When Kevin Rudd walked into an overflowing lecture theatre at Melbourne University today the crowd broke into spontaneous applause. The true believers are desperate for Labor to win. The basic theme of Rudd’s speech was that Australia can do better on education, which the Labor leader argues is crucial to improving Australia’s productivity performance (the audience may not have been so impressed with the focus on economics; many academics like to think they are above mere money-making).
The speech itself was just rhetoric, but the ALP has also released a more substantial discussion paper (pdf). The first half discusses the long-term foundations of prosperity and the importance of productivity, and the second half focuses on human capital.
The tensions between the two halves are what Labor needs to overcome if it is going to be credible on education. They note that one way of increasing productivity is improving the way firms and industries are organised:
That requires the right market incentives for resources to flow to the more efficient areas of the economy, and for businesses to organise themselves in the most productive way … this means businesses working in competitive product markets …
And that another way is to:
improve the quality of production inputs themselves. This in particular means raising the quality of human capital by investing in the workforce…
But if we are to improve our human capital it is not just a matter of increasing inputs, as the second section with all its comparisons with other OECD countries implies, but improving the productivity (broadly defined) of the education industry.
Australia has been increasing its spending on non-tertiary spending. The OECD Education at a Glance publication shows that on non-tertiary education Australia has increased its spending by more than the international average since the mid-1990s. Though productivity is very hard to measure in education, I doubt many people believe there have been significant improvements in school level educational outcomes in that time – certainly not the increasing number of parents shifting their kids to private schools.
Just throwing more money at schools isn’t going to work without sound curricula and good teaching, and in those areas we run straight into the heavily-entrenched centralised education bureaucracies running the public school system and the teacher unions that have obstructed many previous attempts at reform. Without even direct constitutional control over schools, federal Labor will struggle to make the necessary reforms, even if it supports them in principle (which at this stage is far from clear).
In universities, they complain that public spending has been cut. Yet it is very – indeed, surprisingly – hard to show that this has had negative effects on educational outcomes. The number of people completing courses is up, student satisfaction with their courses overall and with teaching is up, and graduate salaries relative to other 20-24 year olds are maintaining a healthy premium (though it bounces around a bit from year to year). The slight decrease in the overall premium from a bachelor degree, as I argued last year, is probably due to qualifications upgrading, as postgraduate numbers and the postgraduate salary premium are both up.
Though the public core of the university system is in student choice even more paralysed by bureaucracy than the schools, financial reliance on full-fee paying international students has started to correct the historic institutional indifference to the interests of coursework students. Most staff now get at least some teacher training, need to do ok in student surveys to be promoted, and many use the web to improve their teaching. Email has helped students get around the problem of academics being in their office for one or two consultation hours a week. Labor needs to create added competitive pressures for universities to keep improving the student experience. Perhaps they will reveal plans for this in the promised future detailed policies.
I agree with Labor that we need to invest more in education. But this makes their promise to further restrict what students can spend on their university education anomalous. If we want resources to flow to where they can best be used, who is better to decide how much a student should invest in his or her human capital? The student or a politician setting a one-size-fits-all maximum? Here the two parts of Labor’s agenda come into direct contradiction.
Education probably does need more money, but it needs micro reform as well. The former without the latter might make us look better in OECD spreadsheets, but it won’t deliver value for the extra money.