Fred Argy has a new Australia Institute discussion paper out on inequality and social mobility. The Australia Institute only have the first 10 pages on their website, but you can get the gist from reading his oped in today’s Age:
The economic case is often misunderstood. To address unequal starting opportunities is to correct a fundamental form of market failure, thereby enabling society to make fuller use of its citizens’ human potential. And it would, in the long term, reduce welfare reliance. True, higher taxes may have some secondary efficiency costs but these could be minimised in three ways – by choosing revenue instruments that do not distort economic choices and incentives; by making greater use of income-contingent loans such as HECS, in lieu of outright grants; and by funding some new social programs – those that are expected to enhance the stock and quality of human capital in the long term – out of government borrowing rather than current revenue.
The full discussion paper is, ironically enough, only available to those with a spare $21.
Update: More from Andrew Norton.