Morrison Abandons Needs-Based Funding

The following is a section from a new Working Paper published by Save Our Schools on the the abandonment of needs-based funding and the massive funding increase for private schools by the Morrison Government. The Government has completed the demolition of the Gonski funding model begun by the Abbott and Turnbull governments and re-affirmed funding choice as its priority. The paper can be downloaded below.

Comments on the paper are invited. Notification of issues not covered and mistakes of fact, analysis and interpretation will be appreciated. Please excuse any remaining typos and repetitions.Comments can be sent to the Save Our Schools email address:

Despite their initial opposition to the Gonski funding model, successive Coalition governments have been forced to retain its basic features, namely the base SRS and the needs-based funding loadings for various categories of disadvantaged students and schools.  However, they have succeeded in destroying the model. The Abbott Government ditched the large funding increase for 2018 and 2019 that was planned under the original model, an increase that would have mainly benefitted public schools. The Turnbull Government abandoned the national approach to funding and reverted to the longstanding division of responsibilities for funding public and private schools, with the Commonwealth having primary responsibility for private schools and the states having primary responsibility for public schools.

The Morrison Government completed the demolition. It engineered a huge funding boost for private schools by adopting a highly flawed method of determining their financial need and by increased funding outside the basic model that was not based on need. Public schools were denied a similar increase. Indeed, the Government and conspired with state governments to massively defraud public schools by allowing them to claim expenditures not included in the measure of the SRS as part of their target share.

Morrison dismissed the needs of public schools as a matter for state governments saying that “state governments are the principal funders of state schools” while the Commonwealth “has always been the principal funder of non-government schools”.[1] It continues the Coalition’s long tradition of guaranteed funding of private schools and no guarantees for public schools. The Morrison Government has fulfilled what Tony Abbott called the Liberal Party’s “proud history of funding independent and Catholic schools” to “protect them” and ensure they “continue to flourish.[2]

The Government has effectively dismissed the needs of disadvantaged students because the vast majority attend public schools. In 2019, public schools enrolled 80% or more of disadvantaged students – low SES (80%), Indigenous (84%), extensive disability (86%), and remote area students (82%).[3] Also, over 90% of the most disadvantaged schools are public schools.[4] Yet, public schools are destined to receive a much smaller increase in funding to 2029 than private schools and will remain vastly under-funded.

Choice is more important than equity in education for the Morrison Government. It unashamedly re-affirmed the Howard-era mantra of school choice as its policy priority. Support for parent choice was a key justification for the funding boost for private schools. The Government’s media release announcing its peace deal with the Catholic Church was headed “More Choice for Australian Families”.[5] It said that the funding would provide “choice and equity in education”. In the joint media conference on the funding announcement, Morrison said:

We believe in choice in education. We believe Australian parents should have choice and we’re guaranteeing that choice through the decisions and the commitments and the agreements we reached today. [6]

This was echoed by Tehan, who told the Parliament that the Choice and Affordability Fund is to:

…ensure, right across Australia, that parents have the ability to have choice, and affordable choice. Whether they’re in an inner-city area or whether they’re in a rural or remote area, we want to ensure that that choice is there.[7]

These views reflect those of the Catholic Church. In his statement on the “peace deal” with the Morrison Government, Archbishop Anthony Fisher said:

Educational need cannot be limited to financial need. Every child needs a quality education and there is a need for every parent to have a real choice in education, including the option of a faith-based school. The previous funding ¬ arrangements put in jeopardy the future of low-fee, low-expenditure, faith-based schools.[8]

The Catholic Church view of need was premised on the availability of choice of low-fee schools as the NCEC stated:

…‘need’ not only relates to wealth; every child needs a quality education and parents need a real, affordable choice including the option of a faith-based school. The community therefore needs a public school system and a parallel, low-fee alternative across Australia if these needs are to be satisfied.[9]

School choice has always been a cover for more funding for private schools. As many research studies around the world and in Australia have shown, school choice is a policy that promotes social segregation in schools and exacerbates inequity in education.[10] For example, an OECD study concluded:

In the last 25 years, more than two-thirds of OECD countries have increased school choice opportunities for parents. The empirical evidence reviewed here reveals that providing full parental school choice results in further student segregation between schools, by ability, socio-economic and ethnic background, and in greater inequities across education systems.[11]

Another OECD report also found that school choice policies have increased social and academic segregation between schools which, in turn, reduced equity in education. it increases social segregation of students as choice is mostly used by middle-class and wealthy families:

Empirical results in this volume suggest that weakening the link between place of residence and school allocation is related to a higher level of school segregation by social status. Some resilient disadvantaged students may have access to schools that would otherwise be inaccessible if a strict residence-based policy were applied. But that, in itself, does not offset the social-sorting effects that result when it is mostly middle- or upper-class families that take advantage of school-choice policies.[12]


Empirical evidence from systems with country- or state-wide school-choice policies, such as Chile, New Zealand, Sweden and the United States, suggests that providing more opportunities may increase school stratification based on students’ ability, socio-economic status and ethnicity.[13]

Remarkably, the Prime Minister claimed that the new funding method would make the education system “fairer and more equitable”.[14] It is incomprehensible how he could consider a massive increase for private schools and no equivalent increase for public schools will make the education system fairer. As former Minister for Education in NSW, Adrian Piccoli, said:

There is nothing equitable or fair about that at all and is contrary to the very concept of needs-based funding. This does nothing for the kids who need the funding the most.[15]

Morrison’s argument that the new funding will make the system fairer has Orwellian overtones. As Peter Goss of the Grattan Institute commented: “…all schools are equal but some are more equal than others”. [16]  

Morrison’s claims are not supported by the research evidence. A study published by the US National Bureau of Economic Research shows that school choice exacerbates inequality without improving opportunities for the most disadvantaged students.[17] This was confirmed by the OECD report which said there is widespread evidence that social segregation in schools impacts on the academic performance of its students.

….this evidence suggests that sorting students into schools by ability or social status may adversely affect both the efficiency and equity of the school system…. social and academic segregation in schools may create additional barriers to success for disadvantaged children and reduce equity in education.[18]


School stratification may also have long-term negative consequences for social mobility. Disadvantaged students may develop biased education and career aspirations because of the absence of inspiring role models that are usually found in schools with a greater social mix. More generally, social stratification amongst schools may threaten social cohesion, as children are not accustomed to social or ethnic diversity.[19]

The report found added evidence of these effects from PISA 2015. It found that countries where schools were more socially segregated also had less-equitable education systems. Increasing social segregation amongst schools tends to widen the achievement gap between disadvantaged and advantaged students.

In 2015, countries where schools were less socially diverse also had less-equitable education Systems…..Empirical evidence suggests that social segregation across schools is negatively correlated with equity in education…[20]

[1] Scott Morrison, Press Conference with the Minister for Education, 20 September 2018; Paul Karp, Catholic and independent schools given extra $4.6bn in funding peace deal, The Guardian, 21 September 2018.

[2] Sean Nicholls and Phillip Coorey, Dump plans to cut school funding, Abbott tells NSW, Sydney Morning Herald, 11 September 2012; Tony Abbott, Doorstop Interview, 7 March 2012.

[3] Australian Bureau of Statistics, Schools 2019; Steering Committee for the Review of Government Service Provision, Report on Government Services 2021, Productivity Commission, 2021, Tables 4A.6, 4A.7.

[4] Trevor Cobbold, The Vast Majority of Disadvantaged Schools are Public Schools, Education Research Paper, Save Our Schools, May 2019.

[5] Scott Morrison and Dan Tehan, More choice for Australian families, Joint Media Release, 20 September 2018.

[6] Scott Morrison, Press Conference with the Minister for Education, 20 September 2018; See also Scott Morrison, Interview with Sabra Lane, ABC AM, 21 September 2018.

[7] Dan Tehan, House of Representatives, Hansard, 20 September 2018, p. 65.

[8] John Ferguson, School funding row ends with $4.5bn deal, The Australian, 21 September 2018.

[9] National Catholic Education Commission, School funding changes support families, Media Release, 20 September 2018.

[10] Waslander, S., Pater, C., & Weide, M. Markets in Education: An Analytical Review of Empirical Research on Market Mechanisms in Education. Working Paper 52. OECD Publishing, Paris, 2010; Trevor Cobbold, The Great School Fraud: Howard Government School Education Policy 1996-2006, Paper prepared for the Australian Education Union, April 2007. 

[11] Pauline Musset, School Choice and Equity: Current Policies in OECD Countries and a Literature Review, OECD Education Working Papers, No. 66, OECD Publishing, Paris, January 2012.

[12] OECD, Balancing School Choice and Equity: An International Perspective Based on Pisa, PISA, OECD Publishing, Paris, 2019, pp. 11-12.

[13] Ibid, p. 20.

[14] Scott Morrison and Dan Tehan, More choice for Australian families, Joint Media Release, 20 September 2018.

[15] Adrian Piccoli, Political fix’: Why Morrison’s school funding deal is a dud, Sydney Morning Herald, 22 September 2018.

[16] Peter Goss, Three charts on: why Catholic primary school parents can afford to pay more, The Conversation, 21 September 2018.

[17] W. Bentley MacLeod & Miguel Urquiola, Is Education Consumption or Investment? Implications for the Effect of School Competition, Working Paper 25117, National Bureau of Economic Research, Cambridge, Mass., October 2018.

[18] OECD, Balancing School Choice and Equity: An International Perspective Based on Pisa, PISA, OECD Publishing, Paris, 2019, p. 20.

[19] Ibid, p. 20.

[20] Ibid, pp. 67, 68.

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