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May 5, 2009
We know that the global recession overshadows the Rudd Government's budget and that the recession will shape the series of reforms that had been set in place. So what is going to happen? Tax receipts are falling, welfare claims are climbing, the global recession has hit home and there are political commitments to meet, such as the pension hike. What will be pushed into the background?
Lindy Edwards in the The Age says that:
The big gamble of this budget is how deep the recession will be and whether stimulus can effectively offset it. Will some of the more benign local forecasts be right? Or will unemployment spike enough to drive a collapse in housing prices, unleashing a downward spiral and making the IMF's doom and gloom more prescient?
Edwards adds that a milder recession means that a good stimulus package might be enough to keep things on the rails.
However, not being able to escape the worst of the global downturn means that the stimulus money might disappear as a drop in the bathtub as we all go down the gurgler. If the spending isn't initiated quickly enough to avert the worst of the recession, there are no guarantees the Rudd Government will be re-elected.
One consequence of the budget is that we can kiss the education revolution goodbye. As Simon Marginson says most of the recommendations of the Bradley report on higher education and the Cutler report on innovation will be "postponed". Priority will be given to measures that extend the capacity of education to meet unemployment, and advance social equity.
Treasury, he says, is less interested in the education revolution than in growing exports and education is our third largest export sector in dollar terms, behind only coal and iron ore. Education earns more than wheat, beef, wool, gold, tourism and other staples. The growth of commodity exports has been slowed by the recession but education exports will grow in 2009 and look recession-proof, for the time being at least, and those educational exports will be supported at all costs.
Paradoxically it is the public underfunding on higher education that drives the exports since the universities seek to overcome the loss they make on domestic students with international students paying full fees. The price is the decline in the average student-staff ratio, from 15 to 20, and middling research capacity.
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I'd always suspected that the education revolution was a damp squid. Great on symbolism--a computer for every kid---but the educational emphasis was on training and apprenticeships not digital literacy or the information society.