Exploring inequities in Australian school funding

Australia’s Education industry is among the largest key sectors in the country, with education and health together making up a combined 13.4 per cent of Australia’s economic output.

Despite this Australia’s education system remains one of the most unequitable in the world among OECD countries, consistently ranking among the lowest nations for the equitable allocation of resources between disadvantaged and advantaged schools.

Associate Professor Emma Rowe discusses whether schools that receive public funding require more transparency and the steps that need to be taken to fix Australia’s school funding model.

How is Australia’s school funding model guided?

Australia’s school funding model is guided by a combination of Federal, State, and Territory Government contributions, along with private funding from fees and other sources.

The Federal Government provides significant funding, especially for non-government schools, covering at least 20 per cent of the Schooling Resource Standard (SRS) for government schools and 80 per cent for non-government schools.

State and Territory Governments are primarily responsible for funding government schools and contribute to non-government schools as well.

“A guiding principle of our school funding model is based on the concept of need – on paper, at least,” Dr Rowe said.

“We first started funding private schools because there was an argument that they needed funding because they were disadvantaged.

“We see this concept throughout our important policies or directions, such as the 1973 Carmel report or the 2011 Gonski report.

“We saw this concept of need gather more and more pace, so now we have needs-based recurrent funding.

“In practice, whether this happens is another question.”

What are Australia’s three forms of school funding?

Australia has three forms of public funding in schools, which are:

• Recurrent Funding – Funding based on needs, with additional support for students with disabilities, those from low socio-economic backgrounds, and other disadvantaged groups.
• Capital Funding – Capital funding for school infrastructure is provided through specific programs (such as new school buildings) and is not always tied to needs-based measures.
• Private Funding – Schools receive funding from fees, charges, and other private contributions. This is particularly significant for non-government schools

“Only one out of three of Australia’s public funding for schools is actually needs-based, which is recurrent funding,” Dr Rowe said.

“Two out of three forms of funding are not tied to any needs-based measure.”

“Because of this, we can start to see real problems in the way we fund schools.

What’s wrong with Australia’s school funding model?

Dr Rowe said Australia’s school funding model is flawed because it does not account for needs-based funding models when considering how much external funding private schools receive.

She suggests that capital funding should be applied uniformly across jurisdictions with a more equitable formula, as the current system disadvantages public schools, and that private income needs to be considered in needs-based funding models.

“There are three very clear problems in our school funding model,” she said.

“The first one is perhaps the most obvious, that recurrent funding targets for public schools are not being met, except for the Australian Capital Territory.

“If we’re thinking about funding for need, we’re absolutely missing that target. Recurrent funding targets should be met tomorrow, or met yesterday.

“The best we can do right now is the promise that these funding targets will be met in the future, pending a political party’s success.

“The second problem is that capital funding is not formally tied to any needs-based measure.

“I think there’s a good way forward in ensuring that capital funding is not ad-hoc and is applied the same way across jurisdictions.

“There needs to be a formula that is far more equitable than the current system when it comes to capital funding, and we’re seeing public schools losing out as a result.

“The other problem is private income. Australia relies on private income in its education system a lot more than other countries, and parents are contributing a lot more on average for education in Australia.

“This constitutes a really important form of income that’s coming into schools that we need to consider in relation to needs-based funding models.”

Should there be more accountability for schools that receive public funding?

Dr Rowe argues that schools receiving public funding need more accountability.

She believes that the current requirements—adhering to the Australian Curriculum, participating in NAPLAN, and reporting results—are insufficient, suggesting that the government should regulate student enrolment and tuition fees for these schools.

She said if schools receive public money, they should be more transparent and give back to the public by allowing a central authority to determine their student intake.

“These are schools which are serving the public, are publicly funded, and are providing compulsory education,” Dr Rowe said.

“We should have an expectation that there will be some give and take and some accountability, in terms of how schools receive public funding and how they serve the broader public.

“Currently, the only string attached to the funding that private schools receive is that they have to adhere to the Australian Curriculum, they must participate in NAPLAN, and they must report NAPLAN results.

“In my view, these strings attached are not sufficient.

“What research tells us is that there are key things which the government should be regulating or requiring from schools that take public money, which is student enrolment (how schools select students), and tuition fees.

“If schools are taking public funding, then a central authority really should be determining their intake – the private schools which receive public funding should not be the ones determining the intake and determining rules about who they take and don’t take.

“If you’re getting public funding, you should be giving back to the public.”

“We see that private school tuition fees are increasing at exorbitant rates, and that’s because they can,” Dr Rowe said.

“If it continues like this, there’s no reason to think they will stop increasing.

“In order to have more power back to the voting public, it’s a case of making the system more equitable for everyone.”

Watch Emma Rowe discuss public school funding: