Tax Funded Educations Debated in Australia

December 31, 2010 International FinanceInternational Taxation

Bond UniversityThe Green Party of Australia has spurned new debate in Australia after proposing that Australians be able to receive free tertiary educations.

On December 30th the Australian Green Party outlined its agenda for 2011, which included a proposal to establish a system which would use the profits arising from mining taxes to fund free tertiary education for all Australians.

The Green Party believes that introducing a system of tertiary education would cost approximately AUD 2.5 billion. The funding would be sourced entirely from the upcoming Mineral Resource Rent Tax (MRRT), which could come into effect as early as July 2012. The claim has already been contested by Bruce Chapman, Economist at the Australian National University, saying that the system would cost as much as AUD 4 billion annually.

The leader of the Green Party Bob Brown commented on the tertiary education proposal, saying, “Unrestricted access to education is essential and is in line with the government’s own advice that future jobs require higher skills.”

Soon after the proposal was announced, the Shadow Education Minister Christopher Pyne labeled the idea as “middle class welfare gone mad.” He contested that a free tertiary education system would not change the composition of students in higher-education and would bring little, if any, extra benefits to the wider Australian society. Bruce Chapman added a similar opinion for the use of the mining tax, saying, “…it is a very regressive use of taxpayers’ money to have graduates contribute nothing … this means less public expenditure or higher taxes in other areas.”

The Green Party also outlined several other social measures which they thought are necessary for the country. It was suggested that extra funding could be assigned to housing, high-speed rail , primary-level education, and dental care, alongside the free tertiary education. It is estimated the entire funding package would cost approximately AUD 23 billion over the next four years.

Photo by Bond Sarah