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Thursday, 27 November 2008
Page: 7619


Senator MASON (9:27 PM) —The Tax Laws Amendment (Education Refund) Bill 2008 amends the Income Tax Assessment Act 1997 to introduce the education tax refund. The education tax refund will provide a 50 per cent refundable tax offset for eligible education expenses up to a maximum of $750 for children undertaking primary education studies and $1,500 for children undertaking secondary education studies. The coalition will support this bill.

The education tax refund is a budget measure which has its origins in a 2007 Labor Party election policy. The education tax refund will apply to eligible expenses incurred from 1 July 2008 and will therefore be claimable from 1 July 2009. Eligible expenses for the education tax refund include the purchase, lease or hire-purchase of computers and computer related equipment, computer software, home internet connections, school textbooks and other paper based school learning material, and prescribed tools of trade.


Senator Parry interjecting—


Senator MASON —I may get to that shortly, Senator Parry. The government is right to be concerned about primary and secondary education in this country. I have little doubt about the sincerity of the Minister for Education, Ms Gillard, and indeed the minister representing her in the Senate, my good friend Senator Carr. They are right to say that the challenges that face us are large. And while the detail is still sketchy, I am pleased to note the new approach to schools and teaching outlined recently by Ms Gillard. Standards, accountability and transparency are goals very well worth pursuing. I wish the minister luck and I hope that she will not be hindered in pursuing these reforms by recalcitrant teaching unions, as the Howard government sadly was.

The Chief Executive of News Corporation, Mr Murdoch, said in his recent Boyer Lecture that education in this country is not a pretty picture. He said:

The unvarnished truth is that in countries such as Australia, Britain, and particularly the United States, our public education systems are a disgrace. Despite spending more and more money, our children seem to be learning less and less—especially for those who are most vulnerable in our society.

Mr Murdoch’s views are supported by research conducted by the Australian National University. This research published early this year found that despite per child spending on education having increased substantially since the 1960s, literacy and numeracy performance among Australian students is no better now than it was back in the 1960s and the 1970s.


Senator Conroy interjecting—


Senator MASON —The finding that the literacy and numeracy of Australian students has not improved since the 1960s truly is a disgrace. Mr Murdoch is right about that. This is not a partisan point, Senator Conroy. This is a point that goes not so much to federal governments but also to state governments. The fact that there has been this extra expenditure by state and federal governments and no increase in literacy and numeracy is a disgrace. Moreover, Mr Murdoch concludes:

… a public school system that does not serve the least of society betrays its mission. The failure of these schools is more than a waste of human promise, and a drain on our future workforce. It is a moral scandal that no one should tolerate. A basic education—and the hope for a better life that it brings—ought to be the first civil right of any decent society.

It is all very well to talk about equality but schools must also be held accountable. I was very lucky and had a good education and indeed I think most people here did as well. But it is always the children of the disadvantaged that suffer the most and have fewer options than the elite because of poor education. As Mr Murdoch points out, it is not that the poor are getting poorer; it is that the economic rewards to the skilled and the educated are making them much richer. Certainly the Senate Standing Committee on Economics and their report on this bill unanimously agreed with that and said:

Cross-country comparisons of economic growth generally suggest that increasing education is beneficial for the economy (in addition to its other merits) …

It is not only the interests of the individual students and their families that benefit from this program but society much more generally. I have always thought that education is more than simply an economic good. It promotes civility, it appreciates complexity and it provides those with an education a critical capacity and a sense of perspective and of proportion. These are all things that I am sure you would agree were perhaps lacking seriously in the 20th century.

The coalition supports this bill because it does provide some relief to parents in relation to certain education expenses. But we believe that the bill could have been improved by more fully promoting choice and promoting flexibility.

The government’s proposal centres on information and communications technology. While important perhaps—and we concede that—these expenses are not necessarily the most important faced by parents. Parents should have greater flexibility to make choices about the sorts of expenses they can claim under the education tax refund. For example, for many low-income families their greatest priority is not securing a computer or internet access but getting uniforms and paying the costs of excursions and school camps. Many parents might believe that their refund would be better spent on these more immediate priorities.

While the government has said much about early childhood education and has even devoted a member of the executive with a special responsibility for early childhood education, the opposition also notes that education expenses in relation to preschool education are not eligible for the education tax refund. Again, parents might believe their child would benefit from assistance with these expenses more than with the narrower opportunities provided pursuant to this bill.

Perhaps the most fundamental problem with this bill is that, whereas the government is keen to assist parents in ICT related matters, that assistance will only go so far. We now know that the cost of computers, for example, is only about one-fifth of the total cost of operating them. We now know that the Rudd government has grossly underbudgeted its digital education revolution by failing to take into account those one-off and ongoing costs connected with the installation and maintenance of computers. We also now know after exhaustive sessions in Senate estimates, from public stoushes between the federal government and state Labor governments, including former New South Wales Treasurer Mr Costa’s infamous attempt to extort money from the Commonwealth government, as well as documents available under FOI, that state governments have refused to pick up the tab and pay the costs of implementing federal Labor’s election promises. And who can blame them?

The Labor government has promised to deliver computers to the one million year 9 to 12 secondary students in this country. They have budgeted $1,000 for the capital costs of each computer and all the associated costs such as internet connection, software, computer support, upgrade and electrical wiring, storage, insurance and so on. Everyone now knows that even if each laptop only costs $500—and that is a very low and a very generous estimate—based on the one to four ratio I mentioned earlier, all the additional one-off and ongoing costs will be at least $2,000 on top of that. So $1,500 has not been budgeted for.

Just tonight, very cunningly, at five to five this evening, in response to a question on notice I had asked at Senate estimates about the Commonwealth’s estimates of the ongoing costs of computers—guess what? The final report entitled Review of legitimate and additional financial implications of the national secondary school computer fund was released. I might add that it is dated 3 September 2008. So it has been sitting on the desk of the Deputy Prime Minister and education minister, Ms Gillard, since 3 September. Now we have it, nearly three months later.

I quote from the top of page 7: ‘The Commonwealth’s review has determined that a reasonable overall estimate of the cost of deploying each additional computer is $2,500 over four years.’ So, after all the horror, all the tempestuous behaviour at estimates, in the end the government finally conceded that the $1,000 they budgeted for is $1,500 under budget per computer. Multiply that by a million computers—my maths is not very good, but that is about $1.5 billion.

But I also learnt something very interesting a bit after five o’clock this evening. The government proposes to give $800 million to the state governments at the COAG meeting on the weekend to help pay for this, so there is another $800 million that has not been looked at in the forward estimates that will also be added to the budget deficit—$800 million at least—and the government itself says that will not be enough. So we are really looking at an extended budget deficit probably in excess of another billion dollars. It is a huge turnaround, but at least, after making an election promise in November last year, the government has at long last—12 months later—finally released some estimates to the public. The government is pretty generous to itself; they are very low estimates, but even the government has said $2½ thousand. On page 27 of the report, we see the estimates that the states believe and they are nearly always between roughly $4½ thousand and $5,000, which is roughly twice the estimate of the Commonwealth government. But, even if we take the Commonwealth government’s very, very low estimates, it is still $1½ billion underbudgeted. We will no doubt hear a lot more about that in the ensuing week.

The New South Wales Labor government have said that they will not pay the difference and they will not take any more computers until the federal government accepts the expenses and commits to footing the bill. Other governments say the same thing. Whether the $800 million secured for COAG by the Commonwealth government this weekend will satisfy the states, I do not know, but it is another $800 million to the deficit.

Just as with all other initiatives of the Rudd government: voter beware! So it is too with this bill. The refund will cover some but not all the costs of acquiring and running a computer. It is a good start perhaps, but parents should be mindful that it is not a one-stop-shop solution to their educational IT needs at home. The coalition believes that greater flexibility in the sorts of eligible expenses claimable as an education tax refund would be beneficial to parents and students, especially expenses such as school fees. This was the coalition’s policy before the last election, and we believe that such flexibility would greatly enhance the utility of this bill. Still, this bill is a step forward for education in this country, and the opposition will support it.