Monday, August 27, 2012

Productivity loses in unholy Gonski money fight

We've just stuffed up a great opportunity to improve worker productivity. You didn't notice? I bet you didn't. It slipped past without the business people and economists who claim to be so concerned about productivity noticing a thing.

It happened last week. The independent schools lobby came out in full cry against the Gonski report's proposal to put federal funding of schools on a needs basis. As is now de rigueur for interest groups on the make, the lobby claimed to have ''modelling'' showing 3200 schools would lose funding under the proposal despite the government's guarantee that ''no school would lose a dollar''.

Though lists of allegedly losing schools were leaked to the Murdoch press, the modelling methodology has not been adequately documented, nor properly examined by the media (fat chance) or anyone else.

But when this attack was combined with the opposition's decision to use Gonski for another scare campaign, Julia Gillard went to water, promising ''every independent school in Australia will see their funding increase under our plan''. In real terms, no less.

David Gonski and his committee proposed increased funding of $5 billion a year for schools - government or non-government - according to their numbers of low-income, indigenous, disabled, non-English speaking or remote-area students.

According to the calculations of Trevor Cobbold, of the public-school Save Our Schools lobby group, Gillard's promise of extra funding for independent schools regardless of educational need could cost a further $1.5 billion a year.

See what happened? Successful lobbying by the independent schools ensured that, however much extra ends up being spent on federal grants to schools, more will go to privileged students who don't need it and less to underprivileged students who do.

Should Tony Abbott win the federal election, it's likely little or nothing extra will be spent on increasing resources for the education of the underprivileged. And that will be a lost opportunity to improve the future productivity of Australia's workforce.

And yet we've heard not a peep from all those business people, economists and economic rationalists who profess to be so worried about our supposedly weak productivity performance. Why not? Two rival explanations come to mind.

One is that they're not genuine in their concern and are using the productivity argument merely as a cover for their demands the government shift the balance of industrial relations bargaining power back in favour of employers and cut the rate of company tax.

The more charitable alternative is that their thinking moves only in straight lines and familiar ruts, causing them to frame the Gonski debate as one involving ''equity'' (fairness) rather than ''efficiency''. Many economics types regard equity issues as beyond their expertise or interest.

Press them and some will say they believe in ''equality of opportunity'' but not ''equality of outcome''. If so, there aren't many proposals fitting that criterion better than ensuring disadvantaged kids get a decent education.

But you don't have to think hard to realise Gonski represents a rare - and thus highly attractive - case where equity and efficiency aren't in conflict.

When we think about human capital and its contribution to productivity improvement, we tend to think of doing more at the top of the skills ladder. But it applies just as much at the bottom.

Leaving aside the ultimate saving to the taxpayer, the better we educate the disadvantaged, the greater the productivity of their labour and its value to employers. And even if few became brain surgeons, their higher rate of participation in the workforce would increase their contribution to the nation's wealth.

It's important to realise the opportunity for ''moving forward'' we stuffed up last week. Gonski represented an attempt at compromise in the unending public-private school battle, a truce in the class conflict.

It involved an end to the division of federal school grants on the basis of schools' category, with funding growth based on the differing resource needs of disadvantaged students regardless of which system they were in. No school's funding would be reduced no matter how privileged, but in a relatively painless process over time the basis of funding would shift from past entitlement to present student need.

This required the teachers' unions and anti-state-aiders to accept that independent schools would continue to receive significant assistance regardless of need. It required privileged independent schools to accept that, over time, their share of total funding would decline in favour of the disadvantaged.

So who wasn't prepared to compromise? The ideologically crazed unions? No, the money hungry elite schools - as usual, hiding their naked greed behind the camouflage of the cash-strapped Catholic systemic schools and some far-from-loaded, relatively new independent schools.

There's nothing new about the pursuit of blatant self-interest in the eternal political money fight. But the political ''debate'' seems to be getting more selfish and aggressive as each year passes. We used to be able to compromise and co-operate for the greater good - to quietly accept that some people's need was greater than our own - but not any more, it seems.

Some of the headmasters and headmistresses of our elite schools are hugely impressive as individuals. Do they really go along with this self-seeking? Here's a good school motto: the first shall stay first and the last shall stay last.

To see so many professed followers of Jesus using all the secular world's dishonest lobbying tricks to preserve their privilege against the depredations of the undeserving poor is truly disillusioning.