The Gonski review: finding a path through the school funding maze

The University of New South Wales Chancellor, David Gonksi, is chairing a review into school funding. AAP

As a five member panel headed by noted business figure and University of NSW chancellor David Gonski reaches the final stages of its review into the structure of school funding in Australia, lobbying by various interest groups and affected sectors is in overdrive.

The Gonski review represents an opportunity to reform a system that many see as fundamentally flawed. But with such an array of vested interests – many, like the independent school and Catholic sector, wielding significant political influence – can the panel genuinely hope to broker significant reform that is palatable, if not pleasing, to all involved?

Melbourne University Professor Jack Keating, Leader of the Education Policy and Leadership Unit within the Melbourne Graduate School of Education, explains how the system works now and where it needs reform.

What should the Gonski Review aim to achieve?

There are two things. One would be to move some way to reconciling what has proven to be an intractable debate over the funding of government and non-government schooling which has been particularly difficult over the last 30 years, but arguably goes back more than a century.

The second thing would be to try and underpin in a strong way the current interest in equity in educational outcomes with a funding regime that recognises those issues but also provides incentives for schools and state and territory governments to deliver programmes that will make a difference.

Is there a structural unfairness or inequity in the way non-government schools are funded in Australia?

The short answer is yes, there is.

It is not so much because non-government schools have higher levels of revenue, that’s a difficult debate and I think broadly, if you take the five per cent of high fee schools the three sectors get roughly the same amount of revenue, it’s a combination of public and private revenue.

But the inquity is over the fact that the conditions under which the two sectors [private and government schools] operate under are radically different. The non-government sector with equivalent levels of revenue have autonomy over their enrolments in particular and over their appointment of staff.

It is only the government sector that carries the public responsibility of educating all. That inherently makes the non-government sector selective in its enrolments and therefore this is unfair.

Is this structural differential the same in state and federal government funding streams?

State government take responsibility for government schools, that is their priority. The Commonwealth government largely takes responsibility for funding non-government schools.

They fund non-government schools at a figure approaching 25 per cent of the average cost of funding a government school That’s a maximum level which would apply to low-fee schools.

The Commonwealth funds up to about 50 per cent of that average cost, arguably a bit more in some cases. The state government funding mechanisms are quite varied, especially for government schools but also for non-government schools, but they work on a basis of having a base level of funding of all schools so they can then operate and have a capitation-based payment.

The funding is either through a budget allocation or through a resource allocation, which is staff, or a combination of the two. You get quite a variation across the state.

The Commonwealth funds in different ways. They fund about 10% of the cost of government schools which they do through a grant to state governments. It has been a little higher recently because of the National Partnership process but that will go back to a 10%.

For non-government schools the traditional method was what is called the Education Resource Index, the amount schools were funded was based on their private income. That was changed under the Howard Government to what we call the Socio-economic Status Model (SES).

That’s a measure of the schools socio-economic profile which has been drawn from various statistics. It is an index for resourcing but at the same time, the Commonwealth guaranteed no disadvantage to schools.

So those schools that wouldn’t have benefited from the SES stayed on the old model.

There’s a third model, which is used for the vast majority of non-government schools, are funded at a set rate, an agreed rate between the Commonwealth and the Catholic Education Commission.

So there is three main funding models and they bear scant relationship to each other.

Should the SES be reformed? If so, how?

It should be reformed for three reasons. One is that we know from looking at census data that there is selectivity within collector districts. The real SES of a student is different to the SES measure that they are give, not always, but on average. The real SES is higher than the measure that is drawn from the collector district and that accounts for a substantial amount of funding.

The second reason is that this is only a proxy. What SES is purporting to measure is scholastic need. The SES doesn’t measure that, it measures various constructs of income, family background, that sort of thing and because of the way private schools operate – they charge fees – [SES] is providing cultural incentives for a select group of the community.

That it is what you get, you will get a scholarship student who is coming in from the western suburbs with an ATAR of 99 but will have a low SES and thus the school will get a higher rate of funding for that student.

The school can continue to charge high fees but have a situation where their SES might be relatively low.

The third reason is that SES should be used on the basis of a needs-based funding regime that is built on top of a minimum resource standard. So we should say “What is the minimum resource standard?” and then say, “Well, there are students who actually need more” and we can quantify those needs in terms of program delivery and we should be funding that.

In theory you could get a school which charges very low fees but have very high SES students and end up with a revenue base that is tiny because they are getting low government funding and not charging very high fees.

And you can get the opposite. I think it is illegitimate funding means. Elements of the non-government sector – not the Catholic sector – like it because they benefit out of it.

Is school funding an intractable political problem? When the Gonski report comes out, is it inevitable that nobody will be happy?

You’d have to be Peter Pan to not realise that. It is inevitable. The main problem is that when you have to got to make major changes, you do it at a point when you can make major investments to smooth out some of the cries and complaints [from vested interests]. It is difficult to do that.

We saw that with the Labor party in 2004 with their position of not funding the highest income schools and they had to drop that. No other OECD country funds schools at that income level but we have managed to get into that situation in Australia.

I think the pivotal question is the Catholic sector. It has always been major political factor, going back to the 1860s when the colonies took the decision to establish state education as we know it which didn’t include faith schools, largely around the suspicion to the Catholic sector.

The collapse of that settlement in 1970s with the Commonwealth coming in has caused a problem and because the Catholic in deep strife and other countries have mostly included the Catholic sector within their publicly funded sector on the same basis as government schools but we haven’t been able to do that for historical reasons.

I have always had the view that if you could reach a settlement with the Catholic sector and provide them with security and say “Right, you’ve got guaranteed funding which is sufficient and fair” and if you do that, you then have a platform to build a fairer and more transparent school system.

Whether that is possible I don’t know. There has been some interesting stuff coming out of the Catholic sector, although their submission [to the Gonski review] seemed to be fairly traditional.