Twelve years of Coalition rule have produced holes and, thanks to continued record tax-takings, the Government can cement itself in as the biggest in the country’s history. And it needs to be that to be able to plug the holes that have emerged in the interim.
The moves on higher education are welcome but don’t get us near the share of GDP spend that we had in 1996 (2% then and projected to be 1.6% soon) and so we lag other countries in this regard. This is despite its critical role in productivity, competitiveness and innovation.
The issue with higher education has been how to persuade Australians to spend more on it — through government or themselves. We have the best system in the world to allow individuals to fund that education (Hecs) and yet for years it has been hampered by regulations that constrained universities in their ability to compete, specialise, improve and make that case to the Australian people. Some of the moves last night will allow that, but even setting up the Endowment Fund would seem to have rules and a committee to allocate even the funds universities might attract themselves back to them. It could work well but why does a government with a supposed market philosophy still maintain a soviet system?
Of course, one aspect of this is the requirement to have these funds managed by the Future Fund. The Treasurer cited “economies of scale.” Well, if that is the case, why not allow all Australians to put their super in the Future Fund. It either will perform better than private funds or it won’t. But in its current structure, it won’t allow universities to balance current and future investments. That will be managed centrally as it always has. And even if that board managing it is independent, who is to say that the government of the day, watching the fund’s performance, won’t adjust its recurrent contributions to universities?
Fortunately, the current changes will go a long way towards letting universities explore different models. The “Melbourne Model” may work much better in this. With degrees such as law and medicine set to cost over a quarter of a million, parents will think twice about letting 17-year-olds make that choice too early. It is a much better investment on a 20-year-old who knows what he or she wants to do.
The other hole being plugged is that continued insanity on child care. Anyone who has attempted to navigate this system (I have) knows that it is one of the most stupid subsidy schemes ever. It is not that funding child care is a bad idea — that is OK. It is the way the 30% rebate is handed out. It can take years — it is a rewait not a rebate. So what is being done here? Let’s just do a once-off so that we can get a big pot in before the election. That way the books are only cooked for one year and what is more the big sum that should have been paid a year ago is combined with the sum that should be paid now anyway to look like a big hit just before the election. My belief is that anyone who has had to sign up for this system will see right through that. Also, I am not confident that claiming the current rebate will prove so easy. We will see.
So, there is nothing in this Budget to move forward. Everything is clawing back. Then again, in an election year, we should expect to see the forward stuff closer to the election.
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