HECS for sportspeople

In one of the many possible budget savings that probably won’t be announced next Tuesday, Andrew Leigh suggests charging elite sportspeople for their Australian Institute of Sport education. This is a rare issue on which I broadly agree with The Australia Institute, which put out a paper (pdf) some years ago callling for income-contingent loans for AIS sportspeople, as Andrew L also proposes today.

Currently Australia’s elite sports education costs about $130 million a year, though I could not quickly see how much of that was directly spent on people enrolled at the AIS. Even if all of it was recovered it would not exactly be a major blow against big government, but worth doing.

Governments have, however, long been wary of this idea. I’m not sure whether this is because they think the negative publicity involved with popular sportspeople criticising them outweighs the relatively small financial benefits the scheme would bring to the government, or whether they were worried about triggering ‘HECS for TAFE’ (assuming that the AIS is a glorified TAFE) controversy. Perhaps a bit of both.

Still, if the punters can be conned into structural reductions in spending to supposedly deal with a cyclical inflation problem, we should take advantage of this political opportunity.

40 thoughts on “HECS for sportspeople

  1. I have an alternative even less popular suggestion, which is to get rid of the AIS altogether. It reminds me of some uber nationalist East German institution where great Australians are made to keep the population happy, with no other obvious benefit. If people stopped worrying about sport so much, they might actually have to turn their brains on.

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  2. I don’t know why the government feels it needs to spend any money on sport or art. If people want to support those things let them pay from their own pockets. I can’t think of one good reason why I should be forced to support some ‘elite’ sportsman or wanky artist. Give me my money back.

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  3. It’s cheap PR. It’s surely better to spend money on sport than another ‘where the hell are you’ type campaign.

    And it’s also important to fund research into drugs that enhance biology. If you haven’t already, read Positve by Werner Reiterer – he details just how drug laced ‘clean’ Australian sport is. He was an Olympic thrower.

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  4. While I think we should try to get back some of the AIS money, this does seem to be among the more effective government programs. Conrad isn’t wrong that sporting success makes people happy; there was a clear spike in the Australian Unity well-being index at the time of the Athens Olympics.

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  5. “If people stopped worrying about sport so much, they might actually have to turn their brains on.”

    Wash your mouth out with soap Conrad. Sport is the glue that holds Australian society together.

    A bit of history is in order. The AIS was created by Malcolm Fraser after Australia’s dismal performance at the 1976 Montreal Olympic Games, which returned a risible 1 silver medal and 4 bronze medals. The AIS has succeeded in its objectives, if the gold medal count carries any weight.

    But, and this key, the AIS was conceived at a time when Olympic sports were all amateur and there was far less money in professional sports. Nowadays, all elite sports people, that is the ones who attend the AIS get generously sponsored with clothing and equipment and some get extremely well paid for endorsements. It is beyond absurd for them not to pay back the cost to tax payer of their training which has made them very rich and famous.

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  6. Aren’t positive externalities the whole rationale for subsidising higher education? While I would support imposing HECS on AIS ‘students’ along with everyone else, it would seem to me that the positive externalities of having successful sportspeople are likely to be proportionately much higher than from having Arts graduates or engineers. So if we privatise AIS, we should do the same across the higher ed sector.
    I’m not aware of arrangements for TAFE – do students pay and if so, how much?

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  7. Spiros: Life wasn’t meant to be easy Spiros ๐Ÿ™‚ and given that almost no-one I know can remember a single gold medal winner in 1976 (in fact I can only name two since 2004 — Ian Thorpe and a cyclist — but thats only because I am a cyclist), winning gold medals obviously isn’t a very useful or productive thing excluding to the individual.

    Rajat: “it would seem to me that the positive externalities of having successful sportspeople are likely to be proportionately much higher than from having Arts graduates or engineers”

    What positive externalities are you talking about, excluding happiness over the Olympic period? I might note also that all the big sports people actually enjoy are or certainly could be fully self funding (cricket, football, soccer, etc.).

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  8. sfw, art has pretty much always been supported by non-market funding. Whether it the church or the aristocracy or the state, if it weren’t for such forms of funding, it’s not an unreasonable proposition that we would never have had the Sistine Chapel ceiling, Beethoven’s 9th symphony, or Shakespeare’s Macbeth if it were not for some form of funding collected through taxation, tithing or plundering of other nations.
    We should be grateful that arts funding today is through levels of taxation that surveys have generally shown the public to be largely happy with (some polls have even shown substantial majorities being willing to pay higher taxes to support the arts).

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  9. lol… good point Andrew – I should have figured that, since I was 17 when I started myself. I was thinking somewhat younger though (eg, certainly as young as 15 years – perhaps younger, I’m not sure)

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  10. (FWIW, I accept that the arguments against producer-subsidies are quite sound, even when applied to the arts. I’d quite like to see a move towards consumer subsidies. Producer-subsidies should be reserved for funding the creation of new art, that is likely to have benefits that extend centuries into the future).

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  11. conrad, I would wager that the happiness produced by Thorpe, Freeman and the female swim team alone both during and after the Olympics is greater than the positive externalities of all the engineers in Australia combined.

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  12. I once heard an argument that the AIS should be subsidised because Australians derived a positive externality from watching sport and seeing other Australians win gold. The problem being that this person was (a) serious and (b) associated with professional sport. So there are people out there who are spreading the positive externality message for the AIS.

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  13. I’m not sure to what degree AIS-supported sports can be considered “professional sports”. Yes, they’re professional in the sense that the athletes who compete in them get paid, but by and large the Olympic sports don’t attract all that much private money, at least not over here. Cyclists can make some alright cash in Europe, the swimmers and athletes can win some prizemoney on the Grand Prix circuit, but most Olympic athletes could not be considered to be making anywhere near the same as those in the football codes or cricket, and I would hardy consider the members of Australia’s Olympic volleyball team to be “very rich and famous”.

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  14. iamspam, why should I have to part with my hard earned to support some volleyball playing teenager? Let him or his parents pay.

    NPOV, I believe that most of the sistine chapel was paid for with indulgences, I don’t know how Beethovens 9th was funded or who paid for Shakespeare to write Mcbeth. But even if it was taxation do you think it was right for the rulers to tax their impoverished subjects so as to provide pleasure for themselves and you? Let me say it again – Don’t spend my money on your pleasures!

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  15. sfw, I agree that the poor of the time suffered needlessly for the enjoyment of the wealthy. But the human race as a whole has benefitted. We’ve come a long way since then, and most of Australia’s poor don’t pay net tax anyway, so it’s mostly middle-to-high-income earners who don’t appreciate art subsidising those who. Given the relatively tiny amounts involved, I think issues of “fairness” can be somewhat overstated. Further, were Australia to cut out all public funding of art, it’s not unreasonable to propose we’d fairly quickly become something of a cultural backwater. If successful business leaders were put off moving here because of a lack of qualify theatre or opera productions, it could have quite a significant negative effect on the economy, which *would* hurt the poor.

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  16. In fact to follow up on that last point – if Perth is going to really capitalise on its possibilities for mega-growth, the government could do worse than to spend up big on arts funding. I might even consider moving there if it could compete with Melbourne on the arts and culture front.

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  17. sfw, I think the point is that without the money, the parents or said athlete wouldn’t be there, and there wouldn’t be an Olympic volleyball team. Or gold medallist women’s basketball or hockey teams. And given that these aren’t commercially lucrative sports, most of the benefits tend to be that national feelgood discussed above, rather than commercial benefits to the players.

    Australia wants gold medals. The market fails to provide gold medals. Therefore the AIS steps in for market failure.

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  18. I wonder if anyone’s made the point before that the AIS is effectively a method via which taxpayers subsidise commercial TV stations, for whom broadcasting sporting events is highly profitable, not least because of all the successful sportspeople that the AIS churns out and people want to watch.

    It does strike me that enough people depend on what the AIS does for substantial profit now that it should be a prime candidate for a reduction in taxpayer funding.

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  19. “were Australia to cut out all public funding of art, itโ€™s not unreasonable to propose weโ€™d fairly quickly become something of a cultural backwater.”

    If it is true that without government subsidies there simply would not be sufficient demand from the people for such “art” to be viable, then that is simply people voting with their feet and hence signaling that they do not value such goods highly enough and that they would rather spend their own money on other things.

    Secondly, by what right do you have to confiscate the resources of the poor by government coercion to subsidize things that generally only the well-to-do use? The appropriate recourse is for you to seek to persuade them that they should change their views and adopt your taste for art, not to use coercive power to enforce your tastes and attitudes on others.

    The real reason why you argue for government subsidisation of art is because without subsidisation, people get what they want, instead of what you think they ought to want.

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  20. Except Brendan, a work of art is generally created with the intention of it being enjoyed not just by the current generation, but by many many generations to come. If I could put money towards funding the creation of our great works of art from 300 years ago, I would, but clearly that’s not possible. There are very few examples of goods created purely through private enterprise that are still available for all to to enjoy hundreds of years later.
    And I said, art also has a huge ability to attract outsiders – they wouldn’t come here and pay for it to be created, but once it’s created they’ll pay to come here and enjoy it.

    And note I quite explicitly said before that we don’t confiscate the resources of the poor – the “poor” in modern social democracies are net beneficiaries of wealth distribution.

    Let me ask you personally – do you think the world would be a better place if the only art that humans had created in the last 500 years was that which was funded by individuals voluntarily paying for it, with money earned purely through voluntarily transactions?

    It seems to me a far greater sin to rob the world the chance of another Beethoven, Michelangelo or Shakespeare than to rob individuals of a tiny amount of their salaries in order to pool funds that enable such a thing.

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  21. “It seems to me a far greater sin to rob the world the chance of another Beethoven, Michelangelo or Shakespeare than to rob individuals of a tiny amount of their salaries in order to pool funds that enable such a thing.”

    But NPOV, I think that for some in libertarian circles, that is the greatest sin. I was discussing this with some friends of mine of that persuasion the other day, and how a lot of art and entertainment which many people currently enjoy in Australia would be unsustainable without some form of government support. To me, to narrow people’s choices seemed somewhat illiberal.

    “No!” came the reply. “Take away the Olympics, take away the arts, take away the fireworks, take away the children’s playing fields! If the market won’t sustain it, then damned if my taxpayer dollars will pay for it, for the worst and most illiberal thing is for the government to use its coercion to take away my money!”

    And indeed, with such a fundamental difference of values as that, how can you argue?

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  22. NPOV – It’s true that feudalism created the huge disparities of wealth that allowed much great art to be produced, but even then there were successful artists who created their own wealth, such as Shakespeare, and the great composers had commercial income (though they also accepted commissions from the aristocracy).

    In Australia’s case, arts funding tends to subsidise work that will has little demand now or likely ever (if we get one Australian film even worth watching a year we can count ourselves lucky, and very few classics), or the production of opera and music written overseas for the upper middle class.

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  23. Sure, but even Shakespeare was very heavily subsidised by the patronage of Elizabeth I. I don’t know of any great composers who didn’t depend on the patronage of aristocrats or monarchs, who generally did little to create their own wealth.
    I’d actually hazard a guess that the typical artist of day is subsidised far less than that of a few hundred years ago.

    I’m not sure how you could prove that “arts funding tends to subsidise work that will have little demand now or likely ever” – if that’s occurring then it would suggest that those responsible for determining what art to fund today are for some reason far less capable of judging great art than the aristocrats, church leaders and monarchs of ages past. If that’s the case, then how we can fix that problem?

    And while it’s true that a significant percentage of the audience at operas and classical music performance would be considered “upper middle class”, there’s also a lot of cash-strapped students and pensioners. The “upper middle class” attendees tend to pay for A reserve tickets and donate privately, so as a group quite probably pay their own way anyway.

    At any rate, I do think there are lots of arguments for reforming how arts funding is done – far more into early education, for instance, and a move towards consumer subsidisation (vouchers?). But were a future Australian government decide to simply slash all funding by half, I would personally move countries, and I’m sure I’m not the only one. A thriving arts scene is part of what makes a place worth living in.

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  24. Hmm, ok, I take back “heavily subsidised” – there’s not a lot of evidence that Shakespeare relied too much on the patronage of monarchs or aristocrats, though he did have some such patrons (e.g. Henry Wriothesley). But he’s certainly a rare case.

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  25. “Did Shakespeare fill his coffers or swell his account with the goldsmiths by writing his plays? Assuredly not.”

    That (very old!) article suggests he made most of his money from investing in property, and some from acting. Virtually none of it from actually creating the plays that are his true contribution to society.

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  26. NPOV – I realise the Shakespeare evidence is sketchy, but theatre was mainly a business then and now, and as I understand it Shakespeare did well out of it. He’d do even better today, when technology allows vastly greater audiences to be reached.

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  27. Sure, and generally I agree that actual production of art shouldn’t be subsidised. It’s the creation of new art that I’m primarily interested in.

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  28. How can I stop other people from taking my money and spending it on things that they think would be good for me ie Arts and Sport? I was a racing cyclisr for many years and and I paint and draw however I don’t ask or want the government to ‘support’ me, so why should I support some fitness freak or simpering artist? Give me back MY money and spend your own.

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  29. Swf, how can I stop other people from taking my money and spending it on things that they think would be good for me ie roads, parks, streetlights, and sewers?

    Anyway, there’s plenty of ways you can avoid paying much tax (legal and otherwise). For a start you could move to Monaco and buy all your goods and services in the UAE ๐Ÿ™‚

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  30. NPOV If you can’t see the difference between essential services and supporting players of sport, well it’s no use discussing these things with you. However I would suggest that if you desire to leave an artistic legacy for future generations to enjoy that you pay for it with your money rather than steal my money and use it to stroke your ego. Who was it that said ‘If I saw a man coming towards me with the intention of doing me good, I would run for my life’. The only thing worse than that is someone who wants to spend your money to do you good.

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  31. No I can’t see the difference – if I had to choose myself how to spend a $1000, I’d rather spend it on the arts than on streetlights. But under your suggestion, the government is allowed to take my money to fund streetlights (which you personally believe are “good for me”), but not allowed to fund art, which apparently you personally don’t believe is worthwhile enough.

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  32. Regarding your suggestion that all artists should pay their own way in creating their art, as I implied above, I don’t believe a single great artist has ever lived off selling the creation of art directly – the few that were essentially self-sufficient managed to be so only because of other talents (investing, acting, or conducting, or what have you). In other words, the market simply doesn’t value great art very well…I’d suggest partly because very few (usually highly educated) people actually have the ability to recognise great art at the point that it’s created, but also the nature of art is that once it’s created, it often takes decades if not centuries for its full value to be appreciated.

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  33. Palestrina was the foremost composer of 16th century Italy. He made his wealth by leveraging his talent into securing fat contracts from the wealthy. It wasn’t patronage, it was business, and both sides gained from the transactions.

    Four-hundred years later, the transactions are forgotten but the great music remains.

    Good, even first-rate, human achievement and commercial success are not mutually exclusive, and I would suggest that they go together very well.

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  34. Jeremy, but did the wealthy that he secured his contracts from create their own wealth? Or gain it largely from taxes on the peasantry or plundering foreign nations?

    And no, of course human achievement and commercial success are not mutually exclusive. But human achievement of the sort that often takes many many decades for all to truly recognise the value of rarely achieves commercial success. Whereas commercial success is very easy to obtain creating goods and services that have very immediate appeal to a wide audience, but that are typically very quickly forgotten in time.

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  35. From a brief scan of Palestrina’s biography, it would seem he earned most of his living through conducting and teaching. Many of his big works were, as I suspected, commissioned by the church directly (sometimes the Pope himself) or via the aristocracy, especially the Duke of Mantua. I think it’s fair to assume the Duke gained most of his wealth through what were effectively taxes on the peasantry.

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  36. NPOV – Though I suspect changed technology – printing for written works, recording for music, movies and TV and for acting – means that the correlation between commercial success in the lifetime of the artist and ‘human achievement’ is now very high. All creativity that it is not just imitation has an entrepreneurial aspect to it, in that the artist is not simply tapping into existing demand, but trying to convince people that they want something new. Patrons/governments will be among those acting as entrepreneurs, in backing artists they pick, but to be among the contenders for long-term artistic status (with the number of contenders massively higher than in previous generations, for the technological reasons above among other factors) initial success will surely be a major indicator.

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  37. Sure, Andrew, I agree that art created today has to prove it has some commercial viability – and governments should definitely not keep throwing taxpayer’s money at artists who haven’t demonstrated any ability to engage audiences.
    But it still remains the case that there simply isn’t enough commercial value in the creation of art per se for it to be a viable form of subsistence.

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