Wednesday, June 14, 2006

Ted Baillieu says to Bracks: You can't outspend me.

And I'm sure Steve Bracks is willing to take up the challenge and respond, "Yes I can ! Bring it on !"

What am I referring to ? Well I can't provide links yet, as it hasn't hit the newspapers. But listening to talkback radio this morning on the drive to work, I heard of the Victorian Liberal's plans to outdo Steve Bracks' $300 per student "school uniform grant". Ted Baillieu is offering a $750 per child subsidy to kindergartens, effectively making all council kindergartens free.

The clueless radio host on 3AW said "this is undoubtedly a good policy". My blood was already boilding. He then invited callers to ring up and discuss which policy was better, the $300 per student school uniform subsidy, or the $750 per student kindergarten subsidy ?

Idiotic fans of the nanny-state glowingly approved of the fat $750 kindergarten subsidy, as it puts the money directly towards "education needs" instead of into parents hands, which in theory they "could spend on anything they wanted".

Now although I hate both policies, as they are nothing more than shameless vote-buying, I can appreciate the school uniform subsidy which gives taxes BACK to parents to spend on what they please (at the expense of non-parents), rather than shovelling even more money to public kindergartens.

Anybody with respect for property rights would realise that the tax should never have been confiscated from the rightful earners in the first place. Giving it back to some people in the form of transfer payments is better than nothing. But throwing fat subsidies at kindergartens is one of the worst outcomes possible.

Not all kindergartens are the same. In fact, no 2 are identical. Some have better services, some have better teachers, some are close to parents home, some might provide religious education, some might provide a very cost effective service, some might be wasteful and expensive. Some may have expenses of $1000 per student, some may cost $400 per student. But the subsidy is a flat $750 per student.

Normally, a business that satisfies consumers desires is rewarded with their dollars. Under a free market, parents will pay for a particular kindergarten, so long as they value it enough. Parents should be able to decide how much they can afford and which kindergarten they like. For some struggling families, the cheaper or more basic kindergartens would suffice. Under the free market, even the *best* kindergartens would have to compete with other kindergartens for parents' money. They would try to compete in terms of quality, and by reducing their pricing, so they could get as many students as possible. The education system would flourish, standards would rise, and prices would fall. Competition always works.

But for nanny-state advocates, this is not enough. We shouldn't be giving parents money and choice. We shouldn't give kindergartens the incentive to innovate, compete and reduce costs. We should just pay the kindergartens a flat amount per student, no matter how satisfied the parents of that student are, or how much they would be willing to pay for that service.

After todays policy announcement, I won't be holding my breath for the Liberals to win power and roll back Bracks' bloated nanny-state that is Victoria. The Liberals have abandoned their ideals. Which party will now stand for smaller government ?