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Funding public education

The Australia Institute: Education funding over tax cuts

Boosting public education delivers greater benefits to Australian living standards than company tax cuts, according to progressive think tank The Australia Institute (TAI).

A report released by the group last week reviewing OECD data found no relationship between company tax rates and general living standards.

On the other hand, there is a positive correlation between public education spending and living standards, it finds.

In his briefing notes on the report, Senior Research Fellow for TAI, David Richardson concludes that: “The data presented here clearly suggest that if there were a choice between funding company tax cuts or more education spending, governments would be well-advised to concentrate on the latter”.

The information arrived at a critical time during the final weeks of the Federal Election campaign, with the Turnbull Coalition focusing on promising tax cuts over Labor’s ongoing support for fully funding the Gonski education reforms.

SBS News reports Opposition Leader Bill Shorten said the TAI report ‘blew Prime Minister Malcolm Turnbull’s economic plan to pieces’.

“Wages are flat-lining and living standards are falling, and Mr Turnbull’s only solution is to give more taxpayer money to big business and the banks.

“Labor wants to invest in people, and the Liberals want to blow up the budget with a $50 billion giveaway to big business.”

In contrast, a spokesman for Treasurer Scott Morrison told News.com.au the study had only “observed the obvious point that when countries have higher GDP they can spend more on education because their economy is growing”.

“This report does nothing to counter the overwhelming body of evidence, including the previous support of the Australian Labor Party, for the economic benefits of lower tax rates on business that enable them to invest and grow.

“If we have uncompetitive tax rates compared to our regional trading partners then investment will flow to those countries and not Australia. That will result in fewer jobs and lower standard of living.”

Australian flag

Election Week One: Turnbull’s $73.6bn promise

The marathon campaign in the lead up to July’s Federal election has already yielded some indication of what to expect from the major parties with regard to education spend and policy.

As mentioned in our update of two weeks ago, the Federal Budget announced an increase of $1.2 billion over three years for school funding, but it comes with a number of caveats.

The amount was announced as part of an overall budgetary commitment of $73.6 billion – the total amount the Commonwealth is planning to provide schools over the next four years. The majority of this money was already budgeted for.

The additional $1.2 billion promised by the Coalition will be delivered using state and territory assessments of the neediest schools, as was recommended by the Gonski review, along with a number of other conditions (such as a standardised Year 1 assessment of literacy, phonics and numeracy against national standards, as well as a minimum standard of literacy and numeracy skills for Year 12 students).

While the additional funding has been welcomed, it has also been noted that it only partially restores the funding cuts introduced by the Coalition in 2014.

By comparison, Opposition Leader Bill Shorten and Labor have promised an additional $4.5 billion over two years, which is slated to include $1.8 billion for regional and country classrooms.

While more money sounds like it will produce a greater windfall for Australian schools, the priority in which they receive these funds is still determined by the individual states and territories, not by the Commonwealth, thereby producing markedly varied results across the country.

The argument being made by the Coalition and a host of pundits is simply that increasing funding does not necessarily increase the performance of schools and, in turn, the academic performance of students themselves. However, this is exactly what the Gonski review was supposed to achieve and it is this element of the academic system that needs to discussed in detail by the major parties.

For yet another election campaign, we can all expect to hear the term ‘Gonski’ much more in the weeks to come.

Australian flag

Election Week One: Turnbull's $73.6bn promise

our update of two weeks ago, the Federal Budget announced an increase of $1.2 billion over three years for school funding, but it comes with a number of caveats. The amount was announced as part of an overall budgetary commitment of $73.6 billion – the total amount the Commonwealth is planning to provide schools over the next four years. The majority of this money was already budgeted for. The additional $1.2 billion promised by the Coalition will be delivered using state and territory assessments of the neediest schools, as was recommended by the Gonski review, along with a number of other conditions (such as a standardised Year 1 assessment of literacy, phonics and numeracy against national standards, as well as a minimum standard of literacy and numeracy skills for Year 12 students). While the additional funding has been welcomed, it has also been noted that it only partially restores the funding cuts introduced by the Coalition in 2014. By comparison, Opposition Leader Bill Shorten and Labor have promised an additional $4.5 billion over two years, which is slated to include $1.8 billion for regional and country classrooms. While more money sounds like it will produce a greater windfall for Australian schools, the priority in which they receive these funds is still determined by the individual states and territories, not by the Commonwealth, thereby producing markedly varied results across the country. The argument being made by the Coalition and a host of pundits is simply that increasing funding does not necessarily increase the performance of schools and, in turn, the academic performance of students themselves. However, this is exactly what the Gonski review was supposed to achieve and it is this element of the academic system that needs to discussed in detail by the major parties. For yet another election campaign, we can all expect to hear the term ‘Gonski’ much more in the weeks to come.]]>