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Peter Bunting | The price of populism

Published:Sunday | June 5, 2016 | 6:00 AM
Peter Bunting
A student makes his way towards the entrance of Papine High School on March 2, 2016. The removal of auxiliary fees has been viewed as populist.
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The idea of freeness can always be relied on to provide some popular response. It is rooted in the old clientelistic model of government, useful for garnering votes, particularly in developing countries.

This thinking seemed to inform the promises behind the scrapping of auxiliary fees announced by the Government, even as it releases the policy in dribs and drabs.

As I stated in my contribution to the 2008 Budget Debate, I believe this is bad public policy for a number of reasons:

1. The first is that I subscribe to a philosophy of personal responsibility. The first responsibility of the welfare of the family must be with the parents. Successive generations of proud Jamaicans have seen their children do better than they have because of the sacrifices they've made for their education and health. The Government should play a supplemental role to improve equity and may even have to play a principal role, where necessary, to compensate for market or personal failures, but it should not, from the outset, assert a paternalistic type of responsibility.

2. In a market economy, prices are very important signals to ensure efficiency, or, as the economists would say, to avoid distortions. Even if a price is subsidised, it still informs the consumer and affects their behaviour. When a good or service is totally 'free', it tends to not be appreciated and used most inefficiently.

I can recall a simple example, from many years ago, during my tenure as parliamentary secretary at the Ministry of Health. I visited the Cornwall Regional Hospital, and outside the operating theatre was a sink with a badly leaking tap. I asked one of the nurses how long it had been running and she couldn't recall because it had been so many weeks.

Now this valve had wasted thousands of dollars of water and all it needed was a washer, which would cost a few dollars to be replaced. But the water was 'free' to the Cornwall Regional Hospital, since the utility bills were paid at the head office in Kingston, while the expense to purchase and replace the washer would have to be paid for by the hospital, so replacing the washer quickly was not a priority. This example shows how the lack of a price signal can lead to waste and inefficiency.

3. An across-the-board subsidy for social services, just like an across-the-board subsidy for food, is inherently inefficient because it dilutes the benefit of the subsidy over the entire population rather than it being a targeted, more substantial benefit for those who are most vulnerable.

All social services provided by Government have a cost. So it is really about who pays that cost and the method of collection. If a subsidy is provided to one group, that cost has to be recovered, and often, not in an equitable way. The subsidy provided to metropolitan area children on the JUTC results in a higher GCT for a single mother in a rural area, even while her children pay full cost for transportation.

Against that background, one must ask, why is this freeness initiative necessary? Is it purely about fulfilling an election promise?

 

ALTERNATIVE POLICY

 

Instead of this policy of no tuition fees, with schools being allowed to "ask parents for a contribution", a more effective use of the country's scarce resources would have been to increase the budget for lower-performing schools while allowing all schools to continue to collect auxiliary fees, with provisions for those who cannot pay. Former Minister Ronnie Thwaites' assertion that no child was turned away for non-payment of auxiliary fees during his administration has not been refuted.

I agree fully with the position that no Jamaican child should be prevented from attending high school because of his/her parents' ability to pay or not to pay. But the answer to that is not to make it 'free'.

What would be much more beneficial is to have the limited state resources targeted at improving the quality of the schools that have fallen behind.

Families will sacrifice to ensure that their child gets into one of the supposed top schools. An educational professional shared a real example with me of parents with one child attending Hampton School and the other child attending an upgraded high school in the same parish. Interestingly, the parents paid the higher auxiliary fees at Hampton while not paying the more modest fees at the upgraded high school.

That will become a thing of the past if we agree, as a nation, that improving the quality output of schools is a top priority, set timelines to achieve this goal, and work from both sides of the House to meet the agreed targets.

It is impatient of debate that many of our high schools are underperforming, but we have seen proof that with the strong leadership at these institutions, targeted support from the Ministry of Education, and a board that is dedicated to performance, changes can come.

Ordering schools to no longer charge auxiliary fees might provide a political fillip, but as stated by some principals recently, it is not sufficiently grounded in research, and seemingly, ignores the prevailing economic realities.

Political points must not be scored using Jamaican children as the balls. It may be 'free' today, but the long-term cost could be more than the country can afford.

- Peter Bunting is member of parliament for Manchester Central and opposition spokesman on national security. Email feedback to columns@gleanerjm.com.