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.

Proclaiming the good news on capitalism

Eugenie Joseph

30 November 2018 | Ideas@TheCentre

It is clear that capitalism is having a moral crisis, when even Jacinda Ardern, the Prime Minister of a prosperous capitalist economy, terms it a “blatant failure”.

But Australians have good reason to be sceptical of the criticism: our capitalist system of private enterprise and free trade has worked remarkably well for us.

As outlined in my new paper, Why We Should Defend Capitalism, economic reforms from the 1980s to early 2000s unleashed the productive power of markets, and led to real growth in incomes and living standards.

But what does that mean for ordinary Australians? For a start, it means we can more easily afford to buy that dress from ASOS and Michelle Obama’s autobiography from Book Depositary, without stretching our wallets.

It means we can afford more overseas trips and holidays – in fact, millions of them each year; Australians are among the most widely travelled people in the world.

It means we enjoy our work more – our jobs have become more interesting, highly skilled, less mundane and much safer. It means we can afford better food and healthcare – with our life expectancy now sitting at 82 years, up from 49 years in the last century.

And it means that nearly 9 out of 10 of us now has a smart phone – which was cutting edge technology just a decade ago.

But remember why we have these opportunities. Governments do not supply us with mobile phones; we buy them from private companies.

Australians do not queue up at a charity kitchen for their weekly fix of sashimi or pizza; they go to private businesses. If you support your local hairdresser or drycleaner, you are supporting capitalism.

However, 27 years of relative prosperity has led to complacency among young Australians; and a growing attraction to socialism.

But their attitudes could easily change – if ditching capitalism meant giving up social media, Instagram, and that annual backpacking adventure through south-east Asia.

To safeguard our prosperity, we should unashamedly defend capitalism — and more importantly, connect the success of capitalism with our everyday lives.

That may be the only way to convince Millennials – and Jacinda Ardern.

Budget surplus?

Simon Cowan

30 November 2018 | Ideas@TheCentre

The government has announced that the next Budget will deliver a surplus: the first in more than a decade. And unlike the “four years of surpluses” Wayne Swan announced in 2012, there is a fair chance the Budget will actually end up in the black for either financial year 2019/20 or 2020/21.

Fair due should be given to the government for turning the fiscal ship around, even if most of the hard work was done by the currents of higher tax revenues rather than the engine of spending discipline.

Yet such a victory may well prove to be hollow. The government faces the electorate in May, and at the moment the signs are pointing to a decisive loss. The government may not actually have a single day in office with the Budget in surplus.

And we can presume from their 2016 election manifesto, that Labor intends to spend up big if they take office. Costings of the 2016 policies suggested Labor would push the Budget further into deficit in the short term, though they predicted in the longer term that additional tax revenue would offset the upfront spending.

Putting aside internal issues within the government — even though these are significant — if Labor is elected, they will claim a mandate for higher taxes and higher spending, having promised to do so for two elections now.

What then can we say has been learned from our decade long descent into deficit? The honest answer seems to be: precious little.

No progress has been achieved in shifting the public’s cognitive dissonance over taxes and spending. Evidence suggests that many people remain woefully ignorant of how much we spend on various government programs or even whether spending is growing or shrinking.

Politicians are still promising to spend money upfront in the expectation of future revenue flows. There is no question this has led to inaction on Budget repair, which has consistently but erroneously been predicted to occur on its own.

Perhaps worst of all, there is even less appreciation now of the limits of government intervention than there was in 2007. That we have received so few benefits from the expenditure of so much money has not even dented public faith in the infallibility of government ‘investment.’

The government may have won the battle to deliver a surplus, but they haven’t won over the hearts and minds on budget repair.


What is a true education?

Jennifer Buckingham

30 November 2018 | Ideas@TheCentre

A university student reflecting on her education recently published a disparaging critique. She condemned an “antiquated” model of education for rewarding her for learning maths and science instead of things she considers more important, such as “how to do a tax return, change a tyre, pay off a car, buy a house, nail a job interview, do CPR, start a self-managed super fund.”

As teacher and blogger Michael Salter pointed out, why shouldn’t this list of life skills include “caring for an infant? Caring for an aged parent? Sterilising formula bottles? Filling in a Centrelink form? Clearing leaves from gutters? Unclogging drains? Cooking a family meal? Or a thousand other things?”

The idea that our highly educated teachers should be spending precious class time on things that could easily be learned on a weekend from a relative or friend, or indeed by watching a Youtube video, is both nihilistic and utilitarian — two things a true education is not.

It would be easy to dismiss these sentiments as typically youthful lack of appreciation for the privilege of an academic education, but they are also endorsed by people of influence in education policy.

Schools and expert teachers exist to give children knowledge and skills that they are unable or unlikely to learn otherwise. While it might be true that many students will not make use of the maths they learned beyond Year 8, there is no way of knowing in advance which students will, and which won’t. Therefore, the most equitable thing is to provide all students with a strong maths education, so no student is denied the opportunity to study maths at higher levels for lack of a solid foundation in the earlier years.

Unfortunately, students — and their supporters — who think maths education is irrelevant might just get what they wish for. A report released this week by the Australian Mathematical Sciences Institute shows a looming critical shortage of qualified maths teachers:  only one in four students currently have a qualified maths teacher in every year between Year 7 and 10, and this likely to deteriorate without immediate action.

Why does this matter? As Chief Scientist Alan Finkel told the International STEM in Education conference last week, maths is “fundamental to science, to commerce, to economics, to medicine, to engineering, to geography, to architecture, to IT… maximising your choices is not the same as maximising your ATAR.”

A good school education is about maximising choices for students in their life beyond school, not delivering a narrowly functional set of life skills.