Chasing the Norm

Australian academic and blogger on politics, international relations, and culture

Tag: Education

Is there a doctor in the country?

Fewer Aussies are undertaking PhD’s, leaving the spots to international students

AUSTRALIA has become heavily dependent on overseas students to tackle PhDs in the hard sciences as locals choose well-paid industry jobs over insecure careers in research, according to a new analysis.
Working with customised official data for 2002-08, Dr Birrell showed 142 per cent growth in PhD starts by onshore international students in the natural and physical sciences (357 more students in 2008 than in 2002), compared with 7 per cent for locals (80 more students).

In engineering and related technologies, locals were down by 19 per cent (116 fewer students) and overseas students up by 161 per cent (350 more). The strongest growth for locals was in creative arts, up 39 per cent, although the absolute numbers remain small (91 more). Dr Birrell said the weakness of local PhD starts during the past few years represented a sharp reversal after healthy growth from the late 1980s through to late 90s, when economic growth and job opportunities were patchy.
But in recent times, at least until the global financial crisis, students emerging with a bachelor’s degree in some sciences and engineering could choose between decent starting salaries in industry or poorly paid entry to an insecure career as a researcher.

The report focuses on the ‘hard’ sciences, but in my own department of Business & Government, again there seems a 70/30 split of International Post-grad students over Domestic. That’s a problem when their knowledge, skills and training will leave the country upon completion, with Australia receiving only a very indirect benefit (since they pay their way and hopefully will retain & encourage good will in the region towards Australia)

It’s no surprise really, given that even if you are lucky enough to win an Australian Post-Graduate Award Scholarship, your income is effectively on the poverty line .

This is not a woe is me post, you undertake a PhD because you love the field, the lifestyle, and after graduation significantly better salaries are on offer, and I couldn’t ask for a better occupation right now. To its credit, the Rudd Government has raised the award slightly for 2010, with promised rises beyond that. But as much as money, the lack of interest by domestic students is also significantly cultural too. We no longer have a government which prefers people do hairdressing instead of PhD’s, but the current prime minister doesn’t seem too keen on them either (Rudd denied the accusations when asked some weeks back on the ABC’s insiders program, though made no effort to argue for PhD’s either). Australia likes to think of itself as the clever country, and vigorously supports university education for all and sundry. Yet when it comes to the highest level of education, there seems a sense people are bludging from life and wasting tax payer money.

Options such as giving residency to successful international postgrad students may help temporarily. However, the number one problem across Australian education is the lack of respect it has in the community. We see less people wanting to be teachers, vast cultural groups simply ignoring education as anything more than a mandatory duty till aged 18, and many talented and bright future researchers and university lecturers leaving for the quick money and respect of industry/overseas jobs. For once, the Australian government can make a big social and future economic prosperity change without spending a cent. It just needs the courage to return the role of education to its rightful place in society’s respect. That’s a goal fundamental to both conservative and liberal ideologies, it just needs a spokesman. That truly would be an education revolution.

Gillard’s need for an Indian summer

The recent whohar with India over the stabbing murder of Nitin Garg is a class A example of how foreign policy crises shape leaders rather than are shaped by them. Neither government initiated it, and whilst the Indian government is playing domestic populist and airing some grumbles over uranium, it would probably prefer the issue goes away quickly.

Though some like Gerard Henderson seem certain Australia has an anti-Indian race problem (he’d never have said that under Howard), for myself, like most of the community, the idea seems absurd. Indians are long standing residents of this country, who don’t cause trouble, seem closely integrated and love their cricket. There are racist elements in Australia who may target all non-whites, but that’s a far cry from the absolute rubbish being served up in the Indian media scaring many potential students and migrants away from the country.

This crisis however offers a potentially career defining opportunity for our Deputy PM Julia Gillard. While clearly highly competent, there is a perception that she is a little too thinly stretched across her responsibilities. Not only as Minister for Employment and Workplace Relations; Minister for Education; Minister for Social Inclusion, she is part of the governments gang-of-four who decide most policy issues, along with being a very politically important Deputy Prime Minister, and a regular Acting Prime Minister. Errors such as the spending of stimulus money on schools that had one student or were due to close were not errors of judgement so much as of editing. Gillard also needs to get some policy runs on the board given her past golden duck efforts such as Medicare Gold. Fixing the issue now would bring short term political benefit to the Rudd Government, whilst offering a point to be remembered in by colleagues in 5 or so years she begins to think seriously about becoming PM in her own right.

Having introduced the ALP’s new IR legislation on Jan 1, it might be a very good idea for Gillard to drop her role as Minister for Employment and Workplace Relations (and Social Inclusion) and focus on education, starting with international students. The Rudd Government came to office promising an education revolution. Even including stimulus spending, it has barely touched the issue, and this challenge is a perfect opportunity to make some big changes with public support.

As our fourth biggest export industry, worth $16.6 billion, the market for international students strangely came about without much government attention. Indeed it was the neglect (if not deliberate damage) by the Howard government of the tertiary sector which lead universities to seek substantial numbers of full fee paying international students as a way to cover their budget shortfalls. This turned into a boom industry, but it is one that has been badly managed and regulated, with the collapse of four private international student focused schools in late 2009 a too common story.Though already a huge industry, the potential for turning Australia into a SE Asia education hub is enticing.

Not only is this an industry that plays on Australia’s strengths in education, culture and brain power, and not only is it highly lucrative irrespective of global financial conditions, it also delivers key diplomatic and security advantages to Australia. By educating the youth of the regions elite (and up & coming leaders) we gain crucial leverage and understanding throughout the region. In 20-30 years time, these same people will be the business, cultural and political leaders, and their views of Australia will be closely shaped by their time here. A positive view could well be the difference between a key trade contract being awarded or even back channels to avoid war and conflict. That’s not hyperbole, in the case of E.Timor a large reason why there was no firefights between Australian and Indonesian troops was because of the personal links between the two armies, averting conflict.

Immediate action is clearly needed to calm the views of the Indian population in Australia, and the Indian government and media overseas. But long term, serious action needs to be taken to help improve the international student sector, as a starting plank for delivering an education revolution. This would deliver on the Rudd governments promise of an education revolution, improve and reform a key economic industry, and let Gillard and Rudd address an area that is clearly very important to both of them, both personally and politically.

For more on the India-Australia challenges faced, and potential responses, I’d recommend two publications by the Lowy Institute: After the perfect storm: Indian students in Australia by Janaki Bahadur and Troubled waters in need of oil by Rory Medcalf.

There are other Universities Mr Rudd!

4 September 2009

Dear the Hon. Prime Minister Kevin Rudd

In recent days you have proposed two very good new initiatives aimed at improving the education and skills of the federal public service. These are the National Security College and a new Policy and Public Sector Management school, with both to be placed at the Australian National University.

There is however one problem. Both of these institutions already exist, and can be found at the University of Canberra (UC). In October 2008 UC set up the National Security Institute with Professor Peter Leahy, former Chief of the Australian Army as its head. And since the early 1980’s, UC has been running the Center for Research in Public Sector Management, and the National Institute of Governance, both of which have now been amalgamated into the ANZOG Institute for Governance . Whilst ANU has its rightful world class reputation for research, the University of Canberra has been carefully carving out a niche serving the public service, providing the latest in research and training facilities.

After the many years of distrust and dismissal of the value of the Higher Education sector by your predecessors, it is fantastic to see a government committed to taking the best new research, insights and training available and applying them to support and enhance the work of the public service. However, as fond as you may be of your alma mata, and as prestigious as the ANU is (and rightly so), there are 37 other universities in this country who are very keen to get involved in this welcome re-engagement. At the University of Canberra (where I have been both an undergraduate and postgraduate student and lecturer) the University has put extensive efforts into a world class research and training body in Public Policy and Public Sector Management. The decision to house the ANZOG institute for Governance at UC in early 2009 was in part a validation of the over 20 year history of high quality work in this sector that had been carried out at the University of Canberra.

So please Mr Rudd, rather than burden ANU to find new buildings and staff, an effort that may take years just to get started, have a look just 5 km away over the hill, past Black Mountain to the University of Canberra where there are already institutions in place with long standing links to serve your vision. Whilst the ANU is rightly one of the worlds finest universities, Australia should seek to expand its research and training excellence across a range of Universities (particularly in a hub such as Canberra) to build an overall reputation for the strength and quality of our institutioins. Just as in the United States where Ivy League schools seek to differentiate their key skills and focuses, building up the University of Canberra with its pre-existing specialisation in National Security and Public Sector Management and Policy can only benefit the country, our international reputation, and the ability of the higher education sector to serve and meet the needs of the federal government and the public service.

Yours Sincerely

Andrew Carr

Around the Traps

Too many pieces deserving attention, but with a chapter due in soon I should be doing other writing:

Hal G. P. Colebatch in The Australian argues the contradictory evidence that some countries went communist in 1975 (Cambodia, Laos) and some countries didn’t go communist (Everywhere else in SE Asia) proves the domino theory. From here he proceeds to resurrect the theory for fighting Islamic extremism, and claim that a Taliban victory in Afghanistan will somehow lead to great chaos in Indonesia. I guess we should call this the zombie domino theory, considering the Taliban has already ruled Afghanistan (well as much as anyone can) from 1996 to 2001 whilst Indonesia was slowly moving towards secular democracy….

Speaking of ignorance: The Australian now seems to think random grabs from punters who don’t actually follow politics counts as serious commentary. I love democracy as much as Churchill, but 3 voters ignorantly whining is not news or even an ‘insight’ into the Australian political psyche. There is a reason pollsters cost money and regularly argue over methodology, this kind of analysis should not be done in such an amateurish fashion.

Then again, maybe they come from Barnaby Joyce Tech where Joyce teaches that “universities were not just learning factories but had a role to “develop the person as a whole”. Sport was sufficient to achieve this, he said.”. And so Joyce is supporting a mandatory $250 student fee, but the money can only go to Uni sporting groups. Anyone needing anything else on campus (like communal services, advocacy, child care, health services, or non-sport social groups (movies, debates, or degree based) can pay for their own needs and subsidies the sports. I see students free’s as a very localised form of taxes, where everyone pay a little bit to ensure the health of the community. Labor shouldn’t accept Joyce’s demand which would be a worst of both worlds for all but a small few (And speaking of which, Labor should take some of the heat out of the issue by allowing the fees be charged to students HECS debt (ideally along with essentials like text books), rather than forcing already cash poor students to cover it today)

And finally Chris Bowen is making seriously smart use of his regular SMH column. He is definitely one to watch. Is it too early to doom him with the anchor of ‘future PM’ ?

Liberals and Markets

I’ve blogged before on my disagreements with Classical Liberal/Libertarian types. Whilst we seem to have read the same great texts, and decided such ideals and principles were for us, most modern ideologues who claim the labels Classical Liberal or Libertarian seem to have but one solution to every single policy option: Create another Market. Yet much as markets are rightly praised as a necessary basis for a free people, I don’t see why what is essentially a means, should have become the default ends for every single policy debate. Take a recent debate on Andrew Norton’s site as he works through the implications of his political survey:

Commenter Robert suggests, regarding my post suggesting Milton Friedman influenced views in favour of competitive curricula on government not delivering school education, that

It could just be that better read classical liberals tend to favour freedom in education (and perhaps freedom in other areas) and it’s not Friedman specific. Is it worth testing whether the effect from Friedman is greater than having read other liberal thinkers?

I’m sorry to report it, as I like and admire Friedman rather than just admire Hayek, but a test comparing Friedman readers and Hayek readers (Hayek being the second most popular classical liberal writer among classical liberals, after Friedman) suggests that Robert is right. Hayek readers are slightly more likely to give the ‘correct’ classical liberal responses to questions on school curriculum setting and funding.

Note the terminology shared between Norton and his commentator. Private education and having states compete in delivering curriculum is a position that “favour’s freedom” and is the “correct” response. (To get the full context you might need to read these two blog posts 1, 2)

Yet whilst robert, andrew and myself all hold individual freedom as the primary goal, I don’t see how that is best achieved through encouraging a market in education. To wit:

1.The options for parental choice are limited: People are limited geographically and to a certain extent socio-economically. And whilst ideally parents may move to good schooling area’s when their children begin school, the ability and likelyhood of moving again to facilitate a better educaiton is almost non-existent. Parents simply make do out of limited choices. Markets can work with only a few choices available, but the selection between then at relatively low cost is critical, and in education non-existent (a factor no government intervention can really overcome – at least not in a private system, more on this later)
2. For children, there simply is no choice. Not only do their parents dictate their education, upon turning 18, people cant and simply wont go and repeat parts of their education should they decide that other vendors are better equipped, cheaper, whatever. They will instead go into another industry, such as choosing between tertiary education providers, or simply leave behind the education market altogether.
3. Together these two points dramatically work to limit the cost or benefits to schools for adapting to the market in issues such as ‘best practice curriculum’. Schools have significantly lower need to be efficient or cutting edge than any business in a real market.
4. Norton presents this debate in the context of choosing between having a nationally delivered curriculum, a state delivered curriculum and ‘competitive curriculum’. Here, the ‘freedom’ of having schools compete in what curriculum is seen as the highest principle and therefore the ‘correct’ approach. Yet the group who benefits from this freedom is a very limited selection of the general public. That is, school teachers and administrators who can implement a variety of curriculum’s that they feel best benefit the students (or suit their own skills/interests) and a limited selection of students who do indeed receive the ‘best practice’ available at the time. As with points 1-3, the actual flow of information and therefore new curriculum will be limited, not to mention the difficulty and cost of implementing new curriculum’s each year; hence even students whose parents have sent them to the ‘best’ school may still miss out on the highest standards due to implementation issues/unlucky timing.

What this presents is an idea of a market which ticks some of the basic liberal box’s (markets, freedom) the market would be inefficient and the freedom limited and largely superficial. Meanwhile the social effect (again a Liberal concern) would be that some students within the system would largely miss out on even an acceptable level of education due to either flawed curriculum (ie an experiment gone wrong), or more likely stay stuck with a consistent, but lagging curriculum chosen by only a handful of local professionals years before and kept in place by tradition and the static effect of the costs of transition.

All this becomes even more apparent when you look back and read the classical liberal thinkers, and not the modern economists who have championed their ideals. Education has always been at the heart of the Liberal ideal because it is perhaps the primary means in which individuals can better themselves and in which they can be prepared whilst children to become independent, responsible, self-fulfilling members of society. Freedom within the liberal context is based upon the individual being aware of their choices, of having knowledge of the flow of information in order to make educated choices between competing options. None of this is available to the illiterate or the educationally deprived. As such, this Liberal would argue that the greatest freedom is delivered not in schools choosing between curriculum, but in individuals being the best possibly prepared to engage the modern world as adults. That is, the short term cost to schools in losing that competition (and to some extent to parents), is offset by having the end product individuals significantly better prepared to independently engage society and exercise their individual freedom in a range of industries.
Given this, the argument for a national curriculum to ensure individuals are well prepared, with such a service delivered by both public or private schools (who have the option to add additional subjects such as religious education), seems a pragmatic but ultimately more profitable approach.

Yet none of this seems to even register in the debate that occurs within ‘Classical Liberal’ and Libertarian circles. That the market is the primary way in which Liberal principles are to be achieved is held without question to be the ‘correct’ answer. Dissenting views from this ideal are almost not engaged with. Now there are several reasons that could be attributed to this. First is the traditional benefits of markets in other areas to provide liberal ideals, along with the general ‘siege’ mentality that seems to lead some liberal/libertarian thinkers to think they are still facing great statist forces as occurred in the 20’s, 50’s and 80’s, and not within a very market orientated culture. Likewise is the effect of the economist’s who became the primary public advocates for liberal/libertarian ideals during the late 20th century (Hayek, Friedman etc).

But either way, it makes for a strange experience to engage people who share very similar principles and ideals, and yet be able to predict without reference to circumstance the policy prescription they favor. Its not that I disagree with them in all cases, and Norton deserves credit for being an intelligent voice advocating an alternate solution within the Australian education context. It’s just that it’s ‘correctness’ and correlation with liberal principles like ‘freedom’ is simply expected due to the means advocated, rather than a more hard headed analysis of the actual ends to which such a system would deliver. Like the statists within social democrat ranks, marketeers within the classical liberal/libertarian ranks have managed to convince their fellow ideologue that the means are actually the ends. Odd.

The trouble with Libertarians

This blog is of course called chasing the norm, and the latest hot norm is of course to claim/disclaim the possibility of an alliance between Liberals and Libertarians, at least intellectually if not politically (Libertarians can only offer a few votes, but do represent a solid branch of the Reagan Coalition between Economic Liberals and Social Conservatives, which Liberals would love to rip out). This was a topic brought up in 2006 by Markos Moulitsas (of Daily Kos fame), urging Libertarians to vote Democrat, and has been raised on a number of major blogs recently see here here and here.

If this is marriage is to be one of more than just an American born alliance of political convenience to defeat the currently inept Republican party, then some changes in rhetoric and perception need to occur on both sides. That is to say, I believe most of the differences are political over policy based. They are tough to change, but not insurmountable.

The great difference between Liberals and Libertarianism is the question of Economics. Indeed many of them are proud to say Political Economy is the only issue upon which they vote. Whilst I have great sympathy for the basis of their arguments (leaving aside the fringe wing which want changes like returning to the Gold Standard), this economics and only economics issue is crippling to both the wider appeal of Liberatarianism, and its usefulness as a political ideology. Libertarians are able to be so dogmatic because they wish away so many of the associated issues, despite having a consistent ideological end point with Liberals.
For example Education: Whilst a fully rounded view of Freedom would desire Individuals to be educated to as high a standard as possible so as to make the most of their opportunities and freedoms, and allowing them to be as capable and prosperous individuals as possible (which offers compensatory economic benefits to the society). So on a view of freedom as individual flourishing you would support a universal education system. But on a view of freedom as purely an economic interaction, then government education imposes tax burdens on the individual and crowds out the market for private education providers, thus allowing the individual the freedom to choose their (or their children’s) own level of education (if any), or go into business running a school. Now I doubt many Libertarians actually embrace the idea of vast sections of society choosing not to educate their kids (indeed Libertarianism is such a niche that it’s reserved almost entirely for those who are quite well educated already). Thus & combined with their rhetorical focus almost purely on economic issues, what begins as a respectable duel legged stance of freedom in education (choosing ones education and/or choosing to open a private school) ends up being a economic pronged attack on government solely to allow a few more people to open private schools, whilst degrading the entire education system of the country.

There’s also a problem in the economics here too, that whilst private schools reduce the burden on tax payers (around $4000 a student in Australia), the field of education simply doesn’t offer the potential for a real working market. Whilst perhaps few choices are more important for an individual, our choices are actually very limited for what schools we will send our kids. Only in the largest of cities is there more than a handful of choices (indeed in some towns only one or even no school may be privately economically viable), and yet factors such as geography, closeness to work, the presence of school friends attending, the religion (and the church has been the biggest private educator for millenia) all serve to limit our choice dramatically. What should be a parent choosing the very best school possible for the education and well being of their child often ends up a decision of convenience between no more than 2-3 options without significant information ever likely to be available (you can test drive a ford, or return a broken hair dryer, but what if your kid doesnt like the school, or you dont like some of their attitudes which are hidden behind the glossy brochures).

From a economic driven view of freedom it makes sense for education to be private, but in outcome it ends up a petty and small effort to promote private education (or simply decry government wherever it is found) without actually encouraging significantly better individual choice for parents, or individual freedom for children by receiving a high quality education to enable them to fearlessly engage the world upon graduation.

This sidestepping of experience for a desire for ideological consistency (ie process over outcome) seems well encapsulated by this anecdote from Matt Steinglass:

I keep encountering American libertarians traveling in Vietnam, and each time I think they’re going to be forced to revisit some of their core assumptions; they all like Vietnam because in comparison to other third-world countries there’s no crime, the services actually function, governance works, and therefore it’s a great place to do business and has a thriving and expanding capitalist economy. I imagine they will be forced to perceive the ways in which Vietnam’s extremely group-oriented Confucian culture, where decisions are generally made at the level of the family or the work unit rather than the individual, renders many incentive systems based on individual decision-making hapless and ineffective. (See: much of the US’s “hearts and minds” efforts in the Vietnam War.) And yet each time I find they leave with their convictions happily unscarred by any encounter with reality

I noticed the same effect, though with semi-libertarians now charged with running the government themselves in 2003 when the US run Coalition Provisional Authority in Iraq set about making major structural reformations to the shattered country of Iraq. Regardless of the the differences between the USA where they had formulated their ideas and the circumstances they found in Iraq, the CPA’s policies were right out of a Conservative/Libertarian utopia. Everything that could be privatized would be, tariffs and regulation were to be ripped up, and a 15% flat tax instituted. Now whilst other factors like an insurgency rudely interrupted this grand design, in case after case where the reforms had been lead by hired ideologues, they failed or barely functioned (In one notable case, the chief economic advisor to Iraqi proconsul Paul Bremer cheered on Iraqis post invasion theft of state owned bus’s & taxis as a form of ‘robin hood policy’ as it would allow individuals to begin running their own private transport services)

Neither the success in Vietnam of collective approaches, or the failure in Iraq of libertarian ones mean that the theory is at fundamental fault. Instead it demonstrates the need for a context sensitive approach to governance that is fundamentally lacking in much of our political culture, but especially amongst libertarians.
The principles are not wrong, but by focusing on process and not outcome, Libertarians almost abandon their claim to be a political theory (which promotes certain goals like individual freedom) as opposed to being a economic or social theory which seeks structural organization without regard to outcome (for example theocratic theories which preference the organization of society above all other goals)

Libertarianism, especially the earlier thinkers or the more academic ones like Hayek seem to regularly acknowledge the importance of shifting process for outcome to benefit the individual, rather than ideological purity around certain forms of social organization. Take the right to property. Maximum Individual freedom need not logically be built upon a theory of private property, however through the historical process we have come to see that private ownership works as a basis for supporting individual freedom. Despite the pernicious effects it can sometimes have in society, and distorting effects in the market (ie inherited wealth) it is a fundamental basis for our conception of individual freedom. Libertarian philosophy incorporates this element because of its effect, whilst simultaneously rejecting other elements so as to maintain an apparent ideological clarity that ends up harming their claim to be a political philosophy of individual freedom, rather than just an economic theory. To be taken seriously as a political philosophy then political ends like freedom need to drive policy, instead of ideological insistence on certain processes -like private property- which may be aid that political end in other areas. If Libertarianism is more than just “anarchism for rich people” as the cartoon so mocks, then where the evidence demonstrates governments role in enhancing individual freedom (as in Education above), the that must drive the Political Philosophy, rather than simply falling back on the same processes that had increased individual freedom in other areas (such as tariffs & trade)

On the other side however Liberals, if anything may also be justly accused of a reflexive weakness in philosophy, consistently seeking to defend the status quo, rather than pushing for true liberal change as desired. From moral issues such as holding back on Gay Marriage or Euthanasia, to Economic (accepting monopolies such as the supermarkets or protectionism for agriculture) Liberals end up giving Libertarians a clear and coherent opportunity to attack the contradictions in such a theory of governance.

A marriage of Libertarianism and Liberals would be beneficial for both groups. For Libertarians to help shift its principles into the mainstream debate and away from just the field of economics, and for Liberals to use this new public voice to help steel themselves during times of conservative or leftist attack when maintaining the status quo is seen as an easier political path than engaging reform as needed. This does not mean that such philosophies will not differ in their response to challenges such as the economic crisis, but each could learn and mutually benefit from the others expanded role. Their end point is the same, individual freedom. The question is what pragmatic approach achieves that outcome, without causing more social harm than it seeks to benefit. Such an answer differs over time and context. Something that Liberals seem to have learnt if a little too well in their desire to be seen to do the right thing to keep their role in governance, and that Libertarians find almost offensive which works to keep them from having consequence via governance (or as in Iraq abysmal effects). One weak but involved, one strong but isolated. It’s not a marriage made in heaven, but then what of mans hand ever is…

The shape of things to come

If the financial crisis is to have a silver lining, it will come not from decrying the misplaced utopianism of free marketeers (as the Prime Minister has done), but as an opportunity for first world nations to fundamentally restructure our economy. With the amount of money moving about, now is the time to make a truely first world, twenty-first economy in this country.

Though the debate about trade vs protection was been comprehensively decided two decades ago, first world countries such as Australia and the USA still have large sectors of their economy either protected or dependent upon government support, such as in manufacturing and agriculture. These industries are iconic for both countries, think of the image of Australia riding in on the sheeps back, or the great machines that have come roaring out of Detroit. Yet whilst both got ahead because of natural advantages in the great quality of our farming land and local population demands for goods, both are being artificially propped up at levels well beyond their sustainable limit.

For as long as I can remember, there has been a predictable pattern with these sectors (There’s others fields too, but these two are useful examples). We have a drought, an international economic down turn (or equally upswing introducing new competition) or a currency change and suddenly these sectors cry poor and threaten thousands of job losses. Likewise whenever Australia tries to undertake a trade deal, either pushing the Doha round or the 2004 FTA with America. Again both sectors rise up to demand their own pound of flesh (In the later example Howard paid off the sugar farmers to get out of the game, almost everyone else got told to suck it up)
This pattern, however justifiable it is from day to day to stop the harm that would inevitably come (including to the governments political support!) is simply unsustainable for the long run. Yet despite the great influx of cash that the Mineral Boom offered, the Australian economy under Howard and Costello remained almost the same. New industries had to fight to emerge, whilst old ones, crumbling away were propped up time and time again under governments watching care. We might not have fixed the foundations during the sunshine, but as we use up our rainy day savings, now surely is the time to make the changes.

Take a look at the image on your right involving job changes in the US in recent times. The tangible sectors of the economy, manafacturing and the like have suffered greatly. People cant justify buying new products and are going out less. But they still have to keep healthy, and they recognise that a good education is the best way they have of ensuring their continued employment in this bad time, and a better future once the sky clears. Hence its continued growth regardless of the health of the economy. As Michael Mandel of Business Week declared of the US economy “The war between the intangible and tangible sectors of the U.S. economy is over—and intangibles have won”.

None of this will be politically easy. Indeed it has been politics far more than economics that has dictated both countries resistance to change, but now is a golden opportunity, Especially for a Labor government who’s voters are much more urban, educated and unlikely to punish the government short term for decisions taken -honestly-in the long term interests of the country. Whilst Rudd’s new stimulus package is being sold with education at its heart, much of the money will still end up going to the tangibles in construction and maintenance. Much more however needs to be done.

Now is the time we should
1) Look to end most agricultural subsidies + support systems (natural disasters excluded). Australia has too much good farming land to ever stop growing food, and is still allowing a lot of inefficient (and environmentally damaging) practices to be carried out by the current generation of farmers, delaying the introduction of new farming techniques and individuals who will be able to provide more and depend on the government less. This will mean the closure of some towns, and whilst these people will need support, the one off cost of assisting people to move is incomparably cheaper than the money spent year after year to keep hospitals and schools running for just 200 people, plus all the usual subsidies that go along (such as unemployment benefits as jobs are so rare in such communities).

2) Realize that unless we go the Work-choices path (one comprehensively rejected by the people) Australia cant out compete in manufacturing against Asia. Indeed even if Howard had won and kept his plan, australian costs of living and workers pay are still far far higher than in faced by our competitive neighbors, meaning a distinct disadvantage on pure dollar terms.

3) Invest in High-Tech industries. We can not outproduce on quantity or cost, but we can do quality. We can make products that no one else in our region can. We can be the one’s to create the next generation of products, to attract (or keep!) the highest quality of graduates in fields like IT, Bioengineering, and medicine. Equally we should look to support those emerging industries who are producing tangibles that require high quality input. Video Games for instances are now worth $2 Billion a year, 40% higher than movies. And yet just recently, two video games companies here in canberra alone have had to close their doors. If anyone thinks games are going away, think again. The average age of gamers is over 30, and they’re just starting to have children and introduce them to games. Yet the sector is virtually ignored by the government, whilst much (perhaps $80 million) is spent on flops such as Baz Luhrmann ‘Australia’.

4) Really invest in Higher Education. Un-noticed (even scorned) by the Howard government, Higher Education rose to become our third biggest export sector (behind iron and coal) worth over $13 billion. Australia has steadily become the place for the elites of Asia to send their kids to be educated, and all without any real focus from our government on making this a point of national pride and economic activity. Not only could this become a great cash cow for the country, it has flow on effects in the local market benefits of increased rich kids living near universities, of the wisdom and knowledge they may bring here, of the high quality graduates who will be attracted, and hopefully stay to work in and advance our high tech industries or improve the educational sector.

Australia rode in on the sheep’s back in for most of the twentieth century. But political calculations and a mining boom let us ignore/smooth over much of the economic changes that were being forced on us. Now, without that buffer, we can no longer continue to waste money on sectors that cant compete, at the cost of those who offer great long term, unique opportunities for economic growth and development.

Now is the time to act Mr.Rudd. Use the financial crisis to restructure the Australian Economy to an intangible knowledge based economy. Our country is too naturally blessed for sectors like manafacturing or agriculture to ever fade away, but by keeping them on the drip we are keeping them inefficient and are starving other potential areas of growth. Such meddling in the economy may not be supported in good times, but with so much money being spent, with so much being challenged, now is the time to get involved and make good on your promises and vision. (And Mr Turnbull – Opposing is one thing, but if you want to win votes then you’ll have to offer something positive as a counter offer. Else your “bold stand” will go the way of Beazley’s 2006 opposition to the tax cuts).