Rudd and Gillard Make a Cogent Case to Replace the SES Funding Model for Private Schools

Both the Prime Minister and the Education Minister have in the past made strong cogent criticisms of the current SES model for funding private schools. They have both exposed fundamental flaws in the scheme, but have failed to take action on their criticisms. The SES model should be replaced by a fairer scheme.

When it was first introduced the scheme provided a massive windfall gain of $50 million for the 62 wealthiest schools in Australia by increasing their funding rate. Since then, these schools have continued to receive funding increases based on increases in government school costs.

The Federal Education Minister, Julia Gillard, said at the time that there were “very concerning statistics in terms of fairness” while the Prime Minister said that it was “an issue of general equity”.

Both Rudd and Gillard noted that the SES scheme would provide an additional $800 000 a year to the wealthiest schools, while government schools would only receive a miserly $4 000 extra a year [Hansard, House of Representatives, 4 September 2000: 20054, 20067-68]. Julia Gillard emphasised:

Those statistics ought to concern anybody in this place who is worried about fairness and equity in our school funding models.

The Prime Minister said:

We have grave problems with this misallocation, this windfall allocation, to category 1 schools, which are that category of school that does not need this money at the end of the day. [Hansard, 4 September 2000: 20068]

Second, the current scheme is based on the average SES of geographical areas, which include both higher and low income families. As higher income families are more likely to attend private schools, schools can receive a lower SES rating and, therefore, higher funding because they enrol high income students from low SES regions. As Julia Gillard told the House of Representatives at the time the SES legislation was debated:

….there is a flaw in the methodology….the model may lose veracity in highly differentiated areas where wealth and poverty live cheek by jowl… is possible for the census collector district averaged data not to be very representative of the individual households involved. [Hansard, 4 September 2000: 20053]

Third, schools receive funding without regard to their capital resources. As Julia Gillard has observed in her contribution to the debate on the legislation:

….the model makes no allowance for the amassed resources of any particular school….over the years many prestige schools have amassed wealth – wealth in terms of buildings and facilities, wealth in terms of the equipment available, wealth in terms of alumni funding raising, trust fund, endowment funds and the like….This is a gaping flaw….a very big flaw, one that needs to be addressed. [Hansard, 4 September 2000: 20053]

A fourth flaw is that increases in SES funding are linked to average government school costs so that any funding for targeted equity groups in government schools automatically flows on in part to private schools even if they do not enrol any of these students or enrol a much lower proportion than in government schools. As Gillard also noted:

….it could be argued that the model is flawed, proceeding as it does on the basis of the average government school recurrent costs figure. [Hansard, 4 September 2000: 20052]

A further anomaly is that over 50% of private schools and over 60% of private school students are funded at higher levels than is warranted by their assessed socio-economic status because the Howard and Rudd Governments have provided a ‘no losers’ guarantee to maintain funding to these schools. As Gillard has further noted, the scheme strictly applies “only to a minority portion of the non-government system”.

A Commonwealth Department of Education review of the SES model found that these schools were over-funded by more than $2 billion over four years to 2008. It says that private schools will get up to $2.7 billion more than they are strictly entitled to under the current four-year funding agreement. Many of the wealthiest schools are over-funded by $2000-$3000 per student each year.

The Prime Minister has stated that the SES funding scheme does not “….reflect a fair outcome for this nation’s future funding of the school system and need[s] to be redressed” [Hansard, 4 September 2000: 20070]. Julia Gillard has concluded that “….this SES model is not the powerful tool we need” [Hansard, 4 September 2000: 20052].

However, the Prime Minister and the Education Minister have failed to follow up their criticisms of the scheme with action. They have refused to stop the diversion of millions of dollars of taxpayer funds to the benefit of a few thousand wealthy families whose children attend elite private schools.

The Rudd Government promised it would undertake a review of private school funding. It is long overdue. It should have been implemented immediately when Labor was elected.

The SES scheme should be replaced with one that links government funding to the social purposes of schools and to actual student need. Future funding for private schools should be designed to ensure a basic level of resources for all schools, above which funding should be based on need. The role of government funding of private schools should be to ensure that each school has the appropriate resources to provide an adequate education for all students and that students with special learning needs and from targeted equity groups are fully supported.

There are two basic elements to such a funding approach.

The first is an in-school baseline component that is determined by rating each private school against the social role of government schools. This could be determined by criteria such as inclusive enrolment practices, suspension and exclusions policies, curriculum requirements and the level of fees that are determined in the registration process. Private schools whose social purpose is categorised as similar to government schools would receive a similar amount of baseline funding as government schools.

The second feature is an additional funding component for students with identified learning needs in literacy and numeracy and for low SES, Indigenous and special education students.

The maximum baseline government funding entitlement would go to those private schools which did not apply religious, ethnic or academic tests for enrolment; which accepted the same procedures on suspensions, expulsions and transfers as government schools; and which had a minimum level of fees. Schools with more restrictive practices would be entitled only to lesser funding.

The maximum funding entitlement would be less than the average baseline funding for government schools because private schools do not perform the same public role as the government system in ensuring local access to schools and to special schools. Private schools would not receive the funding component for government schools to perform their special public purposes.

However, students with identified literacy and numeracy learning needs, students from low SES families, students with disabilities and Indigenous students in private schools would receive the same level of government funding support as those enrolled in government schools. So, private schools where these students comprise a larger proportion of enrolments than in government schools would receive higher funding.

Such a funding scheme would better serve students most in need rather than those least in need as under the current arrangements.

Trevor Cobbold

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