Monday, 18 February 2013
“We don’t need no Education – We don’t need no Self Control” – not many people wouldn’t be aware of Pink Floyds epic song ‘Another Brick in the Wall’, and instantly connect these basic words to a slow and captivating beat. The fact that so many people have learned the lyrics/tune is astounding, especially when the words themselves say we don’t need to learn things or conform – kind of hypocritical. It’s a great song, but I’ll disagree with the lyrics in that I think we need both education and perhaps even more self control (personal responsibility).
Whether we like it or not, one of the main discussion topics this year is going to be Education. We’ll hear how many dollars need to be poured into Education, and everyone will nod their heads. But I doubt very much that there will be any substance as to what will be done with the money.
Both businesses and our country needs a Vision of where we are heading, so we can skill ourselves to get there. The dollars need to be invested wisely, not thrown into the wind, and everybody needs to take their responsibility in the process. I’ll start from the bottom and work my way up through all the education steps with some examples on how this affects everyone.
I walked into a conversation some of our employees were having recently. They were all riled up about not being able to access affordable child care that provided flexibility to meet the needs of people who work. The salt in the wounds was that they knew people where one or both parents were receiving welfare benefits (that is, available each day), yet those parents were receiving free child care, when our employees who work hard each day, don’t. Whatever happened to looking after your own kids? Perhaps there isn’t a shortage of places, just that they aren’t going to those that need it the most. Like many “free” Government Services, they seem to be means but not needs tested. Child Care fee’s in Brisbane average $76 a day, and equate to 12-14% of average take home pay. Half the cost of childcare is subsidised by Government, and without the $5 billion per year in subsidies already being paid, the cost would be 30% of take home pay. Blowing out Birthday cake candles are now deemed too dangerous, and priorities are given to wiping door handles clean of germs - maybe we also need to look at if the care can be simplified?
Debt Collection agencies on the Gold Coast have released a report that shows that at least 20% of parents are falling behind on Private school fee payments. 20% can pay without a blink, 35% can do it but budget carefully, and for the rest, it’s a real struggle. There are also many families who move house to be in certain public school catchment areas. This says two things:
- Many parents put a high priority and value on Education
- The Education available in many of our schools is not up to the required standards. And with entrance requirements to Teaching degrees being amongst the lowest of any occupations (and principals unable to get rid of non-performers), don’t expect any improvements in the near term.
The new National Curriculum is rather backward looking, with lot’s of focus on History etc. Very little is taught to equip our kids for the future in the real world, of which my perennial bug-bear is the complete lack of basic financial education. 52% of Australian households have no cash left at the end of a typical month and live pay cheque to pay cheque. No financial buffers for illness or unexpected events like losing your job. Even more worrying, no retirement planning but an expectation that other Tax payers will be there to pay when the time comes.
Tafe and University
Our higher education institutions have become an industry of their own. Employers are paid subsidies of between $4,000 to $13,500 to put through Apprentices. I shouldn’t use the word Tafe – they’re now Registered Training Organisations, and more focussed on how much they can expedite the training time to put through more students, than making sure they have enough experience to do the job at the end of the process. For Universities to “be successful” in growing their student intake, they offer “popular” courses. So if our aspiring students prefer Movie making or Game programming, courses will be offered. But there is very little correlation between some of these courses and future job prospects. Using Teaching as an example, according to QLD Education, Training & Employment, 1608 university graduates applied for a job to teach in QLD state schools in 2013, of which only 34% (12% permanent & 22% temporary employment) ended up with a job within their profession because nobody checked supply against demand.
So, too many people are falling out of the above education steps and into unemployment. But we only have a 5.4% unemployment rate in Australia, I hear you say? It’s wonderful what you can do when you change the way you measure things. In 1970, the unemployment rate was 0.9%. But if you consider the Participation rate (the proportion of the population available to work), it has decreased progressively over time. The Male participation rate is currently 71.7%, whilst in 1964, it was 83.9%. Granted, the female participation rate has risen from 33 to 58.5%. Our overall participation rate is about 67% - 2% worse than that of New Zealand’s 69%. Further, a person who works as little as 1 hour a week, or one who doesn’t have a job but has too many assets to qualify for Centrelink benefits, is counted as employed. What this shows is that we are counting less of the population as “available to work”, which brings down the unemployment rate. The sad fact is that of those on unemployment “benefits”, 55% have been out of work for over a year, and are unlikely to get out of this rut. We’ve seen Truck drivers who can’t read the weight on a consignment note, and people who struggle to turn on a computer – these are now basic work skills, and not something an employer should have to teach grown adults.
Less than 5% of the population is likely to have sufficient funds when they reach retirement to see out a comfortable life. It’s rarely talked about, because it would frighten too many people. Which means that 95% of the population will rely on the Government to fund all or some of their retirement. This sad situation could so easily be overcome if we educated people on basic finances, and then had a tax system that encouraged savings and investment so that people can look after themselves. Our population is aging, meaning we need to fund a longer retirement. A pension of about $30,000 per year to live on won’t get you far. $1,000,000 in your Super fund seems unobtainable to many (including our politicians, but they get pensions for life, so don’t have an incentive to understand it) and the domain of the rich, but would only give $38,000 per year in retirement – but at least that person wouldn’t continue to be a drain on tax payers. Yet what most people fail to realise is that on an Average wage, putting aside 12% of income (what the compulsory super contribution is increasing to) from 20 years of age to 65 years, with an average real return of 4% per year, the compounding effect of interest would get to this target. So it’s not an un-achievable goal, provided people were educated to try in the first place. We must encourage smart financial behaviour – not penalise it.
Whilst many will not agree on the above points, “if you fail to plan, you plan to fail”. We all need to give some thought as to what Education is, before we run off on too many tangents. It needs to be aligned with the Vision we are striving to reach. What are you educating your family and your business to achieve?
As always, onwards and upwards!