Category: Education

  • David Stephens. Invading our smugness: thoughts on a diversity toolkit

    Wednesday, 30 March, must have been a slow news day at the Daily Telegraph. It is difficult to find any other reasonable explanation for the fuss the Telegraph made about the ‘diversity toolkit’ it discovered on the website of the University of New South Wales. What followed, however, spoke volumes about how careless some in the mainstream media have become about evidence and, more importantly, how easy it is for ‘hot button’ issues to provoke massively disproportionate reactions.

    First, on evidence. Despite the Telegraph’s fulminations that students were being directed to say Australia was ‘invaded’ rather than ‘settled’, and to accept various concepts that the Telegraph blamed on ‘nutty professors’, the toolkit was a fairly mild document. A statement from UNSW insisted the toolkit contained nothing mandatory, merely lists of ‘more appropriate’ and ‘less appropriate’ terminology relevant to settler-Indigenous history in Australia.

    The university rejects any notion that a resource for teachers on Indigenous terminology dictates the use of language or that it is designed to be politically correct … The guide does not mandate what language can be used.

    Even Wiradjuri journalist Stan Grant (Guardian Australia) fell for the idea that UNSW was trying to suppress free speech. Those who delved a little deeper also found the UNSW guidelines had been obtained under licence from Flinders University, Adelaide, that there were similar guidelines in place at the Australian National University, Monash University, the Queensland University of Technology, the University of Melbourne and probably other institutions, and that the UNSW Indigenous guidelines were based on material that has been used in New South Wales schools since – wait for it – 1996.

    Secondly, on the reaction. Paul Daley (Guardian Australia) argued that ‘invasion’ was the correct word to use. He attracted more than 2600 comments in two days, both strongly supportive and strongly resentful, and an unusual number ‘deleted by Moderator’. Shock jocks Hadley, Jones and Sandilands frothed although morning television was fairly laid-back. (The Telegraph’s original outrage had found willing support from Keith Windschuttle and the Institute of Public Affairs.) In non-MSM media, Alex McKinnon in Junkee kept a level head. Up in Queensland, Premier Palaszczuk supported QUT’s similar guidelines. Among the exercised, there was some confusion about whether Cook or Phillip was the invasion leader.

    As usually happens, the best analysis arrived a couple of days after the initial explosion.

    [W]hy is this hysterical response so entirely predictable? [asked Waleed Aly in Fairfax] Why is it that the moment the language of invasion appears, we seem so instinctively threatened by it? This isn’t the response of sober historical disagreement. It’s more visceral than that. Elemental even. It’s like any remotely honest appraisal of our history – even one contained in an obscure university guide – has the power to trigger some kind of existential meltdown. What strange insecurity is this?

    Archaeology professor Bryce Barker in The Conversation also provoked trenchant comments pro and con. He made an important connection.

    It is telling that [Kyle] Sandilands suggested people “get over it – it’s 200 years ago” when we so revere the notion of Lest We Forget when remembering our role in a foreign war (WWI) 100 years ago … [W]ho we, as Australians, choose to remember and what events we commemorate are inherently entwined with how we view ourselves and how we want the world to see us as a nation … Is not a Walpiri man’s death defending his way of life [at Coniston, NT, in 1928, when 31 men, women and children were killed by police] just as worthy of remembrance as a World War I digger’s ten years earlier?

    Why are we as a nation so reluctant to face up to this part of our past? Inconvenient truths that risk tainting the white “pioneer/settler” narrative are, it seems, not to be commemorated but forgotten.

    You could write a history of Australia around two invasions: Australia from 1788; Gallipoli 1915. You would need to explain, though, why one invasion has attained cult status while the other, for many of us, is euphemised out of mind. Smugness reigns.

    ‘Invasion’ or not? Semantics can lead us up a dry gulch. Not all invasions look like D-Day, the War of the Worlds or the Gallipoli ‘landing’ but none of them end when the last soldier splashes ashore. An invasion, at its simplest, is entering and remaining in a place where you are not welcome.

    If the initial reaction of the Eora to Phillip was more one of puzzlement than hostility this did not remain so for long. The invasion went on to take various forms, from loss of land to poisoning to massacre. Indigenous resistance commenced within months of the First Fleet and persisted, led by warriors like Pemulwuy, Windradyne, Jandamarra and unnamed others.

    According to recent research by Evans and Ørsted-Jensen the invasion of Australia led to more than 65,000 Indigenous deaths (men, women and children) in Queensland alone and perhaps 100,000 across Australia. That’s many more Australian deaths than in World War I and about as many deaths as in all our overseas wars.

    ‘Get over it’, or not?

    You cannot “get over” a colonial past that is still being implemented today [responded Indigenous writer Luke Pearson in Guardian Australia]. You cannot come to terms with a national history that the nation refuses to acknowledge ever happened. We cannot “reconcile” what happened yesterday when we are too busy bracing ourselves for what will inevitably come tomorrow.

    That initial ‘wound in the soul’ has been reopened many times and still festers beneath Indigenous family violence, incarceration and mental and physical illness. The strand of our history that traces from 26 January 1788 has left a mark that many of us cannot fail to see and feel but that many more of us refuse to recognise.

    David Stephens is secretary of the Honest History coalition and editor of its website (honesthistory.net.au). Sources for the article can be found here or by using the search function on the Honest History website. The views in this article are not necessarily those of all supporters of Honest History.

  • John Menadue. The fake discussion about state taxes.

    Malcolm Turnbull’s ruse is obvious. He wants us to forget all about deficits and debt and the need for budget repair. To avoid these issues, he now tells us that if we want improved health and education services, we cannot have them because the states have refused his offer on state taxes and he will not increase commonwealth taxes.

    But we know that large increases in commonwealth government revenue are possible without any increase in income tax rates.

    There are numerous proposals on ways to increase revenue without increasing tax rates. The most recent was from the Committee for Economic Development of Australia (CEDA). That Committee suggested various ways in which revenue could be increased without increasing income tax rates.

    • Reducing the superannuation concessions.
    • Reducing the capital gains discount
    • Halving the fuel tax subsidy scheme.
    • Removing negative gearing.
    • Removing the private health insurance rebate exemption.
    • Reducing industry tax concessions.
    • Reducing work-related deductions.

    The other obvious way to increase revenue is to ensure that large multinational companies, private companies in Australia and trusts pay their fair share of tax. Many don’t pay any tax at all.

    None of this involves increasing tax rates. But these proposals would not be welcomed by the wealthy vested interests that support the Liberal Party.

    There is probably $20 b. to $30 b. of increased revenue per annum by addressing the issues above.

    All public surveys that I have seen suggest that Australians are prepared to pay increased tax, even increased rates of tax, if they believe that the tax system is fair and the money is spent efficiently.

    I have posted blogs earlier about the remarkable successes of the Nordic countries – Denmark, Sweden and Norway. These countries have some of the most successful economies and societies in the world yet they have very high rates of taxation. The Nordic countries have a basic trust in government. They broadly believe that the tax system is fair and services are efficiently delivered.

    It is something badly lacking in Australia.

    See links to two earlier articles on the Nordic successes – Postcard from Denmark on the Nordic success (17/1/2015);  Why are the Nordics so successful? (18/1/2015).

     

     

  • Chris Bonnor. Malcolm abandons the middle in schooling

    Two plus years of conservative government has given oxygen to a number of strange solutions to ill-defined problems. Malcolm Turnbull’s proposal to have the States alone fund government schools, leaving the Commonwealth to look after private schools, is the latest.

    As a serious suggestion it has been widely condemned, but it would be premature to dismiss it as a piece of spontaneous kite flying. Conservatives have been playing in this space for some time. In April 2014 the Centre for Independent Studies (CIS) flagged having wealthy parents paying fees for public education. Around the same time Tony Abbott commissioned another Tony (Shepherd) to come up with ideas, including about funding for schooling. Most of his suggestions were wisely ignored – but issues arising from having schools funded by two levels of government struck a nerve.

    Then in June last year the Abbot government’s green paper on federation reform contained a proposal for the Commonwealth to abandon funding of public schools. It was one of four options – but it seems Turnbull’s current proposal has won the day. Malcolm has lurched to the right again. That emotional attachment of the Coalition to private schools, once declared by Christopher Pyne, won’t be shaken.

    It’s not that having two levels of government play around with schools isn’t a problem. It certainly is – and it helps explain why our current framework of schools is largely unsustainable. It’s just that sensible solutions to date have been placed in the too hard basket – or modified out of contention after lobbying by sectional interests.

    The best example is Gonski’s recommendation that a Commonwealth/State schools resourcing body be established to help restructure school funding to reflect student needs, regardless of sector. Both levels of government would contribute, but the allocation of funding would be well outside the political sphere and arguably manageable across levels of government.

    The fact that it didn’t happen is regrettable – because the Prime Minister’s current proposal is going to open a pandora’s box of new problems, while failing to resolve longstanding ones. In their most generous moments there will be few observers who would believe that a Coalition government will slow down galloping funding increases to private schools.

    Even leaving aside the school sector trench warfare that would be renewed, shifting all funding of public schools to the states, in the absence of any overarching equity monitoring, risks cementing the inexplicable variations between the states in the way they currently fund schools.

    There are many examples, best illustrated by comparing recurrent funding for secondary schools with an average level of socio-educational advantage (ICSEA 950-1050). On average the state and territory governments across Australia fund each student in these schools at around $10,260 (2013 figures from My School). Location alone suggests that there will be noticeable differences between the states/territories: Students in the Northern Territory, for example, are funded at $16,400, well above the national average.

    But secondary students in Victoria are funded at around 60% of the level of students in the ACT. In fact Victorian public school students are funded by their state government at levels well below those in other states. If you want to be a well-resourced public secondary student, don’t attend high school in Victoria, or for that matter in Tasmania. Aside from the two territories, the best funding per student comes from the state governments of South Australia and Western Australia.

    It’s not as if current Commonwealth funding solves any of these problems. The average federal recurrent funding to state public secondary school students was $2000 three years ago. Victoria, Tasmania and especially Queensland are well below this figure. There may be a good explanation for these variations but I’ve missed it.

    The patterns of capital expenditure on schools by the states…just don’t seem to form any pattern at all. The last time I checked (two years ago) annual capital expenditure per government school student in NSW and Victoria averaged around $500, but had generally declined over four years. In contrast, capital expenditure per student in Queensland government schools almost trebled, to around $1700 per student in 2012. Capital expenditure increased in South Australia. It also increased in Tasmania to 2011, yet all but disappeared in 2012. Western Australia showed a three year decline followed by a substantial boost in 2012.

    In the light of all this it is instructive to read the following in Matthew Knott’s SMH report. He showed how last year’s green paper warned that the option now adopted by Turnbull

    “could, however, lead to very different funding models being applied across the states and territories and between the government and non-government sectors, leading to differences in the level of public funding for schools with similar population characteristics.”

    Too late, that’s already happening – and on a large and inexplicable scale. Left to their own devices – especially the political ones – governments at both levels won’t get it right. We have to get back to Gonski’s recommendation to set up a schools resourcing body, funding schools on need with the money coming from both levels of government. Yes, where the money comes from is important, but where it goes, and who is checking, is critical.

    In the meantime and while he is licking his COAG wounds, the Prime Minister could do worse than read Jessice Irvine’s piece in the Fairfax media. Why would a canny investor like Malcolm Turnbull ignore the big dividends which would come from investing in schools?

    “Kids from low socioeconomic backgrounds are our greatest untapped source of potential growth. They are our most undervalued stock…..Investing in our most vulnerable kids remains the best social investment strategy around. Only a foolish investor would turn his back on it.”

    Chris Bonnor is a Fellow of the Centre for Policy Development and a Director of Big Picture Education Australia.

  • Michael Keating. The Turnbull Proposal for State Income Taxes

    Prime Minister Turnbull says his proposal for the States to levy their own income tax ‘is the most fundamental reform to the Federation in generations’. Well maybe. It certainly would be a significant change, but reform? Furthermore, even if this proposal were ever implemented, it is hardly new. For example, the Fraser Government actually legislated to allow the States to raise their own income taxes, but none took up the opportunity.

    In principal I agree that governments would be more accountable, and possibly more responsible, if they raised all or most of the revenue needed to fund their expenditures. Consequently, I accept that a move towards reducing the present degree of vertical fiscal imbalance and better match revenue and expenditure responsibilities should be seriously considered.

    At this stage, however, Prime Minster Turnbull is only proposing to transfer 2 percentage points of the income tax rate to the States; effectively an annual transfer between the Commonwealth and the States of about $14 billion. This compares with the $8 billion a year that the Abbott Government took away in the notorious 2014 Budget, and if nothing else changed this extra $14 billion would be quite a carrot to induce the States to agree.

    The Turnbull Government, however, is indicating that it is prepared to restore around $3 billion of these cuts to State payments, and so allowing the States to raise $14 billion in income tax revenue would leave the Australian Government Budget a net $9 billion down. Further savings would therefore be necessary, either from the Commonwealth’s own programs or from payments to the States. In this context it is not surprising that the Treasurer has floated the idea that another $6 billion could be clawed back by the Commonwealth ceasing its funding of State schools as part of the $14 billion package.

    But apart from this fiscal problem, realistically much more would be needed to realise the Prime Minister’s vision of the States taking over full responsibility for a variety of functions and thus ending the ‘blame game’. Indeed, the $14 billion a year that has so far been floated would not even cover the cost of the Commonwealth contribution to hospitals as well as schools.

    Most importantly, in this context, is that $14 billion is well short of the total of $50 billion paid each year to the States to cover all presently tied grants. For the States to be fully responsible for funding all their services would therefore require a far larger share of the income tax than has so far been mentioned, or alternatively allowing them much more freedom and capacity to increase income tax rates.

    But until the States get the taxable capacity to raise all or most of this annual $50 billion does anyone seriously believe that this relatively small change to give them a 2 percentage point income tax rate would make the States much more accountable and responsible?

    In my opinion there is some further scope to rationalise the respective roles and responsibilities of the Commonwealth and the States. For example, if Mr. Turnbull is fair dinkum why doesn’t he offer to return to the arrangements established by the Keating Government under which the Commonwealth was totally responsible for funding national highways, while the States and local government had total responsibility for all other roads. This arrangement was a sensible separation of responsibilities, but it fell foul of the pork-barrelling National Party, and so the Howard Government reversed it.

    As both John Menadue and I have emphasised, however, for many joint government programs there are good reasons why we have adopted our present shared funding arrangements (see my earlier article on Federalism, reposted on 31 March, and John Menadue’s post on the same day).

    Most importantly, in many cases the Australian Government has responsibilities that cannot be separated from those of the States. For example, education and training is vital for the future of innovation, productivity, employment participation, and economic growth, all of which are key Commonwealth responsibilities. While health necessarily involves both levels of government, as the Australian Government responsibilities for Medicare and aged care necessarily interact with the State Government responsibilities for hospital care.

    Indeed, the Turnbull Government seems to be prepared to acknowledge that separating the roles and responsibilities of the two levels of government presents a particular problem. According to some media reports the Australian Government may not withdraw from health funding, but it could withdraw totally from having any responsibility for Schools. Certainly the Australian Government has less at stake in schools, where its intervention has never achieved a great deal in the past. But in that case, maybe the Australian Government should take over total funding responsibility for vocational education and training which is necessarily closely related to the needs of industry, and where most of the funding is increasingly being provided to both private and public providers using a competitive model.

    Perhaps the most important Australian Government responsibility that would be compromised by the States setting their own tax rates would be the potential impact on fiscal policy. In the immediate future this is not expected to be a problem as the proposal envisages that the States would initially only be getting what would effectively be a share of the income tax, and the change would be revenue neutral. But once the States start setting their own income tax rates then this would compromise the necessary independence of the Australian Government to determine fiscal policy for the nation. Indeed, time is of the essence with fiscal policy and we cannot afford to have it run by some sort of Federal-State Committee. While on the other hand if governments set tax rates independently of one another, there is a risk that any time the Australian Government lowers its tax rates, then the States would seize the opportunity to take advantage of the extra taxation capacity available, and raise their own State income tax rates.

    In addition, although the Australian Tax Office would continue to be responsible for administering the tax system, and each taxpayer would continue to file only a single return, there would be a number of administrative problems with the Prime Ministers’ proposal that would not be easy to resolve. Thus, unlike the GST revenue, which has a common tax rate and can therefore be distributed on a per capita basis, this per capita distribution makes no sense for income tax revenue if rates of taxation differ among States. Accordingly, companies are already demanding that the states should not have a share of company tax because of this sort of complication. Many individuals, however, also derive income in more than one state, and it still remains to be worked out how their income tax payments can be distributed between two or more States where the rates of taxation vary.

    As John Menadue points out in his accompanying post, given its many problems and lack of clarity, this proposal by the Prime Minister is essentially a diversion from what is or should be the major concern of the Council of Australian Governments (COAG). The most critical challenge, which all Australian governments are facing, is first to repair the substantial Budget deficit, and in the longer-run to reconcile the demands for public services that are presently projected to run well ahead of likely government revenues.

    What COAG should therefore be discussing is how to raise more revenue and/or reduce the demand for services or improve their efficiency. Personally, and as I have argued in other postings, I think it will prove to be impossible to meet reasonable demands for future services without at least some increase in overall taxation in the decades ahead (see, for example, my recent article posted 28 March).

    In this regard the response by the Labor leader, Bill Shorten, to any suggestion that income tax might rise sometime in the future was most unhelpful. Mr. Shorten has already ensured that the possibility of raising the necessary extra revenue by increasing the GST was taken off the table, and now he seems to be intent on doing the same to any possible increase in the income tax in the decades ahead. One wonders how Labor could deliver its vision of society, and what it has supported, without increasing the overall tax take in the future – certainly Mr. Shorten has so far not told us.

    By contrast, allowing the States to determine their own tax rates raises the risk that at worst the States may enter a new race to the bottom. This is what happened after payroll tax was handed over to them by the McMahon Government in 1971. The States have since dropped the payroll tax rate and increased the tax threshold and exemptions. Ostensibly this was in response to tax competition generated by a perceived need to attract new firms, but most of the changes did little to attract industry because they mainly helped small business which is not geographically mobile.

    On the other hand, this time the Australian Government may force States to raise taxes by further squeezing their remaining tied grants. In that case the Australian Government would continue to solve its own fiscal problems by short-changing the States so that they are forced to raise taxes and thus take the blame for solving a problem of the Australian Government’s own making.

    A better alternative would be to adopt the proposal by SA and NSW that the States all get a fixed share of the income tax. This hypothecated share of the income tax could then be increased if all governments agreed to raise the rates for this purpose. Furthermore, by thus achieving an agreed increase in the overall level of taxation nationally, it would help to resolve Australia’s most important longer-run fiscal problem.

     

  • Ian McAuley. Labor’s policies.

    Amid all the political chatter about tensions between Turnbull and Morrison, a possible early election, and the laundering of donations to the Liberal Party, Labor has released a substantial policy document –Growing together: Labor’s agenda for tackling inequality.

    With a gathering of Labor luminaries – Jenny Macklin (who has main carriage of the policy), Bill Shorten, Chris Bowen, Andrew Leigh – it was hardly surprising that the media had a strong presence at its launch at ANU late last month.

    But it turns out that the journalists were more interested in a photo shoot than in public policy, because the document got little media coverage. Those who believe in an anti-Labor media conspiracy would not be surprised, but my view is that the journalists were looking for “deliverables” in the form of specific proposals (they found a few tidbits), but they weren’t equipped to do justice to a document outlining a major shift in policy emphasis.

    The document has two strong policy messages. First is its focus on inequality. Not welfare transfers or redistribution, but inequality. Second is its dismissal of any idea that there is a tradeoff between “economic” and “social” objectives.

    To understand how far these messages are out of sync with our present thinking, imagine Christian Porter, Alan Tudge, Scott Morrison and Mathias Cormann on one platform giving unscripted statements on the economic importance of dealing with inequality?

    These policy principles should really be no-brainers. Who would not say inequality is a major problem? And who would not believe that good economic policy and good social policy are inseparable?

    Unfortunately, they are not obvious.

    While most people may understand the moral case against rising inequality, they do not necessarily grasp the fact that inequality has bad economic consequences. High and persistent inequality destroys incentives, creates an “underclass” dependent on social security transfers, deprives people of the opportunity to develop and use their capabilities, and in the long run undermines the political legitimacy of the economic system. It’s no surprise that worldwide we are seeing the emergence of populist politicians with simplistic prescriptions for complex problems.

    And to suggest that we must sacrifice social objectives for the sake of “the economy” makes no more sense than the (probably apocryphal) story out of the Vietnam War: “we had to destroy the village in order to save it”.  As the philosopher Karl Polanyi stressed, we live in a society, not in a market: markets are, or should be, subservient to society, and should be subject to society’s norms. There is no superior entity called “the economy” to which we must pay homage. Economic policy that goes against our desire for a fair and just society is just plain bad economics.

    Yet that’s not the way the public see it. Poll after poll gives Labor a strong lead over the Coalition in “social policy”, while giving the Coalition a strong lead in “economic policy”.  Such a contradiction could be sustained only if the idea of a tradeoff is ingrained in people’s minds.

    So while Labor is on the right track in bringing together economic and social policy, it has a lot of convincing to do. Some of that work has to be directed at the public in general, some at journalists who have difficulty in understanding public policy, and some has to be directed at enthusiasts on the “left” who are too ready to dismiss economics, and who abandon the quest to find ways of overcoming inequality and social exclusion that are based on sound economic principles.

  • John Menadue. State income taxes – another political diversion?

    Malcolm Turnbull’s suggestion of states entering the income tax field may please ‘state rightists’ in the Liberal party, but it will damage our national aspirations and our national society and economy.

    In the repost below, Michael Keating, almost two years ago emphasised the importance of the commonwealth government’s domination of income taxes since 1942. This commonwealth government supremacy has been a key factor in building our successful national economy and society. Or as Paul Keating has said, the commonwealth’s income tax monopoly ‘is the glue that holds us together’.

    We federated to overcome the confusion of six different state tariff regimes. Do we now want eight different incomes tax regimes?

    The commonwealth’s supremacy in income tax is critical for economic management across the country. Do we want to weaken that national leadership and responsibility?

    We have national markets in every field and with a very mobile workforce. Do we now want to put up state barriers to this?

    Malcolm Turnbull’s proposal would put pressure on the states to reduce their own tax rates. Perhaps this is what his ‘state rightist’ supporters would like. We saw that in the 1970s when Queensland reduced state taxes and abolished death duties. All other states followed and we are now much worse off as a result. If states decided to introduce their own income taxes, we could see another race to the bottom.

    What Malcolm Turnbull is trying to do was tried forty years ago by Malcolm Fraser. The details may be different, but the Fraser proposal went nowhere.

    The Turnbull government has become very agile in diversionary tactics. The Abbott government spoke of a debt and deficit disaster but the Turnbull government wants to divert attention elsewhere. A GST was deliberately floated but then our attention was directed elsewhere. One critical issue above all else is budget repair. The Committee for Economic Development in Australia (CEDA) and others have suggested options for overcoming our persistent budget deficit, including increases in revenue. But the government doesn’t want to hear about that, so our attention is diverted to state income tax.

    I believe that strong national economic and social leadership is essential for the commonwealth government in the 21st Century, particularly in the global world economy in which we live. That globalisation will continue to grow. Why should we handicap ourselves in meeting such a challenge?

    I have always believed that ‘cooperative federalism’ although less sexy and requiring hard work, is the much better way to proceed. In the health field where states spend up to 30%of their budgets, I have proposed for many years a joint commonwealth-state health commission in any state that will agree. Perhaps a joint commonwealth-state health purchasing agency in regions would be a more practical way to start. I will be writing more about cooperative federalism in the health field.

    Tony Abbott has left us with many unfortunate legacies. He abolished the COAG Reform Council which had been trying to lead an informed debate on ways that the commonwealth, state and territory governments could cooperate to harmonise their responsibilities. One task of that Reform Council was to build a ‘seamless national economy’.

    Malcolm Turnbull seems to want to pull the seams apart.

    Michael Keating will be writing further on this subject.

  • Chris Bonnor and Bernie Shepherd (researchers). School Myths Busted.

    What My School really says about our schools. (Text of press release of 28 March 2016)

    In the wake of the latest version of My School two researchers have published a startling account of what the numbers behind the website actually show. Former school principals Chris Bonnor and Bernie Shepherd have revealed new findings which challenge myths about Australia’s schools.

    While reports are frequently about the ‘drift to the private schools’ Bonnor and Shepherd have found that the drift could be equally seen as one from low socio-educational advantage (SEA) schools to higher SEA schools. As recently reported on Lateline, they show that enrolments are increasing in higher SEA government schools, but declining in low SEA government schools.

    Lower SEA schools in all sectors are tending to lose their more advantaged students, while higher SEA schools, again in all sectors, are not only getting bigger but are increasing their enrolment of the most advantaged.

    “The flipside, as Gonski warned, is that disadvantage is being compounded in lower SEA schools”, Chris Bonnor said. “Hence the student achievement gaps between advantaged and disadvantaged schools are widening. My School data shows Australia’s school equity problem is worsening, especially in the secondary school years and in metropolitan areas’.

    The two former principals warn against using rusted-on beliefs, rather than evidence, to decide future directions for Australia’s schools.

    “The current trend is to make public schools more like private schools, in the belief that the latter get better results. We use both NAPLAN and HSC results to show this is a myth.”

    They also found that government recurrent funding (per student) to private schools is increasing at around double the rate of increases to public schools.

    “We are already seeing large numbers of private schools getting more public funding than goes to public schools serving similar students”, Bonnor and Shepherd warn. “The idea that private schools save public funds is at best a half-truth – on the way to becoming a myth.”

    Their analysis also shows that the high spending on students who are already advantaged is not improving measurable student outcomes.

    “The government portion of this overspend is around $1.5 billion each year. It would be a better investment if it was redirected to more needy schools,”.

    Bonnor and Shepherd’s new publication School Daze – what My School really says about our schools, is available for free download at www.edmediawatch.com

    For more information contact Chris Bonnor on 0411048200

  • John Menadue. Making the Federation work better.

    The Abbott Government decided that over the next decade commencing in 2017 the Commonwealth Government would reduce grants to the states for education and health by $80 b. This is likely to produce a major and concerted campaign by the states to protect their hospitals and schools. It does provide an opportunity for more effective cooperation between the Commonwealth and the States in the health sector. I have reproduced below an article on this subject which was posted in May last year as part of the policy series co-edited with Michael Keating. I argue for the establishment of a joint Commonwealth State Health Commission in any state that will cooperate. In addition to this state by state approach, it might also be possible to build cooperation on a region by region basis. I do not think that a major change in constitutional arrangements is possible or that the Commonwealth will concede completely to the States or vice versa. But I believe that a pragmatic and step-by-step approach could be successful.  See repost of article below.

    Repost

    State governments spend about 25% of their budgets on health and another 25% on education. A cooperative arrangement between the commonwealth and state governments in one of these areas would greatly improve the operation of our federation. This article will focus on possible cooperation in health.

    A State handover of health services to the Commonwealth, as suggested by Tony Abbott many years ago, would be one way to overcome the waste and buck-passing between the Commonwealth and State governments in health. Kevin Rudd suggested that his government might take over state hospitals. Opinion polls suggested that the public would support this approach. But Kevin Rudd backed away. In passing it should be noted that the Commonwealth has no recent experience in running hospitals. It is not an easy task.

    But as a Commonwealth takeover is most unlikely, an alternative would be to establish a Joint Commonwealth/State Health Commission (Joint Health Commission) in any State where the Commonwealth and a State government can agree – a coalition of the willing, a Commonwealth/state partnership on a state by state basis.

    It is envisaged that the joint commission, with shared Commonwealth/State governance would be responsible for funding, planning and integrating all health services in that State. Consistent with an agreed plan, the Commission would then buy health services from existing providers – Commonwealth, State, local, NGO and private.

    A political agreement between the Commonwealth and any State is essential. If this political agreement is achieved, we would see a more cohesive and integrated health service, delivered much more efficiently. Once the benefit was clear in one State, hopefully other States would follow.

    I believe that this proposal would have strong public support. We are tired of the blame game.

    Either the Commonwealth government or any State government could initiate the breaking of the impasse.

    Background

    The Commonwealth Government provides about 43% of national health funding and the State Governments and territories 26 %. Another 31% of funding is from non-government sources (mainly individual users of health services).

    In both the NSW and SA health reviews that I chaired some years ago, a view was widely expressed that it’s all very well for State governments to review their health systems, but a major problem is the inefficiency, fragmentation, gaps, cost and blame shifting which results from the different roles of the Commonwealth and State governments in health’. This view was expressed, not only by those working in the health system, but also by the community generally. It was also frequently expressed by the media. The problem of divided responsibilities is well understood. The public doesn’t really give a hoot who plans and delivers health services. The public’s real concern is that the services are provided efficiently and equitably.

    Integration of commonwealth and state health functions are essential. Professor John Dwyer, in this blog, estimated   that more than 600,000 state hospital admissions per year could be saved if there was more timely community intervention which is funded by the Commonwealth.

    A solution requires a political agreement between the Commonwealth government and at least one State. The political issue cannot be avoided and attempts to get around this issue are likely to be unsuccessful, time-consuming and cumbersome. A bureaucratic or organisational response to a political problem will be unsatisfactory. The issue must be addressed politically. If there is political agreement, governance, financial, administrative and other issues could be successfully managed.

    Such an approach would not produce a unified national health system, but six (excluding the territories for the moment) joint health systems which are State-based. Nonetheless, this would be superior to the present division and fragmentation. The six State-based joint commissions may also better reflect the different history and needs of respective States. One size doesn’t necessarily fit all.

    The states may also be now more interested in what is proposed here because the 2014 budget suggests that over the next 10 years the Commonwealth will contribute $ 50 b less to state hospitals than the outgoing Labor government proposed. There was no certainty that this 10 year funding would have remained in place but I don’t think there is any doubt however that the Abbott government will attempt to shift more responsibility to the states for hospitals and schools.

    A Joint Health Commission in any State where the Commonwealth and the State could agree would have the following characteristics.

    1. Coverage of Joint Health Commission

    The wider the coverage the better to ensure real and comprehensive resource allocation and integration of services across the full continuum of care. The following programs should be included as the planning responsibility of the Joint Health Commission.

    • State Health (including Health Care Agreement)
    • High level residential aged care
    • Department of Veterans’ Affairs (DVA)
    • Home and Community Care (HACC)
    • Commonwealth Regional Health Services in rural and remote areas.
    • Medical Benefits Scheme (MBS)
    • Pharmaceutical Benefit Scheme (PBS)
    • Aboriginal Health
    • Local Government health
    • NGOs (e.g. nursing services)
    • Public health

    State Health, HACC, etc. would tender for the provision of services to the Joint Health Commission. Similarly, local government and NGOs would tender, although allocations to them would probably need to be made through the State Health department.

    Private hospitals could probably be excluded from this coverage, as they depend on private contributions rather than direct government funding – except for occasional seed money. But provision should be made for private hospitals, along with local government and NGOs, to tender for supply of services to a Joint Health Commission, (see 3 below). The private delivery of health services should be encouraged where it is consistent with the state-wide plan and is delivered efficiently.

    Importantly, existing providers would continue to operate and provide services, and where appropriate, ministers – both Commonwealth and State – would continue to be responsible for their own services. But those services would be purchased by the Joint Health Commission as part of a state-wide plan, which I refer to under ‘functions’ below.

    2. Pooled Funding of Joint Health Commission

    The Joint Health Commission would receive a negotiated pooled allocation of funds from the Commonwealth and the State government. which reflected the coverage of programs for which it would be responsible (see 1 above), with appropriate population growth and cost indexation add-ons. As a starting point the shares of the two governments would reflect their current funding shares. Changes in the shares and total funding would be subject to the advice of the National Health Performance Authority (NHPA). That Authority would provide public advice to the two governments. The two governments would need to agree on annual funding arrangements.

    Whilst confidence in the funding formula is developed, it might be useful to consider shadow funding in the first 3 years and move to actual pooling of funds thereafter.

    3. Functions of Joint Health Commission

    1. a) Shared Resource Allocation through the purchase of various services from providers – Commonwealth, State and local government, and NGOs as part of a joint strategic plan.
    • In this case, shared resource allocation can be achieved through the establishment of a minimum set of Commonwealth and State programs.
    • The major changes associated with the JHC would provide an opportunity to move from producer dominated health care delivery to an output/patient focussed delivery system. So many of our health programs reflect provider interests; the MBS reflecting the interests of doctors and the AMA, the MBS reflecting the interests of the Pharmacy Guild and Big Pharma and public hospitals reflecting the interests of their providers, state governments. Patients are a secondary concern. We need to shift to a patient focussed health system in such key areas as chronic, acute and occasional care.
    • Funding would be allocated with agreed short and long term integrated outcomes, rather than siloed program outcomes, with specified standards and levels of performance.
    1. b) Shared Performance Management

    Oversee continuous improvement of the health system, monitor progress and establish reform targets and timelines:

    • Development of standard measurement
    • Benchmarking
    • Patient-centred best practices

    The NHPA provides an excellent opportunity for the establishment of a system that can meet the needs of consumers, community and health services. The NHPA can provide an approach that examines health status and outcomes, determinants of health, and health system performance.

    The NHPA should facilitate the mapping of progress for the population of a State, region or service. It could also be used to examine progress in tackling a particular health problem (e.g. aboriginal health), and to take a wider look at the interface between health and other government departments, the private sector and non-government organisations.

    4. Joint Health Commission Governance

    The following features could be included, and would ensure full Commonwealth and State government input into the state-wide plan:

    • Membership of the board should be high level to enable strategic decision-making on broad and longer-term issues.
    • Maximum transparency and disclosure of the Joint Commission’s work and final recommendations in order to neutralise special pleading and vested interests and to ensure public understanding and support.
    • The board of directors must have clear ‘governance’ responsibility and not a junior role. They should reflect the broad interests of the whole community and not be seen as representative of the Commonwealth or State or ‘insider interests’ that so dominate health systems in Australia.
    • Independent chair appointed by the two Ministers from a short list provided by the respective Commonwealth and State Health CEOs. It might be useful to have the chair from another State.
    • Apart from the chair, no jurisdiction to have more than 50% representation.
    • Representation could include other Commonwealth and State jurisdictions (e.g. Indigenous Affaires) and people having experience in the private sector.
    • The board would appoint the CEO who would be responsible to the board and not the two jurisdictions.
    • The board would approve the strategic plan and budget.
    • A constitution may be useful to provide more user-friendly objects, role, function and operating procedures, including engaging the private sector.
    • Subsidiarity should be an important principle for governors in developing the state-wide plan. Management and service delivery should be driven down to the lowest and most local level possible, consistent with state and nation-wide standards.
    • The Board should have a small secretariat, but rely on Joint Health Commission for planning etc. It must avoid a new level of bureaucracy.
    • Board costs would be shared by Commonwealth and State.
    • The Commonwealth and State minister would be responsible for negotiating high-level policy principles, including overall funding on the advice of the board. This would help reduce the risk of the board dividing on Commonwealth/State lines. Ministers must reach broad agreement if the Joint Health Commission is to work.
    • The board should be responsible to the Commonwealth and State minister, with one financial report to both. If there is not agreement between the two ministers, there would be a public dispute resolution procedure which would encourage cooperation and dialogue between the two ministers. This would encourage public trust in the integrity of the process. I would expect that this would produce an agreement in almost all cases. If resolution is not possible, the Commonwealth minister would prevail; given the need for a stronger national role and that the Commonwealth Government provides 43 % of national health funds compared with 26 % by the states.

    These governance arrangements could be reviewed in 5 years.

    Summary   

    A Joint Health Commission established upon agreement of any State with the Commonwealth would be a substantial improvement on the present arrangements. It would help break the impasse on federalism and better integrate health services. It requires a political decision between the Prime Minister and premier.

    The public is tired of the blame shifting and fragmentation in health and would respond to a sea change such as this. Such a joint health commission in any State that agreed would help achieve what both of them are seeking in health – a better integrated health system and a favourable community response, A committed Commonwealth government could use its financial leverage to make such an offer attractive to the states.

    A Joint Health Commission in any one State could begin to address the ‘big ticket’ problems in health delivery – the Commonwealth/State fragmentation, an eroding primary health care system, an antiquated workforce structure and obvious system failures in safety and quality.

    Of course, the fragmentation in health is not just caused by Commonwealth-State fragmentation. The two big Commonwealth programs – MBS and PBS – are not effectively integrated.

    All these big-ticket issues are lost sight of in the argy-bargy of Commonwealth/State blame and cost shifting.

    Not only would a Joint Health Commission in one State be a substantial improvement, it would also be very symbolic, demonstrating that governments can address hard political issues in a cooperative way.

    We must stop asking continually for more money or tweaking the health dollars, when many problems are structural. A lot of health spending is counter-productive – throwing money at problems to get them out of the media or for short-term political gain, rather than solving systemic problems. Any increase in health dollars must be accompanied by system change. A Joint Health Commission starting in one State is a sound way to begin breaking the impasse.

    The key is political will by ministers. If there is the political will, the governance problems can be resolved.

    There is no reason that the principles proposed above in health could not be applied in other fields such as education.

    John Menadue AO was formerly Secretary Department of Prime Minister and Cabinet, Secretary Department of Trade, Ambassador to Japan and CEO of Qantas.

  • Jonathan Page. The Inspiration of Vietnam

    Postcard from Hanoi:

    I have been an oncologist for some 35 years, treating adults with advanced cancer. Despite a far greater understanding of the disease, with the discovery of quite remarkable “targeted” therapies, most patients still die of this disease. Many are not suitable for these treatments, many don’t respond or respond poorly and briefly, and of course many simply present very late in the course of the cancer.

    As an oncologist I am thus confronted by uncertainty, sadness, despair and grief on a regular basis, as are all the members of the oncology team, but at times leavened by the joy of success, the gratitude of families and the deep insights into the human “soul”.

    Through my own adult life I have had a mixed relationship with death, particularly my own, beginning with a simple non-acknowledgment, then noticing an increasingly intrusive terror, with quite visceral reactions to certain patients as they moved towards their own demise under my care. I was in my forties at that time and would experience profuse sweating, tremors, nausea and a curious clouding of consciousness. I thought I may have malaria (a noble affliction) but to whom should I go for wise counsel? There was little wisdom to be found. Over time my symptoms evolved into a depression, but this only became clear to me years later, in retrospect.

    Technically I had been suffering “thanatophobia”, that is “fear of death”. A common complaint, but rarely considered (in our society) since we prefer a “cultural denial”. Thus, more recently, over 15 years or so I have pursued a deeper understanding of death, my own and that of others. This universal phenomenon unites us all. As John Donne reminds us: “any man’s death diminishes me, because I am involved in mankind, and therefore never send to know for whom the bell tolls: it tolls for thee”.

    I have learnt much from Joan Halifax who wrote “Being with Dying: Cultivating Compassion and Fearlessness in the Presence of Death” and the late Stephen Levine who wrote both “Who Dies? An Investigation into Conscious Living and Conscious Dying” and also “A Year to Live: How to Live this Year as if it were your Last”. I have completed a one year course based on this latter book.

    Death has now become less fearsome to me and more interesting! As Buddhism has told us for 2,600 years, a regular meditation on one’s own death will invigorate one’s life and shed some light on the true nature of the world and the meaning of our own experience.

    The complete practice of oncology requires some exploration of one’s own mortality, to more deeply understand the experience of each patient, to be of service and, importantly, to learn. There is a long history in most cultures of a specific “companion to the dying”. Medical practitioners including oncologists are ideally placed to occupy this role.

    Over the years I have been greatly supported by a mindfulness practice including regular meditation. Again, this cultivation of mindfulness, bringing one’s mind into the present moment with awareness and “heartfulness”, is an ancient Buddhist practice, taught also in other spiritual traditions and in more modern secular environments. This practice enables a deeper understanding of one’s inner emotional life, allowing one to be more “available” for patients, rather than locked within a defensive carapace. The risk of “burnout” and depression is far less.

    Strangely (or perhaps not) these skills have never been a substantial part of medical education or the oncology specialty, with some notable exceptions such as the programme at Monash University in Melbourne and the long-running “The Healer’s Art” course developed by Dr Rachel Naomi Remen at University of California, San Francisco School of Medicine.

    What about Vietnam?

    I have had the privilege of visiting this astonishing country many times, firstly as a medical student in 1974, then more recently with colleagues, supported by the Hoc Mai Foundation, travelling to Hanoi to teach Medical English, oncology and other specialty topics. However, at a deeper level, I (and I suspect my colleagues also) travel to Vietnam to learn from this resilient, gracious and warm-hearted people. I feel there is a spiritual nature to the Vietnamese society, reflecting elements of Buddhism, Confucianism and Taoism.

    It is helpful to leave one’s ‘ego” or one’s “sense of an important self” at home and thereby immerse oneself in this enriching and restorative culture. The Vietnamese (to my eye) seem to embody a friendly mindfulness, a universal respect, remarkable patience and lack the reactivity so often seen in more “Western” cultures.

    I am looking forward to a further visit to Hanoi, to renew friendships and, importantly, to imbibe the pervasive spiritual vitality in that city that now has a direct positive impact on my work.

     

    Jonathan Page, Medical Oncologist, Manly and The Mater Hospitals, Sydney, NSW.

  • John Menadue. Postcards from Hanoi.

    I will be in Hanoi from February 17-26, attending a Hoc Mai Foundation workshop on learning from each other about health issues in Vietnam and Australia, and assisting in the learning of English in the health field. Hoc Mai means ‘forever learning’.

    The foundation was established in the late 1990s. University of Sydney was a very active partner.  Over 30 groups of Australian clinicians and others interested in Vietnam have travelled to Vietnam since the late 1990s. 29 Australians will be in our group in Hanoi.

    Emeritus Professor Kerry Goulston will be leading our group. He has made almost 30 visits to Vietnam as part of the Hoc Mai Foundation.

    During this February visit, a few of us will be sending ‘postcards’ from Hanoi. The first postcard  from Jonathan Page, a medical oncologist, follows.

  • Reversing the Flight to Private Schools Depends on Reforming Australia’s Incoherent and Unfair Funding System

    New school enrolment data show that the long-term shift of students to private schools has stopped in recent years. But, whether it will be sustained is uncertain given school funding trends that massively favour private schools.

    Figures released by the Australian Bureau of Statistics this month show no change in the share of enrolments between public and private schools over the past three years. Public schools enrolled 65.1 per cent of all students in 2015, the same as in 2013 and 2014. Prior to this, private schools had regularly increased their share since the 1970s.

    The figures show different trends in primary and secondary school enrolments. Public primary schools increased their share of enrolments from 68.9 per cent in 2011 to 69.5 per cent in 2015, with small increases each year.

    However, the shift to private secondary schools has continued at much the same rate as in previous years, although it did slow markedly in 2015. The public school share fell from 60.3 per cent in 2011 to 59.2 per cent in 2015. The year-on-year growth in private secondary school enrolments has averaged about 0.3-0.4 per cent since 2010, but in 2015 it was 0.2 per cent, the smallest increase since 2009 and 2010.

    The shift in primary school enrolments to public schools came largely at the expense of Catholic schools. The share of Catholic school enrolments declined from 19.4 per cent in 2011 to 18.9 per cent in 2015. The Independent school share fell only in 2015, down from 11.8 per cent in 2014 to 11.6 per cent.

    The Catholic share of secondary school enrolments fell slightly in 2015 for the first time in decades, from 22.6 to 22.5 per cent. The Independent school enrolment share increased from 17.7 per cent in 2011 to 18.3 per cent in 2015.

    While it is important not to read too much into small changes, the figures do suggest a significant change in trend in primary school enrolments. Families now seem to be more inclined to enrol their children in public schools than for many years.

    There appear to be a couple of factors behind the change.

    One is that there has been a significant slowdown in average weekly earnings growth in the past few years and some families may be finding it harder to pay fees at private schools. Wages growth has been at historically low levels over the past three years – increasing at about 2 per cent a year compared to 3.5-4 per cent in the decade before.

    The slowdown in wages growth has probably more affected the ability of Catholic school families to pay fees than those in Independent schools who tend to attract better off families. When families are feeling the pinch, their first option is likely to be reduce expenditure on primary schooling rather than secondary.

    The second is that over the past few years there has been increasing awareness in the community that there is little academic advantage in attending private schools. Public schools achieve similar results to private schools for a given socio-economic background of parents. Research findings consistently show that students from a given socio-economic background achieve similar results in public and private schools. Increasing awareness of these findings may be affecting decisions about whether to enrol in private schools.

    There can be no certainty that the change in trend will be sustained as the long-term shift to private schools has been fuelled by increasingly skewed government funding. Between 1998-99 and 2013-14, government funding (Commonwealth and state/territory) per private school student, adjusted for inflation increased, by 39 per cent compared with only 17 per cent for public schools.

    The situation has been even more dire in recent years. Real government funding for public schools has decreased while funding for private schools continued to increase. Between 2009-10 and 2013-14, public school funding per student fell by 3 per cent but private school funding increased by 10 per cent.

    Many private schools serving the most privileged sections of Australian society continue to receive large funding increases while many schools serving the most disadvantaged communities have received only small increases and, in some cases, reduced funding.

    For example, government funding of Korowa Anglican Girls School in Melbourne, with 83 per cent of students from the highest socio-economic status (SES) quartile and 1 per cent from the lowest quartile, increased by 38 per cent between 2009 and 2013. In contrast, funding for Northern Bay P-12 College in Geelong, with 73 per cent of students from the lowest SES and 1 per cent from the highest quartile, had its funding cut by 18 per cent.

    In Sydney, government funding for Ravenswood Girls School, with 85 per cent of students from the highest SES quartile and none from the lowest quartile, increased by 28 per cent while funding for Punchbowl Boys HS, with 63 per cent of students in the lowest SES quartile and only 2 per cent in the highest quartile, had its funding cut by 3 per cent.

    Given this, it is a big call to expect that public schools can hold or increase their share of enrolments. Australia has a distorted, incoherent and unfair school funding system in which privilege trumps disadvantage.

    The Gonksi plan promised change. However, it was sabotaged by the refusal of the Abbott and Turnbull governments to fund the last two years of the plan when some $7 billion was due to flow to schools, including $5.8 billion to public schools.

    At least Labor has given voters a clear choice on education by promising to restore a large part, though not all, of its original commitment made when it was in government. It offers hope that disadvantaged schools and students will finally get some justice and that public schools will be able to reverse the enrolment shift to private schools over the longer term.

    Trevor Cobbold is National Convenor of Save Our Schools

    http://www.saveourschools.com.au

    https://twitter.com/SOSAust

     

     

     

     

  • Chris Bonnor. Labor goes back to the Gonski future.

    The ALP’s commitment to funding Gonski for the full six years has created interest and even excitement, being welcomed by the three main school sectors, but panned by the Coalition.

    So why do I just feel that we’ve been here before?

    It could be because everyone welcomed Gonski’s findings and recommendations in 2012, but what followed was one disappointment after the other. Key players in the the non-government school sector soon disappeared behind closed doors to argue the details, especially the weighting given to student needs. It was probably academic: after the 2013 election the Coalition abandoned Gonski funding plans for the vital last two years of the six year period.

    But let’s share the blame around. As education minister and as prime minister Julia Gillard dragged her heels in setting up the Gonski review and then in acting on its findings. When the 2013 election loomed Labor created and jumped into a trench, ready to do battle with Abbott around school equity and Gonski funding. Abbott and Pyne then declared a ‘unity ticket’ on funding and Gonski disappeared as a significant election issue.

    Fast forward and we have another ALP leader facing an election from well behind a reinvigorated Coalition. Malcolm Turnbull and Simon Birmingham have nailed their colors to the masthead, having recently abandoned any idea of funding Gonski for the full six years. A door has opened for Bill Shorten.

    Like Gillard, Shorten is keen to get on the front foot in anything which will define a difference with the Coalition. When Abbott was around the ALP showed little inclination to talk about Gonski funding. Their conversations about school education policy seemed to focus on anything but. Now Shorten is on fire, taking a leaf from Gillard’s 2013 strategy – and on current form, heading for the same outcome.

    Labor’s announcement included separate funding for students with a disability, even though no one seems to know how many students have a disability and where they go to school. Years ago Gonski recommended that we find out. Disability funding has created a few headlines recently and both sides of politics want to be seen to be responding.

    Shorten also mentioned that the distribution of future funding would be “sector neutral”. Whatever that means, it sounds new – but was more likely a misuse of words. Gonski’s distribution was to be sector-blind, in effect funding on need without school sector being a consideration. Sector neutral suggest making sure everyone gets a slice of the funding pie, regardless of need.

    Meanwhile the lofty goals of yesteryear have been dragged out again. Gillard wanted Australian kids to be ahead of Shanghai by 2025. Shorten wants something along those lines and a 95% retention to Year 12. This time around Labor has stressed that there will be strings attached to the money – as indeed there should be. Kate Ellis has  stipulated the need for a strong evidence base to where the funding is to go. Another good move.

    Simon Birmingham has predictably responded by complaining that spending more money doesn’t improve results. He needs to revisit this script: it seems that the best evidence to support this assertion comes not from struggling schools but from high-fee non-government schools. NSW Minister Adrian Piccoli guardedly welcomed Labor’s new commitment. From opposite sides of the fence the AEU and the Independent Schools Council of Australia seem happy – as they were in 2012.

    Here we go again, maybe.

    Chris Bonnor is a Fellow of the centre for Policy Development and a Director of Big Picture Education Australia

  • Chris Bonnor . Unhappy New Year, struggling schools and parents!

     

    Prime ministers come and go but the timing of nasty announcements doesn’t change. And so it was with the dumping of Gonski funding beyond 2017, announced in the traditional period of national lethargy between Christmas and New Year. It came despite earlier rumours which suggested Turnbull would pull a rabbit out of the hat – but the December MYEFO showed an increasing deficit of fiscal rabbits.

    Aside from a very few, the reaction was one of dismay, including from NSW. Amongst the few was Jennifer Buckingham who joined the usual ‘more money doesn’t deliver’ chorus, drawing attention to recent findings which suggested funding makes little difference to student achievement. But the full report on the impact of National Partnership funding in NSW shows that, with certain programs and practices in place, targeted funding is certainly effective.

    Alas it seems that the solution is now to simply cap the funding rather than focus on support and accountability to ensure such programs are indeed in place. And of course, with no continuity of funding the successful programs will fade and new and better ways of doing school will disappear off the agenda. The trickle of Gonski funding to date won’t mean much long term. It somewhat reminds me of the laggards who exist in every school who would respond to new ideas with ‘we tried that but it didn’t work’. Governments have thrown a few dollars at equity programs and gee, NAPLAN scores didn’t go through the roof. What’s the point!

    With the Gonski deck now clear Education Minister Birmingham will just revert to the toolbox of useless school fixes paraded by his predecessors on both sides of politics. There will inevitably be some attention to equity, accompanied by high rhetoric and low dollars. And, as Buckingham implies, extra funding will be presumably accompanied by pressure for assured tangible benefits, by itself not a bad thing.

    But the pressure to show these benefits will be placed on the struggling schools, even though much of existing expenditure is poorly distributed and not particularly effective. My School shows that private schools in Australia spend $4 billion more on their students than do similar government schools – but with almost no difference in measurable student results. At the moment the government share of this unproductive investment is around $1.5 billion. A nice little amount to divert to low SES schools.

    The abandonment of Gonski has much wider implications and is going to multiply the range of problems identified by Gonski, problems which have worsened in recent years. Here are a few which have emerged from my work with Bernie Shepherd and reported in Gonski, My School and the Education Market.

    1. Socio-educational gradients (SEGs) – key measures of school equity – have worsened. For all Australian schools the gradient shifted from 32% to 37% between 2010 and 2014. SEGs for some schools, for example secondary schools, have steepened even more than 5%.
    2. Student performance varies between states and sectors, but the most significant and under-reported trend is a flat-lining of achievement in higher socio-educational advantage (SEA) schools and a noticeable decline in lower SEA schools.
    3. The SEA difference in student enrolment in the different sectors continues, but the rate of recurrent funding increases per student have favoured sectors enrolling the most advantaged.
    4. The funding differences between the sectors has reached the point where, if current trends continue, the level of public recurrent funding of students in non-government schools will exceed the level of funding of students in similar government schools. Regardless of possible future trends, the current operation of all the school sectors must be reviewed.
    5. There are stark examples, within and especially between sectors, of a disproportionately high public and privately sourced expenditure on some schools which is not yielding a return in measurable student achievement.
    6. My School data reveals a significant difference between the level of SEA of schools and the equivalent measure of the communities in which schools are located. Recent research shows that this extends to the ethnic composition of school enrolments.

    As I repeat rather too often, at some stage we’ll feel the need to have a review of the mounting unsustainability of our framework of schools. In the meantime, buckle up for a ride back to the future.

     

     

     

  • John Menadue. Our innovation-averse business culture

    Malcolm Turnbull’s Innovation statement sounded new, but was it? So much of what he said used to be called industry policy-technology parks, offsets, defense technology, support for inventors, and quality assurance. But Malcolm Turnbull dwelt particularly on the need for cultural change in business.

    I think that was new. He said that Australian businesses should be more willing to take risks and less fearful of failure. Many times he said that cultural change in business is essential. He is right.

    We do have a risk-averse business culture. And our society is much the same. We want to be comfortable. After all that is what John Howard urged us to become.

    In 2008, Dr Terry Cutler produced a Green Paper ‘Adventurous Australia’ for the Rudd Government. Following his disappointment with the Rudd government’s response on innovatio he said

    ‘Too many of our business owners or manager have what we might describe as a life-style approach to business. Even many of our so-called business success stories look like under-performers when bench-marked globally. This lifestyle model of business strategy imposes a false ceiling on ambition. Success is having the designer car in the garage and a holiday home or two. … At a recent forum, I actually heard people saying they didn’t need to expand or export because they were doing it quite comfortably as things are.’ 

    In 2012, David Gruen, Deputy Secretary of Treasury said

    ‘Management practices in Australia are mid-range. … We are well below top performers like the US, Germany, Sweden, Japan and Canada, but more similar to France, Italy and the UK. … Australia, like some other countries has a somewhat larger tail of companies with relatively poor management performance.’ 

    In August last year the Governor of the Reserve Bank told a Parliamentary committee that Australian companies were “too risk averse’ in focusing on sustaining a flow of dividends and returning capital rather than investing in future growth.

    We have been told many times about our risk averse business culture. Research and analysis confirm this.

    For example, in association with The Conversation, Roy Green, the Dean of UTS Business School and drawing mainly on OECD data, points to the following problems.

    • Australia still has a long way to go to catch up to its regional and global counter-parts in innovation. We trail well behind China, ROK and Singapore.
    • Australia’s pivot to a digital economy has stalled.
    • Venture capital investment has turned around in countries like the US, South Africa and Hungary, but in Australia it fell significantly between 2009 and 2014.
    • Australia has done little in the past ten years to lower barriers to entrepreneurship.
    • Australian businesses lack a high performance innovation culture.
    • Australia performs poorly on collaboration between the business and research sectors.

    These problems are highlighted in failure of regional linkages. Despite our heavy economic dependence on our region, our business sector has been very slow to respond. It gives lip service to building Asian expertise. But I have yet to learn or meet a board member or a senior executive of any of our top ASX 200 companies who can fluently speak a language of our region. How can we really cooperate well on innovation or indeed many other business areas with such an impediment! Those 200 companies would have over 3,000 senior executives and board members, but no Asian language expertise. That is quite extraordinary. It tells me a lot about business complacency The white male directors’ club keeps appointing people like themselves. They are comfortable as they are in their Anglo comfort zone. But comfortable people are unlikely to be good at innovation

    What is most indicative of the lack of innovation, risk-taking and entrepreneurial flair is the way our Business Council of Australia and other employer groups are invariably pressing governments to change economic policy and industrial relations in their favour. Now they are pressing for reduced company and individual tax and changes in penalty rates. Why don’t they concentrate on managing their own business instead of lobbying governments to fix their problems? They should stick to their knitting.

    So much business energy was spent lobbying against a carbon tax or an ETS that we have missed a decade in developing a new economy based on renewable energy. Many of our entrepreneurs in this field have gone overseas.

    It is not as if our business executives are poorly paid. They are extremely well paid but too often the salary packages are geared to short-term results rather than medium or long term results. Innovation takes time.

    Too often we all become complacent. We acknowledge a problem, take some remedial steps and then go on ‘smoko’ again.

  • Paul Collins. Three wise people.

    In the last eighteen months Australian Catholicism has lost three of its great leaders, people who genuinely contributed not only to the church, but also to our social and cultural life. They were Professor Max Charlesworth who died on 2 June 2014, Sister Veronica Brady who died on 20 August 2015, and Father Frank Martin who died on 2 September 2015. In a time when the church is utterly bereft of episcopal leadership, it was people like Veronica, Max and Frank who were the ones who inspired us and who remained most true to the message of Jesus and the Catholic tradition.

    Without a doubt Max Charlesworth was the most profoundly influential layman in twentieth century Australian Catholicism. A graduate of Melbourne and Louvain Universities, his contribution to Catholic intellectual life is without parallel. His primary interests were in practical philosophy, ethics, Aboriginal religious cosmology, the primacy of conscience, the role of women in religion and society and the relationship between church and state.

    He was the author of twenty books that ranged across all his philosophical interests and his emphasis on the role of the laity in the church and conscience was far ahead of his time; he was a genuine precursor of Vatican II. He and his wife Stephanie brought the lay-led Teams of Our Lady (Équipes Notre Dame) to Australia in the early-1960s and the Teams have had a continuing influence on married couples. Despite criticism from some hierarchs and laity, Max remained a man of deep, but critical faith, always loyal to Catholicism and maintaining a gentleness and humility towards all.

    Right from her earliest years as a teacher Loreto Sister Veronica Brady (born Patricia Mary Brady in Melbourne) inspired her students and challenged them to ask questions about everything, including Church doctrine. She was suspicious of belief that wasn’t “tempered with a certain amount of doubt.” In many ways she was reminiscent of the founder of the Loreto order, Mary Ward, who even in the seventeenth century was a truly self-reliant woman with a healthy independence of church authority.

    Veronica’s tertiary teaching was mainly at the University of Western Australia where she championed the introduction of studies in Australian Literature. A friend of Patrick White, she was also the biographer of Judith Wright. Speaking at the National Library, Veronica said that Wright stood “against the current of the times, against technology and the destruction of the environment, against war and its violations of our common humanity” and against the “historical amnesia” that condemned Aborigines “to oblivion.”

    These were the issues around which Veronica’s life constellated. Like Max Charlesworth she was a champion of conscience and she was part of a group critical of Cardinal George Pell’s restrictive views on conscience and who reported him to the Congregation for the Doctrine of the Faith.

    But Veronica’s interests were not limited to Catholicism. Like Max, she was a ‘public intellectual’. She was appointed a member of the board of the ‘new’ ABC when in 1983 the ‘Commission’ became the ‘Corporation’ with a new managing director, Geoffrey Whitehead, with whom Veronica often clashed.

    Her biographer, Kath Jordan, called her a ‘larrikin angel’ and that is exactly what she was. Former WA Senator Fred Chaney said that “In an often smug and complacent society, we need Veronica Brady and her ilk to remind us to look beyond ourselves. I think Jesus would be OK with her.” Precisely!

    At age eleven Frank Martin was a member of the Vienna Mozart Boys Choir. Well, to be precise, a choir made up of Austrian boys from the Vienna choir stranded in Australia at the outbreak of war in 1939 and boys, like Frank, who were co-opted from the Christian Brothers College, Victoria Parade, East Melbourne to form the original nucleus of Saint Patrick’s Cathedral Choir.

    Frank at first resisted going into the seminary and for three years worked for the secretary to the War Cabinet, a very useful experience of the inner workings of government. Ordained in 1956, by 1970 he was Melbourne archdiocesan Director of Catholic Education. As such he became a pivotal player in the educational reforms initiated by the Whitlam government. We are fortunate that Frank’s long-term colleague and beloved friend, Dr Anne O’Brien, has written the history of this period and of Frank’s enormous contribution in her Blazing a Trail. Catholic Education in Victoria 1963-1980 (1999).

    By the early 1960s Catholic education was in a parlous state. Administration was decentralized and schools were “owned” by either parishes or religious orders. Working with inadequate infrastructure, poor teaching training and a massive increase in student numbers and class sizes (I was in a class of 80 in first year secondary in 1953), the Catholic “system” was on the brink of collapse.

    But after the Goulburn school “strike” of 1962, government money gradually became available, especially after Gough Whitlam persuaded the Labor Party to support state aid. But the church had to organize to receive it accountably. Frank Martin in Melbourne and Archbishop James Carroll in Sydney took the initiative. Here Frank’s background in government was pivotal. He was appointed to the Schools Commission in 1972 by Whitlam which introduced block funding and needs-based payments to Catholic schools. To facilitate accountability responsibility for funding moved from parishes to diocesan Catholic education offices. Frank was central to all of these processes.

    However, a small clique around Bob Santamaria was determined to resist and this merged into their opposition to Vatican II changes in the church. But in the end the contemporary Catholic system was established because of Frank’s skill, persistence and political nous.

    From the 1980s onwards Frank worked as a parish priest in Endeavour Hills and Cheltenham. Both parishes became beacons of hope and his sermons on social justice and issues that resonated in people’s lives meant that parish Masses were packed.

    It is people like Max, Veronica and Frank who have been true leaders in the Catholic and the wider communities.

     

    Historian broadcaster and writer, Paul Collins was a friend of Max, Veronica and Frank.

  • John Menadue. Australia’s Comparative Advantage and Policy Reform

    In May and June of this year, Michael Keating and I edited a policy series ‘Fairness, Opportunity and Security’. This policy series has now been published in book form.

    We were and remain concerned about the policy vacuum in Australia.  We are anxious that the debate on policy reform continue.

    An important contribution to this debate has now been made by a report ‘Australia’s Comparative Advantage’. This report was sponsored by the Australian Academy of the Humanities, The Australian Academy of Science, the Academy of Social Sciences in Australia, and the Australian Academy of Technological Sciences and Engineering. The authors of the report were Professor Glenn Withers, Dr Nitin Gupta, Ms Lyndal Curtis and Ms Natalie Larkins. In releasing the report, Professor Glenn Withers said ‘Australia has achieved much over recent decades but there are substantial challenges ahead, including the risk of economic slow-down with the ending of the mining investment boom.’

    The conclusions of this report were as follows:

    When considering what the future may
bring, this report has found that thinking that tomorrow will be more of the same as today is not good enough. All possibilities need to be contemplated. In choosing how we face that unknown, and in some cases, unknowable future, a broad approach is necessary to make sure that the foundations with which we will face the new challenges are enhanced for whatever may come.

    Australian progress faces challenges of great importance, but these are challenges that this project finds can be met. In the view of this report, building comparative advantage will require a commitment to ongoing institutional reform and to investing in our future capabilities as a nation. The report outlines packages of policies that are illustrative of what is required.

    Natural advantage sectors will still contribute mightily, but they can usefully be matched by the equally promising created advantage in the traditional areas of economic advantage and emerging advantage opportunities in advanced manufacturing and service industries.

    The report also concludes that institutions and culture must be configured to support this process, including through Australia’s rather distinctive deployment of major public-private partnership systems, and that better leadership, management and the encouragement of innovation and entrepreneurship will be a key to

    success. In all the above-mentioned illustrations the importance and centrality of knowledge/ ideas would be explicitly recognised in the associated structures and policies.

    The project has found evidence that the Australian public is increasingly willing to commit to and support such ways forward. Explanation and leadership is needed for this vision to realise its potential, but the Australian community has the level of sophistication to understand what is needed to inform and support that process.

    Building comparative advantage is not simply addressing a list of policies or proposals but ensuring the framework of a broad-based foundational approach to the Australia of the future is understood and at the heart of decision- making and debate. Australia does well at many things but that is no guarantee of future success. If we want the country to be the best it can be, we will have to build that future.

    This report affirms that pursuing both institutional changes in political, legal, market and cultural arrangements alongside investment in skills, infrastructure and innovation would
see long-lasting benefits to growth and living standards. These initiatives would develop
the national capacity to realise comparative advantage and compete well in a changing global environment. They would also enhance our ability to do this equitably and sustainably.

    The full text of this report can be accessed from the link below:

    http://www.acola.org.au/index.php/projects/securing-australia-s-future/project-1

     

    John Menadue.

  • John Menadue. Good schools, good teachers, good students and Gonski.

    On November 15, 2015, The Sun Herald carried a very encouraging story about St John’s Park High School in Sydney, is principal Sue French and staff, and most importantly – its students.

    Quoting Ms French, the report said

    At .. St Johns Park High School, more than 90% of students come from a non English speaking background, while more than 100 of them are refugees. Yet for the HSC last year we had five students with ATARS over 99, 15  over 90, and 146 out of 170 students received a university offer. … Ms French Said. … Surprisingly, those schools had less parent involvement than worst performing schools. … The schools early intervention by one-on-one interviews was integral to identifying children’s needs, whilst the bonus of the first four years of Gonski funding had certainly helped, Ms French said. … It’s about building resilience and their ability to express themselves, so students can take the opportunities and run with it. That has been the key.

    See link below for the full reports.

    http://cese.nsw.gov.au/publications-filter/high-value-add-schools-key-drivers-of-school-improvement

    http://cese.nsw.gov.au/publications-filter/learning-curve-8-six-effective-practices-in-high-growth-schools

  • Thanks to Jake Bailey and Christchurch Boys High School.

    Just one week before his final school assembly, Christchurch Boys High School’s Head Boy, Jake Bailey, was told that he may not have long to live.

    The 18 year old NZ student was bed-ridden and absent from school for three weeks while undergoing treatment for aggressive cancer.

    But during his final school prize-giving ceremony he managed to give an inspirational speech from his wheelchair.

    “None of us get out of life alive, so be gallant, be great, be gracious and be grateful for the opportunities you have” Jake told his audience.

    The school listened in silence as he told of his diagnosis with Burkitts non-Hodgkinson lymphoma, one of the fastest growing tumours.

    See link from The New Daily to story and video of speech below:

     

    http://thenewdaily.com.au/news/2015/11/09/dying-school-captain-speech/?utm_source=SilverpopMailing&utm_medium=email&utm_campaign=20151110%20The%20New%20Daily%20final%20(3)&utm_content=&spMailingID=23943738&spUserID=MTAyODk0Mjg4NDUzS0&spJobID=680889348&spReportId=NjgwODM2MjY0S0

  • Ian Marsh. Will privatised schools and hospital drive public sector efficiency?

    One of the first substantive announcements of Treasurer Scott Morrison concerned the privatisation of schools, hospitals and community services that are provided by State governments. He enthusiastically endorsed this 2012 Commission of Audit recommendation: ‘Given the size of the human services sector (which is set to increase further as Australia’s population ages), even small improvements will have profound impacts on people’s standard of living and quality of life.’ Morrison pointed to the greater efficiency and effectiveness that a competitive regime can deliver. There is no doubt that market mediated competition can drive performance. The private sector provides daily evidence of this.

    But the notion that these approaches can be readily transferred to public services like schools and hospitals and social services cries out for deconstruction. For a start schools, hospitals and social agencies serve many purposes that cannot be easily captured in a unified price measure. How are these more subtle and variegated outcomes, which can vary hugely between individuals and between places, to be incorporated in a contract design? No easy challenge in itself. For reasons the Harper review acknowledges, it is fanciful to imagine that consumer choice can be generally instituted. In it absence, who are the omniscient, all-knowing central agents who will define the precise outcomes that contracted services should deliver? Even assuming this is possible, in practice accountability systems that recognise these wider concerns increase the likelihood of micro-management. And then the alleged benefits of privatised or contract-based settings rapidly evaporate. Innovation or continuous improvement is stillborn. Transaction costs escalate.

    Is there an alternative to these dysfunctions? One approach might be to build on private sector practices that directly lead on to service or process innovation. Think of the Toyota just-in-time production system. Toyota deliberately jettisoned end-of-line capacities to repair or correct faults. It deliberately limited back up component reserves in case of supply chain hiccups. Production was stopped by every fault or flaw. But each of these stoppages became a key source of data in Toyota’s never ending quest for improved efficiency. This covered both the immediate production process as well as the wider system in which it nested. Unlike the aggregated information or ‘strong’ signal that is embodied in price data, this approach focused on the ‘weak’ signals that were critical to continuous improvement.

    Prices embody the outcomes of a multitude of these weak signals. Note Toyota’s rise to become the major global car company. This was an immediate consequence of the visible hand of management practice – only distantly that of the invisible hand of market forces.

    Or note the consistent stellar performance of the Finnish education system. Not one single school is privatised. Instead there is a deliberate focus on identifying obstacles to student performance at an individual level and from an early age. The system deploys more special education teachers than any comparable country. These work with mainline teachers and parents to identify under-performing or troubled children. They focus on these early ‘weak’ signals and initiate immediate remedial action. Approximately one third of the pupils in Finnish schools receive extra support in special education classes.

    So markets and contracting by all means. But if they are to work the invisible hand of the market need to be supplemented by the visible hand of ‘weak’ signals. These are the building blocks of continuous improvement. Of course the challenge to identify pertinent weak signals varies widely. The relevant indicators are not the same in routine or highly specialised surgery or in Accident and Emergency or routine hospital care.

    Translated to a contracting system, how can this be achieved? In principle the answer is simple. Contractors need to report not just on the outcomes that they believe they can achieve but also the means that they propose to use to achieve them. Then they need to be held to account for both outcomes and means. A central authority then needs to manage accountability and learning about these means. Its role is to learn and then to share this information amongst providers.

    The core ethos of such a system is learning about means as well as outcomes. Its unit of exchange is the means used by different providers who are working towards broadly similar ends. But these exchanges will typically not involve anything that could be described as ‘best practice’. Most service settings are too contextualised to allow codified or standardised service designs to be developed. Service decisions need to take into account the circumstances and needs of an individual person or a specific place. In a technical sense decisions are ‘transaction intensive’ – prioritising the needs of individuals or places and mostly blending the technical skills and the empathic judgements of practitioners. Thus a teacher must respond to the circumstances of her students, a doctor to the needs of her patients. In both instances, the hardest cases can provide the richest source of systemic learning.

    Indeed where services can be codified and standardised price mediated exchange will be a sufficient driver of performance. Where the latter is not possible, price mediated exchange will not by itself drive performance. Unless contracts or other systemic arrangements also disseminate learning about means, rhetorical promises of efficiency and continuous improvement will be misleading, indeed chimerical.

    In a justly celebrated book, The Visible Hand, the distinguished Harvard economic historian, Alfred Chandler, showed the extent to which business efficiency in the United States was the product of superior management not in the first instance price mediated exchange. In seeking efficiency and continuous improvement in the much more complex world of hospitals, schools and community services this visible hand is even more critical.

    Over the past thirty years, the discipline of economics has been a fertile source of models and frameworks for the redesign of government and of public services. But as more complex, transaction intensive services (‘wicked’ problems) have come increasingly to be the focus of attention, the limitations of price mediated exchanges need to be acknowledged. This is not the royal road to innovation and continuous improvement. Pace the Harper Review, the design of a functional innovation system is a more complex and more demanding challenge.

    Ian Marsh is a visiting professor at the University of Technology Sydney’s management school.

  • Chris Bonnor. Educational opportunity in Australia.

     

     Educational opportunity in Australia – who succeeds and who misses out? This critical question about our schools is the title of a new report commissioned by the Mitchell Institute. It is a thorough, timely and outstanding contribution to our understanding of disadvantage in schooling. The report, produced by Victoria University’s Centre for International Research on Education Systems, compiles data from a variety of sources to answer the ‘who succeeds and who misses out’ question. And they do this by investigating four stages of education: beginning school, Year 7, senior school and at age 24.

    The report draws together existing information – something which adds to its value and significance. Cutting a long story very short, it concludes that only six out of every ten students succeed across the four identified stages. School works well for these students. As for the others, the report helps us know who they are and why they are falling behind. No surprise here: they are overwhelmingly the socio-educationally disadvantaged. The good news is that, with the right interventions, these young people can recover and succeed at the next milestone – as long as the school is properly funded to make the required difference. Yet another timely plug for the full Gonski.

    Notwithstanding the quality of this report I have an enduring hope that this is surely as far as we need to go in analysing the problem. It follows over a decade of research with the same message: if we want to lift student achievement we need to lift the disadvantaged. Stephen Lamb, the team leader for this report, told us that years ago. His submission with Richard Teese to the Gonski review, along with the NOUS report for Gonski, reinforced the message. More recent reports, including by Lyndsay Connors and Jim McMorrow, show that our framework of schools is dysfunctional. Bernie Shepherd and I have found that Gonski’s findings have been strongly supported by data since Gonski reported.

    A few matters arising out of the Mitchell Institute report are worth a mention. If six out of ten students are well served by our schools, then what strategies are needed for the other four? In a partial answer the report devotes attention to the problem of student disengagement, something which lies at the heart of underachievement.

    But there seem to be at least two underlying assumptions. The first is that the extent of student disengagement is something that the available data, including on attendance, retention and completion captures. Margaret Vickers is one who has challenged this in the past – and teachers are well aware of students who stay the course, but also stay below the radar and jump through the hoops without really achieving their best. For all the talk about lifelong learning, the school experience of many young people ensures that their learning life ends when they finally walk out the door. This contributes to the scale of the problem identified by the Mitchell report for young people at age 24 years.

    The second assumption seems to be that students are disengaged from schools. Many successful interventions proceed on information that suggests that it is the other way around: that the way we do school itself is disengaging and needs a rethink. The experience of Big Picture schools, to cite one example, is that students from a range of backgrounds (and for a range of reasons) have switched off mainstream schooling. Injecting a shopping list of ‘reforms’, including doing conventional school harder and longer – even with better teachers – isn’t the answer. Investigations into disengagement suggest that we should be having serious conversations with the young people and rethinking how we can tailor their learning.

    And we need to do this thoroughly and soon, with organisations such as the Mitchell Institute taking a leading role. We need to investigate authentic interventions which are making a difference, switching kids back onto learning and achievement for the long term, right now – and support the people who are doing it while planning how to scale up such success. If we don’t – and if we only just restate the problem – then we vacate the solutions field for all those intent on recycling solutions that just don’t work. The Mitchell Institute report has appeared in the same week that the media reported on Simon Birmingham’s apparent flirtation with school vouchers. Are we going to have to endure the useless reform fetishes of yet another federal education minister?

    To conclude: full marks to the Mitchell Institute and the authors of Educational opportunity in Australia. What a terrific start. Just don’t stop now!

    Chris Bonnor is a Fellow of the centre for Policy Development and a Director of Big Picture Education Australia

     

  • Dean Ashenden. What is to be done about Australian schooling?

    Dealing with high and rising social and cultural segregation is the real challenge of school reform.

    Over the past two or three months alone, no fewer than five prominent individuals and organisations have tried to answer an increasingly vexing question: what is to be done about Australian schooling?

    Australia, these various commentators agree, is among the school reform dunces of the Western world. While other countries forge ahead (the argument goes) we are stuck. Some schools and school systems – government, independent or Catholic ­– and some curriculum areas have done better than others, but since around the turn of the century none has done much more than flatline, despite strenuous reform efforts by state and federal governments.

    It is on this stubborn ground that the battle of the reform agendas is being fought. Some of the reformers want to press on in the current direction. Some want a quite different agenda. And some want a different system.

    To press on is to persist in the view that if schools are exposed to the right combination of pressures and given the right capacity to respond, they will lift their “performance,” and this will be reflected in better student results in standardised tests. Since Julia Gillard become federal minister for education in 2007, this has been the dominant Australian reform agenda, prosecuted through NAPLAN, the MySchool website, and a flurry of other measures aimed at encouraging parental choice, making schools more accountable for student attainment, and taking us to “top five by ’25.” Gillard’s Coalition successor in the education portfolio, Christopher Pyne, bought the line and packaged it up as the “four pillars” of reform.

    Two of the five recent reports ­– one by prominent academic and consultant Brian Caldwell, the other by the Centre for Independent Studies, or CIS – belong to this agenda. Their concern is not with the “pressure” side of the equation, but with the amount and kind of elbow room schools need if pressure is to turn into “performance.”

    Caldwell has been the leading Australian proponent of school autonomy since the publication of his seminal The Self-Managing School (written with Tasmanian principal Jim Spinks) in 1988. He was among the first to argue that autonomy should serve educational as well as professional and organisational ends, and was therefore among the first to realise that a causal chain with ill-defined “autonomy” at one end and closely specified “outcomes” at the other end is a long and tangled one.

    The most recent of Caldwell’s many investigations of the connection, based on the experience of four government schools in Victoria, Queensland and the Australian Capital Territory, finds that, yes, “autonomy” does improve “performance,” or it can anyway, sort of. The analysis “tends to confirm,” Caldwell concludes, “that higher levels of school autonomy are associated with higher levels of student achievement providing there is a balance of autonomy and accountability” (emphases added). In other words: in the universe of schooling, where everything is related to everything else, it all depends.

    Such inconvenient caveats, qualifications and distinctions eluded the sponsor of Professor Caldwell’s study, then education minister Pyne. “Great schools have leaders and teachers who have the independence to make decisions and deliver the education that best suits the needs of their students,” he enthused in launching the report. “And the research, including the findings by Professor Caldwell, tells us this is the right approach.”

    It doesn’t, and it didn’t, of course. The concept of “autonomy,” along with the Commonwealth’s $70 million Independent Public Schools Initiative and Caldwell himself, has been roped into a highly politicised and dubious campaign that is not interested in whether, how and to what end relationships between schools and systems need reform. It is interested, instead, in making public schools more like private ones.

    The CIS is also a supporter of autonomy and of independent public schools, but wants to go several steps further. It wants Australia to follow the example of the United States, Britain, Sweden, Chile and, most recently, New Zealand in introducing “charter” schools. Models vary, but the general idea is that charters are public schools privately operated (by for-profits as well as not-for-profits) within the terms of a contract or “charter.”

    In the CIS proposal, charters could set or choose their own curriculum and make their own industrial arrangements. They could be either “conversions,” which take over failing public schools, or “startups” going into competition with existing schools. One objective is, of course, to lift “performance,” but the CIS also argues that charters could encourage innovation and bring choice to families currently deprived of it for reasons of income and/or a preference for non-religion-based schooling.

    Considered in its own terms the case is plausible, attractive even. The charter mechanism (unlike the “autonomy” approach) recognises that the whole web of relationships of which “the school” is part needs to be rejigged. Schools working with “the disadvantaged” – the clientele the CIS has in mind – do need better ways of organising teaching and learning, hence different staffing profiles and deployment, and hence different industrial arrangements. They certainly need school-based or school-shaped curriculum. And even if the evidence about the “performance” of charters is mixed, as the CIS concedes, well, there’s still the claimed benefit of extending “choice” to those who don’t already have it.

    It is not until we step outside this advocacy that the real problems appear. Wanting to introduce charters into the US system in 1991 (when the first charters were established) is a very different thing from wanting to introduce them into Australia in 2015. In the United States the charters were designed to tackle the public school monopoly in the interests of variety, choice and innovation. Australia already has plenty of all of these features, and they have not served us well, not least because the ground rules are so different.

    In the United States, neither mainstream public schools nor charters are permitted to charge fees or to select on academic, racial, income or other grounds. Without seeming to notice the implications, the CIS suggests a level playing field for Australian charters and mainstream public schools: they should be funded to the same level, should not be permitted to charge fees, and should be non-selective.

    This raises an obvious question. If a level playing field is a good way to run the public system, why not the system as a whole? It might be assumed that a think tank committed to free and open competition, and to its educational correlative, equal opportunity, would be the first to ask the question, and to pursue the questions that then arise. It could ask, for instance, whether the lack of levelness in the playing field contributes to “educational disadvantage” and whether more levelness might reduce it. But the question is not posed.

    How is it that the CIS wants to import the charter idea, but not its regulatory framework, from the United States? How come the CIS has public schools for the “disadvantaged” in its sights but does not even mention arrangements for the “advantaged” or what has produced such a yawning chasm between the two? Why doesn’t it mention the possibility that a “failing” Catholic school might become a “conversion” charter? Why no consideration of the pros and cons of converting at least some independent schools to charters? Or of the pros and cons of more cooperation between schools in disadvantaged areas as against more competition between them?

    My purpose is not to question the sincerity of the CIS and its authors in wanting to do something about a serious educational and social problem. It is to point to a downward gaze that has trumped the CIS’s own first principles. Disadvantage is being addressed on the strict proviso that certain interests and arrangements remain not just untouched, but unmentioned. It is a question to which we will return.

    Geoff Masters is the long-time CEO of Australia’s preeminent education research organisation, an international authority on the complex interactions of assessment, teaching and learning, and a prominent critic of the all-too-familiar lockstep curriculum. To these research and educational credentials Masters has added a concern with how reform should proceed. In this he draws on arguments advanced by Canadian guru Michael Fullan and others, and particularly on Fullan’s critique of the Gillard agenda (title:Choosing the Wrong Drivers for Whole System Reform).

    Masters argues that, contra Caldwell and the CIS, choice, competition and school autonomy are best understood as elements of an agenda that doesn’t work. That agenda (Masters says) is based on the mistaken belief that “improvement will occur if schools are given incentives to improve,” including rewards, sanctions and the need to compete for students.

    Countries pursuing these strategies, Masters says – referring to but not naming Britain and the United States – “tend to be the countries that have experienced the worst declines in student performance.” Research is now casting doubt both on the “theoretical underpinnings” of the incentives agenda and on associated assumptions about what motivates people to give of their best. Rather than persist with an agenda based on rewards, sanctions and competition, Masters wants Australia to build the “capacity” of teachers and school leaders, and to ensure “high quality practice across the system.”

    Masters offers an outline of just such an agenda: a higher-status and more academically capable teaching profession; a “twenty-first-century curriculum”; more “flexible learning arrangements focused on growth”; early and extra attention for children “at risk of being locked into trajectories of low achievement”; and a narrower gap between the best- and worst-performing schools.

    Another to depart from the dominant agenda is the most recent in the Grattan Institute’s impressive series of reports on schooling. Like Masters, Grattan urges “more flexible learning arrangements focused on growth.” Where Masters points the general direction, Grattan gets down and dirty, reporting in detail on the work of schools that are putting the learning-based-on-growth approach into daily practice by collecting detailed information about each student’s progress and using it to inform curriculum choices and teaching strategies.

    It is at least possible that Masters and Grattan share something else: a loss of faith in or hope of large-scale reform. Until recently Grattan was a leading importer of ideas about how systems could and should be reorganised, but it has moved steadily from telescope to microscope, from reform of the system to reform of practice and to the school as “the unit of reform.” Masters, meanwhile, is straight-out despondent.

    There is (he says) “little evidence” that the status and academic capability of teachers is about to change, while “many features of the school curriculum have been unchanged for decades.” It is not obvious that “we have policies in place to reform mathematics and science curriculum in ways that might reverse the trend in subject enrolments and performance.” The counterproductive age-based organisation of teaching and learning “is deeply entrenched and reinforced by legislation” and “there is little evidence that… we are doing a better job of reducing the number of students on long-term trajectories of low achievement.”

    Masters doesn’t investigate why all this is so, why the “wrong drivers” have been chosen, or why his preferred agenda has not been pursued. Lyndsay Connors and Jim McMorrow do, and what they find justifies both a gloomy prognosis and a different approach to reform.

    Lyndsay Connors is, among other things, former chair of the Schools Commission, while Jim McMorrow was the Commission’s money man and remains the authority on where “resources” come from, where they go, and what they do. As might be expected of an experienced journalist and a de facto forensic accountant, Connors and McMorrow come at the problem in a quite different way from Caldwell and the CIS, and from Masters and Grattan. They look at the workings of the system as a whole rather than those of individual schools. They start not with an agenda but an analysis of the problem, and look at the specifics of the Australian system rather than at reform efforts elsewhere. And, unsurprisingly, they reach different conclusions about what is to be done. In this they are in debt to a reportprepared for the Gonski review by a Nous consortium and that, in turn, was informed by the work of a handful of mostly Melbourne-based researchers. What follows is a free translation of this substantial body of work.

    Any school in any school system anywhere (the argument goes) will reflect the demographics of its location, but Australia’s set-up compounds unavoidable differences in the social composition of schools. Its most distinctive feature is the sector system: three types of school, all receiving funding from two levels of government but in three different mixes and in three different ways. Two of the three, the non-government sectors, charge fees and are mostly religion-based. The third is nominally free, and secular.

    It is often thought that these arrangements permit non-government schools to select on financial and/or religious and/or academic grounds while the government schools do not. In fact, some non-government schools behave for most practical purposes as mainstream public schools and, more to the point, some government schools select all of their students on academic and therefore social grounds, and many select some of their students, both overtly and covertly.

    These structural arrangements mean that an unusually high proportion of Australian parents have an unusually great capacity to choose from an unusually wide range of schools. They typically choose schools where their children will find others just like themselves. And the more parents who do that, the more other parents will conclude that they’d better do likewise. In the doing, they make a choice for those who can’t choose, for reasons of income and/or location, or because their child doesn’t have what the choosy schools are looking for. Thus the non-choosers, like the choosers, find themselves increasingly among their own kind.

    To point this out is not to blame parents who can and do choose, either for choosing or for the choices they make. It is to criticise a system of pressures and opportunities to which parents respond as best they can and which, in the upshot, gives Australia an exceptionally high and rising “stratification” of schooling by class and culture, now approaching the stage at which it should probably be called “segregation,” or segmentation at the very least.

    More than a third of government school students are from the lowest quarter of students according to socioeconomic status, or SES, almost three times the proportion in the independent sector, and these ratios are more or less reversed for the top quartile. There are much higher concentrations in particular schools at either end of the spectrum. The concentration of disadvantaged students in disadvantaged schools is, Nous reports, “substantially higher than for any comparable OECD country,” while the proportion of all students in mixed or average SES schools is well below the OECD average. Research conducted since Nous and Gonski reported suggeststhat the concentration of low SES students in government schools continues.

    Cultural divisions are, in at least some parts of the country, even more pronounced. Taking the cases of Sydney and New South Wales, researcher Christina Ho found sectoral differences in LBOTE (language background other than English) and non-LBOTE enrolments similar to SES differences, but with staggering concentrations in top-end schools. There, LBOTE families have opted for the government schools that select and exclude on academic grounds, while non-LBOTEs have headed for the independents that select and exclude mainly on financial grounds. Thus only one of the top ten NSW government selective schools (by HSC rank) has less than 80 per cent LBOTE enrolments, but Ho can list sixteen high-fee schools with less than 20 per cent LBOTE. In between these extremes Ho finds a less dramatic but still pronounced segmentation going on.

    The sifting and sorting of students and families into particular schools feeds a sifting and sorting of the schools themselves, a process often referred to as “residualisation.” The term was popularised by public school advocates to describe a vicious circle. Schools with high proportions of kids from poor families find it increasingly difficult to attract and keep experienced and capable teachers, principals and other key educational resources, which makes them less attractive to those who can choose to go elsewhere, which increases the proportion of “disadvantaged” students, which makes the school less attractive, and so on, and on, around and around the circle.

    There is also a flip side, not so often noted, a process of aggrandisement that produces schools of almost preposterous grandeur, with five-star resort buildings and grounds, parents paying in fees twice what is spent on the common ruck of students (and that’s before various endowments, public subsidies, accounting lurks and tax breaks), and executive salary packages three times those offered elsewhere. In the course of his review, David Gonski, who came from the world of Sydney Grammar, visited some of the schools at the other end of the spectrum, and was shocked. Australia has constructed a system not just of sectors but of gated communities and educational slums.

    This process is often seen – and objected to – as the product of “marketisation.” It is true that schools parade their wares, and parents shop around. Indeed, more of both sides do the market-like thing in Australia than in any comparable country. But to think that Australian schooling is a marketplace and to argue that the problem lies therein is to make a fundamental mistake. The problem is in the way the market interacts with the funding and regulatory regime to produce massive distortions in what is offered and to whom it is available.

    Thus we have both free and publicly subsidised fee-charging schools; religious and secular schools; schools lavishly funded and schools relatively impoverished; schools permitted to select on grounds of capacity to pay and/or religious affiliation and/or academic performance and schools prohibited from doing any of those things; parents who are required to pay when often they can’t afford it and parents who aren’t and can; and parents who are offered the full menu and others who must take whatever is put on their plate.

    The most obvious educational consequence of all this, or obvious in the psychometrics relied on by all of the authors discussed here anyway, is “inequality” of “outcomes.”

    The argument is that a student’s attainment is determined less by his or her school’s educational program than by the school’s student body. Thus a low SES student going to a high SES school, for example, will do better than his or her peers because of the company he or she keeps. The complex redistribution of students across schools, Connors and McMorrow argue, has therefore also been a redistribution of educational achievement. It has led to a gap between Australia’s highest and lowest performing students (as Gonski observed) “far greater” than in many other OECD countries. And it means that Australia was the only OECD country to see an increase in the performance gap between high and low SES schools between 2000 and 2009.

    Most striking is an increase in “between-school variance,” a measure of the extent to which schools differ from each other. An Australian Council for Educational Research study of results from the OECD’s Programme for International Student Assessment found an increase in variance from 18 to 24 per cent between 2000 and 2009. Over the same period variance in Finland’s schools rose from 8 to 9 per cent. As noted above, recent research suggests that the overall trend in both social redistribution and the redistribution of attainment rolls on.

    But do standardised tests, which these various comparisons rely on, focus on too narrow a subset of the learning that goes on in three areas of the formal curriculum (literacy, science, maths)? This is an important objection, but there is another, at least as important. Standardised tests say nothing at all about what is learned in school via the so-called “informal” curriculum.

    Christina Ho points to the moral as it applies to “multicultural” learning. “Scholars of ‘everyday multiculturalism’ argue that the success of Australian multiculturalism has much to do with ordinary encounters between people of different cultural background that happen every day, in neighbourhoods, workplaces, parks – and schools,” she says. “Monocultural schools, regardless of the brilliance of their teaching programs, cannot socialise students for the realities of a cosmopolitan Australian society and a globalised world.” The same can be said of learning about social difference. The general point is that students who do not learn about others do not learn about themselves either. They are being miseducated.

    Then there are the social consequences. Australian schools are increasingly active in constituting an elite that knows only itself, and an underclass that is being dudded and knows it. More diffuse but no less material is the erosion of “equal opportunity” through schooling as both a fact and as an important source of legitimation for the social order as a whole.

    A first conclusion: to say that we’re not getting anywhere is not quite right. Nor is it quite right to say that the problem with schooling is a problem of agendas. A big part of the problem is that we have the wrong system, and that most agenda-setters are looking elsewhere. We could go further and surmise that all that effort in reforming practice and schools isworking, not particularly well or widely, but well enough to stop us going backwards as a result of the workings of the system. The schools, in this perspective, are galley slaves, badly trained and fed, not very well coordinated, but stuck with rowing against a systemic tide.

    A second conclusion: are “outcomes” the thing to focus on, or the only one? All sides of the battle accept that lifting outcomes is the main game. But shouldn’t segregation itself be front and centre, by reason of its role in generating unequal attainments as well as other educational and social consequences? Why shouldn’t any school or school system that wants to select some or all of its students be held just as responsible for the resulting social mix as it is for “outcomes”? Segregation should be seen not just as an explanation of the problem, but also as a big, direct, closely reported and well-documented target of policy.

    A third conclusion: the tools of thinking about reform are not fit for purpose.

    The reform debate is dominated by the “effectiveness” paradigm, and that is a very mixed blessing. Thanks to its origins in psychology and psychometrics it is much better at understanding teaching and learning and, at a stretch, how a school works, than at understanding how school systems work. It is much more interested in what makes an effective teacher or school than in what makes an effective system. It has encouraged the assumption that “reform” consists of the viral spread of “good practice” and the accumulation of micro-gains.

    It has another problem, noted a moment ago. The effectiveness paradigm can see only the learning that goes on in the formal curriculum. It has blurred the vision of those who do see a segmentation problem, including Masters, Connors and McMorrow (and Nous and Gonski), but then relegate it to the status of an explanatory variable. The effectiveness approach makes them less than alert to learning in the so-called “informal curriculum,” the learning that comes from spending five or six hours, day after day, in a segregated school. They pass too quickly over the fact that high and rising segregation in schools is incompatible with a multicultural society, and with a democratic one.

    The language and interests of “effectiveness” have pushed out of view the system itself, and much of what goes on in schools. And it has pushed history, politics, sociology, philosophy and economics to the margins of thinking about reform. The exception, as employed and elaborated by Connors and McMorrow, illustrates the rule.

    A final thought: what is it about the system that does the damage? To one way of thinking, the problem is in regulation, and the solution is “deregulation.” In other minds, including those of the Nous researchers, the problem stems from (as Nous puts it) a “robust” and “highly competitive” market. In fact, this is less a problem of too much regulation than a matter of bad regulation. The market is not robust, but wildly distorted. Maldistributed liberty has eroded equality and discounted fraternity. The problem is not the market or regulation but their currently dysfunctional combination.

    And so, inevitably, to Gonski, the proposal for systemic reform, the great offset on the Gillard balance sheet, and the hope of the side. If Gonski is lost then so is any chance of arresting and reversing the segregationist logic of the system. If Gonski survives, then it must be remembered that he was sent into the fight with one arm tied behind his back. He was permitted to examine only one aspect of funding (the fee/free distinction, for example, was off limits), and the regulatory regime, including selection and exclusion, not at all.

    Connors and McMorrow argue that Gonski plus some regulatory tightening in a “hybrid” system is the best that can be hoped for. That is certainly the outer limit of what government can achieve at the moment. But is it the limit of thought, argument, proposal?

    My own view is that if Gonski does survive then it should be regarded not as the systemic reform job done, but as a crucial step on a long road. At the end of that road, as the CIS inadvertently suggests, is a level playing field. Between here and there is a lot of hard thinking about policy and politics, compromise and principle, which could be approached in good faith from left, right or centre. The objective is not to restore the status quo of 1960, or to defend this sector against that, or to keep adding more choice to a hopelessly rigged market, but to combine funding and regulation so that no school gets too far behind or too far ahead in the conditions needed to attract a diverse clientele and to offer an educationally engaging program. Schools are, after all, for kids. They are meant to be a bridge to the wider world, not a mere reflection of the circumstances into which a child happens to have been born.

  • Nicholas Reece. Falling behind in the innovation stakes

    Malcolm Turnbull has promised a new innovation policy for Australia by Christmas. Bill Shorten has pledged to be a “jobs prime minister for the new economy”. For the first time in a long while, the political rhetoric matches a genuinely huge national policy challenge.

    In the past 15 years, there have been more than 60 reports on Australia’s national innovation system. They all broadly reach the same finding: Australia suffers from a failure to turn public research into commercial outcomes, to generate higher levels of business research and development, to adapt new technologies and skills, and to participate effectively in global value chains.

    Despite all the reports, there has been precious little action and an embarrassing lack of coherence in Australia’s policy settings. As a result, Australia finds itself languishing near the bottom of the Organisation for Economic Co-operation and Development when it comes to the commercialisation of research and in the middle of the pack when it comes to investment in higher education, research and innovation. This is a very dangerous portent for future prosperity.

    If there is a silver lining in Australia being so far behind world leaders in innovation – such as the Nordic states, Israel, Singapore, Britain, South Korea and United States – it is the existence of strong evidence about what works. Now we just need our leaders to make the bold policy interventions that will drive Australia’s economic transformation.

    These advanced economies all approach innovation systematically, with agile development agencies that foster collaboration and plug gaps in the innovation ecosystem.

    According to chief scientist Ian Chubb​, Australia is the only country in the OECD without a national research and innovation plan. China has the explicit goal of being the greatest investor in research and development in the world within a decade. Japan wants to be the No. 1 global innovator by 2018. Australia?

    We need a clear plan with an inspirational vision and goals – all backed up by our political leaders as proselytisers-in-chief.

    One useful intervention would be to set up a national innovation body like NESTA in Britain, to provide strategic leadership of the nation’s innovation and research effort, and stimulate debate and entrepreneurial activity. If the Productivity Commission is like Australia’s personal trainer, keeping the economy lean and fit, then an Australian NESTA could be the coach, driving the relentless pursuit of innovation and building entrepreneurial skills and culture.

    Instead, we have a Canberra-based bureaucracy that thinks its only purpose is to find and destroy “rent seeking”, like a heat-seeking missile. The result is that high-potential industries do not get the support they need, and globalisation has left us with a national economy that resembles a twisted reflection in a circus hall of mirrors: a gutted manufacturing sector; a dominant mining industry with its cycle of boom and bust; and domestically focused oligopolies of banks, insurers and retailers.

    Australia needs to make a game-changing investment in wealth-generating research, innovation and commercialisation.

    The Australian government allocates about 2.4 per cent of gross domestic product to research and innovation – about the same as it did in 1984. By comparison, South Korea has a target of 5 per cent.

    But the problem is much deeper than just the quantum. The priorities and incentives embodied in the allocation of funds are also problematic. More than half is allocated to public research agencies, medical research institutes and universities. A further 30 per cent goes to business through R and D tax measures. Comparatively little funding is available to support research engagement between business, universities and research organisations.

    For example, the Co-operative Research Centres program, which builds links between researchers and business, makes up just 1.5 per cent of total support for science, research and innovation, and the recently revamped Entrepreneurs’ Program accounts for 0.4 per cent.

    Britain has allocated $3 billion over five years to its Catapult Centres, promoting industry/university collaboration, compared with $190 million over the same period for the Growth Centre equivalents in Australia.

    The US government invests nearly 10 times more than we do as a percentage of GDP in business feasibility studies intended to convert research into proven technologies. The lack of an equivalent to the widely lauded US Small Business Innovation Research scheme here represents a major hole in our innovation ecosystem. That scheme is credited with triggering a fundamental shift in attitudes in US universities towards research being converted into a product or service.

    Australia also needs to plug gaps in the innovation pipeline that funds research and technology breakthroughs into commercial applications. The “valley of death” for businesses that have received venture capital is well known, but other gaps exist at the pre-seed, proof-of-concept,  and angel investor stages. The problem can be fixed with improved funding programs run by sector experts, and new taxation arrangements.

    Finland, with a quarter of the population of Australia, invests about $200 million a year in young growth companies. In Australia, the closest equivalent program is investing $350 million over 14 years.

    Finally, our government could do something really bold with our immigration program. Immigrant-led entrepreneurism is a key ingredient in the economic success of countries like Australia and the US. Immigrants make up 17 per cent of the US economy, yet 50 per cent of business start-ups in Silicon Valley have at least one immigrant as a founder. Nearly all of them are graduates of the US university system.

    The evidence in Australia tells a similar story. The University of Melbourne runs the Melbourne Accelerator Program, ranked 13th in the world among university business accelerators. Over the past three years, 46 per cent of the new businesses that have come through the program have had at least one immigrant founder.

    The Obama administration has moved to offer overseas graduate students six-year working visas. Australia should match it with something equally brave.

    Nicholas Reece is a principal fellow at Melbourne University and a former policy adviser to Julia Gillard, Steve Bracks and John Brumby.

  • Bob Kinnaird. 750,000 temporary residents with work rights.

    The recent Fairfax/ABC Four Corners reports exposing widespread exploitation and wage abuse of overseas students and other visa workers in 7-11 stores, horticulture and other sectors have been justly applauded as outstanding examples of investigative journalism.

    Their impact has been immediate, forcing 7-11 to set up an independent investigation panel chaired by Alan Fels and 7-11 chairman Mr Russ Withers to resign.

    The latest Fairfax report was titled ‘The Precariat’ (SMH, 3 October 2015). The term combines ‘precarious’ and ‘proletariat’ and was coined by British economist Guy Standing. It means broadly workers reliant on transitory and insecure work, though not necessarily low-skill.

    The government’s response to the scandal so far has been underwhelming. This is strange, since Trade Minister Robb says that two ‘super-growth’ industries for Australia’s economic and jobs future are international education and tourism. Both are indirectly implicated in the exploitation scandals in 7-11 and elsewhere. A prudent government would do more to secure their long-term future.

    Senator Cash In her new capacity as Employment Minister in the Turnbull government declared there was no need for government regulation of the labour hire industry, one of the central players in this sordid scene: industry self-regulation was her preferred way.

    As Assistant Immigration Minister she had earlier announced that three months ‘volunteer’ (i.e. unpaid) work by working holiday 417 visa-holders would no longer qualify them for a second-year 417 visa. That long-overdue correction was a reaction to an earlier ABC Four Corners program on mainly Asian working holiday makers being exploited in the fruit and vegetable sector.

    The Fairfax ‘Precariat’ report points out that the end of last year, Australia was host to 750,000 foreigners on temporary visas with some work rights, mostly on student, working holiday and 457 skilled visas. Another 470,000 people were here on visitor visas, largely for tourism. Technically they have no work rights but many do work unlawfully.

    This 750,000 figure actually understates the size of the temporary visa workforce because it is a snapshot at 31 December when many temporary visa-holders go home for the work shutdown or summer break and are outside Australia at this time. In June 2014, the figure was 840,000.

    Alongside the foreign worker exploitation issue, two related issues need attention. The first is the impact on Australian workers especially young people who bear the brunt of cut-throat job competition from the burgeoning temporary visa-holder work force. Between June 2007 and 2014, the number of overseas students and working holiday visa holders in Australia grew by 50 per cent, from 324,800 to 490,960.

    Expressed as a proportion of the 15-24 year old labour force (June 2007 vs 2014, latest available), the stock of WHMs and overseas students has grown from 16 per cent to 24 per cent of the total youth labour force in Australia.

    Most of these temporary visa-holders are young people and compete in the entry-level job market. Not all work, but most do.

    The impact on young Australians is clear in many indicators: declining labour force participation rates among young people, rising youth unemployment and underemployment, increasing unemployment rates among new graduates and many others.

    Competition from the growing temporary visa work force is not the only factor responsible. Increased participation rates in higher education and some welfare disincentives to work also contribute, among other things. Successive governments have failed to commission any serious study of the labour market impacts of this recent explosive growth in this temporary visa workforce. But this level of growth in labour supply is bound to have major impacts especially in times of sluggish employment growth, even before considering the characteristics of the additional labour.

    The second issue is the role of government international education and visa policies that are feeding the growth in Australia of a vast underclass of temporary visa holders desperate for work and ripe for exploitation.

    These policies need to change or the already large underclass of temporary visa workers will grow even larger, if international education and tourism do become Australia’s super-growth’ industries.

    International education and visa policies

    The two most serious examples are international education and visa policies for overseas students and graduates. Working holiday visas are also another serious area, not dealt with here.

    When Australia’s international education industry started in the mid-1980s under Labor, overseas students had no work rights in Australia. The target market was foreign students whose families were wealthy enough that their fee-paying sons and daughters didn’t need to work in Australia to survive. They were also in university study only, not low-rent private vocational colleges.

    Over time the government’s international education policies have changed dramatically. They now increasingly target overseas students from families with far less wealth and resources especially in the vocational education (VET) sector. Many go into debt to fund their Australian study and hope for a long-term employer-sponsored 457 visa or permanent residence (PR) visa. Many of these students need to work for much of their time here just to survive or send money back home, and are prepared to work for $6/hour or less. Some even pay their employer for the job, to secure 457 employer sponsorship or employer certification of ‘work experience’ needed for some visas, as reported in a Monash study I co-authored with Bob Birrell and others (‘Cooks galore and hairdressers aplenty’, People and Place, 2007).

    Over time the government has also expanded work rights for overseas students and graduates to give Australian international education providers a marketing advantage over other competitor destinations. What is being sold here is not the quality of the education offering but the right to work in Australia.

    The work rights on student visas now are 40 hours a fortnight during term and unrestricted hours the rest of the year.

    The most important recent development is the post-study work visa (485 visa) introduced by the former Labor government. This visa now gives overseas student graduates from higher education degree courses, in any field of study, unrestricted work rights in Australia for 2 to 4 years, depending on the qualification level. The vocational education (VET) sector is lobbying hard for the same post-study work visa. It is probably just a matter of time before they succeed. At present overseas student VET graduates can only get a more restricted 485 visa, limited to courses in occupations on the government’s skill shortages list and only for 18 months.

    The Immigration department says it expects 70 per cent of eligible overseas student graduates to take up the post-study work visa – a massive 200,000 by 2017-18, regardless of unemployment among Australian graduates whose numbers are set to grow rapidly at exactly this time, a result of policy-driven increased enrolments in the last five years or so.

    All overseas students and the graduates on 485 post-study work visas compete in the labour market with no legal obligation on employers to give preference to young Australians or to undertake labour market testing. Many overseas student graduates on 485 post-study work visas will end up competing in the lower-end of the job market, if UK experience with a similar program is any guide. That means even more pressure on young Australians with low skills looking for entry-level jobs.

    Incredibly, none of these extensions of work rights to overseas students or graduates including the post-study work visa has ever been based on any serious assessment of the impact on Australian residents in the job market. The Knight review, which recommended introducing the post-study work visa, completely ignored its potential labour market impact on local graduates and non-graduates.

    The main policy driver, as always, is to grow the international education sector and increase overseas student numbers and revenue. Governments like this, because it takes pressure off their education budgets. Business likes this, because it means a larger domestic market for their products and services, increased labour supply and downward pressure on wages.

    The policy changes needed are clear but unlikely, given the institutional resistance and vested interests.

    First, Australia’s international education policies should not be targeting relatively poor overseas students for onshore course delivery in Australia. Onshore provision should be targeted more to high-yield/high fee courses and well-funded students, not at overseas students so poor they have to work 40 hours/fortnight just to stay alive. If this segment is to be targeted, more emphasis should be given to providing courses offshore.

    Second, the overseas student graduate post-study 485 work visa needs a complete rethink. The timing is bad enough, coming into operation just as the Australian economy faces several years of below-trend growth, with no visa mechanism for protecting Australian graduates and job seekers. The number of 485 visas is not limited in any way and will be determined simply by graduate demand for them.

    At the very least, the visa should be restricted to graduates in occupations on the skill shortage list.

    Bob Kinnaird is Research Associate with The Australian Population Research Institute and was National Research Director CFMEU National Office 2009-14.

     

     

  • Why the Rich are so much Richer in the US

    Nobel Prizewinner Joseph E. Stiglitz has been at the forefront of the debate in the US and elsewhere about growing inequality. In a recent review in the New York Review of Books, James Surowiecki comments on three recent books by Stiglitz. He says:

    “The numbers are, at this point, woefully familiar: the top 1% of earners take home more than 20% of the income and their share has more than doubled in the last 35 years. The gains for people in the top 0.1%, meanwhile, have been even greater. Yet over that same period, average wages and household incomes in the US have risen only slightly, and a number of demographic groups (like men with only a high school education) have actually seen their average wages decline.”

    See link to article below.       John Menadue

    http://www.nybooks.com/articles/archives/2015/sep/24/stiglitz-why-rich-are-so-much-richer/?utm_medium=email

  • John Menadue. The smoko continues.

    I have posted many blogs on this subject – how we have failed to equip Australia for our future in Asia. We just do not have the Asian literacy and skills we need for our future in the region.

    See blogs. The smoko continues (3 December 2014) and Will the new Colombo Plan work? (12 August 2014).

    Our business sector talks endlessly about the need to improve productivity in Australia particularly through labour market reform. At the moment the business campaign is to reduce penalty rates. Yet the business sector has failed comprehensively to equip itself with the skills needed for the Asian Century.

    Over forty years ago there was a surge in language learning in Australia. Ross Garnaut reported in 1989 in his report Australia and the North-East Asian Ascendancy about the need for Asian literacy and skills in business and in the wider community. But it petered out because there were so few businesses employing the new Asia-literate graduates.

    In 2012 the White Paper on Australia in the Asian Century commented:

    “The share of Australian students studying languages, including many Asian languages, is small and has fallen in recent times. Between 2000 and 2008 the share of Australian students learning a tertiary accredited language other than English in year 12 dropped in a time where overall student numbers increased by almost 9%. In 2008, less than 6% of Australian school students studied Indonesian, Japanese, Korean or Chinese (Mandarin) in Year 12.”

    The Foreign Minister, Julie Bishop, has now a new Colombo Plan in reverse to fund internships for young Australians to work and study in Asia. But its value will be limited unless Australian employers lift their game and employ qualified Asia-literate people.

    With others, I campaigned in the 1970s and 1980s for Asian language education. There was a lift in Asian language leaning in schools and universities. But unfortunately those with Asian skills were in general not able to obtain work in Australia and drifted off to work in places like Hong Kong and Singapore.

    The Diversity Council Australia has just released a report ‘Leading in the Asian Century – a national scorecard of Australia’s Asian capability’. In the launch of this report this month, DCA said :

    DCA’s first ever research on workforce AQ in Australia has revealed that for Australian businesses, one of the biggest impediments to realising business and investment opportunities in the Asian region is a lack of understanding about Asia capabilities. In particular, Australian businesses are not identifying and cultivating the Asia capabilities that are critical to business success. Key findings include:

    There is a strong business case for fostering workforce AQ. Seven out of Australia’s top ten export markets are in Asia, and constitute 66% of our total export market. More than 50% of the world’s population lives in Asia and its consumer demand is worth US$10 trillion annually, similar to the U.S.

    Asia capable talent is available. AQ is considerably higher in some groups – in particular the 16.7% of Australian workers who have an Asian cultural identity, the 15.9% who have lived and worked in Asia and the 20.9% who can read, write and/or speak an Asian language (at least basic proficiency level).

    But a third of workers have low AQ. While one in ten (10.8%) of all Australian workers have excellent Asia capability, one third (34.7%) have none or very little. Close to two-thirds of workers have no or very little working knowledge of how to effectively manage in Asian business contexts. Overall, our workforce scores three out of five for Asia capability.

    Senior executives & managers are more likely to have higher AQ. Australian senior executives and managers are more likely to have excellent Asia capability than non-managers (13.9% of managerial workers versus 10.3% of non-managerial workers).

    Fluency in Asian languages is low. Only 5.1% of workers are fluent in one or more Asian languages (i.e. can comfortably discuss and write about highly complex issues with colleagues/clients in an Asian language).

    Having business interests in Asia doesn’t guarantee AQ. Workers in organisations with Asian business interests are less likely to have excellent Asia capability (16.4%) compared with workers in an organisation with an Asian head office (29.8%).

    There is too much talk and not enough action. While a fifth of workers said their organisations valued the AQ of their workforce (19.1% strongly agreed), fewer said their organisation was likely to effectively use these capabilities (12.6%).

    (AQ is defined as an “individual’s ability to interact effectively in Asian countries and cultures, and with people from Asian cultural backgrounds to achieve goals.” In this research initiative DCA was partnered by Norton Rose Fulbright, Telstra, the CMIC Group and Asialink Business.)

    Indeed as the report says ‘There is too much talk and not enough action’ The smoko continues. Even the White Paper on Australia and the Asian Century has been taken down from the government’s website.

    I have yet to meet or hear of a Board member or senior executive of any of our top 100 companies who can fluently speak any of the major languages of our region.

    Parochialism reigns supreme.

  • Dean Ashenden. Could Turnbull give a Gonski?

    Until last week, Gonski’s last hope – and an increasingly promising one – was a Labor victory in 2016. Now, that hope has dimmed, but another has appeared. It would make political, ideological and policy sense for the Turnbull government and its new education minister, Simon Birmingham, to go back to Gonski.

    The story so far. Gonski’s inquiry was commissioned in 2010 and reported in 2012. It tackled three major problems in schooling: the dysfunctional arrangements for funding three sectors in three different ways by two levels of government; the consequently chronic antagonism between sectors and interest groups; and the failure of funding policies to address growingproblems in schooling, including social and cultural segregation, a widening gap between the best and worst schools, a “long tail” of students leaving school without even the bare minimum of skills, and stalled performance.

    Gonski’s plan was elegant in its simplicity: state and federal governments would agree on how much each would contribute to the cost of schools, and on how the total would be distributed to school systems and thence to schools. Each school would be guaranteed a minimum per student amount (the “schooling resource standard,” or SRS), plus loadings reflecting the school’s size, location and demographics. The same formula would apply across all schools and sectors on the advice of a “national schools resourcing body.” The new scheme would be national, sector-blind and, above all, needs-based.

    Gonski’s proposals were widely applauded as an educational, political and policy breakthrough. But there were problems in the plan too, most of them exacerbated by the bungled, drawn-out implementation process initiated by Julia Gillard and conducted by schools minister Peter Garrett.

    The national school resourcing body was dropped early in the process. That meant that there was no agency to carry the extensive research needed (as Gonski foresaw) to settle key questions such as the level of the SRS, ways of measuring each of five categories of “need” (socioeconomic status, language background, indigeneity, disability and school size/location), the proportion of total funds to go to basic resourcing as against the loadings, how many schools should receive loadings, and how extra resources could be most cost-effectively used. Nor was there an accountability mechanism.

    Critics on the right (and in cabinet, apparently) claimed that school funding increases over the decades had done little or nothing to improve outcomes, which meant that Gonski’s $6.5 billion increase on an annual spend of around $40 billion was a case of throwing good money after bad.

    Since most needy schools were government-run, that sector was Gonski’s main beneficiary. Some supporters of non-government schools were suspicious or hostile, and Gonski became identified in many minds with public schools and the teacher organisations that did so much to bring the review into being. As well, Gonski was often seen as a kind of consolation for schools doing the hardest educational yards rather than, as intended, the price paid for schools to deliver improved performance.

    All this was in addition to the handicap given to Gonski at the outset, the requirement that “no school will be worse off,” which greatly complicated the calculation of school entitlements and pushed up costs (accounting for up to half of the $6.5 billion by some estimates).

    But the resistance that really mattered came from Coalition-governed states, which stood on their constitutional dignity and refused to enter an agreement that would tell them how much to spend on schools and how to spend it. They were aided and abetted by the Abbott opposition, which attacked the scheme at every opportunity right up to the eve of the 2013 election, when it abruptly switched to a Gonski “unity ticket.” That, in turn, was abandoned as soon as the new government took office.

    The upshot was that some states had signed up before the election for Gonski and its conditions through to 2017, others were told by the incoming government that they could have the money without any strings attached, and all were informed that from then on things would revert to the unfair, educationally counter-productive and administratively chaotic arrangements that confronted Gonski back in 2010.

    Meanwhile, other arms of the Abbott government commissioned reviews – the Commission of Audit, the Competition Policy Review, and the Reform of the Federation process – that either directly tackled school funding or made recommendations bearing on it. None had Gonski’s breadth, and none linked resource distribution and use with national goals for schooling such as social cohesion and equality of opportunity.

    Ironically enough, though, they might be just the thing that would allow Turnbull to give a Gonski. Together, they suggest that the Gonski approach should rely less on a single, prescriptive formula and more on an agreed framework for local implementation. It would thus be made more workable, and more acceptable to Coalition governments at both state and federal levels.

    What might such an agreed framework for schools funding look like? It would need to include at least four components:

    • A statement of purposes, making clear (as Gonski put it) that differences in educational outcomes must not be the result of differences in wealth, income, power or possession
    • A statement of principles, specifying that funding should be, among other things, nationally consistent, sector-blind and needs-based
    • A provision that all school jurisdictions, government and non-government, will report allocations made to each of its schools, and the methods and data used to determine them, publicly, promptly and in detail, using a common reporting template
    • A provision that all jurisdictions should participate in an ongoing, national research effort to understand how best to allocate and use resources to achieve stated purposes.

    A framework along those lines would address most of the problems in the original plan, and those arising from its stormy, aborted implementation.

    No response to complex political and policy problems will be perfect, of course. In this case, there seems little prospect of removing the “no school worse off” provisions, for example. And there would be much devil in the detail of a devolved approach, including how much variation between jurisdictions should be permitted, and by whom. But that is detail. And after all, there’s not much to beat.

    That’s the first reason why Turnbull should consider Gonski. The second is that – Abbott and Pyne rhetoric notwithstanding – there is nothing intrinsically Labor in Gonski. Indeed, its first and still most enthusiastic supporter is NSW education minister Adrian Piccoli, a National Party member in a government led by Liberal premiers. Piccoli is by no means a lone Coalition voice for Gonski, and has promised to lobby the new government in support.

    The third reason might seem trivial to the point of irrelevance, but history sometimes turns on small things. Malcolm Turnbull and David Gonski are old friends. They went to school together (Sydney Grammar) and Turnbull recently launched Gonski’s book, I Gave a Gonski. They belong to very similar ideological and social worlds. What Gonski proposes is consistent with – and perhaps even essential to – the kind of forward-looking Australia Turnbull says he wants. It would be surprising if Gonski did not use his undoubted access to Turnbull to make out the case.

    There are two further reasons why Turnbull might listen, both of them political.

    Among the many areas in which the Abbott administration was gratuitously adversarial, and blatantly deceitful, was schools funding. It opposed Gonski, then supported it, then ditched it, the stance on each occasion dictated by party-political advantage seen in the shortest of terms. What better way for the new minister to distance himself from his predecessor, or for the new government to demonstrate that it is not the old one in drag, than to reverse the ill-judged and petty decision to dump Gonski?

    Last, and perhaps the best reason of all from a Turnbull point of view: why go to the next election, less than a year away, with the electorally popular Gonski in Labor’s hands?

    Labor still owns the Gonski brand, and despite its bungling of the implementation process, it deserves to. Gonski is, as shadow treasurer Chris Bowen has put it, “in our DNA.” But if Labor tries to run again on Plan A, vulnerable both states’ opposition and to sharp criticisms of design, it could find that it has handed one of its biggest political assets to its new opponent. •

  • Tom and Rosie support the Syrian Refugees.

    Two young students from “Prouille” Dominican School at Wahroonga have raised nearly $4,500 for Syrian refugees. It started as a street stall in front of their house. It led to community support. It is a lovely story – worth reading.  See link below.  John Menadue

    https://unhcrpersonalchallenge.everydayhero.com/au/help-the-syrian-refugees-with-tom-and-rosie

  • Sydney’s Holroyd High School and asylum seeker children.

    Refugees and their children face many difficulties in settling in Australia. But the evidence shows that after this settling in period, refugees and their children outperform Australian-born people in many areas. We see the results for refugee children in university-entrance exams and in university performance.

    One remarkable example is the experience of refugee and asylum seeker children at Sydney’s Holroyd High School. The principal of Holroyd High School, Dorothy Hoddinott, was interviewed recently by Eleanor Hall on the ABC’s The World Today.  Read about the remarkable story of Holroyd High School and its students in the link below.

    http://www.abc.net.au/worldtoday/content/2015/s4298964.htm

  • John Menadue. A night with the Vice Chancellors – the export of education services.

    Current Affairs

    Education services earn an export income for Australia of over $16 b. p.a. Those export services are expected to increase to $31 b. p.a. by 2020 from about 600,000overseas students. Education is now our fourth largest export behind iron ore, coal and natural gas. It is our major services export, ahead of tourism.

    The benefits from our export of educational services have been spread across Australia. It is estimated that each international student spends over $40,000 p.a. in fees and living expenses. Chinese and Indian students represent over 30% of overseas students. The top 10 source countries for overseas students are all from our region. The growth has been extraordinary and is likely to continue.

    This spectacular increase in education exports is far beyond anything that we imagined when we first considered this subject in the Department of Trade in 1984.   As a percentage of total exports they hardly appeared on the graph.

    With our export of education services in its infancy we examined in the department our poor performance in exports generally and how we could respond. We continued to rely on resources booms every decade or so. The inflated dollar had put our manufacturing sector under great pressure. Between 1965 and 1982 we had not created one new job in manufacturing. Our economy as well as our society was insular and inward looking.

    Whilst we had a large services sector in Australia, particularly in education and health it was overwhelmingly focused on the domestic market. Our exports of services were very low in world terms. Yet we had world-class education institutions and the middle class of Asia was growing. We were not taking advantage of that opportunity and we compared very unfavourably with educational institutions in the US and UK who were performing much better than we were in expanding their role in our region.

    In the Department of Trade we could see clearly that we were missing out and we focused our attention on how we could lift our exports from our well-reputed institutions and particularly our universities.

    In addition to seeing the possible economic benefits of expanded education exports, I also saw increased numbers of Asian students as a way to improve Australians attitudes to Asia. As a student at a university college in Adelaide, I had roomed with students from Malaysia. They changed my attitudes on White Australia and relations with our region. My experience with these and other students who came to Australia under the Colombo Plan was I believe an important factor in helping to transform community attitudes about Asia and opposition to White Australia. Until those Asian students came to Australia there was a fairly widespread view of Asians as poor and unskilled and a threat to our living standards. But the Asian students studying here in the 1950’s and 1960’s were young, well educated, spoke good English and not at all threatening.

    So I saw Asian students at our universities and schools as offering both economic and social benefits.

    But to get the ball rolling we had to convince Australian universities about the possibilities of substantially increased Asian students on their campuses. In my autobiography in 1999, ‘Things you learn along the way’, I wrote about my first approach to Australian Vice Chancellors.

    ‘In the department in 1984, we commenced a study on the export of educational services. After we had completed the study, I spoke at a dinner with 19 vice-chancellors of the major Australian universities in the Scarf Room at the ANU about our thinking and plans for the export of educational services. I outlined ways in which I thought we could promote education services offshore and encourage more Asian students to come to Australia. The Americans and British had been doing it very successfully. We were not serious competitors. With the universities under financial pressure, this was a commercial opportunity for them. It would also transform university campuses and, hopefully, student attitudes towards Asia.

    The dinner turned out to be a frost. The vice-chancellors were not impressed with my commercialism. My main critic was Professor Peter Karmel, Vice-Chancellor of the ANU. He had been my mentor from Adelaide University days. We held similar views on most public issues but we didn’t agree on this one. He was upset at commercially exploiting educational services on such a scale. After the dinner, Karmel buttonholed me on my proposal. His concerns also came back to me through an old friend, Frank Hambly, Secretary of the Vice-Chancellors’ Committee: ‘What is Menadue up to in advocating selling overseas educational services in this way?’, he had asked his colleagues.

    You always remember the speeches that don’t go well but in retrospect it helped quicken reform. In the mid-1980s education exports were minimal. They now have grown to $3 billion annually with almost 150,000 foreign students in Australia each year, mainly from Asia. The Australian International Education Foundation estimates that educational exports will be worth $5 billion in 2001.’ (p.245-6)

    In fact in recent years there have been over 600,000overseas students in Australia each year, earning $16b pa for the Australian economy.

    The remarkable growth in education services has not been trouble free. With cutbacks in government funding mainly for our universities, institutions have become too dependent on fee-paying overseas students. In some cases I think academic standards have been compromised.

    But in 1984, when I spoke to the 19 Vice Chancellors, I could not have envisaged the dramatic changes that were to come. The seed I sowed with the Vice Chancellors fell on stony ground but it survived and flourished.

    John Menadue was Secretary Department of Trade 1984-86.

  • Michael Keating. Improving Employment Participation

    Fairness, Opportunity and Security
    Policy series edited by Michael Keating and John Menadue.

    The rate of employment participation and the productivity of those employees together determine the average per capita incomes of Australians, and therefore our living standards. In addition, being employed creates many of the social contacts and sense of self-esteem that are vital to our individual well-being. While arguably the best way to reduce inequality is to create the conditions where those disadvantaged people who are presently on the margin of the workforce get work, or in other cases get more work.

    In short increasing employment participation is most important if governments want to improve living standards, individual well-being, and equality.

    What has happened to employment participation in Australia

    In March Australia’s employment participation rate was 60.8 per cent, representing an average of a 66.9 per cent rate for males and a 54.9 per cent rate for females. Interestingly this rate of employment participation for the population is the same as fifty years ago, but the composition of employment has changed markedly. The male employment participation rate is now as much as 18 percentage points lower than in 1966, whereas the female rate is 15 percentage points higher.

    The fall in male employment participation is closely associated with the decline in ‘blue collar’ employment. This decline principally reflects the impact of technological change, rather than changing trade patterns and globalisation, as the output of the relevant industries increased or was at least maintained over most of the fifty year period. In contrast, the rise in female employment participation probably reflects a combination of changing social attitudes and the rise in the number of job opportunities in the service industries.

    Almost all this long-term decline in employment participation for those males in the main working ages from 25 to 55 was accounted for by those men who did not complete secondary school and have no further qualifications. Furthermore, for both men and women the employment participation rates are much lower for those who did not complete year 12 and have no further qualifications – 71.3% for men and 59.7% for women in 2011. By comparison employment participation rates for those who have completed secondary school and/or have further qualifications are 88.9% for men and 81.6% for women. That is a difference of 17.6 percentage points for men and 21.9 percentage points for women in employment participation according to levels of educational qualifications.

    It is also interesting to compare Australia’s employment participation rates with other countries, especially as it is often suggested that because Australia’s female participation rate tends to be lower than in the other English speaking countries that have similar cultures and institutions, policies to assist women could help lift their participation. First, the difference between female participation in Australia and the other countries is, however, quite small (see Table 1). Second, for those women who have tertiary qualifications there is practically no difference between their employment participation and their overseas counterparts.

     

    Table 1 Employment Participation rates by educational attainment, 2013
    Per cent

    Male participation rates Female participation rates
    All aged 15-64 Tertiary education All aged 15-64 Tertiary education
    Australia 77.6 90.6 66.4 79.4
    Canada 75.4 85.0 69.6 79.0
    New Zealand 78.5 89.4 67.9 79.8
    United Kingdom 76.1 89.0 66.6 79.3
    United States 72.6 84.9 62.3 76.0

    Source: OECD Employment Outlook, 2014

    In short, it is people whose educational qualifications are poor and who lack skills who have the most scope to increase their employment participation. So if we want to increase employment participation, with all the benefits that would bring, then the focus should be on policies to improve the job prospects of low-skilled and disadvantaged people.

    Job Creation

    A common view is that unemployment reflects a lack of jobs, or employment opportunities. Right now the 6 per cent unemployment rate probably reflects some shortage of demand, due to generally sluggish economic conditions post the GFC. But full employment is generally judged to occur at around a 5 per cent unemployment rate, so that increasing demand generally would not mean a lot more than a one per cent increase in employment participation[1].

    Further demand increases to try to lower unemployment below 5 per cent may well be frustrated by skill shortages, as experienced only a few years ago prior to the GFC. The reality is that ongoing structural adjustment means that unskilled people tend to have difficulty competing for the jobs that are available, and it is almost impossible for governments to create more unskilled jobs on a sustainable basis.

    Accordingly the focus for improving employment participation must be on:

    • improving the skills of low-skilled people so that they can compete for the jobs that will become available through sound demand management policies; and
    • maintaining the currency and further improving the skills of those people further up the occupational skills ladder so that they can progress further and thereby create vacancies for newly skilled people below them to get a job. 

    Education and Training

    The fact is that we now have enough experience of providing education and training packages to disadvantaged people that we broadly know what is needed and what works. The key policy requirements are as follows.

    First, and most important, is to provide more money, especially as the funding for these programs has been cut substantially in recent budgets. In fact these programs have never been funded to meet the need, and a lot more people should be enrolled. The former Australian Workforce and Productivity Agency (AWPA) in its 2013 National Workforce Development Strategy recommended additional funding of at least $200 million each year for Vocational Education and Training alone to train less advantage people, and this amount should probably be further increased to make up for the recent cuts and weaker labour market.

    Second, the best results are obtained by increasing the funding per person. Too often in the past political pressures have required programs to maximise the number of people enrolled, but as a result the available funds are then spread too thinly to optimise the cost effectiveness in terms of sustained employment outcomes.

    Third, the most disadvantaged people who have been out of work for some time usually need other supporting “wraparound” services. These services can involve personalised case management to deal with these peoples’ lack of confidence and to help them overcome personal barriers, including by coordinating other services such as housing and health. Often these most disadvantaged people need to progress through more than one training program, starting with something like Adult and Community Education to build up their confidence, re-engage with learning, and to develop their social and employability skills.

    Fourth, programs need to be directed not only to those who are not presently employed, but also to those people who have lower skills and or who risk their skills becoming superseded through ongoing technological change and other structural adjustment pressures.

    Fifth, the nature of the training needs to be changed to be less focussed on the specific requirements of a particular job and/or a particular employer. Job specific skills are important, and they also can help engage the trainees, many of whom have an aversion to class-room based learning, and prefer to learn as much as possible on the job. But these job specific skills do need to be accompanied by more generic skills that better equip employees to adjust to changing job requirements.

    While policy action to increase participation by improving people’s skills will not be cheap, the social and economic cost of doing nothing more will be much higher. Indeed AWPA showed that the increase in qualifications and skills consistent with its recommendations could reasonably be expected to lead to a 1.7 percentage point upward adjustment to the participation rate in 2025. The consequent impact on employment and GDP would be a 2 percentage point increase, and tax revenue would be about $12.4 billion higher in 2025 compared to a continuation of policies as they were in 2013. On the other hand, by 2025 the additional cost of AWPA’s recommendations would be only about $2 billion, meaning a net gain to the Budget of $10 billion.

    Clearly increasing employment participation by investing more in skills is a very good investment socially, economically and fiscally. It should be an over-riding priority.

    Alternative proposals to increase participation

    While as has been shown there is an over-whelming case for more investment in education and training, there are other proposals which are justified by their alleged positive impact on employment participation. These will briefly be assessed below. 

    Lower wage costs

    Wage costs obviously affect the demand for labour. Here the emphasis has been on upskilling the least qualified people so that their productivity is increased and they can compete, and compete for jobs further up the occupational scale where there are more jobs. The alternative would be to cut the wage rates of people with lower skills, with the two most common proposals being to lower penalty rates and/or the minimum wage rate.

    There is not a lot of evidence available to enable a judgement as to what impact this might have on the demand for labour and therefore on employment of less skilled people. But it is probable that the impact would not be great – and nothing like as big as the impact from upskilling.

    In particular one interesting piece of evidence comes from a comparison of the experience with the minimum wage in Australia and the United States. As is well known the minimum wage is exceptionally low in the US relative to the average, whereas in Australia minimum wage is higher relative to the average wage than in most other advanced countries. However, in 2012 the employment participation rate for Australians aged 25-64, who had less than upper secondary education was 66.2 per cent, while for equivalent Americans it was only 52.9 per cent, or a whole 13 percentage points lower[2].

    As there would be a high correlation between low education levels and employment on the minimum wage, it does not seem that the lower minimum wage in the US is achieving much in terms of employment participation, and accordingly lowering the minimum wage would be equally unlikely to increase employment participation much in Australia. And of course, there are other reasons for supporting a reasonably high minimum wage.

    Improving the incentives to work

    The two main proposals to improve the incentives to work are to:

    • Improve the accessibility and reduce the cost of child care to the family
    • Lower marginal tax rates so that people gain more from extra work.

    Taxpayer support for childcare is largely an issue of equity. It is a moot point how much employment participation by women would be affected by additional support to reduce the cost of child care to the family. Female employment participation by professional and other women with tertiary education is already comparable with other similar countries (Table 1). It may be that less costly child care might make more difference for women in less well paid jobs, however, as these costs would be a greater burden for lower income families.

    What is reasonably certain is that reducing the cost of child care could be quite expensive. Indeed the recent Productivity Commission report on child care estimated that adoption of the recommendations would increase employment participation by mothers (primarily in low and middle income families) by 1.2 per cent, but this is only equivalent to a 0.1 per cent increase in total employment.

    Cost is also the big inhibitor to reducing the marginal tax rates so as to increase the incentives to work. The present alleged disincentives arise because the interaction of the tax and income support systems can result in effective marginal tax rates (EMTRs) as high as 60 per cent, although only over a fairly limited income range. Nevertheless most pensioners and beneficiaries who want to work part-time, face an EMTR of around 30 per cent or a bit more. What is not well established is how much this acts as a disincentive, and therefore how much extra employment and extra hours worked might result from reforms to lower EMTRs.

    One indication of the relative costs and benefits from policy reforms of this kind is available, however, from some work done by the Melbourne Institute of Applied Economic and Social Research. The Institute estimated that a package of changes in income tax rates, family benefit tax and pension and benefit withdrawal rates that came into effect on 1 July 2006 would increase the available labour supply by less than 50,000 workers, or less than half a per cent, at a full-year cost of $11.4 billion in each year.

    Conclusion

    In short what this analysis shows is that employment participation in Australia could be increased significantly. By far the most promising means would be to increase the investment in education and training to improve the skill-base of the economy, and especially the employability skills of disadvantaged people. Other proposals to reduce the cost of child care and reforms to lower effective marginal tax rates may well be useful, but they come at a considerable cost and are unlikely to have nearly the impact on employment participation that can be expected from policies to increase skills.

    These education and training policies would greatly benefit the economy the government’s budget, our society, and many disadvantaged individuals.

    Michael Keating is a former Head of the then Department of Employment and Industrial Relations, and a former member of the Boards of the Australian Workforce and Productivity Agency and the South Australian Training and Skills Commission.

    [1] Employment participation would rise by more than the fall in unemployment because some people who do not declare themselves to be unemployed would successfully rejoin the labour force under conditions of full employment.

    [2] Source: OECD Employment Outlook, 2014