Perhaps you remember the ladder of opportunity. It was then opposition leader Mark Latham’s pitch for the 2004 election, directed at aspirational voters who were concerned – rightly, as history has since shown – by the increasing inequality and declining social mobility resulting from the policies of the Howard government.

There were a number of rungs to Latham’s ladder, but all the focus fell on one. That was his plan for major change to the funding of Australia’s schools.

His proposal was to cut $520 million of federal government funding from 67 of the nation’s richest private schools over five years, and to freeze funding at existing levels for 111 others. The savings from this were then to be redistributed among the most needy government and non-government schools.

It was based on a formula that determined all primary schools should receive $9000 a student, and all secondary schools, $12,000. All the targeted schools, Latham said, already received more than that in fees alone.

Then prime minister John Howard called the policy “class warfare”. The wealthy private schools warned of fee hikes and a flight by students to the government schools, which would not be able to cope. The plan was savaged in the conservative tabloid media, which called it a “hit-list”.

A few weeks after the announcement, Latham lost the election. Indeed, there was a significant swing to the government. And that was the last time anyone in either of the major parties dared suggest that private schools received more taxpayer support than was fair and that maybe something should be done to redress the situation.

Until last Monday week, that is, when the current education minister, Simon Birmingham, suggested some wealthy private schools were overfunded. He stopped short of saying they would lose money, but the logical inference was they should.

1 . Labor response

The political response was very like 2004, except with the roles reversed. Now it was Labor talking about a government hit-list.

“Which kids will be robbed by this minister,” demanded Labor education spokeswoman Tanya Plibersek, “who seems incapable of being upfront about his secret plans for school funding?”

It may well be that Plibersek was hoping to bait Birmingham into actually naming private schools that were in need of fiscal trimming. It may be that she intended to use the intense media attention attracted by his admission as a point of contrast with the billions he plans to cut from government schools.

But it looked to a lot of people like she was defending elite private schools.

She wasn’t, of course. Plibersek is a strong advocate of public schooling and one of the very few in parliament who is not only state educated herself but who sends her children to state schools. 

Equally, though, she was scrupulous to avoid giving the impression she was attacking elite schools. Ever since the Latham debacle, Labor has lost heart for that fight. The lesson they took from 2004 was that taking on the non-government schools was electorally perilous.

That prevailing wisdom is very questionable, however. If you go back and look at the polls from 2004, they show Latham’s schools funding policy was actually very popular. Sixty-five per cent of the electorate supported the idea of taking money from rich private schools and redistributing it. So, whatever the voters’ reasons for rejecting Latham, his school funding plan was not one of them.

Polls consistently show two-thirds of Australians want a more equitable education system. The fact this proportion is about the same as the proportion of people who send their kids to state schools perhaps indicates an element of the politics of envy. But there is more to be concerned about than that. The evidence strongly suggests our segregated school system is making Australia less globally competitive. In colloquial terms, a dumber nation.

Year by year, in one international comparison after another, we are sliding down the global rankings. In the most comprehensive of these, a year ago, the OECD assessed the performance of 15-year-olds in 76 countries. Australia ranked 14th, behind some surprising places, such as Poland, Estonia and Vietnam. 

2 . A unique system

We’ll get to the likely reasons for this shortly. First a little background on our unique school education system.

Sometimes, for cultural or historical reasons, countries develop systems in particular policy areas that are peculiar to them – in both senses of the word. Think of Japan’s sentimental protectionism of its agricultural sector or the United States’ crazy gun laws. They have their roots in the culture – in one case the urge to self-sufficiency and in the other to self-defence – but have maintained outsized political power long after they’ve been shown to be harmful.

Australia’s school system is like that. It is peculiar to us. Schools elsewhere are one thing or the other: they either run on government money or they run on private money. Only in Australia can they get funding from both sources. Elsewhere, if parents decide they want an elite education for their children, they pay elite money. Nowhere else in the developed world do the taxes of people on modest incomes help support schools to which they could never afford to send their children.

National peculiarities tend to be rooted in cultural or historical contexts, and the story of how the Australian school system came to be this way began as a cultural one, rooted in the sectarianism of 60 years ago. Catholics wanted their own schools but state governments, which were responsible for all education funding, were reluctant to fund them.

“Catholic schools in the UK and Canada and New Zealand are considered public schools, because they receive public funding and don’t charge fees,” says Laura Perry, associate professor of education policy at Murdoch University.

But not here, so Catholic schools in Australia were poor. In 1964, the conservative government took some pity on them and provided some direct, one-off grants.

3 . Recurrent grants

Recurrent grants began under the conservatives in 1970. At first, as a flat rate per non-government school student, but in 1974 the Whitlam government extended the largesse to state schools and also introduced special targeted programs for disadvantaged schools, special education, teacher professional development and innovation. 

It remained the case, however, that state governments were the major funders of state schools and the federal government the main funder of non-government schools.

 And it grew from there. We need not go into all the subsequent policy shifts, but one big one deserves mention.

That is the so-called socio-economic status (SES) funding model introduced by John Howard’s education minister, and leading light in the Institute of Public Affairs, David Kemp.

It purported to ensure needs-based schools funding, but in practice greatly increased the money going to private schools, particularly elite private schools.

By the calculation of Perry, and Emma Rowe of Deakin University, per student funding for private schools went up by $1584 between 1999 and 2005, compared with $261 per state school kid.

The figures are worth noting not only because they highlight the inequity of the Howard government’s approach to schools funding but because they coincided with another significant development in Australian education.

4 . Sliding down the rankings

At the same time as these payments were increasing, Australia started to drop down the international education rankings.

Kemp and others on the conservative side of politics attributed this to inadequacy in the state school system and suggested things could be improved by greater “choice” in schooling – read: more private schools. 

One new senator, in his first speech in 2007, had this to say: 

“I believe that choice is also a major piece of the puzzle of providing the best education to young Australians. Families who can afford to choose between an overly bureaucratised government school and a responsive private school have voted with their feet in recent years. They have shifted en masse from the public sector to the private sector. Thanks to the policies of this government, more parents have been able to afford that choice.”

He went on to suggest a voucher system, to enable even more to shift out of the government sector. That new senator was Simon Birmingham.

A few months after Birmingham’s speech the government changed and so did the rhetoric, but the trajectory of funding for government and non-government schools continued to favour the latter.

As Perry and Rowe note: “Overall, total public funding (federal and state) has increased at a greater rate for private than public schools. Analyses of data from the Productivity Commission showed that total public funding has increased by 9.8 per cent for private schools but only 3.3 per cent for public schools over the last 10 years.”

The last Labor government did, however, take a more evidence-based and less ideological approach to determining the reasons for Australia’s slide down the educational rankings.

In 2010, then education minister Julia Gillard commissioned a major review of school funding conducted by an “expert panel” chaired by businessman and philanthropist David Gonski. In November 2011 it produced the so-called “Gonski report”.

5 . Call for extra spending

It said that all government funding should be “sector-blind” and needs based. That is, all schools should have the same base funding, plus extra loadings according to the relative disadvantage of their students. It also called for a huge amount of extra spending.

It was politics that made it so expensive, as Gonski explained in one of his rare public comments on the matter, giving the Jean Blackburn Oration to an audience of educators at Melbourne University in May 2014.

“We knew that the additional cost to governments, which we noted was $5 billion, based on the 2009 numbers, was a large number. But we also knew that it was an increase of just under 15 per cent of all government recurrent funding for schooling that year ...

“Our calculations were based on our terms of reference and the announcement of the government of the time that ‘no school will lose a dollar per student as a result of the review’.

“Obviously on that basis any change we proposed to existing funding of necessity would involve more money. If you have a cake and the portions are already divided, if you want to give more to any, you need additional cake.”

Carmen Lawrence, former Labor premier, now professor of psychology at the University of Western Australia, was a member of the Gonski expert panel and she, too, says the whole exercise would have been much cheaper but for the fact Labor was still haunted by the ghost of Latham and the 2004 election.

That’s why Gillard insisted that nothing could be taken away from overfunded elite schools. And that, says Lawrence, was a big mistake.

“I don’t think there’s any doubt that the community by and large doesn’t like the elite, segregated system that’s developed in this country over the past 50 years.” 

People understand that public education has been allowed to “erode in favour of privilege”, she says.

“Even if people don’t understand the detail, they understand the dynamic. And I think they mostly resent it.” 

And so Labor’s lack of courage gave the country a more expensive and somewhat inferior reform from the start. Other compromises and mistakes were made in the process of trying to implement the recommended changes. The states, encouraged by Tony Abbott’s opposition, played ducks and drakes about signing up, which resulted in differing deals for different jurisdictions. Labor back-end loaded the greater part of the cost beyond the forward estimates of the budget.

The eventual deal saw commitment to get all schools funded to the 95 per cent of the resourcing standard set by Gonski, with the states to cover 30 per cent of the cost. Still, because of the previous commitments to increasing funding to private schools, it would take 100 years before state schools and the wealthiest independent schools were equally funded.

6 . Positions keep changing

Meanwhile, the opposition parties repeatedly altered their position, first opposing the reforms, then just before the 2013 election promising to honour them, then reversing their position after the election, then saying they would not fund Gonski past 2017. 

The 2014 budget claimed $80 billion of cumulative savings in health and education by 2024-25, compared with the spending arrangements put in place by Labor. About $30 billion of that was from education.

Some money has since been recommitted, and the current government will spend more on education over coming years. But what is promised is significantly less than the “full Gonski”. About $29 billion less, on the government’s own figures.

Birmingham is negotiating funding arrangements with the states, trying to divide them on the basis of the different funding deals they struck in the past. So far, they have refused to be divided.

Through all this politicking Australian education standards have been sliding.

In 2000, when the OECD began producing its Program for International Student Assessment (PISA) scores comparing the performance of different countries, Australia ranked fourth for reading, sixth for maths and eighth for science. 

By 2012, the country ranked 13th, 19th and 16th in those respective categories, albeit in a larger pool of 65 countries compared with the initial 41.

Equally concerning is the fact that the difference in competence among Australian students is greater than in many other countries. At the top end, we still do well; but we have a large tail of students who do not.

There’s no point blaming teachers for this, as another member of the Gonski expert panel, former NSW Education Department director-general Ken Boston, said in a recent speech.

“We found no evidence to suggest that teachers in our most disadvantaged and low-performing government, Catholic and independent schools are not as skilled as those in the most advantaged schools,” he said.

“We concluded that the issue in low-performing schools is not the quality of teachers in these schools but the magnitude of the task they are facing. These teachers work in the emergency wards of Australian education, yet they lack the battery of specialist support typical of an emergency ward in a hospital.”

7 . Huge gaps

Pete Goss, school education program director at Grattan Institute, underlines the point.

“Money has to flow to where it’s needed, and Australia has been pretty uniquely bad at doing that,” he says.

 “By year 9, the typical class will have a seven-year gap between the top 10th of students and the bottom 10th of students. So you will find a couple of students functioning at a year 11 level, and a couple functioning at a year four level. We are asking the teacher to do an extraordinary job, teaching them all at a level where they can all learn.”

Australia, like a number of other countries that are sliding on international comparisons, tends to have a competitive, punitive approach to underperforming schools, threatening their funding.

It is exactly the wrong approach, Goss says. “A teacher needs to be able to say, ‘I have been trying to get this kid to progress and I can’t. Help me.’ If you fear that someone will use that to fire you, you’re not going to say it.”

And they need more expertise, in the form of specialists, to provide that help. It should be “more disadvantage, more help”, Goss says.

In Australia, though, the kids in least need are the ones getting the most resources. 

Ironically, Gonski and other studies have shown that the school environment is less important for kids from advantaged family backgrounds than for those from low SES backgrounds.

“High SES kids, if they are put into heterogeneous classes, with a more diverse group of kids, suffer no penalty,” says Melbourne University professor Barry McGaw, a former director for education with the OECD.

“But low SES kids, particularly low-performing kids, if they are put exclusively in the company of other low-performing kids, suffer a huge disadvantage.”

A key to the success of many high-performing countries, he says, is that all schools are resourced the same, and have a heterogeneous student population.

He cites the example of Poland, which formerly streamed students into different schools on the basis of their perceived ability.

“Well, Poland, in 2000, abandoned that practice and made their lower secondary schools entirely heterogeneous – no selection at all. They were a low-performing system, and by 2003, when we did a second analysis, Poland was up among the Scandinavian countries.”

It became, in fact, the fastest improving of all countries, and now does better than Australia.

Sweden, of all places, provides the opposite example, as Pete Goss explains.

“They’ve had the worst slide in the OECD,” he says.

Back in 2000 the country was a top performer on the PISA scale. But as part of an economic liberalisation regime, the Swedish government opened up schools to private providers.

“They went for a model that aimed for improvement by getting schools competing against each other,” Goss says. “They said, ‘We’ll let the market do it.’ Their results went off a cliff.”

By 2012, Sweden had fallen to 28th place on the PISA list. A key factor in that decline, according to OECD and other analyses, was the introduction of a voucher system. It was intended to allow middle-class parents to select the best schools for their children. But it resulted in a huge increase in the achievement gaps among students. An OECD report released last year called on Sweden to “revise school-choice arrangements to ensure quality with equity” and “improve the access of disadvantaged families to information about schools”.

It is not known whether Simon Birmingham has read that report.

Laura Perry is careful to note that there are many factors affecting the way countries perform in educational attainment. But one thing that can safely be said to be “beyond doubt” is that “countries that do well on PISA tend to be countries that don’t have much difference between schools, that try to level the playing field between schools as much as possible, whether they have private schools or not. The more social segregation you see between schools, the kids at the bottom do worse than they would otherwise.” 

But no one in either of Australia’s political parties is prepared to seriously take on the task of redistributing money away from segregated rich schools.

Tanya Plibersek at least appreciates that the way to lift Australia’s game is to work towards “the ideal … notion that you can send your kid to your local school, with confidence, because they are all properly resourced”.

But she doesn’t want a fight with the elite schools. “The real fight is the billions the government has taken from schools already,” she says. “It’s not about a few private schools.”

Simon Birmingham is aware of the mistakes of the past. He told Radio National’s Patricia Karvelas that he had been “very careful, ever since becoming education minister and dealing with the budget challenges we have, to not repeat those Gillard government words that no school would lose a dollar”.

Sadly, though, he’s also been very careful not to say anything specific that might bring on the fight with elite education we really need to have.

For elsewhere around the world, other countries continue to climb past us on the educational ladder of opportunity. And we continue with a system that is, in both senses of the word, peculiar. •

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