Private Schools to Triple-Dip Under Baillieu Plan

Private schools around Australia and in Victoria would get a hidden windfall gain of up to $90 million a year from the Baillieu funding plan proposed as an alternative to the Gonski model. Victorian private schools would gain up to $55 million and private schools in other states would gain about $33 million. This hidden bonus is in addition to an increase in their direct funding from the plan of about $100 million.

Private schools will triple-dip on the taxpayer under the Baillieu plan. It will provide three sources of additional government funding for private schools in Victoria – one direct funding for disadvantaged students from the Victorian and Federal governments, a second as hidden indirect funding for all private schools from the Federal Government and a third as hidden indirect funding for all schools from the Victorian Government.

They can triple-dip because private school funding is linked to government school costs. Under current Federal and Victorian government funding of private schools part of any increase in funding for disadvantaged government school students automatically flows on to all private schools. Even those that have none or few disadvantaged students would get an increase.

The Baillieu plan has the same “lack of coherence and transparency” as the current Federal SES funding model criticised by the Gonski report. The hidden benefits for private schools under the Baillieu plan would not occur under the Gonski model because it does not link private school funding to government school costs.

The Baillieu Plan would deliver about $400 million in additional funding for disadvantaged Victorian schools and disability students each year when fully implemented. It is subject to an “appropriate” contribution from the Federal Government.

Of this, disadvantaged private schools would get a direct funding increase of about $100 million. According to 2006 Census data, 74% of low income students in Victoria attended government schools and the Report on Government Services shows that 76% if disability students attended government schools in 2011. Therefore, it can be roughly estimated that about 25% of the additional $400 million, or $100 million, would go directly to disadvantaged students in private schools. Anything more would be out of proportion to the enrolments of disadvantaged students in private schools.

In addition, however, all private schools would receive a large hidden funding increase that does not discriminate between disadvantaged and well-off private schools. Even elite private schools such as Geelong Grammar, Melbourne Grammar, Scotch College, MLC and others would get an increase.

This increase would occur because both Federal and Victorian government funding for private schools are linked to average government school recurrent costs (AGSRC).

The increase in Victorian Government funding for government schools would increase national AGSRC by about $150 million, assuming a 50/50 split between the Federal and Victorian governments in the increase (national AGSRC does not include Federal grants). The national AGSRC in 2011 was $10,570 per student (a weighted average of primary and secondary AGSRC) and this would increase by $65 per student to $10,636 with the Baillieu increase.

Every private school in Australia would share in the increase. On average Federal Government special purpose payments (excluding National Partnership funding) to all private schools in 2010-11 amounted to 55% of AGSRC (or $5786 per student). Therefore, on average, every private school student would receive 0.55 of the $65 increase in AGSRC which would amount to a total of $44 million across Australia, including about $11.4 million for Victorian private schools.

Victorian private schools will also get another hidden increase because Victorian Government funding for private schools is linked to average government school costs in Victoria. The Baillieu Government is increasing the rate of funding for private schools from 17% to 25% of Victorian AGSRC.

There does not appear to be any published estimate of Victorian AGRSC. However, it can be roughly estimated from the figures in the Report on Government Services on Victorian government expenditure on government schools, excluding user cost of capital and depreciation. In 2010-11 it was $5.1 billion, or $9382 per student. With the $300 million increase, Victorian AGSRC would be $9937 per student (assuming that Federal grants are included in Victorian AGSRC) – an increase of $555 per student.

All Victorian private schools will get 25% of this increase, that is, $139 per student. The total increase would be $44 million, which added to the national increase would give an overall increase of $88 million. Victorian private schools would receive $55 million and private schools in the rest of Australia would receive $33 million.

If Federal grants are excluded from Victorian AGSRC then these amounts will be less. The total increase would by $22 million, which added to the national increase would give a total of $66 million. In this case, Victorian private schools would receive an increase of $33 million.

Thus, the $300 million increase for disadvantaged students in government schools would generate an increase of $66 – $88 million for private schools around Australia and in Victoria without regard to whether they enrol any disadvantaged students. This is a pure windfall gain for private schools on top of the increased direct funding of $100 million.

In total, private schools will get a funding increase of nearly $200 million compared to the increase for government schools of $300 million. This is way out of proportion to relative education need in government and private schools. Private schools enrol about 25 per cent of low income and disability students, but will get nearly 40 per cent of the total direct and hidden funding increases under the Baillieu plan. Even the richest schools in Australia will get part of the increase. No wonder Independent Schools Victoria has welcomed the plan.

These hidden bonuses for private schools are likely to increase. The Queensland Government has announced that it will follow the Victorian Government and prepare its own funding plan. Any increase in Queensland Government funding for government schools will generate hidden increases for all private schools from the Federal and Queensland Governments. Queensland Government funding for private schools is also linked to government school costs at a rate of 21.2% of Queensland AGRSC.

The Gonski report criticised the current school funding approach based on AGSRC as “opaque” and lacking “a convincing education rationale”. It said that retaining the AGRSRC mechanism as a centrepiece of school funding will not assist Australia in meeting its educational challenges and that it should be replaced by a new set of arrangements.

The Baillieu plan (and the likely Newman plan) demonstrates the truth of this judgement. A funding system that allows private schools to triple-dip on the taxpayer is an outrage that must be replaced.

Trevor Cobbold

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