Make or Break Time for Gonski

It is make or break time for the Gonski school funding model. It is make or break time for a better funding deal for disadvantaged students and schools. It is make or break time for putting equity in education before entrenching privilege. It is make or break time for reducing the high social and economic costs of inequity in education.

This is what is at stake in coming months as decisions on the recommendations of the Gonski report on school funding are made.

It is imperative that the current inequitable and incoherent funding model be replaced. However, the prospects for a new model are very uncertain as federal/state government negotiations have been long delayed and are now caught up in election year politics as many warned they would if the Federal Government did not act early.

The current funding system should be replaced
It is imperative that the current funding model for private schools be scrapped and replaced. The Federal Opposition’s demand that it be extended for at least another two years should be rejected. The scheme has already diverted hundreds of millions of dollars from those most in need to those least in need. It has augmented privilege in education rather than equity.

Between 1998-99 and 2008-09 total government (federal and state/territory) funding for Independent private schools increased by 144 per cent and by 105 per cent for Catholic schools. In contrast, total funding of government schools increased by only 82 per cent.

This increase has benefited better-off families. Independent and Catholic schools serve much higher proportions of high socio-economic status (SES) students and much lower proportions of low SES students than government schools. For example, 50 per cent of Independent secondary school students and 30 per cent of Catholic school students are from the highest SES quartile compared to only 16 per cent of government school students. On the other hand, 35 per cent of government secondary school students are from the lowest SES quartile, compared to 16 per cent of Catholic students and only 10 per cent of Independent school students.

Many medium to high SES private schools are particularly well-favoured by the current funding model. Under the “funding maintained” (FM) arrangements a majority of these schools get more funding than warranted by their SES score. This over-funding amounted to $615 million in 2010 according to the Gonski report. None of it goes to low SES private schools.

While the biggest funding increases have gone to higher SES students, the results of low SES students have continued to lag well below those of high SES students. For example, the gap in reading between low and high SES 15 year-old students is equivalent to nearly three years of schooling. Indigenous students are three to four years behind high SES students.

The Gonksi funding model promises to be a circuit breaker to this inequity by giving priority to the funding of disadvantaged students. The proposed $6.5 billion in additional funding for disadvantaged students and schools will make a huge difference. Much of it will go to government schools because they enrol about 80 per cent or more of low SES, Indigenous and remote area students, but some would also go to low SES private schools. None of it should go to elite high SES schools.

The fate of Gonski is uncertain
However, the fate of Gonksi remains uncertain even though it is over a year since the report was presented.

State Liberal/National governments have not committed to any additional funding and it is by no means clear that they will come on board. The Baillieu Government in Victoria has just announced its own scheme, but with much less funding than would be delivered under the Gonksi model. The Federal Opposition’s demand that the current model be extended for another two years would mean that the Gonski model may never happen, especially if there is a change of federal government.

The Gillard Government has added to the uncertainty. There are still no details on what it proposes, and we are unlikely to get them until the next meeting of the Council of Australian Governments in April. State and territory governments still have not been given any details for negotiations to start. It will all be decided in secrecy behind closed doors with state and territory governments and private school organisations. Government school representatives are completely sidelined from the negotiations.

When we finally get the details of the Government’s model it should be judged on some key benchmarks:
• The $6.5 billion a year increase should go entirely to disadvantaged students and not be depleted by funding increases for higher SES students;
• The Federal Government should take responsibility for the main share of the funding increase; and
• The funding increase over the transition period should be fully transparent to ensure that the full amount is delivered.

The Gonski funding increase should go entirely to disadvantaged students
The funding increases should be directed entirely at the most disadvantaged groups – low SES, Indigenous, remote area, and disability students as well as students from some ethnic groups. This is where Australia’s education system is failing. This is the priority for change.

The extra funding loadings for disadvantaged students proposed by the Gonski report should be adequate to the task. They should be higher than those suggested in the report because there is strong evidence that the report got it wrong here.

Under the most generous loadings proposed by the report, a low SES student in a very high SES school would be allocated and extra $5,000 if the national resource standard is determined at $10,000 per student. A low SES student in a high SES school would get only $1,000 in extra funding.

In contrast, several education cost studies show that the cost of educating low income students is double or more the cost of educating an average student. This would require an additional $10,000 per student if the national resources standard is set at $10,000 per student.

If the loadings for low SES students are too low, then the total funding for all disadvantaged students to achieve national minimum standards will also be too low. Thus, the extra $6.5 billion for disadvantaged students is unlikely to be enough. But, it is a very significant start.

Given this, the proposed additional funding pool should not be depleted by funding increases for well-off private schools. Federal Government should rule out general funding increases for higher SES private schools. All the available additional funding would be better directed to students and schools most in need.

However, it seems that the Government is bent on paying off higher SES private schools as well. The Prime Minister has committed to increasing funding for all private schools and the education minister, Peter Garrett, said it will be a real increase (that is, it will exceed cost increases) for all schools. The Prime Minister has also committed to funding all students, regardless of school, on a consistent basis.

The latter commitment alone implies a massive increase for medium and high SES private schools currently funded at their SES score rate. They will have their funding increased to match that of FM schools at each SES score.

Just 73 of Australia’s most elite private schools would get an increase of nearly $300 million a year, based on 2009 figures. This estimate is based on a one-year transition to the new model.

Many schools would receive very large increases of over $4 million a year, once the full transition period is over. In NSW, Barker College (the Federal Education Minister’s old school) would get an annual increase of over $8 million. Other increases include SCEGGS Redlands ($5.5 million), Abbotsleigh ($5.4 million), Newington College ($5.3 million), Cranbrook ($5 million) and The King’s School ($4.7 million). In Victoria, they include Caulfield Grammar ($9.6 million), Wesley College ($9.4 million), Carey Grammar ($7.9 million), Methodist Ladies College ($7.8 million), Scotch College ($7.1 million) and Melbourne Grammar ($6.8 million).

Save Our Schools has estimated that the total windfall gain to private schools from the Government’s commitments at nearly $2 billion, but it could be more or less depending on the fine details of the rate schedule adopted. Virtually all of it would go to medium to high SES schools.

This would put a huge hole in the Gonski funding bucket. The entire proposed 30 per cent Federal Government contribution envisaged by the Gonski report would go to medium to high SES private schools and leave increased funding for disadvantaged students to the vagaries of negotiation with state and territory governments.

This commitment should be shelved. The only sure way to put all private schools on a consistent funding basis is to freeze the funding of all FM schools and allow cost increases over time to erode their funding advantage over other schools on the same SES score.

However, the Government has promised that all schools will get a funding increase, including FM schools. This would mean even bigger increases for the non-FM schools in order to get them to the same funding per student as FM schools on the same SES score. It is a promise whose cost will be borne by disadvantaged students and schools, whether in the government or private sectors.

The Federal Government should assume the large share of the funding increase
The federal government should provide the major part of the funding increase. This means taking a greater role in the funding of government schools than at present. The Government should go it alone if state governments refuse to come on board.

There is a strong case for this. The federal government already has an established role in reducing disadvantage. It is also a matter of improving our national economic prosperity. Investment in reducing disadvantage in education will deliver huge returns – improvements in productivity, increased employment and incomes, reduced government expenditure on health, welfare and crime.

The other reason is that it will be disadvantaged government schools that miss out on the additional funding if the states do not come on board or refuse to commit to a significant funding increase. State and territory governments provide the large bulk of funding for government schools while the federal government provides the large bulk of government funding for private schools. The legislation for federal funding for schools expires at the end of this year, so the Government has to act. The Education Minister has promised to increase federal funding for all private schools in real terms. If the states fail to commit to contributing to the Gonski funding increase we could end up with a big increase in funding for private schools from 2014 and no, or little, increase for government schools. What an outcome that would be!

There should be no fudging of the funding actually delivered
The accounting for the funding increase should be fully transparent. There should be no fudges in the amount of funding actually delivered. The Gonski recommendation for an increase of $6.5 billion is based on 2010 funding figures and it also recommended a change in the way annual funding increases are indexed against rising costs. The new funding model is due to be introduced in 2014 with a transition period of six years to 2020 to implement the full increase in funding. This will allow opportunities for governments to secretly limit the extent of the funding delivered on the ground by 2020.

The Prime Minister has already indicated that the bulk of the proposed funding increase will be postponed until the later years of the transition period, with only $1 billion being budgeted for the first year. This makes it more uncertain that the full amount will ever be delivered, especially with different political and economic circumstances in the later years.

When the Government finally announces the details of the new funding model it should include the forward estimates to 2020 and show the Gonski funding increase separately for each year. By 2020, the full Gonski funding increase should amount to over $10 billion a year based on annual indexation of 5 per cent. This would mean that total federal, state and territory government funding should be over $71 billion (excluding user cost of capital for government schools) compared with total funding in 2010-11 of $39 billion. Anything less than this would indicate governments have not fully delivered on Gonski.

The choice is equity or privilege in education
The new school funding model will be a test of government resolve on equity.

To date, the Rudd and Gillard governments have given priority to completing David Kemp’s vision of subjecting education to the rule of market forces. Not only has Labor continued Kemp’s privatisation and competition policies, but has extended them in ways Kemp could only dream of, namely, school league tables, teacher performance pay, school performance bonuses and school autonomy.

The Government’s education policies are beset by a fundamental contradiction. Greater equity in education cannot be achieved by extending the market in education. Choice and competition are the antithesis of equity. They exacerbate inequity and social segregation as shown by many research studies of these policies in Chile, England, New Zealand, Sweden and the United States.

The Government should put equity before privilege and press on with the Gonski funding model and the funding increase for disadvantaged schools. It has a unique opportunity this year to make a difference to the futures of low income and other disadvantaged students, to set a path to a fairer society and to boost economic prosperity. This is what is at stake in implementing a new school funding model.

Trevor Cobbold

An earlier version of this article was originally published in the February 2013 edition of Education Review.

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