Gonski Panel Member Refutes Criticisms of Needs-based Funding Plan

Ken Boston, a member of the Gonski school funding review panel, has comprehensively refuted claims that there is no basis in evidence to increase needs-based funding as recommended by the Gonksi report. Boston’s comments follow criticisms recently presented to a Senate Committee inquiry on school funding.

Boston was asked by the Committee to respond to several criticisms of the Gonski funding plan made by Professor Henry Ergas from Wollongong University who is also a columnist for The Australian. The criticisms related to the impact of funding on school outcomes, increases in government funding for schools, the relationship between socio-economic status and achievement and the design of the disadvantaged loadings in the Gonski funding model. Boston’s response was published last week on the Senate Committee website.

In his submission to the inquiry, Ergas claimed that there is no evidence that a substantial increase in funding is required to ensure Australian schools perform to a high level. He said that there is an enormous literature on the link between school funding and student achievement and that, most often, no link is found and when one is found, it tends to
be weak.

However, Boston shows that Ergas selectively cited research evidence to support his claim and ignored research studies showing that increased school funding does lead to higher student achievement. Boston cites a number of studies that Ergas ignores and concludes:

Prof. Ergas has failed to survey adequately what he describes as the “enormous literature in the economics of education that examines the relationship between school funding and student outcomes”. His conclusion that “most often, no link is found” is wrong.

Boston also disputes the funding increase over the past decade cited by Ergas. Ergas says that government funding for schools increased in real terms by over 3.8 per cent per annum over the period 2000-2012. In contrast, Boston cites a paper by Save Our Schools’ Trevor Cobbold that estimates the real funding increase between 1999-2000 and 2011-12 at 1.3 per cent per annum, three times less than the Ergas figure.

Cobbold says that the Ergas figure is over-estimated for several reasons. It includes book-entry (user cost of capital and depreciation) and other items (payroll tax and school transport) for government schools which have increased significantly, but which have no impact on school outcomes; it does not allow for increased enrolments over the period; it under-estimates the rising costs because it used an inappropriate deflator for education; and it fails to take account of an increased proportion of higher cost enrolments including Indigenous, disability and senior secondary students.

Boston says that past funding increases were not targeted strategically, but where targeting occurred there has been some improvement in student results.

My view is that far too much of the increased funding during the period 2000-12 has not been targeted strategically at areas of need, and has been spent on schools and for purposes which are not a high priority nationally. Much could be achieved by redistributing available funding according to need. It is not a logical requirement of sector-blind needs-based funding that no school should lose a dollar.
Where it has been possible for schools and systems to target funding against areas of need, there has been real improvement. The strategic targeting of available resources on reading in the early and primary years has clearly resulted in improved achievement: as a result, over the period 2008 to 2013 there has been an improvement in reading in Year 3 and Year 5, including notable improvement amongst Indigenous students.
Similarly, there has been a significant increase in the TIMSS results for Year 4 mathematics, in my view arising from the strategic targeting of resources on numeracy in the early years of schooling.

Boston also challenges Ergas’ astonishing claim that “parental socio-economic status has a relatively minor effect on school outcomes”. As with Ergas’ claim on funding and outcomes, Boston shows that he ignored a very substantial corpus of research that clearly shows a strong relationship between socio-economic status and student achievement. Boston concludes: “The jury is in on this issue: the evidence is overwhelming.”

Boston also demonstrates that Ergas has misleadingly represented the evidence he used in support of his claim. He further notes that statistical analyses indicating a weak link between socio-economic status and student achievement use a questionable methodology. For example, they include prior achievement as an explanatory factor but this is also affected by socio-economic status. As a result, inclusion of prior achievement as an explanatory variable dilutes the measured effect of socio-economic status.

Another questionable practice in some studies is the inclusion of a range of other variables in the analysis which dilute the socio-economic effect but which are also related to socio-economic status. These factors include poor school experiences, participation in risky activities such as smoking and alcohol consumption, and low aspirations.

Ergas also claimed that adoption of disadvantage loadings in the Gonski plan risks worsening outcomes for poor students by creating an incentive for schools to increase concentrations of disadvantaged students. In response, Boston says that it is highly questionable whether the loadings are sufficient incentive for a school to chase low socio-economic status enrolments. He says it is more likely that other incentives will dominate. In particular, there is a strong incentive for schools to chase high achieving students because they are lower cost (in more ways than financial) and boost school rankings and reputations. For example, many private schools now ask for NAPLAN results before accepting enrolment applications.

Boston also notes that international evidence compiled by Save Our Schools suggests the disadvantage loadings are far too low to be effective, in which case schools would be taking on a bigger challenge than they are funded to deliver if they gave priority to enrolling more disadvantaged students.

As an alternative to the Gonksi model, Ergas advocates competitive neutrality between providers of education to maximise competition and choice between schools. He says that the best way to achieve full competitive neutrality between government and private schools would be to transform the current recurrent funding into a per-child voucher which would be allocated to families and which would have the same value in government and private schools. In support, he cited the Swedish funding system.

Boston shows that the Swedish system has failed to improve student results and that inequity in education has increased. He cites the conclusion of the Swedish National Agency for Education that school choice reform has contributed to the increasing performance differences between schools and to decreased equity.

Boston says that a voucher system is the antithesis of sector-blind, needs-based funding. He also notes that research by Save Our Schools shows that a voucher model would result in massive windfall funding increases for private schools.

Boston concludes that funding education is an investment not a cost, and that the dividends arising from that investment are potentially enormous. He says that “the knowledge-based economy of the future requires needs-based investment today”.

Trevor Cobbold

Response by Ken Boston to Criticisms of the Gonski Funding Plan.pdf

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