The government school system is remarkably secretive. Under the influence of the teacher unions, schools in most states still refuse to release the information parents need in order to compare performances across schools. The system is also very centralized – head teachers cannot decide on hiring and firing of staff, for example, but must accept the people they are sent. Nor are they allowed to take on teachers in subjects where there are shortages and train them on the job. All this could and should be changed.

The biggest reform, however, would be to extend school choice to all parents. There are various ways this could be done – through charter schools, for example, or by means of education vouchers – but the best strategy would be to give all parents education tax credits so they can pay their own money to buy the schooling they think best suits the needs of their own children.

Higher education, too, needs reforming. The current system of quotas and price controls provides universities with neither the incentives nor the capacity to offer high quality, professionally delivered higher education. Universities should be free to decide for themselves how many students to take and what fees to charge. They should also be free to bundle their services and charge for them accordingly (some might then offer a basic, no frills package while others offer a full campus experience).

Key questions:

• What explains the differential performance of state and privately-run schools, and why do girls tend to perform better than boys in secondary education?
  
  
• What are the benefits of parental choice in schooling, and what policies enhance the ability of schools to compete effectively in an education market?
  
• How should higher education be funded to ensure Australian universities reach world standards and graduates get the courses they want?