Opinion & Commentary
Simple ambition for all schools
The people who can explain in detail how school funding works in Australia could probably be counted on one hand.
As federal education minister in 2009, Julia Gillard described school funding as complex, opaque and confusing. If anything, this is an understatement.
Each state and territory government has different systems of allocating funds to public schools and to non-government schools. In the case of public schools, in some states there has been a move to student-centred funding formulas with multiple variables, while other state systems have the relics of decades-old industrial agreements based on teacher demands. In all states there are various idiosyncrasies with historical and political precepts. In addition, public schools receive money from the federal government for special programs and initiatives.
Non-government schools also receive a mix of funding from state and federal governments. As they are mostly per capita payments, the mechanisms are more transparent in this sector but are still complex and multi-layered.
And this is just recurrent funding. Capital funding to all sectors is even more complicated, involving state contractors, funding by submission, priority lists, sliding scales of interest subsidies, block grant authorities and numerous other factors. It makes the Building the Education Revolution look like child’s play.
The need for a comprehensive review of school funding is undeniable. It is a long time since funding to all schools has been scrutinised on a national scale. The last several inquiries and audits have focused on non-government schools rather than considering the school funding apparatus as a whole.
The system by which the federal government funds non-government schools has operated for close to a decade.
Commonly known as the SES funding scheme, which stands for socioeconomic status, it calculates a school’s entitlement based on the average SES of its students. Schools with higher proportions of children with low SES should, in principle, receive higher amounts of per capita funding.
While admirable in intent, the SES system has become fraught in application. There are errors inherent in estimating SES using census district data rather than individual household information. And a report by the Australian National Audit Office revealed that in 2006 only 53% of non-government schools were being funded strictly on the basis of their derived SES scores.
The rest were receiving funding negotiated by intermediary organisations, such as the Catholic school authorities, or were provided with a guarantee to maintain their pre-SES scheme funding levels.
When a system designed to cater for an entire school sector is applied to only half of the target schools, there is good reason to argue it is not working.
Likewise, there is plenty of reason to believe public school funding needs a serious overhaul. There are observable disparities between public schools in neighbouring suburbs but whether this is due to poverty of funding or poor use of resources is unclear. A 2007 report on primary school funding by Max Angus, Harriet Olney and John Ainley found it was near impossible to ascertain an individual school’s total income, but survey results showed schools with the most socioeconomically disadvantaged students were receiving only an extra $300 per student on average. This will have changed with the National Partnerships Program, which provides substantial funding to needy schools, but this is yet another layer of temporary ad hoc funding.
The release of the discussion paper and draft terms of reference for the current school funding review encountered a mixed reception earlier this year.
Despite Gillard’s reassurances no school will lose a dollar, in the sense that their budget per student will not fall in dollar terms, non-government schools and their representative organisations are nervous.
The responses from the Independent Schools Council of Australia and the National Catholic Education Commission released in April both point out that funding freezes are not ruled out. Freezing a school’s funding allocation is outwardly consistent with the promise no school will lose money, but over time it is a reduction in funds in real terms.
Also of critical concern to independent schools in particular is the issue of private contributions. ISCA estimates some 60% of the total income of non-government schools is from private sources (and 80% of capital funding). It is seeking to ensure any new school funding system does not discourage these investments.
Whether and how to factor in the resource disparities created by private contributions represents the single greatest challenge for this review.
The final terms of reference were released on Friday. Their neutral tone with regard to school sectors is preserved and some changes have been made, with the inclusion of governance issues that affect funding efficiency, such as budget autonomy. Significantly, the question of a base-level entitlement is retained and the role of government funding in enabling choice is acknowledged. Even so, it will take more than the right words to convince non-government schools and their families they have nothing to fear. The Australian Labor Party has a chequered history when it comes to non-government schools.
It is hard not to be suspicious about the review’s timing and the schedule for implementation. The report is not due until 2011, delaying real debate until well after the election.
However, in some respects this is also positive. It will allow time for a proper evaluation, away from the populist pledges of election campaigns.
Whenever this debate happens, it will be in an electorate that has come to value choice and diversity in schooling as much as equity and stability.
Any funding proposal will have to reflect this new reality.
