September 19, 2012
Horse 1363 - Cutting Education Budgets To Avoid Worse Pain In The Future
"It is tough when you wind back expenditure clearly people are going to react to it, but I say to those individuals, economic conditions are tough. I can't spend money that I don't have. If I do, I'm condemning those students at school now to further deeper cuts in the future."
- Barry O'Farrell, as quoted Sky News, 13th Sep 2012.
I like what the NSW Premier Barry O'Farrell is doing here, he's playing the long game. He knows that cutting $1.7 billion from education budgets will avoid worse pain in the future. Mainly because students in the future won't be so demanding.
BHP's chief executive Marius Kloppers cited that BHP needed to find a "less capital intensive way" of doing business and that "Wages are too high in the entire country and working conditions too generous" when interviewed on 702 ABC Sydney.
Gina Rinehart suggested that "Australia is indeed becoming too expensive and too uncompetitive to do export-orientated business" and ungraciously suggested that African workers are more competitive because they will work for less than $2 a day.
Network Ten's Masterchef judge George Calombaris said that the cost of staff wages was prohibitive and that his restaurants "don't open Sundays because it's not viable" on 720 ABC Perth.
Time and time again we hear that wages in this country are simply too high and that Australian businesses are uncompetitive because of it. This is where Barry O'Farrell has played an uttter masterstroke.
Most people who attend primary and secondary schools can not vote because they are under the age of 18. The same goes for a great deal of TAFE students who are doing apprenticeships and or attending academic studies having just left school. For those students who have only recently left school and are between the ages of 18-24 which is typical, they won't be able to vote in a NSW State Election until 2015 by which stage, they won't actually be in TAFE any more.
Cutting education funding in the short term comes with absolutely no consequence whatsoever because they people who you directly affect will have either moved no or still will not be able to vote; because it comes with no consequence, there is no moral obligation to do otherwise. Moral obligation in politics seems to only extend as far as the ballot box.
In the long term, it makes perfect sense to cut education funding. Cutting education funding reduces and degrades the quality of the labour force in the long run. By degrading the quality of the labour force, it also has the net effect of reducing the bargaining power of future workers who are probably in primary school right now.
Of course the sorts of people who go to TAFE are usually those people from poorer income brackets, so it's probably for the best that they start to learn to accept longer hours, lower pay and reduced conditions now to "avoid worse pain in the future".
By drastically shifting the supply curve for wages to the right a new lower equilibrium price can be established. Shift it far enough and we will be able to compete with Africans on price because there'll be workers here who will settle for less than $2 a day or its future equivalent.
Students in future won't be so demanding and moreover they'll be increasingly ill-informed and hopefully illiterate. Admittedly there needs to be some sort of functional literacy so that people can run machines and file reports but again, these workers will merely blame their employers rather than the government. In that respect, maybe it is a good idea to cut funding from education budgets now because if he survives 2015, I'm sure that he would not want to be premier in 2019 when the ill-informed; illiterate make their anger known at the ballot box.
Posted by Rollo at 06:32