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Australia’s underinvestment in education

By William Isdale - posted Wednesday, 23 May 2012

In an essay entitled On Useless Knowledge, Bertrand Russell wrote of the value of education. “I have enjoyed peaches and apricots more since I have known that they were first cultivated in China in the early days of the Han Dynasty; that Chinese hostages held by the great King Kaniska introduced them to India [and] that the word ‘apricot’ is derived from the same last source as the word ‘precocious’, because the apricot ripens early…All this makes the fruit taste much sweeter.”

It’s a truism that education opens doors of opportunity and enriches the lives of individuals. In the 21st century it is even more than that. It is one of the main enablers of productivity and economic growth. Higher levels of education are variously associated with improvements in health, social cohesion and civic participation.

In fact, universal public education could well lay claim to being the greatest sustained public policy for promoting human well-being ever. Education is a significant individual and public good, and we have strong reasons as a society to want to provide it.


So, why are we still underinvesting in education? And why did the debate on the distribution of educational resources go dead so quickly?

In February the Commonwealth Government’s long awaited Gonski Review Report – the first comprehensive review of Australian school funding in over 30 years – was released. It recommended a serious shake-up to our funding allocation system, and an injection of over $5 billion into school funding as a whole. Then we forgot about it.

The debate we might have had was over-shadowed by Rudd’s planned leadership challenge, and with it’s recommended funding increase, the report soon found itself sacrificed on the Government’s political altar of budgetary surplus – or at least relegated to obscurity for the foreseeable future on grounds of ‘continuing consultation’.

As a country we now invest roughly 3 per cent of our GDP in education. That’s below the OECD average of 3.5 per cent, and significantly below top-performers like Finland (3.7 per cent) and Norway (5 per cent).

In our own region, we’re on the slide. In 2000, only Finland outperformed our students in literacy, and only Japan in mathematical ability. Come 2009 and twelve countries can claim better outcomes in math while six can claim superior literacy. Who are the new kings on the block? Think Singapore, Korea and Hong Kong (China) amongst others.

It’s a terrible indictment of our politicians that we seem to be doing very little to ensure we remain competitive in a globalised world of international investment and out-sourcing. The world is moving on, and we are stuck behind.


Of course throwing money at a problem doesn’t make it go away. Research from the Grattan Institute shows that we’ve wasted resources on reducing class sizes with little effect, instead of investing in the real engines of educational outcomes: our teachers.

Educational eagle Finland requires all its teachers to attain a Master’s Degree. Denmark regularly offers its teachers paid professional development – offering them the opportunity to take university classes and brush-up on their knowledge. In comparison, we expect too little, we give too little. Empirical work by former ANU economist Professor Andrew Leigh shows that teacher quality in Australia has declined over previous decades - largely the result of a fall in average teacher pay, and a rise in the remuneration of non-teaching professions.

We must accord teachers a salary and standing in our society that gives due regard to the importance and value of their work.

As a country we now enjoy almost unparalleled prosperity. Australia has the highest minimum wages in the OECD, the third lowest debt and the sixth lowest taxes; we have the second highest average wealth in the world, and the highest median wealth. But a lucky country can’t ride on luck forever.

Our future is not in minerals or resources – those will run out. Instead, it lies with the investment we make in our own citizens. An investment in education may well, in the long run, prevent more conflict, help people discover more talents and opportunities, eradicate more diseases, nurture more creativity and create economic growth and jobs – in sum, increase human well-being – more than almost any other alternative.

We can’t indulge our complacency on education. We need a bigger pie, and we need to cut it better. The Gonski Review provided a road map for the future of educational reform in this country, and we ignored it. It’s time we had a serious debate. Australia is well placed to invest more in education, and it ought to be our nation’s highest priority. 

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About the Author

William Isdale is a law student at the University of Queensland, where he is an Academic Excellence Scholar and TJ Ryan Medallist and Scholar.

He is the President of the Australian Legal Philosophy Students' Association and Editor of the Justice and the Law Society's journal Pandora's Box.

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