Victorian Education Minister Fails in His Response to Criticism of Funding Guarantee for Private Schools

Wednesday March 4, 2015

With its legislative guarantee that private schools will receive 25 per cent of expenditure on public schools, the Victorian Government has joined with the Abbott Government in sabotaging the Gonski school funding agreement.

A key feature of the funding model agreed between the previous Federal Labor Government and the Victorian Coalition Government was to move away from arbitrary, politically determined, funding percentages for private and Catholic schools, and to fund both public and private schools according to need. The objective was to develop an educational level playing field for all Australian children. In stark contrast, the Victorian Government has just written into law a percentage funding formula for private schools, which is a direct attack on the Gonski principles.

In response to criticism by the Gonski panel member, Ken Boston, the Victorian Education Minister, James Merlino, has claimed this is not important because state government funding of private schools is based on need. This is highly misleading, even disingenuous. The Minister’s claim ignores the fundamental fact that private school funding by the state government is based on public school costs instead of need in the private system. Some of the money may be eventually distributed according to need, but the total bucket of private school funding is determined by expenditure in public schools.

Under the legislation passed in the Victorian Parliament, the total amount of state government recurrent funding for private schools is determined as at least 25 per cent of total expenditure on public schools. That is, the total bucket of money given to private schools is determined by need in public schools, not by need in the private sector.

The number of disadvantaged students in the private school sector has no influence on the level of funding it gets from the state government. Indeed, the proportion of disadvantaged students in the private sector could decline but it would still get the same 25 per cent of the cost of public schools. Similarly, even if the proportion of disadvantaged students in private schools increased it would not attract any additional government funding because it is determined by expenditure on public schools. The Gonski funding model dispensed with this absurdity.

In Victoria, as elsewhere in Australia, disadvantaged students account for a much greater proportion of public school enrolments than they do in private schools. In 2013, 29 per cent of public school students in Victoria were from low socio-economic status (SES) families compared to only 15 per cent in Catholic schools and only eight per cent in Independent schools. That is, the proportion of low SES students in public schools was double that in Catholic schools and nearly four times that in Independent schools.

Similarly, the proportion of Indigenous students in public schools was three times that in Catholic schools and five times that in Independent schools. Overall, the proportion of disability students in public schools was double that in private schools.

On average, the school results of disadvantaged students are much lower than for other students and additional funding is provided to improve their results and to meet the higher costs of educating students with disabilities. This increases average expenditure across public schools.

This is where the unfairness of this funding system comes in. Despite having much lower proportions of disadvantaged students, Catholic and Independent schools get state government funding that is based on the costs of the public system which are higher because of its higher proportions of disadvantaged students. So, if the state government increased funding to government schools to address issues of disadvantage, at least 25 per cent of it would flow on to private schools, whatever their enrolment of disadvantaged students. This link sets up a perverse incentive for the private sector to reduce their already low commitment to disadvantaged students, and simply pocket the funding.

Once the total bucket of money is determined for private schools, some of it is then distributed according to need. Under what is called the Financial Assistance Model (FAM), there is a per capita component and a needs-based component to state government funding of private schools.

Each school gets a per capita component which is not based on need. It is the minimum level of state government funding for all schools. Schools such as Geelong Grammar, Scotch College, Brighton Grammar, Lauriston, etc. down to the poorest private school all get a per capita funding amount. This amount is very slightly modified according to a formula to determine each school’s capacity to support its student population. Lower SES schools get a slightly higher per capita grant than higher SES schools. The per capita component makes up about 40 per cent of state funding of private schools.

The needs-based component is determined by student and school characteristics. Schools attract additional funding based on the number of low SES, Indigenous and disability students. This needs-based component accounts for about 60 per cent of state recurrent funding of private schools.

However, funding for private schools that are part of systems such as the Catholic, Seventh-Day Adventist, Lutheran and Ecumenical school systems is given to the system authority, such as the Catholic Education Commission, to distribute to individual schools as it sees fit. There is no requirement for the authority to distribute the money according to the formula of the Financial Assistance Model. Moreover, the system authority is not required to demonstrate how the money is distributed. The Catholic Education Commission, for example, has consistently refused to divulge how its funding is distributed.

These system authorities account for the large majority of private schools in Victoria and the large part of state government funding for private schools. Yet, there is no public information available on how the money is distributed.

The lack of information on how taxpayer funding for private schools systems is distributed has been strongly criticised by national reports on school funding. A 2009 National Audit Office report (pp. 22, 85) and the Gonski report (p. 47) on school funding both criticised the lack of transparency on how school systems distribute taxpayer funds to their member schools.

The Minister representing the Minister for Education in the Legislative Council, Steven Herbert, told the Council last week that the Catholic Education Commission distributes the funding to its schools based on need. He said:

The Catholic Education Office has a fully grown system. We respect the system and we respect the way it operates, and it distributes the funding according to its formula of need and according to its needs.

But, the Minister did not say what that formula is. The fact is that the Government does not know. It is operating on faith that private school systems distribute their funding according to need. This is not enough for accountability to the taxpayer.

The contrast with its approach to public school funding is instructive. The Education Minister has promised to reveal how much federal and state funding each public school has received under the Gonski funding plan. He should do the same for private schools. School systems should be required to disclose how they allocate taxpayer funds to member schools.

Instead of obfuscating, the challenge is now for the Victorian Education Minister and the Victorian Labor Government to bring their education funding policies into line with those of Federal Labor and Gonski on what may be a key issue in the next Federal election. If they don’t, they will have simply joined Abbott and Pyne in their sabotage.

Trevor Cobbold

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New Figures Show that Government Funding Increases Favour Private Schools

Wednesday January 28, 2015

New school funding figures provided to Senate Estimates show that government funding increases for Catholic and Independent schools have outstripped funding increases for public schools since 2009. The percentage increase in funding for Catholic and Independent schools was almost double that for public schools despite the fact that public schools enrol the overwhelming majority of students in need of increased support.

Total government (Australian & state/territory) funding for Catholic schools across Australia increased by 19.5 per cent between 2009 and 2012 and by 18.3 per cent for Independent schools (see Chart 1). This compares to an increase of only 10.6 per cent for public schools.

The new figures were compiled from the My School website by the Australian Curriculum, Assessment and Reporting Authority (ACARA). It is the first time that aggregated school income figures derived from My School have been officially published by ACARA.

Chart 1 – Increases in School Funding 2009-2012.pdf

The disparity in funding increases is primarily due to larger funding increases for Catholic and Independent schools by state and territory governments. State/territory government funding for Catholic schools increased by 18.8 per cent and for Independent schools by 15.7 per cent compared to only an 8.8 per cent increase for public schools. State governments are the primary source of funding for public schools, but are clearly failing to deliver the funding public schools need.

In contrast to the failure of state and territory governments, Australian Government funding increased by similar amounts for public, Catholic and Independent schools. Funding for public schools increased by 21 per cent compared to 19.7 per cent for Catholic schools and 19.3 per cent for Independent schools. National partnership funding under the previous Labor Government at least ensured that the increase for public schools was on a par with the increase for private schools.

Increases in fees and charges have also helped Catholic and Independent schools to increase their total income by nearly double that of public schools. The total income of Catholic schools increased by 18.5 per cent and by 17.5 per cent for Independent schools compared to 10.5 per cent in public schools.

As a result of these increases, the total income of Independent schools is about 45 per cent higher than that of public schools – $17,941 per student compared to $12,403 per public school student (Chart 2). Public and Catholic schools have a similar total income per student. Government funding accounts for 73 per cent of the total income of Catholic schools and 42 per cent of Independent school income.

Chart 2 – Income of Public and Private Schools, 2012.pdf

The funding difference between public and Independent schools is less for net income per student while Catholic schools have slightly lower net income than public schools. Net income excludes income allocated to current and future capital projects and income allocated to debt servicing. The reason these items are excluded is that private schools must provide for part of their capital expenditure out of current income whereas capital expenditure for public schools is funded separately by government.

However, it is well known that many non-systemic elite Catholic schools and other elite Independent schools give priority to gold plating their facilities (multiple sporting ovals, indoor swimming pools, gymnasiums, tennis courts, auditoriums, and even equestrian centres). These gold plated facilities provide a considerable advantage for private schools in attracting enrolments and they are partly financed from recurrent funding by governments. In contrast, capital expenditure on public schools is confined to providing a base standard of facilities. Governments do not provide funding for multiple sporting ovals, indoor swimming pools, gymnasiums, tennis courts, auditoriums, and equestrian centres in public schools.

Thus, excluding recurrent income allocated to gold plating private school facilities from income comparisons of schools reduces the apparent funding advantage of non-systemic Catholic and Independent schools over public schools, even though expenditure of this income provides a significant resource advantage for these private schools.

The total income of Catholic and Independent schools is also under-estimated by the exclusion of several items from the estimates. While the total income of public and private schools includes notional allocations for various central administration costs, a number of other items are excluded which primarily benefit private schools such as student transport subsidies, the cost of tax deductible donations, the cost of Australian and state/territory administration of private school funding and the cost of private school regulation by state/territory governments.

For example, most private schools offer tax deductibility on contributions to building and library funds set up by the school and allows parents of non-government school students to reduce the level of personal tax being paid. This cost to government is not included in private school income. The Australian Government administers the large part of government funding of private schools, but the cost of this is not included in private school income whereas the cost of state/territory government administration of public schools is notionally allocated to schools. State and territory government expenditure on the administration of private school registration and accreditation is excluded from private school income. These exclusions mean that the total and net income of Catholic and Independent schools is under-estimated in comparison with public schools.

The exclusion of private school own-funding of gold-plated facilities and the exclusion of several Australian and state/territory government costs that benefit private schools means that the current measure of net recurrent income under-estimates the income of private schools compared to public schools. On the other hand, the inclusion of private school own funding of standard facilities in total recurrent income over-estimates the income of private schools compared to public schools. However, the exclusion of other government-provided benefits from the income of private schools may mean that total recurrent income is a reasonably comparable measure of public and private school income.

A further consideration in comparing the income of public and private schools is that public schools have to do more with their funding than Catholic or Independent schools. Public schools face much greater challenges because they enrol the vast majority of low SES, Indigenous, disability and remote area students. For example, about 82 per cent of all students in the lowest SES quartile in Australia attend public schools compared to 12 per cent attending systemic Catholic schools and six per cent attending Independent schools. In addition, 84 per cent of all Indigenous students attend public schools compared to 10 per cent in Catholic schools and six per cent in Independent schools. About 77 per cent of funded disability students attend public schools.

On average, these students have much higher learning needs than other students. Much higher costs are associated with ensuring that low SES, Indigenous and remote area students achieve adequate standards of education and improve their results relative to high SES students. Much higher costs are also associated with educating students with disabilities.

Clearly, it is public schools that are doing the heavy lifting in education in Australia. Catholic and Independent schools do not assume the same social obligations as public schools. They under-enrol higher cost students which means that they effectively have an even higher level of income.

School funding priorities in Australia are completely awry. Unfairness is at the heart of current funding approaches. Public schools need much higher per student funding than both Catholic and Independent schools to meet their challenges. Yet, they have much less total income per student than Independent schools and only a similar amount to Catholic schools.

The OECD says that fairness in resource allocation is important for ensuring equity in education opportunities and has labelled Australia as a low equity nation in the resourcing of schools [OECD, Pisa in Focus, No. 44, October, 2014]. Its data on the allocation of resources between advantaged and disadvantaged schools show that only four of the 34 OECD countries and only 10 out of 65 countries participating in the PISA tests have greater inequity than Australia.

The Gonski funding plan introduced by the previous Labor Government was designed to give more priority to improving equity in education by increasing funding for disadvantaged students in all school sectors. The large part of the $16 billion funding increase from the Federal and state governments would have gone to public schools. However, the plan has been sabotaged by the Coalition Government because it refuses to fund the final two years of the six year plan when the bulk of the $16 billion increase was due. It has also been sabotaged by the refusal of many state governments, with the notable exception of the NSW Government, to commit to funding increases. Indeed, some have cut school funding.

At the Federal level, nothing will change until the next election. Labor should re-affirm its commitment to the full implementation of the Gonski funding plan. State and territory governments should also follow the lead of the NSW Government in keeping to its Gonski commitments and step up their funding of public schools.

Trevor Cobbold

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Wealthy Private Schools Walk Away from Pyne’s Train Wreck With Millions in Over-funding

Monday June 9, 2014

Calculations by Greens NSW MP John Kaye show that the Abbott government’s termination of the Gonski process after just four years will deliver a $169 million a year windfall to 163 private schools, while the average NSW public education system will lose funding that could employ four new teachers in the average public school.

Federal education Minister Christopher Pyne’s axing of the last two years of the Gonski deal will cost the average NSW public school $387,000 a year by 2020.

The same decision will leave the state and federal funding of the state’s wealthiest private schools well above the level set by the Gonski review.

Some of the elite winners from Mr Pyne’s decision, such as Loreto Kirribilli, Brigidine St Ives, and St Aloysius’ College in Milsons Point will be paid more than $5 million a year over the Gonski amount, in large measure because a funding guarantee given to them by John Howard in the year 2000.

Kaye said: “Terminating the Gonski process after just four years will leave government funding of the wealthiest private schools intact while destroying the opportunity for public schools to catch up.

“Private schools like Loreto Kirribilli and St Aloysius’ College in Milsons Point will continue to receive millions of dollars a year largely unaffected by the Gonski principles. Public schools will be denied a big boost to their annual budgets.

“Indexation of wealthy private school subsidies and the growth in the underlying Gonski resource standard were supposed to eventually transition all schools to the same funding principles.

“By cutting off the funding agreement after just four years, the Abbott government has not only robbed NSW public schools of the chance to increase teacher numbers and reduce class sizes, but it has left the scandalous funding of the wealthiest private schools largely as it was.

“The state’s 163 wealthiest private schools will continue to be paid $169 million a year more than the Gonski amount.

“More than $68 million a year of that overpayment goes back to John Howard’s funding maintenance deal with the powerful private school lobby.

“Schools like Loreto Kirribilli will continue to receive funding based on their pre-2000 levels, maintained by three Federal separate governments.

“Loreto will receive $9.1 million in state and federal funding, which is $6.4 million over its Gonski amount. It would receive $4.3 million less if it had not been Funding maintained in 2000.”

Kaye estimated that it would take 202 years for Loreto Kirribilli to have its funding adjusted to its Schooling Resource Standard.

“Thanks to Christopher Pyne’s back flip, NSW’s wealthiest private schools will continue receive an average of more than $1 million a year over their Gonski amounts. Averaged across the state’s public education system, each school will miss out on a $387,000 boost that could increase staff numbers by four additional teachers.

“If the last two years of the National Agreement were honoured by the Abbott government, NSW public schools would enter 2020 with an additional $851 million in their annual budgets.

“The Gonski formula and the National Education Reform Agreement were far from perfect but at least they tried to even out some of the worst injustices in the funding system.

“The Abbott is ending the reform process before public schools receive the major part of their funding growth and before indexation has a chance to equalize the public private gap.

“The NSW government should start cutting into its $1 billion funding of non-government schools to make the system much fairer,” Dr Kaye said

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Is there ‘evidence that independent public schools lift student performance’?

Asked by Senator Penny Wright at a session of the Senate Standing Committee on Education and Employment whether there was any evidence that Independent Public Schools (IPS) lifted student performance, Mr Tony Cook, Associate Secretary, Early Childhood Education and Care in the federal Department of Education answered that there was “a range of evidence”. Continue reading “Is there ‘evidence that independent public schools lift student performance’?”

Abbott Govt Turns its Back on Public Schools and Disadvantaged Students

Thursday May 15, 2014

The Federal Budget is a disaster for public education in Australia. It has killed off the Gonski school funding increases for 2017-18 and 2018-19. Public schools stand to over $6 billion as a result. The unity ticket on school funding promised by Abbott and Pyne before the election has been completely shredded.

State governments are unlikely to make up the loss and may not even meet their own commitments to increase funding, in which case the loss to government schools will be even bigger. The huge funding loss reduces the prospect of Australia improving its school results and reducing the large achievement gaps between disadvantaged and advantaged students.

Under Labor’s National Plan for School Improvement (NPSI), Federal Government funding for schools was expected to increase by $10.3 billion (excluding indexation for rising costs) over the six years to 2018-19, with $2.8 billion committed to the first four years. This left $7.5 billion to be delivered in 2017-18 and 2018-19.

This has been rejected by the Federal Government. From 2018, increases in Federal funding for schools will be limited to increases in the consumer price index (CPI), with adjustments for student enrolments.

Public schools will bear the vast part of the loss. Under the NPSI, public schools would have received 83 per cent of the overall increase and would have amounted to $6.2 billion over 2017-18 and 2018-19.

Moreover, tying future funding increases to the CPI is likely to mean a real cut in funding. The CPI is not a good measure of rising costs in education because it reflects productivity increases in the rest of the economy. The wage price index for public education and training is a better measure of costs in schools and it has increased by much more than the CPI in the past. Funding increases based on the CPI will not match future cost increases and will compound the funding shortfall facing public schools.

The Federal Government says it is shifting responsibility for school education back to the states, but it is very unlikely that they will make up the loss. The future of state and territory government funding for public schools is itself in question, especially as the Federal Government has released them from their commitments under the NPSI to increase their funding.

The Abbott Government has turned its back on public schools and disadvantaged students. This is not really surprising given that the Federal Education Minister, Christopher Pyne, has repeatedly said that Australia does not have an equity problem in education.

Without the Gonski funding increases, Australia has little prospect of increasing student outcomes or reducing the huge learning gaps between advantaged and disadvantaged students. Disadvantaged students are two to three years behind their advantaged peers in reading, numeracy and science and three-quarters of them attend public schools. These schools are massively under-resourced for the task they face. The Abbott Government has ensured that they will continue to struggle.

As the Greens spokesperson on education, Senator Penny Wright, said “The Coalition has abandoned every child, every parent, every teacher and every school, but none more so than those in greatest need”.

It is not without irony that almost to the day that the Government killed off funding increases for disadvantaged students a major research study published by the US National Bureau of Economic Research found that increasing funding for disadvantaged students has large long-lasting benefits.

The study found that a 20 per cent increase in per student funding for children from poor families leads an increase of about one extra year spent in school, a 25 per cent increase in average earnings and a 20 percentage-point in the annual incidence of adult poverty. So much for the idea that money doesn’t matter in education!

Trevor Cobbold

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Shorten Re-affirms Labor’s Commitment to the Full Gonski

Tuesday April 1, 2014

Following questions raised about its commitment to the Gonski funding for the two final years of the six year transition period, the Leader of the Opposition, Bill Shorten, has clarified Labor’s position. At a doorstop interview in Perth yesterday, Shorten gave an unequivocal commitment to the full Gonski funding:

JOURNALIST: You have committed and you still will commit to the next election for those years five and six?
JOURNALIST: That will cost I think about $7 billion additional is that you’re prepared for that?
SHORTEN: We budgeted for this when we were in Government and furthermore, what does it cost Australia if we short change our kids?

Save Our Schools welcomes this clarification by the Leader of the Opposition. Unfortunately, mixed messages had come from the Opposition that raised concerns for organisations and people campaigning for the full Gonski to give a better deal for disadvantaged students.

The planned $7 billion Federal funding increase for the two final years of Labor’s National Plan for School Improvement would complete the biggest increase in school funding in living memory – over $10 billion from 2013-14 to 2018-19. If the state governments who signed up to the plan stay on board, the overall funding increase will be of the order of $14 billion.

It would deliver large increases to under-resourced schools and to disadvantaged students. About $8 billion in Federal funding would go to government schools which enrol the vast majority of low SES, Indigenous, disability and remote area students.

The funding increase offers the best prospect of ensuring that all children complete Year 12 or its equivalent and reducing the large achievement gaps between rich and poor that Australia has ever seen. It will help boost workplace skills, improve productivity and reduce health, crime and welfare expenditure.

Labor’s clarification puts the microscope back on the Budget. In May, we will find out whether the Coalition Government intends to continue dismembering the Gonski plan. The forward estimates of the May Budget will reveal the funding planned for 2017-18, the fifth year of the Gonski funding plan.

The Coalition has so far refused to fund the final two years. It has also refused to hold state governments to their agreements with the previous Labor Government to increase funding for schools; it has refused to place conditions on the funding increase it provided to the governments that did not sign up to Gonski; and it has refused to require governments to implement a needs-based funding model. All it has done is to guarantee more funding increases for private schools, including Australia’s wealthiest.

The issue at stake in the Budget is whether the Coalition will continue its tradition of giving priority to funding privilege in education over reducing inequity and disadvantage. The prospects are not good as the Federal Minister for Education, Christopher Pyne, believes that Australia does not have an equity problem: “I don’t believe there is an equity problem in Australia”. The evidence from international and national test results is overwhelming that Australia does have a major equity problem and doing something about it is at the heart of the Gonski funding plan.

Trevor Cobbold

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The Folly of ACT School Closures Revealed

Tuesday January 14, 2014

Education Minister Joy Burch has exposed the folly of the 2006 school closures as an expensive and short-sighted mistake. The loss of spare capacity has now seen new classrooms built in schools only kilometres from closed schools, at a cost of tens of millions of dollars.

Ms Burch started the 2014 year by proudly announcing the completion of $16 million worth of works at Macgregor, Duffy, Hughes, Majura and Yarralumla primary schools (The Chronicle, 7 January 2014, p4). This follows her 2013 in-principle approval for two new private schools in Charnwood and Spence.

Duffy is only a few kilometres away from the now-closed Weston Creek and Rivett primary schools. Macgregor Primary School and the two new private schools are not far from the now-closed Flynn Primary School.

In the Northwest Belconnen region alone, the combined increase in capacity of the three schools (Macgregor expansion and the two new private schools) is estimated at:
• Charnwood (Brindabella College): 194 students enrolled by 2018, increasing to 650 K-12 students
• Macgregor Primary School: an extra 250 students enrolled by 2016 (to reach a total of 700 students)
• Spence (At-Taqwa Islamic School): 800 students enrolled by 2022.

If the two private schools eventually proceed (and neither has been given the green light yet), the combined effect will be to add another 1700 student places to the Northwest Belconnen region. (Potential enrolment growth from Dunlop and Macgregor West would already have been already included in the 2006 planning.)
All-in-all, the 2006 school closures have cost the government tens of millions of dollars, and the community even more in terms of lost services and social capital.

To save a $21.3 million over four years for 23 schools, the ACT Government has spent more than $15 million on new classrooms and on refurbishing existing ones to accommodate new students. And that doesn’t even start to count the cost of new classrooms and schools in the private sector. The huge capital investment that followed, including two new P-10 schools and IT upgrades, promised as sweeteners to surviving schools, were a welcome investment in the sector, but according to government claims, were not dependent on closing schools.

The government has also borne the cost of refurbishing the closed schools for other uses. This has so far added up to around $40 million. Another $1.1 million dollars was spent on “community consultation” after the schools were closed, much of it on consultants. While community facilities are something the community lobbied hard for in 2007, much of this $40 million could have been avoided as many of the closed schools were engaged and active in their local communities, with some doubling up as community facilities in their own right. Some now-closed schools had even proposed more community use as a cost-free, and possibly revenue-raising, alternative to closing their schools. Just keeping Flynn Primary School open could have reduced that bill to less than $30 million because of the cost of protecting the heritage values of the site while adapting it wholesale for other uses.

In contrast, Joy Burch’s own announcements this week show that it has cost about $2 million for an “older school upgrade”. If this had been spent on each of the 23 schools instead of closing them, the total cost to government would have been around $46 million, without the angst and social costs. The actual cost would most likely have been lower: condition assessments for 2006 show that most schools needed an average of around $0.5 million to bring them up to “normal” standard, leading to a total refurbishment cost of around $12 or $13 million.

The total cost of not closing schools could have been around $35 million—significantly less than the $55-or-so million spent so far to close them and keep them closed. And these are just the direct, easily documented costs to government.

It is good news that Ms Burch places a value on neighbourhood schools that her predecessor, Andrew Barr, never understood. Her proud announcement of up to 300 more places at Macgregor Primary School to meet the growing demand from the local area is to be applauded. It is a shame, however, that she does not yet have the courage to make the obvious move and at least apologise for her government’s mistakes, if not re-open closed primary schools rather than throwing yet more money at keeping them closed.

Sarah James

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Are Finland’s Vaunted Schools Slipping?

Leading Finnish education expert, Pasi Sahlberg, comments on Finland’s slip down the rankings on international test results from the Programme of International Student Assessment (PISA).

The irony of Finland’s successful school system is that the Finns never aimed to be better than anyone else — except, it is often humorously claimed, Sweden. Since the announcement of the first results of the Organization for Economic and Cooperation and Development’s Program for International Student Assessment, or PISA, in 2001, Finland has been the center of educational attention. Finland’s PISA scores topped the charts, and the Finnish approach to educational policy has stood in direct opposition to the path embraced by the United States, England, and much of the rest of the world. Continue reading “Are Finland’s Vaunted Schools Slipping?”

The New School Funding Plan

Friday July 19, 2013

The new National Plan for School Improvement (NPSI) consists of a new funding model for government and private schools, increased funding over six years and a range of new education policies. The new funding model is based on the framework recommended by the Gonski report, but there are some significant differences.

The new funding model
As recommended by the Gonski report, the new funding model consists of a base resource standard and additional funding (called funding loadings) for disadvantaged students, school location and school size. Separate base resource standards are set for primary and secondary schools and are specified as per student amounts. The disadvantage funding loadings and the location loading are specified as various percentages of the relevant base resource standard while the size loadings are specific dollar amounts.

A Schooling Resource Standard (SRS) per student will be estimated for each school combining the base resource standard and the disadvantage, location and size funding loadings. The SRS will differ between schools according to their enrolments of various categories of disadvantage students, location and size.

The base standard is based on the estimated cost of educating a child at high performing schools, known as ‘reference schools’. It is the minimum level of funding (from government and private sources) that should be available to every school.

Reference schools are determined by their NAPLAN performance. They are schools where 80 per cent of students are achieving above the national minimum standard at each year level in reading and numeracy over the three years 2008 to 2010. The reference schools consist of about 1600 government and private schools across the country according to a brief prepared by the Federal Parliamentary Library.

The base resource standard for primary schools in 2014 will be $9,271 per student and for secondary schools $12,193 per student. These amounts will apply to government schools. The level of government funding for private schools will vary according to parental capacity to contribute school resources as under the current SES funding model. All schools will be funded to at least 95 per cent of their base SRS by 2019.

Schools will also be eligible for a range of disadvantage loadings based on a percentage of the base amount per student:
• Low socio-economic status (SES): a) Sliding scale from 15 to 50 per cent for the 1st SES quartile; b) Sliding scale from 7.5 to 37.5 per cent for the 2nd SES quartile;
• Indigenous students: sliding scale from 20 to 120 per cent;
• English as a second language: 10 per cent;
• Students with a disability: current funding will be maintained in 2014 and a new loading introduced from 2015;
• Location: a) Inner Regional schools will receive up to 10 per cent of the loading amount (the total of the base amount plus any school size loading). b) Outer Regional schools will receive between 10 per cent and 30 per cent of the loading amount. c) Remote schools will receive between 30 per cent and 70 cent of the loading amount. d) Very Remote schools will receive between 70 per cent and 80 per cent of the loading amount.

In addition, primary schools of between 15 and 200 students will attract a loading of $150,000, reducing to zero for schools with 300 student enrolments. Secondary schools of 100 to 500 students will attract $240,000, reducing to zero for schools with 700 students. These amounts are added to the base amount.

The base resource standard will be indexed at 3.6 per cent a year. This implies that the disadvantage loadings (as a percentage of the resource standard) will also be indexed at 3.6 per cent a year.

Not all schools will be immediately funded according to this model. Whether a particular school attracts funding under the model will depend on comparing their old (current) funding per student with the SRS (base + loadings) estimate. Commonwealth Government funding for schools whose funding under the old scheme is less than their SRS per student amount for 2014 will be increased by at least 4.7 per cent a year until they reach their SRS.

Schools whose old per student amount for 2013, increased by 3 per cent, is more than their estimated SRS for 2014 will continue to receive the old per student amount, plus indexation of 3 per cent per annum until their new per student amount catches up.

Under agreements between the Federal and participating state/territory governments, state/territory education authorities will have flexibility to distribute funds according to their own needs-based funding systems, but every system will have to be approved by the Federal Government to ensure it is consistent with the SRS. The different approaches will be evaluated for their consistency in addressing student need. School systems will have to publish how they have calculated their funding allocations and what every school actually gets each year. The distribution to each school will be published on the My School website.

Government funding for private schools will depend on their assessed capacity to contribute. They will receive a proportion of their base SRS according to their assessed socio-economic status (SES) score. Their SES score is determined in the same way as under the current SES funding model introduced by the Howard Government, that is, according to the SES of the ABS statistical area in which students are resident.

Government funding for private schools with an SES score of 93 or less will be 90 per cent of the total per student funding and for schools with an SES score of 125 or more it will be 20 per cent. Government funding for schools with an SES score of between 93 and 125 will range along a sliding scale of between 90 and 20 per cent. In contrast with the current funding model there are separate funding scales for primary and secondary schools. Primary schools have higher government funding rates (as a percentage of their base SRS) than secondary schools [see Chart 1 below].

The SRS for each Catholic school will be aggregated and distributed to Catholic systemic school systems which will administer the distribution of funds to individual schools. Independent schools will be funded directly based on the SRS estimates and their assessed capacity to contribute. The Catholic systems will have flexibility to implement their own needs-based funding systems. As in the case of government school systems, needs-based distribution in Catholic systems will have to be approved by the Federal Government to ensure it is consistent with the SRS. The distribution to each school will be published on the My School website.

Funding increases
The original plan proposed a $14.5 billion increase in school funding over the six years from 2013-14 to 2018-19. It was expected that the Federal Government will contribute $9.4 billion of this increase and state/territory governments will contribute the remaining $5.1 billion. The total funding amount has been increased as a result of agreements with the ACT, NSW, SA and Tasmanian governments and could be increased further if the other states and the Northern Territory sign on. On the basis of what has been agreed so far and what is on offer to WA, the estimated increase now stands at $15.2 billion.

On the basis of the original proposal, government schools would receive 83 per cent of the total increase. Government schools would receive $12.1 billion compared to $1.4 billion for Catholic schools and $1 billion for Independent schools.

The total increases over the six years range from $4-5 billion for NSW, Victoria and Queensland to $380 million for Tasmania and less for the Northern Territory and the ACT. Based on 2012 enrolments, NSW, Victoria, Queensland and Tasmania would get increases of $4,000-5,000 per student over the six years and the Northern Territory an increase of about $7,500 per student [Chart 2]. Western Australia and South Australia would get increases of about $2,500 per student and the ACT an increase of $605.

The large part of the funding increase will go to schools that are currently funded at less than the national base standard. According to information released by the Federal Government, 82.7 per cent of the increase will go to these schools and 17.3 per cent will be allocated to the various funding loadings. Low SES students will receive 7.4 per cent of the increase, students with disabilities 5.4 per cent, students in regional and remote locations 2.1 per cent and Indigenous students 0.9 per cent.

The Federal Government has announced the details of its funding contribution to the new funding arrangements. The 2013-14 Budget papers show that the large part of its contribution to the increase in school funding is postponed until the last two years of the transition period. The Federal Government component for the next four years is estimated at $2.8 billion, or 29 per cent of the original proposed Federal contribution, leaving $6.6 billion to be provided in the two years 2017-18 and 2018-19.

The large part of the Federal contribution to the NPSI increase is to be financed by the termination of existing programs. Five national partnership programs are to be terminated over the next four years and their funding re-directed to the NPSI. The partnership programs are the Low Socio-economic Status Communities, Literacy and Numeracy, Empowering Local Schools, Rewards for Great Teachers and Rewards for School Improvement. According to the 2013-14 Budget Paper No. 2, the total funding to be re-directed from these programs over the forward estimates to 2016-17 is $2.1 billion.

Thus, very little new funding will be allocated to the NPSI over the next four years. The new funding beyond what was already committed over the forward estimates period is $0.7 billion [Table 1]. There is a net increase of $333 million in 2013-14, declines in expenditure in 2014-15 and 2015-16 totalling $265 million and a net increase in 2016-17 of $630 million.

School improvement
The new funding model will be accompanied by a range of education policies designed to improve student results. These policies focus on five main areas:
• Quality teaching;
• Quality learning;
• Empowered school leadership;
• Meeting student need; and
• Transparency and accountability.

It is a condition of Federal funding that state/territory governments implement the agreed national education policies. They incorporate a large number of measures.

The Quality Teaching measures include:
• Higher entry standards for teaching and better training for teaching students;
• Teachers will need to be in the top 30 per cent for literacy and numeracy before they can graduate;
• Annual performance reviews for every teacher;
• Access to ongoing training for all teachers throughout their career.

The Quality Learning measures include:
• Implementation of the Australian Curriculum in all subjects by 2016 for Foundation to Year 10 and by 2018 for Years 11-12;
• An early years reading blitz to focus on improving literacy skills in Foundation to Year 3;
• Access for every student to learning an Asian language by 2025;
• Inclusion of science in the NAPLAN tests.

Under the Empowered School Leadership plan:
• Principals will have more power to make decisions for their schools including choosing staff and managing the budget;
• Principals will receive extra training in leadership skills and ongoing professional development.

The Meeting Student Need measures include:
• A school funding system based on the needs of every individual student;
• Additional funding for schools and students that need more support – low SES students, Indigenous students, students with disability, students with limited English skills, small schools, and rural and remote schools;
• The extra funding will be able to spent on things like specialised equipment and teachers, and programs like breakfast clubs and literacy programs;
• Every school will have a Safe School Plan to prevent bullying;
• Schools will be encouraged to engage parents and the broader school community to improve student outcomes.

Trevor Cobbold

Charts and Table on National Plan for School Improvement.pdf

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The Gillard School Funding Plan is a Watershed But is Not the Full Gonski

Tuesday June 11, 2013

This is a speech to a Gonski Information Forum in Perth by Trevor Cobbold on 6 June.

The new school funding plan passed by the House of Representatives last week is a potential watershed for school funding in Australia. It breaks new ground in the history of school funding with its focus on increasing equity in education. Its adoption of Gonski’s equity goals and principles sets the foundation for the future.

The plan provides the biggest increase in funding in living memory, certainly in the last 40 years. It proposes a $14.5 billion increase in school funding over the six years from 2013-14 to 2018-19. It is expected that the Federal Government will contribute $9.8 billion of this increase and state/territory governments will contribute the remaining $4.7 billion.

Every state will benefit, although some more than others. NSW, Victoria, Queensland and Tasmania would get increases of $4000-5000 per student over the six years and the Northern Territory an increase of about $7,500 per student. Western Australia, however, will get very little – only about $800 per student over the six years.

The small increase for Western Australia is difficult to understand and I am at a loss to explain it without further details of the model. The ACT will get $1,610 per student even though its average expenditure per student in government schools is slightly higher than in WA and it has a much lower proportion of low income and Indigenous students and has no remote area students. On this basis, the Barnett Government has a good case for a better deal and it is hard to understand why it is not willing to negotiate on behalf of its disadvantaged students. The ACT Government negotiated and got more funding. By refusing to negotiate, the Barnett Government has abandoned the state’s low income, Indigenous and remote area students.

The new funding model will provide a huge benefit to government schools Australia wide. Of the total $14.5 billion, $12.1 billion will go to government schools compared to $1.4 billion to Catholic schools and $1 billion to government schools. If fully delivered and effectively distributed and used, it could make a major contribution to reducing the huge gap in school achievement between rich and poor throughout the country, which at age 15 amounts to two to three years of learning.

Low achievement is strongly associated with low socio-economic status (SES) students and Indigenous students. About 75 per cent of low income students and 85 per cent of Indigenous students are enrolled in government schools. Government schools therefore have far more to do with their resources than private schools. Yet, government schools have much fewer resources than Independent schools and similar resources to Catholic schools.

The school sector with the greatest resources has the lowest proportion of disadvantaged students. Total funding per student in Independent schools is 40 per cent higher than government schools – $16,309 per Independent student compared to $11,645 per government school student. However, Independent schools enrol only 10 per cent of low income students and 5 per cent of Indigenous students. These figures show how skewed and inequitable the current funding system is. It is this inequity that the Gonski model seeks to redress. This is the fundamental importance of the Gonski model.

In adopting the Gonski model, the Gillard plan represents a marked change of direction in school funding in Australia. Instead of a primary focus on funding for school choice as in the Howard Government’s SES funding model, the new model gives priority to reducing the effects of disadvantage on education outcomes. The focus of the new model is equity. It guarantees a minimum resource standard for every school in the country and provides additional funding loadings for various forms of disadvantaged students: low SES, Indigenous, remote area, language background other than English and students with disabilities.

The Gonski model has put the supporters of privilege in education on the defensive. Only the most extreme advocates of privilege can deny that improving equity in education outcomes is the central priority and, when they do, they are seen for what they are – a rich elite removed from the realities of the daily lives of our most disadvantaged families and students and lacking in any sense of common decency and humanity.

Another watershed in the new model is that it breaks the link between government funding for private schools and average government school costs. This is a highly significant change. The link is a major source of inequity in school funding. Every time state governments increase funding for disadvantaged students in government schools, a portion of it flows through to private schools including the most privileged and richest private schools.

The link to government school costs has allowed private schools to double dip on government funding. Not only do private schools get direct grants from the Federal and state/territory governments but they get indirect funding increases via increased funding to government schools. Private schools with none or very few disadvantaged students receive windfall gains from any increases in funding for disadvantaged students in government schools. Under the new model, the Geelong Grammars and Sydney Grammars of the world will no longer be able to double dip on the taxpayer on the backs of disadvantaged students.

The funding increase is not the full Gonski
However, although the Prime Minister’s plan adopts the Gonski framework, it is not the “full Gonski”.

At this stage, we only have details of the Federal Government funding program. The Budget Papers show that most of its $9.8 billion increase is back-loaded on to the last two years of the six-year transition period and is beyond the traditional four-year forward estimates of government budgets. Only $2.8 billion will be provided from 2013-14 to 2016-17, leaving $7 billion to be provided in the last two years of the transition period.

There will be at least two Federal elections before the bulk of the Gonski funding can be delivered. Consequently, there can be no guarantee that the full $7 billion for the final two years of the transition period will ever be delivered, especially under an Abbott-led government.

Moreover, the large part of the $2.8 billion increase to 2016-17 is to be financed by the termination of existing programs. Five national partnership programs are to be terminated over the next four years and their funding re-directed to the Government’s National Program for School Improvement (NPSI). The funding allowed for in the forward estimates for these programs over 2013-14 to 2016-17 was $2.3 billion.

Thus, very little new funding will be allocated to the Gillard plan over the next four years – only a mere $0.5 billion.

Moreover, it is unlikely that the full Gonksi increase will be delivered at the end of the transition period. The Gonski recommendation was for an additional $6.5 billion a year in 2013-14 dollars. Allowing for indexation, the actual final transition year funding increase in 2018-19 should be about $8 billion in 2018-19 prices. This does not seem to be in the ball-park of the Government’s planning.

The low SES funding is too little to be effective
A second major concern about the Gillard plan is that the additional funding to be allocated to disadvantaged students is relatively small and, in the case of low SES students, is to be spread over a much large number of students than proposed by the Gonski report. The increase for low SES students is likely to be too little to make any significant difference to student outcomes or to reducing the gap between rich and poor, although all schools will welcome the extra funding.

According to information released by the Federal Government, 83 per cent of the total increase in funding will go to schools whose funding is below the national resource standard and 17 per cent will be allocated to the various disadvantage funding loadings. Low SES students will receive 7.4 per cent of the increase, students with disabilities 5.4 per cent, students in regional and remote locations 2.1 per cent and Indigenous students 0.9 per cent. This means that disadvantaged students will get about $2.5 billion of the total increase over the next six years with about $1 billion of this going to low SES students. This is much less than the $3 billion provided by Low SES Communities national partnership over seven years.

Of course, many disadvantaged schools may gain additional funding because they are currently below the national resource standard. However, it is not possible to determine how much they will get at this stage as many medium to high SES government schools are also funded at less than the national resource standard.

There are two significant differences between the Gonski and Gillard models as regards funding for low SES students. First, the Gillard model provides slightly more generous funding loadings. Its range of loadings begins at 15 per cent of the resource standard compared to 10 per cent in the Gonski model.

Second, while the Gonski report recommended a funding loading for every student in the lowest 25 per cent of SES backgrounds, the Gillard plan spreads the funding much more broadly. It provides a loading for every student in the bottom 50 per cent, with students in the lowest quartile receiving bigger loadings. It means that more than 95 per cent of schools will receive low SES funding.

The Government’s case for funding loadings for the second lowest SES quartile is that a significant group of these students achieve much lower outcomes than students with above average SES background. This is true. The 2009 PISA results show that while 24 per cent of 15 year-old students in the lowest SES quartile were below the international reading benchmark, 15 per cent of students in the second lowest SES quartile were also below the benchmark. In mathematics, 28 per cent of students in the lowest quartile and 17 per cent of students in the second lowest quartile were below the benchmark. In science, the respective figures were 23 and 13 per cent. Thus, there is a strong case for additional funding for students in the second lowest quartile as well.

The issue is whether the low SES funding loadings are large enough to make a significant difference to the results of these students. The evidence suggests not.

Overseas research studies show that the additional expenditure required for low income students to achieve at adequate standards is up to double or more the cost of educating an average student. This implies loadings of 1.0 or more.

Under the Gillard model, the maximum funding loading for low SES students is 0.5 and this applies only to schools that have over 75 per cent of their enrolments from the lowest SES quartile. Low SES secondary school students in these most highly disadvantaged schools will only receive an extra $6,096 compared to $12,193 if the loading was set at 1.0.

Even this maximum loading will apply to only a tiny proportion of all low SES students. According to the My School website only 331 schools (265 government, 29 Catholic and 37 Independent) would have qualified for this loading in 2012. The total enrolment in these schools was just under 30,000, of which about 25,000 can be assumed to be in the lowest SES quartile. In 2012, there were approximately 600,000 students in the lowest SES quartile. Therefore, only about four per cent would qualify for the maximum low SES loading in the Gillard model, a loading which itself is well below the loadings suggested by research studies.

More special deals for private schools
A third issue with the Gillard plan is that it will be even more riven by special deals than Howard’s SES model. Just as the integrity of the SES model was undermined by special deals with Catholic and Independent school organisations, new special deals are being negotiated that will undermine the integrity and coherence of the Gonski model.

The Prime Minister has already broken with the principles of the Gonski model by promising Cardinal Pell that Catholic schools will retain their current share of federal funding. This introduces a new link between government school funding and Catholic school funding. Federal funding for government schools will apparently not be permitted to outstrip funding for Catholic schools, even though government schools enrol much higher proportions of disadvantaged students than Catholic schools – Catholic schools only enrol 16 per cent of low income students and 9 per cent of Indigenous students compared to the government school proportions of 75 and 85 per cent.

The special deal will allow Catholic schools to double dip on Federal funding. In addition to their direct funding under the new model, they will receive additional funding to compensate them for any loss of enrolment share to government schools or other private schools. For example, if the number of disadvantaged students in government schools increases this would draw increased Federal funding for those schools and decrease the share of Catholic school funding in total Federal funding. Instead, Catholic schools will receive additional funding to maintain their current share, even though their enrolments of disadvantaged students are unchanged, increase by less than in government schools or decline. Similarly, an increase in enrolments in other private schools will draw an increased percentage of Federal funding, for which Catholic schools will be compensated.

This new special deal adds to one that was incorporated into the Gonski model at the behest of the Federal Government. The focus on improving equity in education in the Gonksi model was diluted by a new “no losers” guarantee for medium to high SES private schools. This is the Government’s promise that no school will lose a dollar of funding under the new model. This means that medium and high SES schools that have large privately sourced funding will continue to receive government funding and maintain a large resource advantage over lower SES government and private schools.

Gillard’s new “no losers” guarantee also protects the special deals done by the Howard Government to maintain “over-funding” of some 40 per cent of private schools. These are the so-called “funding maintained” (FM) schools that were allowed to keep funding they would have otherwise lost if the SES model had been strictly applied. The over-funding amounted to $615 million in 2010 according to the Gonski report. All of this funding goes to well-off private schools – none of it goes to low SES private schools. These schools get to keep their over-funding under the Gillard plan, although it will be indexed at slightly less than for other schools.

The new “no losers” guarantee and the new link between Catholic school funding and total Federal funding means that the exceptions, incoherence and inequities in the Howard Government’s funding model criticised by the Gonski report will also be a feature of the Gillard model. And, we have yet to see what special deal Gillard gives Independent schools.

Extending the market in education
A further problem is that the accompanying plan for school improvement will extend market-based features of education. In particular, national testing and reporting on science will be introduced, state education authorities are encouraged to adopt performance pay, and increased school autonomy is a condition of the future funding.

The extension of national testing to science and more reporting of school results on My School and in league tables in newspapers will harm education further. I don’t need to spell out to you the effects in terms of narrowing the curriculum and teaching.

There is little evidence that performance pay or greater school autonomy increase student achievement. At best, the evidence is mixed, but generally the weight of evidence from research studies is that they have little effect on student results. School autonomy also tends to reduce collaboration between schools and increase social segregation and inequity in education.

Gonski offers more than the Coalition
Unfortunately, the Gillard Government has made an unholy mess of Gonski. Not only has it delayed implementation for far too long and made it hostage to the election campaign, but it has not adopted the full Gonski. The funding increase committed over the next four years is only a small percentage of the full Gonski and it is largely financed by re-cycled funds; its funding for disadvantaged students is far too low and is too widely dispersed to make any significant difference; and the integrity and coherence of the framework has been destroyed by more special deals with private schools.

As if this is not enough, the small funding increase is being used as a vehicle to extend the market in education through more testing and reporting of school results, performance bonuses for principals and teachers, and more autonomy for principals.

However, having the principles of the Gonski model enshrined in legislation would be a major step forward and the more states that sign up the greater its significance. It would be a major achievement. It would provide the foundation for school funding in the future and offer the hope and opportunity for a “full Gonski”. It would indeed be a watershed in the history of school funding in Australia.

Having the Gonski principles enshrined in legislation will also make it harder for a Coalition government to revert to the unfair and incoherent SES model. This is why it is so important to continue the pressure on governments to sign up. This is why Abbott and Pyne are leaving no stone unturned to stop Coalition governments signing up and why they are so angry with Barry O’Farrell and Adrian Piccoli in NSW.

The other Liberal state premiers are playing cheap politics – turning their backs on increased funding for disadvantaged schools and students for party political gain. Some 36 per cent of all Victorian and Queensland students are from low income families, but the Napthine and Newman governments are prepared to put their education and future at risk by refusing to sign up to the new model. It is unconscionable.

We cannot expect anything from a Coalition government. The Coalition has refused to commit to the Gonski model. It voted against the Education Bill in the House of Representatives. Tony Abbott says that the current system “is not broken” and not in need of fundamental change. The Coalition has no commitment to reducing disadvantage in education. According to Tony Abbott it is private schools that are the victims of an “injustice” because they get less public funding than government schools. The Coalition is ruthless in its protection of privilege in education. As Abbott has said, supporting the funding of Independent and Catholic schools is “in our DNA”.

Whatever happens at the next election, Gonski has given us something to fight for in the longer term. The Gonski model is the foundation on which to build the future. It is vital to meeting the biggest challenge facing Australian education – reducing the large achievement gap between rich and poor. This has to remain our fundamental priority in education policy.

In conclusion, I would like to pay tribute to the campaign that the Australian Education Union has run in support of Gonski. It has been a tremendous effort in a most extenuating and difficult political climate. On behalf of SOS and, I am sure, other supporters of public education everywhere, I would particularly like to congratulate the efforts of Angelo and his colleagues and express our heartfelt gratitude for your commitment and tenacity in fighting for a better deal for government schools and disadvantaged students.

Thank you.

The Gillard Funding Plan is a Watershed but is Not the Full Gonski.pdf

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