I can't speak for your region but not failing younger kids isn't political here. It's a response to the developed understanding that doing so has worse outcomes, not better. At younger ages there is a much broader range on skill development. My oldest was reading chapter books in Grade 1 and my youngest is still struggling with basic sentences in Grade 3. The solution is that he's allocated some 1:1 time with a teacher who focuses on the weaker spots.

Holding kids back a grade is really just a sloppy solution. It kind of speaks to, "we have nothing to offer. The best we can do is just teach you the same stuff again." It's essentially a sign of bad, or underfunded education.