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Taxing lessons

EDUCATION has been touted by Labor as a key election issue, and quite rightly so.

Unfortunately, it has played second fiddle to the immigration debate that has dominated this campaign, the issue likely to win Saturday’s poll for John Howard.

I say unfortunately because a real debate about education would itself be an education.

And it would largely prove Kim Beazley wrong.

The big problem with Australian education is it has become a victim of our increasingly marginalised place in the world.

The Australian dollar’s demise is the key indicator of all this. The more the knowledge economy grows in other parts of the world, the more our commodity-driven economy looks like a poor investment to the rest of the world.

Yes, Kim is right in that we need to address this by attracting expertise to bolster our intellectual clout, but traditional Labor think-ing will undermine their good intentions.

Throwing money at our education institutions will not make them world competitive.

Subsidised academics will only help churn out more talent to stock the laboratories and think tanks in offshore locations like Silicon Valley.

And how will we pay for these academics? By raising taxes, of course. One of the key factors which will drive our talent away.

In fact its all a catch-22, unless someone is prepared to bite the bullet and reduce the tax burden at the top of the pay scale.

I am not talking about a few CEOs here. Academics, scientists and all manner of mid-level experts command salaries that would make many of us blush – all for what seem like regular jobs.

At the end of the day, Australia has just one clear point of difference over the rest of the developed world. It is a great place to live.

Add our isolation from the current terror, which simply underlines our distance from the real urban rat race, and we have a unique selling message to encourage all sorts of experts to come here.

Technology can overcome the next biggest obstruction, which is also isolation.

But governments must clear the biggest hurdle, that too much of income earned from personal endeavour goes in taxes.

Of course, John Howard has hardly addressed this situation. His tax reform has only marginally lowered income tax while loading up other imposts like the GST.

However, the conservative parties are the most likely to recognise that lower taxes are the most important step in correcting the giant imbalance, which will mean other countries have a competitive advantage.

Less tax at the higher end of the scale will have some negative impact in the short term, but longer term it is the only sustainable way to attract talent to this country.

True test

ONE area where governments have started to turn off the tap and impose a user pays mentality is in sport. Until recently, sport largely had one sponsor – the public purse – with the providers of largesse being our pollies and bureaucrats.

Commercial interests capitalised on that effective subsidy and made hay, with a few sports reaping the benefits through good management and superb timing.

Accountability is now making it harder for public money to go to sports, and many less businesslike organisations face a dismal future.

And the former army of volunteers are now too busy.

Now, rising insurance costs are another nail in the coffin for many.

This period will be the ultimate fitness test for many sports.

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