ga('send', 'pageview');
John Passant

Site menu:

January 2011



RSS Oz House



Subscribe to us

Get new blog posts delivered to your inbox.


Site search


My interview Razor Sharp 18 February
Me interviewed by Sharon Firebrace on Razor Sharp on Tuesday 18 February. (0)

My interview Razor Sharp 11 February 2014
Me interviewed by Sharon Firebrace on Razor Sharp this morning. The Royal Commission, car industry and age of entitlement get a lot of the coverage. (0)

Razor Sharp 4 February 2014
Me on 4 February 2014 on Razor Sharp with Sharon Firebrace. (0)

Time for a House Un-Australian Activities Committee?
Tony Abbott thinks the Australian Broadcasting Corporation is Un-Australian. I am looking forward to his government setting up the House Un-Australian Activities Committee. (1)

Make Gina Rinehart work for her dole

Sick kids and paying upfront


Save Medicare

Demonstrate in defence of Medicare at Sydney Town Hall 1 pm Saturday 4 January (0)

Me on Razor Sharp this morning
Me interviewed by Sharon Firebrace this morning for Razor Sharp. It happens every Tuesday. (0)

I am not surprised
I think we are being unfair to this Abbott ‘no surprises’ Government. I am not surprised. (0)

Send Barnaby to Indonesia
It is a pity that Barnaby Joyce, a man of tact, diplomacy, nuance and subtlety, isn’t going to Indonesia to fix things up. I know I am disappointed that Barnaby is missing out on this great opportunity, and I am sure the Indonesians feel the same way. [Sarcasm alert.] (0)



The crisis in education is the crisis of capitalism

The Greens proposed abolishing University fees for students and the reactionaries from the Labor Party, the Liberals and the media went crazy. They raised the clarion call of conservatism – where’s the money coming from?

Yet figures from the Department of Education, Employment and Workplace Relations in a briefing to the re-elected Gillard Government show the cost would only be $23 billion over 4 years.

The vast bulk of that – about $15 billion – would come from forgiving all current Higher Education Contributions Scheme debts. (For international readers HECS is Australia’s study now pay later through the tax system scheme).

The ongoing cost of making Universities free would only be about $2.5 billion a year.

The Whitlam Government abolished University fees in 1973. I was one of its first beneficiaries.

The rationale for doing this was to increase working class participation in higher education.

To be internationally competitive Australian capitalism needed to match the education levels of its competitors and trading partners. Cost free universities seemingly provided that opportunity.

But the move had little impact on the sons and daughters of blue collar workers who as a generalisation continued to shun higher education for vocations. The children of white collar workers took up the offer with more gusto.

The proletarianisation of the student population over the course of the second half of the last century was and is a global phenomenon. Despite the wet dreams of reactionaries, that will continue.  The real question is who bears the cost of training the next generation of educated workers.

The Hawke Labor Government answered that question in 1989 by introducing HECS, a scheme designed to recoup some of the cost of higher education from students. Again this was painted as a social equity move but again it has had little success in attracting students from low socioeconomic backgrounds.

Liberal and Labor Governments have embraced the neoliberal agenda of educational privatisation with gusto. The most recent examples from the market fundamentalists of Labor include more money for rich private schools, My School and proposals to give principals and boards autocratic educational market enhancing powers.

The need for more educated workers flows from the growing technologicalisation of capital. The increase in the organic composition of capital is inherent to competitive capitalism.  In crude terms competition forces capitalists to spend more and more on capital relative to labour.

Now this can occur even though at the same time wages are increasing. This is relevant for University graduates whose expectation is that they have postponed earning opportunities for 3 or more years to make more money with their degree over their lifetime.

A university degree can give a graduate the skills to ride the technological train or its offspins (eg tax law advice to big business to use an example close to my heart) and gain the financial rewards.

And yet, despite 16 years of free universities in Australia between 1973 and 1989  (or rather the cost being borne by taxpayers) the social composition of students changed little. That is because you cannot address social disadvantage when someone is 18 years old.

Any attempt to increase the number of students going to University from working class backgrounds and into productive and service sectors of Universities like engineering, nursing, teaching and the like must begin in primary education and flow through to the secondary system.

Yet the same neoliberal agenda that infects Universities infects schooling. The last 30 years have seen a  move away from the public provision of education without cost to a hybrid system of public and private systems, with more and more money going to private schools at the expense of public schools, and within that shift an increase to well off private schools.

There needs to be much more money going to working class schools – public schools and poor private (often Catholic) schools.

This extra money would pay for more and better paid teachers and infrastructure. But to do that requires a challenge to the very basis of the politics of the Labor and Liberal parties – that the market best satisfies human need.

The Greens do that with their cradle to grave public education proposals. An important part of their higher education and vocational policies is a living allowance that frees students from the need to have jobs while studying.

And the conservative jackals howl ‘We can’t afford it.’ Well, actually we can.

Labor’s initial Resource Super Profits Tax on the latest estimates could have yielded up to $24 billion a year in revenue.

That’s more than enough to pay for free higher education and proper living allowances, more and better paid school teachers and improved educational infrastructure for all working class schools.

The Greens want Labor to do nothing more than adopt its initial resource rent tax, the tax Labor itself defended before it capitulated to the mining maggots and got rid of its Prime Minister for one even more compliant to big business.

Extending this economic rent tax from the resource sector to all monopoly or oligopoly sectors would raise many many billions more – including much much more for public health and transport and addressing climate change as well as for public education.

Social justice – if that is possible under the current conditions of Australian capitalism – and the ongoing success of the bosses’ own system demand a massive injection of funds into public education from pre-school to University.

Where is the money coming from? From those who have been freeloading on us for the last 3 neoliberal decades – business and the rich.

Neither neoliberal party will do that unless forced to. Education won’t be saved unless teachers and other workers across all parts of the education sector take real and prolonged industrial action for better pay and conditions, more staff and more infrastructure funding.



Comment from Nicholas Gruen
Time January 3, 2011 at 12:07 pm

John, are you aware that Paul Krugman would say that a sentence like “To be internationally competitive Australian capitalism needed to match the education levels of its competitors and trading partners” is, to him like walking round with a big flashing sign saying “I don’t know what I’m talking about”?

Comment from John
Time January 3, 2011 at 12:26 pm

No, Nicholas but if you want to join me in fighting against competitiveness and for humanity please do so. If you don’t think education under capitalism is about creating the next generation of workers to extract surplus value from and that every aspect of Australia’s profit system (including education) is compared internationally, OK. But hey, what would I know, given that I am not an apologist for capitalism?

Comment from Peter Jones
Time January 3, 2011 at 3:49 pm

If that’s Krugman’s position, it’s no wonder he struggles to get the US ruling class to listen to him.

The world’s ruling classes are not deluded when they focus on improving competitiveness. Global capital markets are extremely open. Capitalists can choose where they invest their ill-gotten gains.

Capitalists who need workers with a certain level of education face a choice: invest somewhere where the state pays for a comprehensive higher education system, or invest somewhere else and provide and pay for that training themselves.

Ricardo’s theory of comparative advantage is behind Nicholas Gruen’s comment. It gets wheeled out by neoclassicals in university economics courses to explain why the gap between rich and poor nations must be narrowing, so everything is OK with the system.

I haven’t looked into Ricardo’s theory in detail, but it strikes me that it wouldn’t hold in a world where we don’t have full employment, trade balances can stay in surplus or deficit for very long periods of time, and capital mobility is very high (i.e., the world we live in). In this world, the alternative to exporting cloth may well not be port, but be nothing at all, as capital investment simply passes the ‘uncompetitive’ workers by.

Comment from Tristan Ewins
Time January 3, 2011 at 4:02 pm

Within capitalism the benefits of a skilled workforce can flow on more broadly – as attraction of investment and the presence of company, income and other taxes redistribute some of the proceeds into welfare, infrastructure and social services. If we don’t have the means, for now, to more fundamentally transform society – but have to work within this framework – then we need to do so in a way that delivers the best result to ‘the people’ at a variety of levels – that is currently possible.

The existence of better-paying skilled jobs can also benefit those concerned; and there are individual and social costs to unemployment.

On the other hand – As inferred – there is a tendency on the mainstream Left these days to take the argument ‘we can run capitalism better than the capitalists do’. In the sense that the Left can pursue a more ‘humane’ capitalism – with a larger redistributive welfare state and social wage – and a better regulated labour market, with more rights for organised labour – this might sometimes be true. But under Australian capitalism – and even more so in the US – there are constant pressures to dismantle the welfare state, and take labour market deregulation to an extreme. And labour market ‘competition’, with deregulation and a structural underclass, and an assumed ‘reserve army of labour’ – are seen by capitalists as ‘functional’ and creating pressures for ‘labour market discipline’.

Countries such as Sweden, Denmark, Holland – show a more human social democratic/corporatist compromise is possible. But there are still deeper issues that even these approaches neglect.

The problem with posing the issue in the fashion of today’s mainstream social democracy – that ‘we are better managers of the system’: is that there is no critique of corporate welfare; and increasing social subsidies for the services and infrastructure capitalism needs. Even if we are constrained by circumstances – we still need a critique in order to progress at all – and make future change possible.

And there is little in the way of a critique of the concentration of wealth and power that occurs even under social democratic corporatism. There is no movement for economic democracy or critique of inequality; no critique of the tendency in modern capitalism always to maximise share value even when this involves neglect of less-profitable goods in services where nonetheless there is great social need.

Further: there is no critique of alienation amidst rampant consumerism, and the Ideology for which ‘more’ is always better: despite our having the material base for a fundamentally different kind of society – where there is scope for greater personal fulfilment and development, with time for family and social participation. So yes – we need a vision beyond the proposition that “the Left can manage capitalism better than the capitalists.”

On the other hand there are things we could learn from capitalism: while co-operation could conceivably promote innovation, competition can provide this also. And competitive markets can provide signals that promote quality and responsiveness to consumer needs. So perhaps on the Left we should consider a compromise – a ‘democratic mixed economy’ – with a strategic place for the public sector (infrastructure, services, government business enterprises, strategic sectors like mining, natural public monopolies) – but also a place for co-operatives, mutualism, and collective capital formation. This under conditions where real redistribution of wealth delivers economic power to ‘the people’.

But again: also addressing issues of alienation – recognising the dignity of all manners of labour; and embracing a deeper vision of ‘quality of life’ – for which ‘more’ is not necessarily everything

BTW – readers feel welcome to check out my blog ‘Left Focus’ too – Hope you don’t mind my mentioning that John. 🙂


Comment from Tristan Ewins
Time January 3, 2011 at 4:21 pm

Also – re: the issue ‘where is the money coming from?’. Any kind of government would face real questions how quickly they could expand the revenue base to expand welfare and social services, and investment in social and economic infrastructure. Whether we like it or not – we have a low tax culture in this country. Reform is likely to be met with resistance from some workers as well as bosses.

Implemented and restructured properly – ‘HECS’ could become like a ‘progressive tax without being a tax’. Repayment thresholds could be raised. Repayment schedules could exist on a number of levels – with several ‘tiers’ – dependant on income. Debts could be forgiven if unforeseen circumstances mean individuals do not benefit financially from their education.

Yes, though – there IS scope to reform tax of capital as well as tax of income – even though we have to factor in resistance from workers (ie: low tax culture again); and the possibility of capital flight in some sectors, and the power of the corporate sector to beat up panic and fear.

But even with the original mining super profits tax – Even that kind of money couldn’t provide for everything. So if you had a kind of ‘default progressive tax’ system with HECS anyway – I believe the money could be better spent on Health and Aged Care; infrastructure including public transport in new suburbs; investment in primary/secondary public education; massive expansion of social housing.

If Rudd had won the mining super profits tax battle – and diverted the money into these areas – it would have been a big victory which could have made a great difference. But it would not have been ‘the end of the matter’. Even then we would have had to have set priorities. Yes private shareholders should pay for the social investment in education which they profit from – literally. But if HECS could be reformed to be like a progressive income tax – perhaps those other priorities mentioned earlier could be seen as ‘more urgent’. (this even despite the fact there is a ‘problem in principle’ with social subsidy of private profit from public education) Like it or not – we can’t achieve everything ‘right now’…

Comment from Tristan Ewins
Time January 3, 2011 at 4:44 pm

btw – sorry for the typos…

Comment from Dave Cavill
Time January 3, 2011 at 6:31 pm

I agree with the Greens education should be free at all levels including university. And speaking from an uneducated point of view I see Australia becoming a mass importer of educated workers that is directly proportional to the blue collar jobs that they are currently exporting.
For this I blame the white collar workers and the ACTU. Since the last ACTU president blue collar worker left the ACTU and when Bob Hawke took over we have gone down hill from a 72 % union membership to about 16%. Based on CFMEU figures).
So the ACTU is now controlled by the white collar workers and we haven’t had a national strike since the Medibank strike
(that’s the day Bob Hawke played tennis while we did our hard earned wages)
Hawke also sacked Norm Gallagher (BLF) and the construction industry has been cash in hand and every man/woman for themselves ever since.
So the solution, in my opinion, is if we want free education for all and sundry (and we deserve nothing less) is get rid of the educated, strike shy ones, and replace them with genuine trade unionists who are prepared to strike and do the hard yards for social justice.
However we do still need lawyers, and people who can write nice letters, but not to run unions or governments just to advise them.
And one last say, when people say where is the money coming from the answer is- safer work places will save about 20 billion a year, safer roads more billions, less binge drinking at least 24 billion. And educated workers, priceless.

Comment from John
Time January 3, 2011 at 6:53 pm

That’s OK Tristan. I am no saint when it comes to typos. Good to have you commenting here.

Comment from Paul
Time January 3, 2011 at 7:28 pm

I’m not sure what Niki Gruen is on about! Isn’t that what capitalist always say, to be internationally competitive modern economies must be also be competitive in education to produce the best graduates. But as John has pointed out the introduction of HEC’s based uni fees did not make us more competitive because it reduced the effective pool of graduates that Australia could draw on. Where as a cost free sysytem should in practise make more graduates available for the economy. The true reasons for the introduction of HEC’s was in part I think to force students to undertake more competiitive choices in their studies such as business/economics/law/engineering at the expense of arts/science/health at least thats why we have had shortages in teaching, nursing and science graduates. True the Hawke Keating government wanted to reduce the impact of increased student numbers on the budget, the increased student numbers importantly wern’t just coming from school leavers but from the mature sector who saw opportunities to increase their marketable skills or to change careers at very little cost. Don’t forget we also had the short lived training levy on business (2% on payroll) that was also introduced by Hawke Keating but quickly scrapped when corporate Australia jacked up not just about the cost but its employees upskilling and changing jobs for better wages and conditions. So I think John your analysis is correct. HECs was supposed to pay for increased graduate numbers but ultimately made nurses poorer (ultimately fewer nurse graduates), and became on of the greatest foreign aid programs Austarlia ever produced for the USA, Cananda and The United Kingdom. Australian graduates that did emigrate for better paid jobs will never pay back their HEC’s debt because they will probably never work in Australia again.

Comment from Tristan Ewins
Time January 5, 2011 at 11:52 am

btw: If any readers are interested there’s a Left Focus group at Facebook too. Feel welcome to join…

Write a comment