Norton versus Norton on the promise of a Knowledge Nation

Another issue, which KN and Considine don’t discuss but which is socially significant, is the effect of large personal higher education debts (from HECS and loans) on decisions about childbearing and family formation. Combined with the shift to insurance-funded retirement income, this constitutes a major pressure on many women and many couples to defer, downsize or abandon plans to start families.

Despite all of this, Andrew Norton’s faith in private and market-based financing of education remains unshaken – perhaps because he never leaves the realm of economic rationalist theory to consider the empirical evidence presented by Considine and KN.

What are the alternatives to increased private financing? The two suggested are taxation reform and redistribution of existing public expenditure. In practice, some combination of both will be necessary. Strangely enough for an economic rationalist, the only reason Norton offers for discounting these options is that they will be electorally unpopular and/or politically difficult.

At least as far as new or increased taxes are concerned, this is probably not the case, given recent opinion surveys that voters would pay higher taxes if this were to yield improve social or environmental outcomes including in education services (see, for instance, The Australian Higher Education Supplement of 4 July 2001). Many options for tax reform have been mooted, including taxes on financial speculation (e.g. the Tobin tax), a progressive expenditure tax (the Kaldor tax, championed by Mark Latham) and taxes on environmental "bads" such as a carbon tax. Some combination of these would yield some of the billions require to meet KN objectives.

There undoubtedly are political difficulties with Latham’s proposals to reduce "passive welfare" and industry assistance. On the former matter these are less important than the negative social consequences of half-baked attempts at "welfare reform" which won’t yield the savings that some imagine. What is needed are innovative, non-coercive and non-punitive ways to link welfare entitlements with knowledge opportunities, with increased costs being more than recouped by long-term economic and social benefits. Industry assistance, too, needs not so much to be abolished as redirected away from subsidies for underperforming, and often ecologically unsustainable, industries and sectors (the Australian Conservation Foundation and Australian Greens respectively claim figures of $7 billion and $14 billion for such subsidies throughout the economy) to intelligent support for new and emerging knowledge-based and sustainable industries, including those prioritised in KN. As such industries grow, the private economic activity they generate would almost certainly produce more private knowledge investment, with better outcomes, than would hitting poor students with more fees and bigger debts.

The other point which Norton misses is that if, as KN proposes, a "whole-of-government" approach to achieving a Knowledge Nation is adopted, many areas of public sector activity which don’t presently contribute to the nation’s knowledge effort could begin to do so without requiring more spending or redistributing resources from other areas.

All told, the debate about education funding, like others canvassed in KN, will hinge on whether we continue, as a nation, to focus on purely fiscal considerations or whether we take a genuinely economic approach to the costs and benefits of the kinds of changes called for in the Report. Indeed, the "triple bottom line" of economic, social and environmental benchmarks, frequently referred to in KN, is a good basis for deciding our collective commitment to those changes.

Finally, readers may have gained the impression that I’m enthusiastic about Knowledge Nation. On balance I am, subject to the two qualifications noted above and a third one: that Knowledge Nation is, like the ACTU/ALP Accord, as much about politics as about policy, and hence embodies compromises between different forces within Labor and with different constituencies which Labor is courting in an election years. Not only are the policy colours still to be painted into the strategic sketch KN provides, a close reading reveals a number of apparent contradictions and "bob-each-way" statements. The delineation of "new" and "old" economies and the degree of commitment to the former are two such areas. Also the strong commitment to sustainability sits uneasily with KN’s enthusiasm for biotechnology. And there are good social and democratic reasons for deepening and broadening the Australian people’s knowledge store, thinking skills and communicative competence, yet these are very much subordinate to the instrumental economic case (as well as the environmental case) for a Knowledge Nation.

But with these qualifications, I feel that KN does represent a leftward shift on balance, and a pronounced green shift, for Federal Labor, and that there are strategic and ideological footholds within it which left, feminist and green forces should recognise and utilise as a base for contesting and defining the future direction of a Federal Labor government. And the release of KN means that Federal Labor finally has a Big Idea – like "It’s Time" in 1972 and the Accord in 1983 – with which to win the coming election, rather than relying on the conservatives to lose it. I hope we can see more discussion of Knowledge Nation, its problems and its possibilities, besides what I’ve been able to offer here.