Why Charter Schools Are Huge Bargain for Taxpayers

Alwyn Poole
Founded and was the head of Mt Hobson Middle School in Auckland for 18 years. MH Academy is now an in person private school for years 11–13. There is now a nationwide online provision called Mt Hobson Academy Connected for years 1–13.

From the New Zealand Herald focused on the growth of Auckland schools and some that are bursting at the seams (i.e., these are not my numbers).

1. Mt Albert Grammar Principal Patrick Drumm is thankful for the school being allocated $30million to establish 22 new classrooms and accommodate 600 extra students.
   
   So… an establishment cost of $50,000 per student.
2. Drumm notes that a new state school establishment for 600 students would cost $250million.
   
   So… an establish cost of $416,666 per student.
3. If the new charitable company I am involved with is awarded the four wonderful charter schools we have proposed that establish cost would be well under $9million (at a rough, but experienced, guess) for 1,160 students.
   
   So an establishment cost of $7,758 per student.

The ongoing interest (or opportunity) costs, at five per cent, for five years are:

MAGS: $1.5m per annum (600 students) i.e., $2,500 per student – five year total $7.5m

New state school: $12.5m per annum (600 students) i.e., $20,833 per student – five year total $62.5m

Education 710+: $450,00 per annum (1160 students) i.e., $387 per student – five year $2.25m

Just on establishment and the first five years these charter schools (for equal numbers) would save the taxpayer:

$32,623,000 against the MAGS situation.

$307,613,000 against the state new school situation (i.e., over twice the cost of the 15 proposed new charter schools over four years).

The charter schools then operate at the same per student cost for similar sized and demographics state schools – and have actual performance targets to meet.

You will probably not hear this from the teacher unions or the Labour Party.

I knew my economics degree would be useful at some point.

This article was originally published on the author’s Substack.