Flat White

Masterchef Canberra

13 July 2020

7:34 PM

13 July 2020

7:34 PM

If you are in the souffle business and you keep delivering broken crackers, no amount of increase in ingredients and no kitchen upgrade will solve your problem.  You need to look at your recipe.  But when it comes to what governments produce, for example, education and health, it always seems to be about the ingredients. 

I have had the fortune and opportunity to work in both the public and private sectors and there are certain known knowns.  In the private sector, failure is generally determined to be the result of bad strategy or bad execution.  In the public sector, however, failure is generally determined to be the result of insufficient resources.  To remediate, the private sector looks at the recipe, fixing the strategy or changing the management.  The public sector, on the other hand, looks at the ingredients, increasing resources and budgets. 

This, if you ever wondered, is why our governments are always crying about the need to increase taxes to increase funding in health and education.   

Governments never want to look at how things are done because such questions might challenge the notion that government spending does not need to continually grow.  To admit the operating model of government and the bureaucrats are flawed and sub-effective, necessitating change would be like admitting that the water bucket has no bottom. 

At this time, when there are loud and repeated calls for tax reform, it is important to consider how government operates and spends the taxes it currently collects.  This is particularly the case when the term tax reform is used as a euphemism for tax increases.   

Education is one of the perpetual black holes of government spending.  Recent history has shown that increases in spending have delivered decreases in educational outcomes.  A cursory look at education budgets and PISA trends categorially evidences this.  Yet the calls for more inefficient spending grow.   


It is thus always amusing to read the tax increase lobby argue for reform of and increase in taxes because of the need to increase the economic efficiency all the while unconcerned and uninterested with the economic efficiency of government spending.  Their argument is basically that efficient tax collection is needed to fund inefficient spending.   

When it comes to inefficient spending, the favourite argument for increased education spending relates to means based funding to accommodate various socioeconomic disparities.  So much for the virtues of diversity. 

Issues of curriculum, classroom discipline, teacher training, school leadership, school discipline and the elephant in the room, the value of giant and expensive central Departments of Education are not even secondary considerations. 

In his recent book, released on his ninetieth birthday, American economist and social theorist Thomas Sowell produced his analysis of charter schools in New York City.  Charter schools are a system in the US where non-government schools receive public funding but operate independent of the government education bureaucracy.   

Sowell’s analysis demonstrated that charter schools achieved much better educational outcomes at a cost per student of less than in the government system.  He even highlighted a charter school that significantly outperformed a government school where both schools were in the same building and thus drew on the same student and teacher pools. 

Sowell noted that the essence of the success of charter schools was discipline, a focus on education and not social engineering and the accountability of the school to the parents and not departmental officials.  Basically, these charter schools focused on the recipe and not the ingredients. 

A core problem of government service delivery, whether it be in education or health or other is the disconnect of accountabilities.  This delivers policy by proxy.  Defence policy becomes about regional employment and not defence.  Education policy becomes about producing and managing teachers and not educating children.  Childcare policies are about creating career paths for careers and not caring for children. 

We can argue about whether there is a role for governments to fund education and health but this does not mean that governments should be delivering education and health services.   

Better and more efficient outcomes can be achieved by making schools and health providers accountable to parents and patients.  But for as long as governments and oppositions talk about funding schools and hospitals and not students and patients, we will continue down this road of insatiable tax appetites. There can never be sufficient tax collected to satisfy the demands of the health and education industrial complex. 

Maybe one day governments will be as concerned with the efficiency of their spending as they are with the efficiency of their taxing.  Probably not. 

Got something to add? Join the discussion and comment below.

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