Economists back increased investment in education, not Malcolm Turnbull's company tax cuts

22 June 2016

A major survey of economists has found that two-thirds say increased education spending is a better driver of economic growth than company tax cuts, in a criticism of Malcolm Turnbull’s cuts to Gonski funding.

AEU Federal President Correna Haythorpe said that economists understood the importance of investing in education to ensure Australia’s continued economic growth.

“Malcolm Turnbull’s cuts to Gonski won’t just see our children miss out on the help they need to succeed at school, but they will weaken our economy in the long-term,” Ms Haythorpe said.

“We need Gonski to ensure students have access to the smaller classes, one-on-one support and extra literacy and numeracy programs they need to succeed at school and in work.

“Voters will have a clear choice on July 2 between Malcolm Turnbull’s cuts to Gonski after 2017 and the $3.8 billion of extra investment in our schools that Labor and the Greens have committed to.

A survey of 31 economists by the Economic Society of Australia found almost two-thirds agreed with the statement that:

'Australia will receive a bigger economic growth dividend in the long-run by spending on education than offering an equivalent amount of money on a tax cut to business.'

UNSW economics professor James Morley said that:

"Estimates on returns to education are larger and more precise than estimates on the effects of tax cuts on investment and long-run growth."

Ms Haythorpe said that investing in education was a positive for social equity, as well as for economic growth.

“If we give students the help they need in the early years of school, particularly those from disadvantaged background, they have a better chance of succeeding when they leave school.”

“We know Gonski funding is already working in schools across Australia. So why does Malcolm Turnbull want to stop it?”

“Gonski delivers the bulk of extra funds to disadvantaged schools, to ensure their students don’t miss out on the support they need.

“Economists have backed AEU-commissioned research by education economist Adam Rorris who found that ensuring all students left school with the basic literacy and numeracy skills needed for work would deliver a long-term benefit of $72 billion through increased tax revenue and lower welfare costs.”

“The public also supports Gonski funding, with recent polling in marginal seats finding 63% would prefer to see increased spending on schools to Malcolm Turnbull’s company tax cuts.”

Media Contact: Ben Ruse: 0437 971 291