The neoliberal approach to education policy is to understate education's social value, valorise its economic role and emphasise the private returns to individuals who ‘invest’ in it. Employing such a narrow set of assumptions makes it easier to attack the efficiency of public education institutions and champion market-based mechanisms for distributing funding (Chubb and Moe, 1990; Norton, 2012). In contrast, social democratic perspectives, while acknowledging its economic value both to individuals and to nations, also emphasise education's social role in ‘civilising humanity’ and are concerned about the fair distribution of educational opportunities and outcomes (Nussbaum, 1997; Dreze and Sen, 2003). The narrow assumptions of the neoliberal consensus have now gained such ascendancy, that few politicians have the courage to defend their education policies in social terms alone. As a result, agendas are invariably framed in terms of both economic objectives and social goals, conveying a ‘hybrid mix of the neo-liberal with social democratic aspirations’ (Lingard, 2010, p 1) that lead to apparent contradictions in policy and practice.

This chapter explores how the Australian Labor Government accommodated the neoliberal consensus in its national education policies between 2007 and 2013. The chapter focuses on federal education policy initiatives in schooling and higher education as these two sectors are primary vehicles for social and economic mobility (Ball, 2003). However, it is acknowledged that Australia's vocational education and training (VET) sector has also been the target of extensive neoliberal reform which has diminished its capacity to contribute to social outcomes (Smith and Keating, 1997; Wheelahan, 2007). The concluding section discusses how education policy needs to change to address the social and economic challenges of the 21st century.

Structural inequalities in higher education

Today, in spite of 150 years of public funding, access to Australian universities remains unequal. Although the total number of domestic undergraduate students more than trebled over the 35 years from 1974 to 2009, the proportion of higher education students from the bottom socioeconomic quartile (i.e. the bottom 25%) has remained, since 1989, at 15% (Bradley et al, 2008, p 12). In 2007, men with a university-educated father in Australia were still 2.8 times more likely to have graduated from university than other men, while women with a university-educated father were 3.7 times more likely to have graduated than other women (Chesters and Watson, 2012).