Thursday, May 10, 2007

Market Manipulation Economics

While nearly everyone benefits from the Howard government’s election budget the detail is throwing up some interesting dynamics. As I predicted, lower income earners will be better off by about $3 per week. On the other hand a massive injection into education is beginning to look like market manipulation on a grand scale.

The Budget cash splurge has failed to address key issues facing low income earners such as housing affordability, advocacy groups have claimed. New figures released yesterday show the Australian house price index rose 1.1 per cent in the March quarter.

The big item was a $5-billion ‘endowment’ to higher education. The Government says that willl deliver $300-million a year by way of its income stream for capital works in universities.

The Federal Education Department's assessment is of the higher ed underspending, or under-investment Capital Works Program. As of today it's $1.5-billion. So if you simply assumed that that was going to generate $300-million a year, in five years' time you might have caught up with where you're supposed to be.

At the same time, the basics were ignored. Australia currently ranks last across the OECD (Organisation for Economic Co-operation and Development) in terms of national investment in the education, literacy and numeracy of four-year-olds.

So the big figure has been bandied about and virtually locked away. That is $5 billion the government have access to, in perpetuity, to move in and out of various short term issues. The first of these issues will be to turn university into internationally competitive profit centres.

The Feds have used the spectre of these bags of money to move on the States’ control of higher education. The aim, it appears, is to turn higher education into an international marketplace, ignoring Australia’s own education needs. So again, ‘our’ money will be used to further reduce our investment in the country’s future.

Don’t ask me what our politicians gain from these games. Perhaps it is ego or corruption, I really don’t see the benefit to them or the country. But from the evidence the manipulation is well under way.

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