Quality education needs to be made a top priority

I think we should all be very concerned about whether we are producing a future workforce with the necessary skills to compete successfully in an increasingly competitive world.

It is fair to say that Australia currently enjoys a relatively good education system and that, overall, our population fares pretty well internationally in terms of literacy and numeracy.

But there are two things we should be worried about: namely, that a significant proportion of the population is getting left behind at an early age and never catches up; and that we run the risk of our future education outcomes generally being well below current levels.

Both of these issues are a function of the quality of our teachers, and the question is, what can we do about it?

If you stand back and think about what single thing would enhance our prosperity in the future, you would have to conclude that it's providing the best possible education to our young.

If you asked yourself which profession you should therefore be trying to steer your best and brightest graduates into - wouldn't it be teaching?

I'd like to suggest that a declining quality of teachers threatens our future prosperity more than any other factor; and that it's something that requires a dramatic change of focus.

Do we have a problem?

How many of us hope that our children will grow up to be teachers? How often do we read about the shortage of teachers or the shortcomings of teachers? How often have we heard about the falling standards for entry into teacher courses at university?

In a paper published in The Melbourne Review last November, Andrew Leigh described how, in 1983, the average person entering teacher training was at the 74th percentile of the aptitude distribution, whereas by 2003 that had fallen 13 percentage points to the 61st percentile.

At the University of Sydney, in 1977 the cut-off for entry into a bachelor of education was nearly as high as law and well above economics. By 2005 the cut-off was below economics and substantially below law.

Some other countries have experienced similar trends but in the top performing school systems, the opposite was the case. For example, teachers in South Korea are recruited from the top 5 per cent of school leavers; in Finland from the top 10 per cent and in Singapore and Hong King from the top 30 per cent.

Does it matter?

In September last year, the consulting firm McKinsey and Company released a report titled 'How the world's best-performing school systems come out on top', which summarised the results of research carried out in numerous countries the previous year.

McKinsey found that significant efforts to improve and reform schools - through such things as reducing class sizes, reforming curricula, improving governance, assessment and testing, devolving responsibility and developing closer relationships between schools and communities - had no discernable material effect on student outcomes.

The only factor that had an effect on student learning was the quality of teachers. This conclusion is consistent with those of other studies, and it's worth quoting some.

What can we do about it?

McKinsey's research indicates that high performing schools do three things well:

- get the right people to become teachers;

- develop them into effective instructors; and

- put in place systems and targeted support to ensure that every child is able to benefit from excellent instruction.

Clearly, improving the quality of instruction would be easier if the calibre of teachers were higher; but how can we get the right people to become teachers?

I think it requires two things. Namely, substantially lifting remuneration for the better teachers, and improving the status of the teaching profession.

There is no doubt that many people are motivated by more than money to go into teaching, but in my view there is no doubt that poor remuneration results in a lot of good people choosing not to become teachers - and this is supported by research evidence.

However, starting salaries are not the main problem. Rather, it is that teachers reach maximum salary levels relatively quickly and then get left behind.

For example, a first-year teacher in Western Australia gets paid around $50,000 a year, which is very similar to the salary of a first-year accountant in a sizeable company. If the teacher performs well enough to rise through level 2 and level 3, they can look forward to a salary topping out at $76,000.

Under the collective agreement negotiations recently undertaken between the teachers' union and the WA government, that top salary was proposed to rise to $87,000 by 2011.

In my view that will be significantly less than will be required to solve the problem; and in any event, the onerous administrative requirements associated with becoming a level 3 teacher are so great that only a very small fraction of WA teachers hold that rank.

I think we need to change the way we remunerate teachers in a much more dramatic way than governments are currently envisaging, in particular so that excellent teachers earn a multiple of the salary paid to mediocre teachers.

In a report released in May this year the Business Council proposed such a system.

This would result in half of all teachers receiving salaries at current levels, 30 per cent (called accomplished teachers) would be paid salaries twice the starting salary (around $100,000) and 20 per cent (leading teachers) earning two and a half times the starting salary (around $125,000).

The cost should be considered an investment rather than an expense.

Such a plan assumes, of course, that teachers become increasingly rewarded on the basis of merit.

One of the arguments mounted by unions and many teachers against pay for performance is that there's no objective way of working out who the good teachers are.

The key, I believe, is to give school principals more autonomy. I personally can't see any reason why the boss of a school is not able to do what the boss of most other organisations take for granted as one of their duties.

I have no doubt that improving remuneration will, by itself, go a long way to lifting the status of teaching as a profession. There is also scope for a comprehensive marketing exercise by governments that develops and reinforces an image of teachers as one of our most important and valued resources.

We need to ensure that we produce people with the necessary skills and attributes to compete in the global economy - and the only way to achieve that is to ensure that we have the best teachers possible.

- This is an edited extract from Michael Chaney's speech to an Australian Institute of Company Directors' function last month. Mr Chaney is chairman of Woodside Petroleum and National Australia Bank and Chancellor of the University of WA.