zealand on the Human Development Index, and its GDP per capita is US$28.25 compared to New Zealand's US$48.42.

But with a population roughly the size of Auckland, Estonia placed 7th on the 2022 Programme for International Student Assessment rankings for maths, 6th in science, and 6th in reading.

New Zealand, meanwhile, was 23rd in maths, 11th in science, and 10th in reading.

Both countries are above the OECD average, but Estonia's presence in the upper echelon amongst larger countries and economies like Japan and Korea would have stood out to a prime minister who looks overseas for inspiration.

"There's lots that we can learn from lots of places, and as you've seen, I can look at education systems in Denmark as well. I look at Estonia. I look at what Ireland has done, for example, in education," he said.

Christopher Luxon at Cardinal McKeefry School

The coalition government has made reading, writing, and maths one of its key targets. Pictured is Christopher Luxon at a Wellington school in April, 2024. Photo: RNZ / Angus Dreaver

It was pointed out to Luxon that Estonia has universal free school lunches, at a time where his government is looking at changing the free school lunch programme here.

"I just say to you there's lots for us to learn," Luxon responded.

Labour has seized on the comparison.

"Universal free school lunches for every child attending school in Estonia. A light rail system in their largest city, in Estonia. Heavily subsidised kindergarten education in Estonia. Teachers focused on not just the basics but on digital skills, on coding, and on other skills that their learners are going to need for the 21st century," Labour leader Chris Hipkins said in the House on Wednesday.

There was no mention of what happened to a light rail system in New Zealand's largest city when Labour was in government.

Estonia also has a flat income tax of 20 percent, a Value Added Tax of 22 percent, and a land value tax between 0.1 and 2.5 percent.

Its average tax wedge (the net difference in gross income and net income, after taxes are deducted) is 39 percent, versus New Zealand's 20.1 percent.

No indication from Labour yet if it is looking to the Baltic, as it works out its tax reforms to put to the public for the 2026 election.

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