Ideas@TheCentre – The Centre for Independent Studies


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.

Does inequality matter?

Simon Cowan

05 October 2018 | Ideas@TheCentre

This week we hosted an interesting discussion on inequality (see video).

CIS Senior Fellow Robert Carling argued inequality is actually an integral part of a market economy, because the incentive of massive wealth drives and rewards innovation and risk taking. He noted that “if you accept that markets are the best way to organise economic activity … then you must accept some degree of inequality”.

Importantly, he raised the often ignored trade-off between equity and economic efficiency; and the fact that people mistakenly believe increasing taxes and redistributing income is essentially costless. This is not the case.

Another interesting point of view that both Melinda Cilento from CEDA and Jonathan Coppel from the Productivity Commission shared, was that the perception of inequality was also different from reality. When asked, people feel they are worse off and that the benefits of growth are only accruing to the rich.

Yet inequality in Australia has not increased substantially in recent years — in fact it may have decreased. Further, wages have increased across the spectrum in Australia.

In some ways, this is a case where Australia has imported arguments from the US and the UK assuming that they apply here. It’s also related to an increasing focus on, and anger towards, the rich.

Pointing out that the top 1% (or the top 1% of the top 1%) are doing really well and pretending that is the same as broad inequality is an effective way of stoking resentment.

It’s telling that the measures to combat inequality are largely on the revenue side. Focusing on how rich people are, rather than poverty, allows progressives to advocate for massive tax increases and more regulation on the productive sectors of the economy.

These are exactly the kind of things that will hammer economic growth, which — as Carling noted — may harm the disadvantaged more than the redistribution helps them. Tax increases on the rich are perennially popular, but they will not lead to greater prosperity

One big lesson to be drawn from the populist revolt that put Trump in the White House is that people don’t want more redistribution, they want more opportunities. Many in the working class are rejecting the perennial solution of the left (more money and fewer obligations) in favour of the opposite: re-establishing what they believe is the broken link between work and success.

Teachers’ union stance wrong on reading

05 October 2018 | Ideas@TheCentre

I have been a member of teachers’ unions since I began teaching 30 years ago. The role of unions is to protect the pay and conditions of their members. However, as a practicing teacher, I am becoming increasingly concerned with their present stance on the teaching of reading that seems to undermine the very thing they claim to protect — teacher workload — as well as doing a disservice to the children they educate.

The NSW Teachers Federation commissioned a paper titled “Exploding some of the myths about learning to read” by Professor Robyn Ewing, who participated in the recent phonics debate. Professor Ewing will be given a further platform to present the ideas in her paper at a Federation-endorsed professional development session in October.

Professor Ewing’s report misrepresents the case for effective phonics instruction — including the adoption of a straw man argument that a systematic and explicit approach teaching phonics precludes other aspects of literacy such as vocabulary development. Professor Pam Snow has summarised the shortcomings of Ewing’s report by stating, “Nothing was exploded in Professor Ewing’s union commissioned paper. Rather, a number of tired though conveniently protean myths have simply been perpetuated; unhelpfully and uncritically so.”

In contrast, Professor Snow’s research documents the consequences of failure to develop essential literacy skills, and she draws our attention to the overly high rates of illiteracy amongst incarcerated youth who disengaged from society and the education system, as evidenced in the 2015 Young People in Custody Report.

As a learning and support teacher I see students every day who have difficulty with reading and spelling. Engaging these students in the classroom becomes increasingly difficult as students become older and the gap becomes wider. This adds to teacher workload and stress through having to manage disruptions and robs all students of valuable instructional time.

The gap need not become wider if teachers engage with the findings of reading research and trials. The South Australian phonics check trial showed that the check was not stressful for students and teachers and school leaders were overwhelmingly positive about it. More teachers are beginning to understand the importance of this check and the Queensland Catholic Education Commission will now trial the check in 2019.

Many teachers were surprised that the Phonics Check detected a deficiency in students’ decoding abilities that was not evident in the more cumbersome and time-consuming ‘running records’ mandated by many education departments throughout Australia.

Teacher unions should be arguing for teaching strategies that reflect a strong evidence base, and for assessment tools such as the Phonics Check that reduce teacher workload.

Countering China’s BRI march

Hugh Morrison

05 October 2018 | Ideas@TheCentre

As China’s Belt and Road Initiative (BRI) marches west through Southern Asia, diplomatic envoys criss-cross the Indo-pacific like honeybees; collecting assurances, and pollinating relationships. Australia, the US, India & Japan — the ‘Quad’ — are buzzing with concern about China’s increasing economic and military assertiveness in the Indo-Pacific.

Since 2017, each Quad member has introduced a policy or strategy, promoting economic freedom, security, a rules based order and freedom of navigation in the region. They’re concerned partly due to China’s track record of irreverence to international law in the South China Sea, and BRI projects heaping developing countries with unmanageable debts; making them increasingly dependent and vulnerable to Chinese coercion.

Malaysia recently scrapped three Chinese BRI infrastructure projects worth US$23 billion (AU$30 billion). And Sri Lanka granted China a 99-year lease on a local port in exchange for the cancelation of a $US1 billion debt.

Both states are situated on key shipping trade routes, and there are fears the port could be used for military purposes in the future. The Quad members have sought to temper China’s regional hegemony; with US Secretary of State Mike Pompeo recently travelling to Malaysia, Singapore and Indonesia, announcing $US300 million for regional security assistance.

They’re also vying for influence in Sri Lanka, where last month Japan’s foreign minister delivered two coast-guard patrol aircraft, a week after the US gave US$39 million for naval development — while India and China have been competing for road and housing projects in the Island’s north.

Pakistan, another state with crippling debts to China, is a crucial link in the BRI chain, providing a direct trade corridor between China and Arabian Sea ports. Last week, Pakistan received both US and Chinese envoys within days of each other.

In July, the US announced its answer to the BRI; the ‘Indo-Pacific Investment Plan’, in partnership with Japan and Australia, to offer responsible infrastructure lending and encourage private investment in the region.

They could disrupt the BRI’s continuity by attempting to win over key states, such as Pakistan, through infrastructure lending. However, the trio are unlikely to make moves that require huge funding and risk compromising important diplomatic and trade ties with China.

After all, honey bees can sting, but they pay with their lives.

Hugh Morrison is a Bachelor of Journalism student majoring in international relations, and an intern at the Centre for Independent Studies.