Bid for our schools silent and sinister

By JOHN MINTO*

A quiet revolution is being organised for our public services. Unlike the very public revolution led by Roger Douglas and the Labour Party in the 1980s, this Government is keeping this revolution very quiet.

It is coming about through the General Agreement on Trade in Services (Gats), one of 15 international agreements being negotiated under the auspices of the World Trade Organisation.

The agreement aims to "liberalise" trade in services - that is, to open them up to private enterprise without Government restrictions or regulations. "Services" here means "anything you can't drop on your foot", according to our Ministry of Foreign Affairs and Trade, and includes our education system.

In a bald statement on where Gats is heading, investment banker Merrill Lynch has predicted that through commercial pressures and Gats, all education worldwide will be privatised over the next 10 years. For private corporations there will be huge financial gains to be made.

How would this come about? The general rules of Gats include that the best treatment accorded to any foreign service provider must be accorded "immediately and unconditionally" to all foreign service providers. Alongside this are rules that require the treatment of foreign providers to be the same as the best treatment given to domestic service providers.

Nor must there be any restriction on the number of these foreign providers the Government will agree to fund.

Our Government is playing down any risk to public education by saying that only private education is covered by Gats. That is at best misleading and the grave implications for our public education system cannot be understated.

The Government quotes Article I:3 which says that services are excluded if they are "supplied in the exercise of governmental authority", but this same article goes on to say that such governmental services are excluded only if they are supplied "neither on a commercial basis nor in competition with one or more service suppliers".

In reality our education system is tied in because the Government funds most areas of education commercially or semi-commercially. In our tertiary sector, the explosion in funding for private tertiary education under today's minister, Steve Maharey - from $7 million in 1999 to $150 million this year - will make it impossible to deny Government funding to any foreign provider on the same basis as these local private providers.

Even in compulsory schooling the Government gives substantial subsidies to private schools. How will we argue that this funding is not given on a commercial basis or that our public schools are not in competition with these private schools and, therefore, not covered by Gats?

Our Government apparently still clings hopefully to the belief that public education is somehow protected but the WTO secretariat itself agrees only that this may be the case. But it is clear from the international trend towards commercialisation that Gats' Article I:3 will be interpreted narrowly and increasingly so as time passes. Having committed to Gats, it will become impossible to resist the slippery slope.

The critical point, though, that makes protection of our public education system at best token is that it will not be the Government which decides if it is funding schools on a commercial basis or if our public schools are in competition with private schools.

This will be decided by a Gats disputes committee dominated by free marketeers which will convene in Geneva as soon as a foreign corporation complains to its Government that our Government will not extend subsidies to it on the same basis as it funds our public schools.

Should the corporation view be upheld, our Government will be liable to financial penalties payable to all affected parties.

Unless action from New Zealand citizens changes Government policy, the medium-term future looks bleak. It is a future in which foreign private providers could drain education funds and weaken our public education system so that privatisation for schools in wealthy communities appears a relief.

An extreme scenario? No. The Labour Government's approach to railways in the 1980s is an example of what can happen when public services are underfunded, commercialised and then privatised.

Other nightmare scenarios for education are almost inevitable under Gats. Even if we are nominally protected at present under Gats' abuse of monopoly rules, New Zealand could be cited if schools in our public education system offered courses which were offered by a foreign private provider. Again a Gats disputes committee would decide to what extent our education system was "in breach of its monopoly".

From the outset our Government had the opportunity to cite restrictions for our public education system but did not. In fact, it has made specific commitments in each of primary, secondary and tertiary education. And once a commitment is made there is no backtracking.

But there is more. Gats rules require members to enter into successive rounds of negotiations to achieve a progressively higher level of liberalisation. Movement in one direction only is allowed - that of commercialisation and privatisation.

To underline this, Gats contains other rules, including one on domestic regulations whereby negotiations are under way to develop "disciplines" to ensure any new Government measures do not constitute "unnecessary barriers to trade in services".

Still a further Gats obligation requires governments when making regulations to take the "least restrictive necessary" approach, to allow unrestricted free trade.

These rules mean much less freedom for governments to legislate in the best interests of their citizens or their public services and more freedom for private corporations to move at will.

A democratically elected New Zealand Government would be quite unable to roll back privatisation or commercialisation in our public services, for example, because the financial penalties from breaches of Gats rules could cripple the country.

With these rules it is naive for the Government to believe it can do some sort of balancing act between exporting educational services to other countries and protecting the integrity of public education at home. In today's international environment this is quite untenable.

It is ironic that the International Covenant on Economic, Social and Cultural Rights requires New Zealand to take measures to "prevent third parties from interfering with the enjoyment of the right to education". Under Gats this would be a lost ideal because under Gats there is no mechanism to require the Government to comply with its international human rights obligations.

Gats casts a long, dark shadow over our public education system and our community. It's time the lights came on.

* John Minto is the national chairman of the Quality Public Education Coalition.