What makes an education 'revolution'?

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Leading up to the 2007 federal election in Australia, the Labour party used reforms to the Australian education system as a key policy offering to the Australian public. Dubbed the ‘Education Revolution’, these reforms consisted of a $14.7 billion investment in education over the following three years. Much attention has been paid to these reforms; [...]

Leading up to the 2007 federal election in Australia, the Labour party used reforms to the Australian education system as a key policy offering to the Australian public. Dubbed the ‘Education Revolution’, these reforms consisted of a $14.7 billion investment in education over the following three years. Much attention has been paid to these reforms; they will have fundamental impacts on the future Australian labour force, with flow on effects for workforce planners globally. Since the election however, the government has also promised over $40 billion in response to the global financial crisis, and is facing rising health care costs related to population ageing. In this context, are the proposed education reforms efficient, and how can they be improved?*

Many academic studies have demonstrated that although investments in the public education system may encourage income growth and equality, these outcomes are dependent on student attendance and completion of schooling. Despite the compulsory nature of primary and secondary schooling, Australia currently ranks 20th*amongst*OECD* countries in terms of school completion – overall, 72 percent of 19 year olds had completed year 12 in 2006. Only just over one third of ‘very remote’ students had completed 12 years of high school, while a similar proportion*had not even completed year 10.*In this case, rather than simply providing more financial input to the education system, a real education revolution would target the underlying factors which prevent children from attending school, the most prominent being the requirement in some families for children to earn an income. One simple suggestion in the literature is to schedule school holidays at a time when a child’s labour is most required in the family business (harvest time for farming communities, for example).

The second issue relates to the level of public involvement in education. Supporters of the free market would criticise the extent to which the government is responsible for the provision of education, and consider the proposed education spending to be unnecessary at best, and harmful at worst. Academic studies have shown that private schools provide greater incentives for students to remain in school, for example to provide more funds for their own child’s schooling. Other authors also consider that private schools, in a deregulated system, would be better able to target their offerings to meet the needs of individual students. For most goods this would be the end of the matter, however a good such as education brings with it what economists term ‘externalities’, where the consumption of a good by an individual has flow on benefits for other individuals. Broadly speaking, the externalities associated with education include a stable and democratic society, as well as increased productivity of individuals and their co-workers. For goods with positive externalities the societal benefits of consumption outweigh the benefits to private individuals, and government intervention is justified to encourage consumption to the societal optimum.

One compromise in this situation would be to move towards an education voucher system, shown by many studies to encourage income growth in absolute terms for all groups of society. Basically, in such a system parents receive a specified amount of money from the government which they may only use for their child’s education at a school of their choice, be it public or private. The value of the voucher can be means tested to provide greater financial assistance to lower income students of higher abilities. Such a system would allow students to attend schools which meet their needs, but also would ensure optimal investment in education. The Institute of Public Affairs in 2009 developed such a voucher model for Australia, suggesting that the education system be funded for significantly less than the cost of the current reforms.

To be deemed a real education ‘revolution’, the government’s education reforms must go beyond financial assistance and address the structural nature of education in Australia, encouraging children to not only attend school, but to do so in a system which is designed to maximise their potential.



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