Jane Caro and
Lyndsay Connors

Flaws in Coalition’s schools funding

The Coalition won the recent federal election at least in part on its reputation as the better economic manager. It claimed it could be trusted to take care of taxpayer dollars. But does this stand up to scrutiny? Frankly, not when it comes to the way the government funds our schools.

The Coalition’s version of Gonski – usually referred to as Gonski 2.0 – borrowed the rhetoric of the original scheme, claiming to be needs-based and sector-blind. But its actions gave the immediate lie to that. Having decided to adopt the national resource standard at the centre of that scheme, the government then committed to providing private fee-charging schools with 80 per cent of the public funding required to meet that standard, while promising public schools only 20 per cent of their required funding. State governments were to be “encouraged” to do the opposite.

Gonski 2.0 was a sector-based, needs-blind scheme from the start.

Of course, some argue that – thanks to the support of the states – private schools still receive less public money per student than public schools. So, what’s the problem? In our view, that’s a fundamentally misguided question.

Despite statements by the federal education minister, Dan Tehan, about “record funding” for education, far from closing the gap between advantaged and disadvantaged students, Gonski 2.0 appears to have done the opposite.

According to the ABC and researcher Peter Goss at the Grattan Institute, nearly one in three private schools now get more government funding than public schools that enrol a similar number of students from comparable socioeconomic backgrounds. A decade ago, that figure was one in 20.

Education editor Jordan Baker revealed in The Sydney Morning Herald that public funding from both levels of government has risen by $155 a student in public schools during the past decade, while it has risen by $1429 a student in private schools.

Put to one side the morality or injustice of such an imbalance. In the spirit of the times, let’s be ruthlessly hard-nosed.

As Tehan has pointed out, taxpayers are investing a lot of money in schools. Tehan fails to mention, however, that about two-thirds of Australia’s children attend schools that are totally dependent on public funding – public schools. One-third attend private schools, which combine their public funding with uncapped fees. Yet successive governments, particularly Coalition federal governments, have given a higher priority to increasing funding for the latter.

This seems absurd, even if one ignores the fact public schools serve a disproportionately high – and private schools a correspondingly low – proportion of educationally disadvantaged students, including those in regional and rural areas, those from non-English-speaking backgrounds, Indigenous students, refugees and those with a disability.

In unvarnished economic terms, it appears the government has made a value judgement, deciding kids in private schools represent a lower risk and a likely higher return on investment.

If so, are they right? Has our increasing investment in the students who attend fee-charging schools borne fruit?

Analysis by Dr David Zyngier at Southern Cross University of Victorian Certificate of Education results between 2014 and 2018 found that public schools achieve similar or even better results than private schools that enrol students from similar sociocultural backgrounds. And these public schools achieved these results far more efficiently than their wealthier counterparts.

In fact, over the past decade, the performance of Australian school students has fallen across the board.

The performance of the most disadvantaged kids has fallen further and faster than those luckier in the lottery of birth, but even the lucky ones are doing worse than their older peers once did. The Public Education Foundation estimates the fall in performance by Australian school students from 2009 to 2015 has cost Australia’s economy $118.6 billion. By anyone’s measure that’s a lousy return on investment.

So, if generously increasing the amount of taxpayer money invested in more fortunate students enrolled in fee-charging schools has not improved their performance or even just stopped their decline, what reasons are given for the largesse?

Two arguments are used to justify Australia’s unique system for investing in schools. One is that private-school parents pay tax as well, so their children are entitled to taxpayer support. This seems to be based on a misunderstanding of how taxation works. After all, shouldn’t childless taxpayers get some kind of rebate if that logic holds?

Such an argument also misunderstands the purpose of education. It is a service offered to children, none of whom pay tax.

Why should private schools be getting so much support – more federal support than public schools – when they do not shoulder a corresponding share of the responsibility for the compulsory education of all students, which demonstrably benefits all Australians because it creates an educated general population? Why is it acceptable for private schools to receive money from all taxpayers when these schools are not accessible to all taxpayers’ kids?

We have resisted mentioning the extra $4.6 billion our former treasurer, now prime minister, suddenly magicked into the coffers of fee-charging schools last year – with no equivalent funding, of course, for public schools. Should private schools be getting this funding when it isn’t actually improving anyone’s performance? In fact, it may be indirectly depressing the performance of disadvantaged students because too much funding is being directed away from the schools they attend.

The other justification advanced by government for their level of private-school funding – one of the most generous among OECD nations – is that it gives parents more choice of schools. One can only presume this means the public subsidy keeps private-school fees within reach for, well, one-third of families. But does it?

The Australian Scholarship Group has estimated the cost of educating a child in a private school has increased by 61 per cent during the past decade. How is this sustainable, particularly for parents, most of whom cannot afford the fees already?

Well, as we have seen with the childcare rebate, the first-home owners scheme and private health subsidy, the public subsidy of private supply may actually drive prices up, rather than keep them down. This is because, unless you cap the fees that schools – or childcare centres, or health insurers – can charge in return for the subsidy, the private providers merely pocket the government money and charge what they would anyway. It’s Economics 101: the market will charge what the market will bear.

Worse still, our funding system may also have increased the cost of educating children in public schools. Using public funding to sustain and expand a private-school system for one-third of students (a far greater proportion than in most other OECD countries) has reduced the capacity for economies of scale in our public system, and has also left it to increasingly shoulder the responsibility and the costs of educating those students who need the greatest support, driving up the per-student cost in public schools across the board.

To sum up, if the way we fund schools has not increased – or even maintained – academic performance overall and may, in fact, have actively depressed the performance of our most disadvantaged kids, how can we claim to be getting any kind of return on our investment?

If the way we fund schools has not lowered the cost to parents – in either public or private schools – and may, in fact, have driven it up, how is that good fiscal policy?

Imagine, for a moment, that Australian governments had chosen a different path 30 years ago and decided to fund the public education system to make it among the best in the world. A few parents, as they do everywhere, would still have chosen private schools for various reasons, but most Australians would have kept faith with the public system. Imagine how much money, both public and private, we could have saved in those three decades and what we might have invested it in?

Instead, governments have adopted schools funding policies for which there has been little educational or social justification, and which have contributed to inequality and to socioeconomic stratification of our schools. At the same time, they have shown a disregard for such economic considerations as efficiency, effectiveness and productivity, which should be central to public investment. Especially by governments that boast of being better economic managers.

This article was first published in the print edition of The Saturday Paper on June 7, 2019 as "False economies of Gonski 2.0 ".

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Jane Caro is a Sydney-based novelist, writer and documentary maker.

Lyndsay Connors has held senior positions in education at state and national level.

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