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Higher learning is a societal good for all

Every taxpayer contributes and every taxpayer benefits from the tertiary sector.

Every taxpayer contributes and every taxpayer benefits from the tertiary sector.


The Australian

September 6, 2017

Education Minister Simon Birmingham is being disingenuous when he says: "Less than half of all school-leavers go to uni so that's a lot of taxpayers providing funding for a public good" ("Time for unis to repay debts, says Simon Birmingham", 30/8).

The parents of those who do go to university are also paying taxes, and those whose children don't go to university all benefit from the schoolteachers, doctors, nurses and others who have university qualifications. Every taxpayer contributes and every taxpayer benefits.

The notion that education is a private rather than a public good feeds on a false dichotomy. It is both.

Yet the prevailing orthodoxy - accepted by both sides of politics - is that because getting a university degree supposedly leads to better jobs and higher incomes, the individual graduate should pay back the money governments have invested in that university education.

Notice the slippage here. Governments believe that education is a good investment, presumably in the economy as a whole, but the individuals who work hard to further their capacities and thus their contributions to the economy, those who in fact personally invest years of effort while they forgo earnings, should pay back some of that investment because they are benefiting.

What of progressive taxation?

If a degree leads to a higher income, you should be paying higher tax. And the whole purpose of a tax system based on income brackets is so the better-off subsidise, help pay for, the education and welfare of those less well off in society. It's not just a direct investment, it's an indirect way of fostering the talent too often left to stagnate among the disadvantaged.

Governments first invested in primary schools because they needed workers who could read instructions about machine operations and safety. As industry became more sophisticated, public secondary schools were set up too, because private colleges were not turning out enough skilled people to drive industrial and business development.

But governments didn't then load the millions of students who finished school with an extra fee once they reached a certain income level. Instead, they had them "pay back" via higher taxation in the higher income brackets. (We still don't invest enough in early child development, although the evidence is clear that countries that do so benefit enormously in terms of reducing disadvantage and increasing lifetime productivity.)

Today, as technology and automation revolutionise the workplace yet again, tertiary-level education - a degree or higher certificate - is essential for more or less everyone.

If we don't invest in that advanced learning, we risk becoming Keating's white trash of Asia. And those full fee-paying Asian students crowding our university classes won't be able to stay here and boost our economy, they'll go home and benefit theirs.

The value of new knowledge and technologies to the national economy in 2014 was estimated by Deloitte Access Economics to be $160 billion, a return of between $5 and $10 on every dollar invested in university research.

So by all means call, as Birmingham does, for greater efficiency and economies of scale, fewer administrators and fewer expensive buildings in universities, but don't ignore or downplay the value and long-term cost-benefits of the nation investing a measly extra $2.8bn a year in higher education.

Moreover, a one-off degree or certificate will not be enough in the longevity economy. Decrying the ageing of our population won't stop the inexorable rise of what is already a seven-million-plus middle-aged group of 50 to 75-year-olds, most of them needing and willing to stay in the workforce, using their skills and experience in productive ways, but in need of retraining and reinvention to stay productive.

Why are we not investing in upgrading their skills instead of assuming we can rely on the uncertain and often inadequate training of younger people?

The idea of an initial degree as "preparation" for a lifelong job is already outmoded. Most of us will have multiple jobs, in multiple, even as yet unimagined industries, and our education systems have to start planning for that.

Workers won't need a postgraduate degree requiring more years of class attendance and more HECS-type fees. They will want flexible course structures to give them the new skills those businesses and industries want.

And the lead may have to come from industry itself, not just government. In the US, telecommunications company AT & T is paying its mature workers up to $30,000 to spend on new skills-oriented short courses developed in co-operation with universities and colleges.

They very sensibly don't assume young graduates are "prepared" for work; instead they value their older workers as reliable and productive human resources to be built on, to be retained and retrained as necessary. They are willing to invest in enhancing the skills of those they already employ and trust.

In fact, universities are starting to look like the emperor with no clothes: University of Melbourne graduates are among those least likely to find a job within four months of graduating, according to the Good Universities Guide. Nor are their starting salaries high.

The universities doing best on course quality, satisfaction and finding a job are those with more mature-age students, a better mix of courses and help with internship programs. Reputation is not always linked to quality.

Firms such as PricewaterhouseCoopers too are starting to realise it is real skills and human resource capacities they need, so they are not just looking for young people with a high ATAR score or a degree from a prestigious university.

So let us refocus the education debate. Call out those who claim having a degree is an individual luxury. Ask them who is teaching their kids. Who is doing their accounts? Who is caring for them in hospitals and surgeries? Or inventing new technology, new jobs, new futures for this country?

And ask whether the investment we made as taxpayers was worthwhile in itself as a public good, or whether instead students should be punished by loan repayments, forced to delay buying a house, starting a family or building a new business. What do economists who study cost benefits say about that?

Don Edgar is a sociologist and was foundation director of the Australian Institute of Family Studies.