Proposed Education Cuts

David Adamson

Dr. David Adamson, Senior Research fellow at The Centre for Global Food and Resources, shares his view on the Australian government’s proposed education cuts.

With budget time fast approaching, the leaks, fears, and work-shopping ideas in the media are in full swing. It has been suggested that Education is again in the cross-hairs. This time, instead of making the states pay a greater proportion of the costs of educating school students, the target returns to the University sector.

The most recent data from the ABS, notes that the real expenditure on higher education has basically plateaued since 2010-11. With real costs constant, the proposal is that a 2-3% efficiency measure will be introduced over a number of years. While those with HECS debt will be targeted to replay loans faster.

education exp Aust

This current suggestion comes at a time when business tax breaks are under review in a climate where there is an international ratcheting to the bottom. With a proposed absence of revenue from business, which in the absence of any additional revenue raised from the trickle down zombie, means that some things need to be cut.

Education is one way of tackling inequality but decreasing funding may only increase the gap between those who have access to good education and those who don’t.  While the OECD may have pointed out those risks for Australia’s primary and secondary education, the arguments concerning subsequent economic harm do not diminish when tertiary education funding is reduced.

In summary, businesses gain from well-educated individuals, as output and productivity increases in relation to education. Subsequently education can be seen as a business subsidy.

So if the government was truly trying to improve economic productivity, perhaps it’s time to introduce an education levy on businesses.

This post was orginally published on Dr Adamson’s blog, where you can read more about his research.

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