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Education and Investment
Budget outcomes for education good but not great
You can be forgiven for not having a strong sense of what the 2020/21 Federal Budget (the Budget) has in store for education, as it has not held centre stage and has attracted little commentary. The big areas of focus are infrastructure, supporting private business and jobs. Sensible, but narrowly focused.
A focus on education avails opportunities to:
- Support parents to return to work
- Address loss of learning
- Stimulate consumer demand
- Correct funding anomalies
- Encourage continued learning for the future of work.
When measured against these yardsticks the Budget outcomes for education are assessed as good, but not great.
Support parents return to work
COVID-19 undermined the ability of both mums and dads to work. Some struggled to meet the costs of early childhood education and care. Others struggled to be productive while supporting their children to learn from home during lockdown.
With nearly two in every five families across Australia with children under the age of 15, supporting parents to return to work is not merely good for families it is good for the economy.
The Budget extends the temporary financial support measures in place to buffer Victorian childcare providers from the ongoing impacts of COVID-19. However, it misses an opportunity to address the affordability of childcare in general.
In April, the Federal Government committed to extending funding for preschools for another year till the end of 2021. The Budget confirms this commitment. But that is it. There is no provision beyond then.
There is an urgent need for funding reform, not only to facilitate access and affordability of early learning and care, but to support the labour force participation of mums and dads.
Address loss of learning
Much has been written on the extent of the loss of learning during the period of school closures. New research by the Centre of Independent Studies1 estimates that around 1.25 million (over 40%) students across New South Wales, Victoria, and Queensland may have fallen behind while learning at home. Victoria’s disadvantaged students are estimated to have fallen behind by as much as six weeks in their progress over the extended period of closures.
The Budget commits new funding over five years for a package of initiatives aimed at improving educational outcomes – particularly among disadvantaged students and those most impacted by the COVID-19 pandemic. The bigger initiatives provide funding for:
- The Clontarf Foundation to expand and extend its existing program, which supports the education and prospects of young Aboriginal and Torres Strait Islander men
- The Smith Family to support around 76,000 disadvantaged young Australians to complete Year 12 and move into work, training or further study
- Good to Great Schools Australia to develop a pilot program to support up to 10 remote and very remote schools to expand their Direct Instruction literacy program to include numeracy and science
- The creation of a fund to enable the Government to respond flexibly and quickly to emerging priorities and educational challenges presented by COVID-19.
Each is meritorious in its own right. However, all except the last, are selectively targeted rather than generally focused on redressing any loss of learning. And, the last is bereft of any detail.
In June, the Grattan Institute called upon the Government to fund a six-month tutoring blitz to help disadvantaged school students recover learning lost during the COVID-19 lockdowns.2 It recommended sending a battalion of 100,000 tutors into schools to conduct intensive small-group sessions on reading and maths. It sold this as a win for both students and the economy. If done well, these sessions could boost learning by five months. And, the incomes of tutors could provide a much needed economic stimulus.
Stimulate consumer demand
The last point is a convenient segue to the next brief yet poignant point. Another take on the Budget is that it is designed to stimulate a recovery by bolstering the supply-side of the economy. While the Government would likely argue that its tax cuts are demand-side initiatives, the jury is out about whether the gains will be spent or saved for later. And, irrespective of the timing of spending, whether it would be in priority areas, such as education. Vouchers are a way of directly encouraging spending now. Co-contribution schemes are a way of targeting savings for later spending in priority areas. Neither got a look in.
Correct funding anomalies
The intent of the above is not in any way intended to belittle supply-side initiatives. On the contrary, with the pandemic impacting the demand and supply sides of the economy, Budget measures need to address both.
Hence the concern, when cuts to vocational education were shown to have caused apprentice numbers to decline, exacerbating Australia’s skills shortage. And new modelling warning that significantly fewer new apprenticeships and traineeships will be offered as a result of the economic fallout from COVID-19.3
The Budget includes additional funding for 100,000 new apprenticeships and traineeships. The Boosting Apprenticeship Commencements initiative will take the form of a new 50% wage subsidy for all businesses that take on new apprentices.
Encourage continued learning for the future of work
The headline Higher Education Budget initiative is more funding for additional places for domestic students to implement the Job-Ready Graduates package of reforms (the package).
The funding was announced as part of the Budget ahead of the Senate giving its blessing on 8 October 2020 to the Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020. While more money to support growth in student demand in the wake of COVID-19, and in anticipation of the Costello baby bubble reaching school leaving age, is well received, the devil is in the detail of this legislation.
The package is touted to deliver graduates in the disciplines where they are needed most. While it includes many things, at its centre is a recalibration of the contributions of the Government and students to meet the costs of studying towards qualifications in students’ chosen fields.
To stretch Government funding further, on average students will go from paying 42% to 48% of the cost of their education. Averages, however, mask distributions. For some disciplines deemed as ‘national priorities’, such as health, teaching and STEM, the contributions of students will decline. In others, such as humanities, law, economics, and accounting, it will dramatically increase.
Whether these changes will result in more students studying towards priority disciplines is unclear. In disciplines where the net change in the contributions from the Government and students are negative, such as in some STEM disciplines, providers will have less of an incentive to offer places.
And even if they do, it is questionable whether they should. It makes little sense for the Government to pick winners as it arguably is not better informed than the market and, more significantly, because the jobs that come out on top today, will differ from those that top the list tomorrow. Jobs are being created, becoming redundant, and are transforming at accelerating rates. Meaning that ‘job-ready’ makes little sense. More important is to support ‘work-readiness’ - readiness for multiple jobs and careers. This suggests that the focus should be on skills that add value across many current and future jobs, such as critical thinking and communication.
1 Fahey and Joseph (2020) Parents’ perspectives on home-based learning in the covid-19 pandemic, Centre of Independent Studies, 30 September (available at: https://www.cis.org.au/publications/analysis-papers/parents-perspectives-on-home-based-learning-in-the-covid-19-pandemic/).
2 Sonnemann and Goss (2020) COVID catch-up: helping disadvantaged students close the equity gap, Grattan Institute, 14 June (available at: https://grattan.edu.au/report/covid-catch-up/).
3 Dawkins, Hurley and Lloyd (2020) Averting an Escalating Labour Market in Australia: A proposed National Job Cadet Program, Mitchell Institute, October (available at: https://www.vu.edu.au/sites/default/files/mitchell-institute-report-national-job-cadet-program.pdf).
About the author
Mary Clarke is
the founder and principal of DXP Consulting, and the lead author of the
2020 Parents Report Card. She has headed the education policy function
for a professional body, and executive and senior public service
economic and policy roles. Mary holds an Executive Masters in Public
Administration and an Honours degree in Economics.