‘Basket case’ industry ruining economy
Provocative chief executive Matt Barrie says Australia's education system is a "basket case" and is the main contributor to the country's "completely cactus" economy.
The tech entrepreneur and multi-millionaire blames the deterioration of Australian manufacturing output on what he calls an ancient education system where overachieving students are pushed into medicine and law while participation in electrical engineering and computer science dwindles.
"That's why there's no productivity because we're producing people to serve cups of coffee and serve avocado on toast to each other," Mr Barrie said.
Gross domestic product grew by just 0.5 per cent in the June quarter, dragging year-on-year growth to 1.4 per cent as Australians struggle with stagnant wage growth and a crippling debt-to-income ratio.
Mr Barrie, boss of ASX-listed freelancing marketplace Freelancer.com, says the fastest way to turn this around is to encourage youngsters to be leaders in more practical, high-skilled industries.
"If you get enough people into the right jobs, then four years later they go into the workforce, they get high-paying jobs, they start companies, they create income tax, and benefits flow from that," he told news.com.au at a Yahoo Finance conference recently.
"Plus they also increase the skills level because when they start these companies, they train all the employees they hire."
The entrepreneur said year 10 students needed access to pathways to jobs with a greater ability to stimulate the economy.
"We've created this insane leaderboard in the HSC, which is basically medicine and law; they're the best subjects.
"Everything else doesn't really matter and every parent, every teacher and then every kid thinks, 'I've got to do medicine or law'.
"We don't need any more lawyers in the world. There are plenty of other jobs that are far more important to the economy right now.
"We've got to fix the secondary school system, which is an 18th century relic training people for jobs that don't exist."
Mr Barrie told news.com.au a more productive population would bump-up wage growth.
"If you're going to have high wages you need to be high value producing in the value chain. You can't be serving people a couple of cups of coffee and expect high wages.
"You've got to be doing advanced manufacturing like robotics or sophisticated products and services with a high margin.
"And that's what we've let fall apart. We need to have very sophisticated trade schools in the country so people can learn advanced skills, mechanical engineering and electrical engineering in order to produce these products and services and infrastructure.
"We don't do that. It's basically you're a doctor or you're a lawyer, otherwise you're a failure and that's pretty much it."
Shadow minister for innovation, technology and the future of work, Clare O'Neil, agreed improving the education sector was the best way to correcting Australia's anaemic economy.
She told the same finance conference that federal funding wasn't translating to better results.
"We haven't had a really good conversation in Canberra about why, even though we're spending more money on schools all the time. Our performance is pretty static or in some instances declining," Ms O'Neil said.
"Wherever I go around Australia there's a big disconnect between that pointy end of the education system and the needs of business.
"And it just amazes me that after knowing that's been a problem, for probably 40 years, we haven't found a solution."
Mr Barrie said Australian skills had fallen behind because of the inaction of politicians and uninspired workers within the sector.
"It's a complete basket case because education is the remit of state governments and you've got a lot of teachers who are frightened of technology because their job is threatened," the entrepreneur said.
"It's the teachers that are holding things back, and because it's all controlled by the state governments you have all this duplication, bureaucracy, glacial movement of the system and all these entrenched people in positions that you just need to reinvent it."
He said this had created fiscal issues for a country too reliant on commodity exports and a bloated housing market.
"The Australian economy is completely cactus," Mr Barrie told news.com.au.
"We've let manufacturing completely fall apart and we're just deluding ourselves thinking we're a wealthy country just because we've got inflated house prices and because we've got an immigration program to prop up tax receipts and prop up the housing market.
"It's going to end in tears - households are already at capacity in terms of their ability to pay rent and buy houses."