A Greater Australia: Population, policies and governance - CEDA

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Section 3.3upgrading will trend towards on-the-job training. An effective education and trainingstructure is one that complements that demand by channelling additional resources tothose areas before skills shortages act as a brake on economic growth.When the economy is weak and unemployment high, the focus of education andtraining policies tend to be more obvious. As the opportunity cost of education issignificantly less (because it does not necessarily result in wages foregone), fundingfor additional places for post-secondary education is a primary focus of policy. Thatis, policy flexibility and versatility are relatively unimportant when the economy is in acyclical downturn. From the early 1970s to the early 1990s, cyclical downturns werecommon – and the current inertia within Australia’s institutional arrangements in relationto education and training is likely to be a reflection of that time.In contrast, when the economy is near, or at, full employment, policy flexibility andversatility has the potential to improve productivity.Some programs to increase productivity that could be considered include:• Extending availability of income contingent loans:– To the VET sector;– To mature age students to partially finance their living costs when they undertakefast track skills transfer courses; and– On a temporary basis, to address skill shortages.• Providing additional funding to universities and VET organisations who are offeringintensive, fast-track skilling courses;• Introducing a tax offset to replace the current deduction for self education, and limitavailability of the offset to a regular reviewed and prescribed set of skill attainments;and• Taking a leadership role when negotiating with educational institutions and industrygroups an appropriate mixture of public and private funding that could be providedto those institutions willing to rapidly shift resources in order to implement fast trackqualifications.The author would like to thank Professor Bruce Chapman, Crawford School ofEconomics and Government, ANU for valuable guidance and comments. However, allresponsibility for the contents rests with the author.A Greater Australia: Population, Policies and Governance159
Section 3.3Endnotes1 IGR 2010: Challenges and Priorities for Australia, Presentation to CEDA by Ken Henry, Secretary to the Treasury, 14 July 2010.2 Forbes, M., Barker, A. and Turner, S., 2010, The Effects of Education and Health on Wages and Productivity, Productivity CommissionStaff Working Paper, Melbourne, March.3 See, for example, Shomos, A., 2010, Links Between Literacy and Numeracy Skills and Labour Market Outcomes, ProductivityCommission Staff Working Paper, Melbourne, August.4 Acemoglu D., S. Johnson, and J. Robinson, 2005, “Institutions as a Fundamental Cause of Long-Run Growth.”, Handbook of EconomicGrowth, Volume IA. Edited by Philippe Aghion and Steven N. Durlauf Amsterdam, North-Holland.5 See, for example, Blundell, R., Dearden L., Meghir C., and Sianesi B. (1999), Human Capital Investment: The Returns from Educationand Training to the Individual, the Firm and the Economy, Fiscal Studies, 20(1), pp. 1–23.6 See, for example, Long-Run Trends in School Productivity: Evidence From Australia, Leigh, A & Ryan, C, Education Finance and Policy,2010 and Challenges for Australian education, Thomson, S, Research Developments: Vol. 25, Article 2, 2011.7 How and Why has Teacher Quality Changed in Australia? Leigh, A & Ryan, C, Centre for Economic Policy Research, DP 534, September2006.8 See Council of Australian Governments’ National Education Agreement at http://www.federalfinancialrelations.gov.au/content/national_agreements/education/education_agreement.pdf9 Ciccone, A. and Papaioannou, E. (2006) “Human Capital, the Structure of Production, and Growth”, ECB Working Paper No. 623, May.10 For further background see Machin, S. (2004) “Skill-biased technical change and educational outcomes” in Johnes, G. & J. (eds)International Handbook on the Economics of Education.11 See, for example, Bean, C. (2000), “The Australian Economic ‘Miracle’: A View from the North” in Gruen, D. and Shrestha, S. (eds), TheAustralian Economy in the 1990s, Conference Proceedings, Reserve Bank of Australia, Sydney, July, pp73–114, and Gretton, P., Gali, J.and Parham, D. (2002), “Uptake and Impacts of ICTs in the Australian Economy: Evidence from Aggregate, Sectoral and Firm Levels”,Paper prepared for Workshop on ICT and Business Performance OECD, Paris, 9 December.12 PC Submission to the House of Representatives Standing Committee on Economics Inquiry into Raising the Level of Productivity Growthin the Australian Economy, Sep 2009, p xiii.13 Parkinson, M. (2011), “Sustaining Growth in Living Standards in the Asian Century”, Address to the Seventh Economic and SocialOutlook Conference, Melbourne, 30 June.14 Banks, G. (2010), “Successful Reform: Past Lessons, Future Challenges”, Address to the Annual Forecasting Conference of AustralianBusiness Economists, Sydney, 8 December.15 See, for example, Taylor, D. (2009), “Australia’s Changing Labour Market” in Corbett, J., Daly, A., Matsushige, H. and Taylor, D. (eds),Laggards and Leaders in Labour Market Reform – Comparing Japan and Australia, Routledge.16 Eslake, S. (2011) “Productivity”, Paper presented to the Annual Policy Conference of the Reserve Bank of Australia, 15 & 16 August.17 Hanushek, E. and Wößmann L. (2008) “Education and Economic Growth” chapter prepared for the International Encyclopedia ofEducation, 3rd Ed.18 For a fuller discussion, see Dowrick, S. (2003) “Ideas and Education: Levels or Growth Effects?”, NBER Paper No 9709, May.19 Other externalities arising from education are of a non-financial nature and therefore are not easily measured and are very difficult tocalculate. These include benefits accruing to society from a more educated populace resulting in reductions in crime and improvedhealth outcomes.20 See, for example, .Job Market Signalling, Spence, M, Quarterly Journal of Economics, 87: 355–74, 1973.21 Chapman, B. & Lounkaew, K. (2011),“Higher Education Base Funding Review: the value of externalities for Australian higher education”,commissioned research for the Higher Education Base Funding Review, unpublished.22 The Social and External Benefits of Education , McMahon, W. in Geraint Johnes and Jill Johnes (eds), International Handbook on theEconomics of Education, Edward Elgar: 211–259, 2006.23 This does not necessarily mean that higher education expenditure should be significantly increased. The benefit need to outweigh costfor it to be worthwhile.24 Because a discount is available for up-front payment of HECS, this creates an effective small real rate of interest on a standard HECSloan when the two payment methods are compared.25 On 1 February 2012, the Prime Minister announced that plans were being developed to extend income contingent loans to (some) VETstudents.26 See Chapman, B, Rodrigues, M & Ryan, C 2007, ‘HECS for TAFE: The case for extending income contingent loans to the vocationaleducation and training sector’, Commonwealth Treasury Working Paper, 2007– 2, April, Canberra; and Chapman, B., Higgins, T. &Taylor, D. 2009, ‘Income Contingent Loans for Mature Aged Training’, Australian Journal of Labour Economics, Vol 12, No 2.A Greater Australia: Population, Policies and Governance160
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A Greater Australia:Population, pol
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ContentsForeword CEDA Chief Executi
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ForewordIt is with pleasure that I
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IntroductionResponding to the resul
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IntroductionA more dynamic and vita
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IntroductionSustainabilityConcern a
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IntroductionThe new demographics, h
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Section 1.0Historical perspectives1
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Section 1.1IntroductionJapan’s cr
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Section 1.1Figure 1Forecast number
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Section 1.1Table 1Defence spending
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Section 1.1How much defence is enou
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Section 1.1ConclusionA substantial
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Section 1.2There has been over a ce
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Section 1.2Resource constraints wer
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Section 1.2Similarly, in the 1994 H
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Section 1.2ReferencesAustralia, Dep
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Section 1.3IntroductionAustralia is
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Section 1.3The grey 90sThe heady ex
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Section 1.3Taylor’s stony rebutta
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Section 1.3Figure 1The Benhamite Op
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Section 1.3In mathematical terms, t
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Section 1.3characterisation of the
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Section 1.3ConclusionA retrospectiv
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Section 2.0Population futures2.1 Fo
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Section 2.1Conventional population
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Section 2.1It is more useful for go
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Section 2.1Forecasting of births, w
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Section 2.1Future net overseas migr
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Section 2.13). This had a lot to do
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Section 2.2IntroductionIn late Sept
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Section 2.2Figure 1The migrant cont
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Section 2.2The visa and residency s
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Section 2.2sponsorship, subject to
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Section 2.2Figure 3Historical and p
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Section 2.2The views in this chapte
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Section 2.3IntroductionThe Australi
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Section 2.3Figure 3Australia: Distr
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Section 2.3Table 2Australia: Popula
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Section 2.3Table 4Views of Australi
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Section 2.3Table 5Australian States
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Section 2.3A number of hypotheses h
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Section 2.3Table 8Australia: Distri
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Section 2.3Table 10Non-Metropolitan
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Section 2.3Policy issuesThe configu
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Section 2.3Climate change is likely
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Section 2.3ConclusionAny realistic
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Section 2.340 Swan, W., 2010.Austra
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Section 2.4IntroductionThe Australi
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Section 2.4At present there is a hi
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Section 2.4innovation initiatives w
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Section 2.4Endnotes1 Henry, K 2009,
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Section 2.5IntroductionAustralia is
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Section 2.5else. Even with a broad
Page 110 and 111: Section 2.5commercially viable - th
Page 112 and 113: Section 2.5A vast country like Aust
Page 114 and 115: Section 3.0Society and the individu
Page 116 and 117: Section 3.1Extent of public opinion
Page 119 and 120: Section 3.1category immigrant/forei
Page 121 and 122: Section 3.1The Environics Research
Page 123 and 124: Section 3.1Per cent100908070Figure
Page 125 and 126: Section 3.1A number of surveys soug
Page 127 and 128: Section 3.1Table 8Percentage who an
Page 129 and 130: Section 3.1A more precise indicatio
Page 131 and 132: Section 3.1The strongest predictor
Page 133 and 134: Section 3.1Endnotes1. There is also
Page 135 and 136: 3.2Social inclusion and multicultur
Page 137 and 138: Section 3.2a broader definition of
Page 139 and 140: Section 3.2Figure 1Estimated povert
Page 141 and 142: Section 3.2Table 2Visa Type of Sett
Page 143 and 144: Section 3.2Table 5First Generation
Page 145 and 146: Section 3.2Table 6Australia: First
Page 147 and 148: Section 3.2Improving outcomes for v
Page 149 and 150: Section 3.2increasing diversity of
Page 151 and 152: 3.3Linkages between education and p
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Page 155 and 156: Section 3.3In the past decade, prod
Page 157 and 158: Section 3.3succeed in education or
Page 159: Section 3.3case, funding also could
Page 163 and 164: 3.4Healthcare delivery for our agei
Page 165 and 166: Section 3.4• Private medical serv
Page 167 and 168: Section 3.4the whole spectrum of in
Page 169 and 170: Section 3.45. Experiences, pathways
Page 171 and 172: Section 3.4Stratification of patien
Page 173 and 174: Section 3.4Other steps include impr
Page 175 and 176: Section 3.438 National Health Refor
Page 177 and 178: 4.1The economic effects ofpopulatio
Page 179 and 180: Section 4.1population growth can ex
Page 181 and 182: Section 4.1In theory, the answer pa
Page 183 and 184: Section 4.1Kirchner concedes that t
Page 185 and 186: Section 4.1Endnotes1. Productivity
Page 187 and 188: 4.2Urban infrastructure and land us
Page 189 and 190: Section 4.2bearing the fixed costs
Page 191 and 192: Section 4.2Figure 1Indicative dwell
Page 193 and 194: Section 4.2Taking the electricity,
Page 195 and 196: Section 4.2Promoting better land us
Page 197 and 198: Section 4.2preferences to homeowner
Page 199 and 200: Section 4.2in any Australian urban
Page 201 and 202: Section 4.2Endnotes1 Productivity C
Page 203 and 204: 4.3Water security:Water for the far
Page 205 and 206: Section 4.3Water trading enables us
Page 207 and 208: Section 4.3cent of water entitlemen
Page 209 and 210: Section 4.3were either the full eco
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Section 4.3Strategic opportunitiesA
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4.4Critiquing governmentregional de
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Section 4.4However, there is often
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Section 4.4Potential policy interve
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Section 4.4Unfortunately, advocacy
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Section 4.4contribute substantially
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Section 4.418 Department of Educati
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5.1The future of population policyG
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Section 5.1a million fewer women in
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Section 5.1For the present, ongoing
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Section 5.1The second worry is that
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Section 5.1The now significantly de
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