Ideas@TheCentre – The Centre for Independent Studies

Ideas@TheCentre

Ideas@TheCentre brings you ammunition for conversations around the table.  3 short articles from CIS researchers emailed every Friday on the issues of the week.

Guessing growth is not the answer

Eugenie Joseph

10 August 2018 | Ideas@TheCentre

This week, Australia’s population clock ticked over to 25 million: a moment of celebration for some and consternation for others.

Remarkably, this milestone was reached more than 20 years ahead of schedule if we believed official government projections from 2002.

Yet this has highlighted an inconvenient truth: governments are not good at predicting long-term population growth.

And this undermines public confidence in their ability to plan for a bigger Australia.

After all, how can governments plan for larger cities and more infrastructure if they cannot anticipate future population with any certainty?

To take one example: in its 2014 Plan for Growing Sydney, the NSW government estimated that an extra 664,000 homes would be needed in the next 20 years. Just two years later, this was revised up to 725,000.

Population growth is inherently difficult to forecast. This is why agencies like the Australian Bureau of Statistics make projections instead — that is, estimate different possible rates of population growth, based on assumptions about birth rates, life expectancy and migration levels.

However, these projections are often treated like a crystal ball; even though they are, at best, a form of sophisticated guesswork.

And another problem is that the underlying assumptions can be very conservative ¾ and even implausible in some respects.

For example, the government projections from 2002 assumed that annual net migration would stabilise at 90,000 – even though it peaked at 300,000 in 2008.

More recent projections also assume the level of net migration will stabilise in the long-term – although realistically it could keep growing, barring major policy changes.

This is why governments should approach population projections with extreme caution – and not present them to the public as divine revelation.

Otherwise, the public will lose all faith that governments are capable of planning for a ‘big Australia’. And public reaction to population growth will become increasingly more consternation than celebration.

This is an edited extract of an op-ed published in the Spectator online earlier this week.

5 facts on school funding

Blaise Joseph

10 August 2018 | Ideas@TheCentre

“Facts complicate things. All the press, the people, and their leaders want to know is: who are the goodies and who are the baddies.”

That’s how Sir Humphrey Appleby explained foreign policy, but he could have just as easily been talking about Australia’s school funding World War 3.

There have been numerous misleading and factually incorrect statements recently reported in the media about the government’s ‘Gonski 2.0’ school funding plan. Here are five key facts often ignored.

  1. Funding is increasing for all school sectors above inflation and enrolments.

Federal per-student funding is going up on average for government (5.1%), Catholic (3.7%), and independent (4.3%) schools. Only a small number of individual independent schools will receive less money.

  1. Government schools are receiving a larger increase than non-government schools.

Contrary to what education unions claim, the current disagreement between the Catholic and independent school sectors is not at the expense of government schools, who are receiving an even larger percentage increase in federal funding.

  1. The Catholic school system retains the right to distribute funding however it likes.

The ongoing argument over the ‘system-weighted average method’ — essentially, whether to treat the Catholic system like one school or a group of schools for the purposes of the funding formula — affects the total amount of funding received by the Catholic system, but not its freedom to distribute the pool of money to its schools as it sees fit.

  1. There are no ‘cuts’ to school funding.

The government’s Gonski 2.0 increases are not as large as in the original Labor Gonski 1.0 plan. But most of the extra money promised by Labor was fantasy funding — it was allocated beyond the forward estimates of the 2013-14 budget (the last budget before the Coalition was elected) and so was never funded.

  1. There is no clear link between school spending and student outcomes.

Total government funding per-student has increased in real terms by more than 15% over the past 10 years, while Australia’s results on international literacy and numeracy tests declined. There is no evidence more money will help if spent in the same ways, or in the ways the latest Gonski review suggest. The Turnbull government and the Labor opposition should cease their futile bidding war on who can lavish even more taxpayer money on schools.

ILC poor land management model

Charles Jacobs

10 August 2018 | Ideas@TheCentre

The recent controversy surrounding the Indigenous Land Corporation (ILC) in Cape York is emblematic of a government body operating on a broken model.

Established in 1995, the ILC is a federal government organisation that assists Indigenous groups to purchase land unable to be acquired through the Native Title process. In many cases the ILC has acted as a caretaker for land, leasing it from its Indigenous people and building investments such as cattle stations and tourism ventures to be handed back to traditional owners down the track.

Unfortunately, following millions of dollars of investment, three Cape York cattle stations have been running at a loss. As a result, the ILC has decided to hand direct control of these properties back to their Indigenous owners.

Part of this process includes selling off the large numbers of cattle that stock the ventures. While the ILC generates a significant amount of its own revenue, in 2017 it received over $60 million in government funding. Divesting the stations’ livestock will go some way to recouping these funds.

However, some Indigenous land owners are furious, suggesting that the cattle should remain so Aboriginal can continue to run viable enterprises and maintain employment and training programs once the ILC has left.

While both the taxpayer and Indigenous groups both can lay claims to the cattle, it must be asked what the government is doing running commercial enterprises on what is essentially private land?

Once title deeds were passed to Indigenous owners, the government should have allowed these groups the full autonomy to manage the land. The ILC could provide advisory services, however the management of the properties should have be contracted to private organisations who could properly assess their commercial strengths and weaknesses.

Thankfully, the ILC’s withdrawal from Cape York is a sign that this may be happening. Indigenous owners will now be free to use this land as they wish.

If this means placing a higher priority on developing training facilities for their people rather than maintaining a high profit venture, so be it. Such a decision would be made free of the political and policy environment by which the ILC is constrained.