Tak­ing on the NBN, Gon­ski ‘re­forms’ and NDIS was al­ways go­ing to end in tears


With the Turn­bull govern­ment tee­ter­ing as the cit­i­zen­ship sta­tus of more mem­bers of par­lia­ment is called into ques­tion, it is worth­while pos­ing this ques­tion: what have been the pol­icy achieve­ments of the Coali­tion govern­ment?

You may think that this is a brave ques­tion to set my­self given the need to file the re­quired num­ber of words to fill this space on the page. My so­lu­tion is to in­clude anal­y­sis of the fail­ure to meet le­git­i­mate pol­icy ob­jec­tives. This of course means I won’t have enough space.

Take the case of the Na­tional Broad­band Net­work, some­thing with which Malcolm Turn­bull is ex­tremely fa­mil­iar given his for­mer role as com­mu­ni­ca­tions min­is­ter. There is ab­so­lutely no doubt that the NBN that the Coali­tion govern­ment in­her­ited from La­bor should have been junked.

Turn­bull is smart enough to un­der­stand the con­cept of a sunk cost. The project should have ceased and the costs in­curred sim­ply writ­ten off. Start­ing again would have in­volved the ac­knowl­edg­ment that the pri­vate sec­tor would pro­vide fast-speed broad­band on com­mer­cial terms for most of the pop­u­la­tion.

The role of the govern­ment should be to fo­cus on ar­eas in which the mar­ket would fail to achieve this out­come — in ru­ral, regional and re­mote ar­eas. There would be no need to be pre­scrip­tive about the tech­nol­ogy or the form of de­liv­ery.

In­stead, Turn­bull de­cided to “save” the project us­ing La­bor’s model while aban­don­ing the fi­bre to the premises com­mit­ment as well as the (close to) ex­clu­sive use of fi­bre. He would claim his strat­egy saved time and money.

The trou­ble with this ap­proach is now clear. A deeply in­debted govern­ment mo­nop­oly is charg­ing ex­ces­sive fees to re­tail­ers, which are pro­vid­ing ex­pen­sive, sub-op­ti­mal of­fer­ings to cus­tomers.

The end re­sult is a tsunami of com­plaints, slow speeds and costly, in­flex­i­ble pack­ages for house­holds and busi­nesses. In in­ter­na­tional terms, Aus­tralia is per­form­ing ex­tremely badly and there is ev­ery chance that most of the govern­ment fund­ing of the NBN will need to be writ­ten off.

So what about pol­icy achieve­ments in the higher ed­u­ca­tion space? Af­ter all, for­mer ed­u­ca­tion min­is­ter Christo­pher Pyne told us he was fixer and would be able to im­ple­ment a pack­age of higher ed­u­ca­tion re­form mea­sures. The trou­ble is he didn’t.

In fact, it’s dif­fi­cult to keep track of the govern­ment’s pro­posed changes to higher ed­u­ca­tion although there are some com­mon fea­tures; most no­tably, re­duc­ing the rate of growth of govern­ment spend­ing on uni­ver­si­ties. There was to be fee dereg­u­la­tion; var­i­ous changes have been mooted for the stu­dent loan ar­range­ment, the Higher Ed­u­ca­tion Loan Pro­gram; fund­ing cuts in var­i­ous guises; and a va­ri­ety of other changes.

In the space of four years, how­ever, noth­ing sig­nif­i­cant has been achieved. The costly and du­bi­ous sys­tem of de­mand-driven en­rol­ment re­mains in­tact and govern­ment spend­ing on higher ed­u­ca­tion con­tin­ues to bal­loon.

Out­stand­ing stu­dent loans have blown out from a lit­tle more than $12 bil­lion in June 2006 to close to $48bn in June last year. It is pro­jected that if this trend con­tin­ues there will be close to $200bn in out­stand­ing HELP debt by 2025. It is also clear that the em­ploy­ment and salary prospects of new grad­u­ates have de­te­ri­o­rated sig­nif­i­cantly in the con­text of the surge of new grad­u­ates.

The govern­ment might claim that it fixed the highly du­bi­ous VET FEE-HELP scheme that it also in­her­ited from La­bor. Re­call this was a scheme in which pub­lic and pri­vate vo­ca­tional ed­u­ca­tion providers could of­fer of­ten over­priced cour­ses to naive stu­dents who could put the fees on the (govern­ment) tab.

In most in­stances, there was lit­tle prospect that the stu­dent would re­pay the debt. In­deed, in many cases the cour­ses were not com­pleted, and in some cases they were es­sen­tially fic­ti­tious.

While the Turn­bull govern­ment even­tu­ally hit the stop but­ton, it was not be­fore an ad­di­tional $2.7bn of debt had been added to the scheme. A pass­ing pa­rade of ju­nior min­is­ters, a se­nior min­is­ter (Pyne) who was miss­ing in ac­tion, a weak bu­reau­cracy: it was a recipe for pro­cras­ti­na­tion and on­go­ing waste.

More­over, it’s not clear that the “so­lu­tion” that has been put in place is op­ti­mal. It overly favours the in­ef­fi­cient TAFE sec­tor as well as cre­at­ing some per­verse dis­in­cen­tives for stu­dents to un­der­take le­git­i­mate and valu­able vo­ca­tional ed­u­ca­tion cour­ses.

Then we have the Gon­ski school fund­ing “re­forms”, an area that the Turn­bull govern­ment was des­per­ate to re­move as an item from the pol­icy agenda given La­bor’s pre­sumed po­lit­i­cal ad­van­tage. If it meant spend­ing more than the La­bor pro­posal, then so be it. The fed­eral govern­ment will spend an ad­di­tional $19bn across 10 years on so-called “needs-based fund­ing. Even in the shorter term, the fed­eral govern­ment’s spend­ing on schools will rise from just over $17bn to close to $23bn.

But in a clas­sic case of putting the cart be­fore the horse, the govern­ment is still wait­ing on David Gon­ski’s sec­ond re­port to ad­vise the govern­ment how best to spend the ad­di­tional money to achieve bet­ter stu­dent out­comes. Note also that, not­with­stand­ing this avalanche of new fed­eral money, the hap­less Ed­u­ca­tion Min­is­ter, Si­mon Birm­ing­ham, still man­aged to dud, in a rel­a­tive sense, the Catholic schools.

Did I men­tion the Na­tional Dis­abil­ity In­sur­ance Scheme? Again, this was a project that was in­her­ited from La­bor but given the full en­dorse­ment of the in­com­ing Coali­tion govern­ment. The re­al­ity was that this was a scheme for which the prepa­ra­tion and fund­ing were woe­fully de­fi­cient. In- deed, the idea that a na­tional scheme run by bu­reau­crats in Gee­long could re­ally meet the le­git­i­mate needs of peo­ple with dis­abil­i­ties was al­ways highly du­bi­ous.

To give the govern­ment its due, So­cial Ser­vices Min­is­ter Chris­tian Porter has given it his best shot to get the scheme into some sort of shape and to en­sure there is fund­ing go­ing for­ward. None­the­less, the com­plaints keep com­ing in thick and fast, and there is a ques­tion mark over whether strict el­i­gi­bil­ity stan­dards, which are re­quired to make the scheme sus­tain­able, can be main­tained, par­tic­u­larly in re­spect of chil­dren.

What about im­mi­gra­tion? Im­mi­gra­tion Min­is­ter Peter Dut­ton, has in­tro­duced a se­ries of changes in re­la­tion to tem­po­rary skilled work­ers — the old 457 visa cat­e­gory — and he has held the line on strict border con­trol to de­ter the re-emer­gence of peo­ple-smug­glers. But when it comes to the num­bers al­lowed to en­ter Aus­tralia un­der the per­ma­nent mi­gra­tion cat­e­gory, this govern­ment has ex­hib­ited a tin ear.

The fact is that 190,000 a year is just too high, par­tic­u­larly as the vast ma­jor­ity of these en­trants go to Mel­bourne or Syd­ney. And at this point the govern­ment has shown no in­cli­na­tion at all to re­duce this num­ber, even though the min­is­ter is aware that many mi­grants who en­ter un­der the skill cat­e­gory are in fact not very skilled at all.

Of course, there are lots of pol­icy ar­eas that I haven’t men­tioned — su­per­an­nu­a­tion, for ex­am­ple. Health is an­other area where progress has been min­i­mal as govern­ment spend­ing con­tin­ues to grow faster than the econ­omy.

But the big pic­ture is this: the pol­icy record of the Coali­tion govern­ment has been a crush­ing dis­ap­point­ment. It has been too keen to con­tinue to em­bark on largescale govern­ment schemes — NBN, Gon­ski, NDIS — know­ing full well that these en­deav­ours al­most al­ways end in tears while eat­ing through masses of tax rev­enue.

It has made some mon­u­men­tal mis­takes by dither­ing — VET FEE-HELP, for ex­am­ple — and it has sim­ply re­fused to do the ob­vi­ous by re­duc­ing the per­ma­nent im­mi­gra­tion in­take to take the pres­sure off our two largest cities.

Most im­por­tant, it has for­got­ten the maxim that good pol­icy is good pol­i­tics.

The end re­sult is a tsunami of com­plaints

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