When you ignore the distractions, this election has come down to a clear choice.
One side of politics wants high income earners and businesses to pay less tax. They believe that, by supporting the owners of capital, benefits will somehow trickle down to the rest of us.
The other side of politics want to support the human capital on which everything else depends.
One side sees health and education as high cost commodities. The other sees them as civil rights and an investment in the long term prosperity of the nation.
In 2013, the Australian Workforce and Productivity Agency produced a report which suggested that, on average, an additional year of learning increases an individual’s wage by between 5 and 16 per cent and would result in a 3 to 15 per cent growth in GDP per capita in the long-run.
Studies showed, however, that those that would expect the highest returns from learning (i.e. generally the least skilled and most disadvantaged) may be the least likely to undertake it.
Foundation skills are a crucial factor but they are also some of the most difficult skills for adults to develop. In contrast, the literature suggests that intervention early in life (including in primary school) is likely to provide large payoffs.
The study also points out that tertiary education is likely to be more important for advanced economies such as Australia. Advanced economies are closer to the technological frontier, requiring firms and labour to engage and absorb more complex technology and to engage in innovation to further enhance welfare.
Germany and all the Nordic countries – Denmark, Finland, Iceland, Norway and Sweden – provide higher education free of charge for their own citizens. These governments realize that the knowledge people gain through education helps develop an economy and leads to economic growth.
Learning also produces flow on effects. Studies have found associations between learning and improved health, societal and environmental outcomes. In addition, it is also likely that investment in learning by one worker increases the productivity of his or her co-workers.
Overall, the benefits of investing in learning are compelling. Learning is good for individuals, firms and the economy. They enhance material welfare in terms of wages and profits and promote a more innovative, adaptive and inclusive economy.
Similarly, investment in preventive and primary health care brings enormous economic returns.
In 2011, the World Economic Forum produced a report showing that heart disease reduces global GDP by 33%, cancer by 18%, and mental ill health by 35%.
The AMA has actively joined the election campaign stating that “Investment in health is the best investment that governments can make.”
They are calling on the government to lift the freeze on the Medicare Benefits Schedule (MBS) patient rebate and for substantial new funding for public hospitals. They want effective policy on Indigenous health, medical workforce and training, chronic disease management, a rural health strategy and Investment in preventive health measures.
Harmful use of alcohol, illicit drugs, poor food choices and overconsumption, combined with an obesity epidemic, sedentary behaviour and a lack of physical activity are contributing to Australia’s high rates of cardiovascular conditions and poor health outcomes.
Health prevention is an investment not only in the individual; there are social, economic and community savings by helping Australians to be healthier and make better health decisions.
The Coalition government has chosen to invest an enormous amount of money into national security which does not add to the yield of production output. If just a fraction of the money they intend to spend on unproductive war toys was directed instead to health and education, it would provide a far greater boost to productivity and growth than any company tax cut could ever hope to do.
We have choices.
If, for example, we chose not to give tax cuts to high income earners and big companies, to halve our orders for submarines and fighter jets, to stop paying fossil fuel subsidies and to price carbon rather than paying polluters, we would have well over $100 billion to invest in things that will actually make a difference.
Labor’s proposed changes to negative gearing and capital gains tax would also raise more revenue, stimulate construction of new dwellings, and slow the increase in housing prices.
On July 2, Australia gets to decide which course of action is more likely to improve the opportunities and standard of living for all Australians – investing in health and education or a $7 billion windfall to the big four banks.
