May 16, 2014
In this interview Chris Bowen, the Shadow Treasurer, makes explicit the different economic environment Australia is in. We haven't got a mining boom. So where to now for Australia? Bowen says:
Of course it [the mining boom] was going to come to an end. We identified the transition. The language I identified and prefer is the transition from the construction phase to the export phase, which is still good for the national income. It’s still good for export figures, but not so good for employment generation. But we have seen a decline in terms of trade. But interestingly, you saw the impact on government revenue fairly quickly after Labor came to office. Terms of trade stayed strong, but government revenue started to take a hit. Of course you had the global financial crisis, everybody understands that, but you’re also seeing some structural changes.
The consequence was the fall in the iron ore price, the fall in the coal price and the very big fall in mining investment. Hence the systematic fall in government revenue. So what do we do with the mining boom ending?
Not much according to Hockey's 2014 Budget. There appears to be is a policy vacuum. There is the systematic dismantling of clean energy support schemes and support for clean coal.
There is no fostering of a digital economy. Public investment in the NBN has been capped. The government has made major cuts to research and innovation funding including significant cuts to the CSIRO and the consolidation of several key start-up funding programs that would lead to a reduction in overall funding to the sector.
The deregulation of universities means that Australia embraces the American model without American wealth. Simon Marginson observes that:
It is a remarkable change from the existing higher education system, but a change that will sit comfortably with the upper middle class backbone of the coalition parties. The recycling of privileged families through independent schools, the top universities, and business and the professions will continue as before. These families will be better protected from social competition from below, for example from ambitious migrants.
The new system will be socially regressive rather than progressive and will limit the growth of participation in bona-fide tertiary education. The research mission will become concentrated on fewer providers, the word ‘university’ will break loose from the present requirement for research and become associated with many smaller teaching-only institutions offering no frills degrees, and some of the existing institutions will be struggling to survive.
Presumably with a smaller government the deregulated market will provide the answers--with a little help from the medical research fund funded by sick people visiting the GP.