The great author/philosopher Eric Hoffer once said, ‘Every great cause begins as a movement, then becomes a business, and eventually degenerates into a racket’.
It costs Australian taxpayers approximately $20,000 pa to educate a student in a government school and $12,000 pa to educate a student in a non-government school.
With around 4 million students in Australia, that adds up to nearly $70 billion pa. A lot of taxpayers’ money. In a previous post I mentioned federal government bureaucracy in education. This post is about cost and choice.
Considering non-government schools consistently outperform government schools in overall student performance, why can’t the government simply offer every family $8,000 – the difference between government and non-government funding – giving parents the option of sending their child to a non-government school if they wish?
Given the majority of non-government schools charge less than $8,000 pa in school fees, parents could send their children to a non-government school and pay no fees. For those schools which charge more than $8,000 parents who make sacrifices in order to send their children to higher cost schools would be $8,000 better off.
This would be ‘funding the user’ of the service (the family), not ‘funding the provider’ (the school). It allows the family to choose what is best for them – starting with education. It also reinforces the primacy of parents in the education of their children.
Feeding, clothing and educating children are some of the key necessities the family provides. We don’t tax people in order to set up government supermarkets to feed our children or government clothing stores to clothe them, so why do we do it with education? Walk into any supermarket and see the incredible range of food and other essential goods available at prices that continue to fall, not rise, relative to the CPI (consumer price index). Or clothing … or motor cars. The same would happen with education. The quality and range would increase.
Speaking of motor cars, over 90% of all journeys in Australia are by motor car. Less than 10% are on public transport. The true cost of providing public transport is approximately $20 per person per journey which the government gives to the ‘provider’ of the public transport service – the bus/tram/train company/agency. Again, this runs into billions of dollars of taxpayers’ money. The passengers however, the ‘users’ of the service, pay on average only $2 per journey. Taxpayers pick up the tab for the other $18. Without reducing opportunities for people to travel, if passengers were given the $18 to add to the $2 they already pay and were told, “You’ve now got $20, go buy yourself a bus/tram/train ticket” – which could be hundreds of dollars per week for some people – they may well choose to walk or ride a bike and pocket the money. By funding the ‘provider’ of the service instead of the ‘user’, we can never know what is the best value for both passenger and taxpayer.
All this is important as families pay enormous amounts of tax in the form of GST, stamp duties, registrations, and numerous other levies and taxes hidden in water and power costs which are then handed to the ‘providers’.
When state governments privatise water and power utilities, they do deals with purchasers allowing the new purchaser to push up power and water charges in exchange for a higher purchase price of the utility. A state government-owned electricity trust, for example, would offer the utility for sale. Potential purchasers would respond with various offers depending on what changes to legislation the state government would be prepared to make to allow future increases in power prices and supply charges thereby increasing the purchase price. This results in state governments receiving much more than the original valuation. It is just taxation by another name as consumers pay more for their power and water. On top of that, utilities like SA Water, pay ‘dividends’ to the SA state government. More taxation under a different guise.
Private companies that base their business models on providing services to consumers but are either paid by the government or are able to persuade governments to prevent or limit competition are called rent-seekers. Aged care, child care, disability care, energy, housing, superannuation, pharmaceuticals, education, public transport and many others are a huge burden on taxpayers and cost families a fortune. It is a form of taxation that low-income families cannot avoid and cannot afford.
The answer is ‘fund the family’, not the racket.