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Katherine Forestier

Will Clem

Nobel laureate says the kindergarten sector will be undermined by curbs

One of the world's most influential economists has hit out at Hong Kong's plans for kindergarten vouchers as a 'very bad idea' which will undermine the sector.

Nobel Prize-winner Milton Friedman, known for his monetarist theories that influenced the Reagan and Thatcher administrations in the 1980s, criticised 'limiting the voucher scheme to a restricted sector of the market so it will curtail the amount of competition'.

However, Secretary for Education and Manpower Arthur Li Kwok-cheung defended the government's proposals in Legco, warning not to treat Professor Friedman's theories as 'orthodox' and saying the Education and Manpower Bureau would not 'blindly follow a man's thoughts from more than 40 years ago'.

The scheme, announced in the policy address, restricts vouchers valued at HK$13,000 for use in non-profit-making kindergartens that charge up to HK$24,000 a year for half-day classes.

'There is nothing wrong with having a voucher scheme but it has got to be universal and without restriction by anyone and by any kindergarten that satisfies the broad criteria, regardless of the income of the parent and the tuition fees of the kindergarten,' said Professor Friedman in an interview.

In a paper published in 1955, he was the first to propose the idea of vouchers as a means of giving parents greater choice of schools and to use competition as a means of upgrading the quality of schools. The Milton and Rose D. Friedman Foundation continues to campaign for the use of vouchers in the US.

'People who are not subsidised are forced to pay twice, once through taxes and once through tuition. There is no justification for discrimination,' he said.

'In general the place to get innovation and development begins with the high end where it is expensive. But these are the very people who will be ruled out,'  said Professor Friedman, 94, from his home in California. 'What is well understood is that the production role of the rich is to serve as a testing board for new developments and financial support for them.'

Competition, he said, would bring prices down so there would be places  for the less well-off. 'Price control in general is a bad idea. You really want to allow prices to be free so experiments can be made. People can offer something expensive and find out what works.'

He said there was nothing immoral in allowing the funds to buy places in profit-making schools. 'There are no public funds. They are all taxpayers' funds.'

But addressing the Legislative Council on Thursday to  acknowledge  the policy address, the education secretary said Professor Friedman's theories were out of date.

'I know that as soon as you talk about education vouchers, people will bring out Milton Friedman, as if since time immemorial only what he says is orthodox and if others want to make adaptations they are committing heresy,' Professor Li said.

'The world is changing every day, and every age and every place has different needs. How could we blindly follow a man's thoughts from more than 40 years ago?'

He rejected calls to make all kindergartens eligible for the vouchers, regardless of whether or not they were profit-making or how high their fees were. 'I run education, and must respect education,' he said. 'Investments in education must be for the good of students, not for the benefits of certain people running businesses.'

Professor Li also dismissed calls for the government to regulate kindergarten teachers' pay, saying it should be left to the free market.

'After the government has increased the funding of pre-school education and kindergartens have extra resources and stable income, they should be more able to hire good teachers for reasonable salaries,' he said.

He added that the government's voucher scheme was intended to increase funding for kindergartens, unlike most education vouchers which were aimed at increasing parental choice, introducing competition or allowing children from less well-off families to attend private schools.

'In Hong Kong, all kindergartens are private, they are competing with each other, parents are able to choose freely, and the 'fee remission scheme' already guarantees that no child will be unable to attend school due to economic difficulties,' he said.



Friedman condemns limits on vouchers