New Figures Show that Government Funding Increases Favour Private Schools: Trevor Cobbold 28.01.2015

New Figures Show that Government Funding Increases Favour Private Schools

Wednesday January 28, 2015

New school funding figures provided to Senate Estimates show that government funding increases for Catholic and Independent schools have outstripped funding increases for public schools since 2009. The percentage increase in funding for Catholic and Independent schools was almost double that for public schools despite the fact that public schools enrol the overwhelming majority of students in need of increased support.

Total government (Australian & state/territory) funding for Catholic schools across Australia increased by 19.5 per cent between 2009 and 2012 and by 18.3 per cent for Independent schools (see Chart 1). This compares to an increase of only 10.6 per cent for public schools.

The new figures were compiled from the My School website by the Australian Curriculum, Assessment and Reporting Authority (ACARA). It is the first time that aggregated school income figures derived from My School have been officially published by ACARA.

Chart 1 – Increases in School Funding 2009-2012.pdf

The disparity in funding increases is primarily due to larger funding increases for Catholic and Independent schools by state and territory governments. State/territory government funding for Catholic schools increased by 18.8 per cent and for Independent schools by 15.7 per cent compared to only an 8.8 per cent increase for public schools. State governments are the primary source of funding for public schools, but are clearly failing to deliver the funding public schools need.

In contrast to the failure of state and territory governments, Australian Government funding increased by similar amounts for public, Catholic and Independent schools. Funding for public schools increased by 21 per cent compared to 19.7 per cent for Catholic schools and 19.3 per cent for Independent schools. National partnership funding under the previous Labor Government at least ensured that the increase for public schools was on a par with the increase for private schools.

Increases in fees and charges have also helped Catholic and Independent schools to increase their total income by nearly double that of public schools. The total income of Catholic schools increased by 18.5 per cent and by 17.5 per cent for Independent schools compared to 10.5 per cent in public schools.

As a result of these increases, the total income of Independent schools is about 45 per cent higher than that of public schools – $17,941 per student compared to $12,403 per public school student (Chart 2). Public and Catholic schools have a similar total income per student. Government funding accounts for 73 per cent of the total income of Catholic schools and 42 per cent of Independent school income.

Chart 2 – Income of Public and Private Schools, 2012.pdf

The funding difference between public and Independent schools is less for net income per student while Catholic schools have slightly lower net income than public schools. Net income excludes income allocated to current and future capital projects and income allocated to debt servicing. The reason these items are excluded is that private schools must provide for part of their capital expenditure out of current income whereas capital expenditure for public schools is funded separately by government.

However, it is well known that many non-systemic elite Catholic schools and other elite Independent schools give priority to gold plating their facilities (multiple sporting ovals, indoor swimming pools, gymnasiums, tennis courts, auditoriums, and even equestrian centres). These gold plated facilities provide a considerable advantage for private schools in attracting enrolments and they are partly financed from recurrent funding by governments. In contrast, capital expenditure on public schools is confined to providing a base standard of facilities. Governments do not provide funding for multiple sporting ovals, indoor swimming pools, gymnasiums, tennis courts, auditoriums, and equestrian centres in public schools.

Thus, excluding recurrent income allocated to gold plating private school facilities from income comparisons of schools reduces the apparent funding advantage of non-systemic Catholic and Independent schools over public schools, even though expenditure of this income provides a significant resource advantage for these private schools.

The total income of Catholic and Independent schools is also under-estimated by the exclusion of several items from the estimates. While the total income of public and private schools includes notional allocations for various central administration costs, a number of other items are excluded which primarily benefit private schools such as student transport subsidies, the cost of tax deductible donations, the cost of Australian and state/territory administration of private school funding and the cost of private school regulation by state/territory governments.

For example, most private schools offer tax deductibility on contributions to building and library funds set up by the school and allows parents of non-government school students to reduce the level of personal tax being paid. This cost to government is not included in private school income. The Australian Government administers the large part of government funding of private schools, but the cost of this is not included in private school income whereas the cost of state/territory government administration of public schools is notionally allocated to schools. State and territory government expenditure on the administration of private school registration and accreditation is excluded from private school income. These exclusions mean that the total and net income of Catholic and Independent schools is under-estimated in comparison with public schools.

The exclusion of private school own-funding of gold-plated facilities and the exclusion of several Australian and state/territory government costs that benefit private schools means that the current measure of net recurrent income under-estimates the income of private schools compared to public schools. On the other hand, the inclusion of private school own funding of standard facilities in total recurrent income over-estimates the income of private schools compared to public schools. However, the exclusion of other government-provided benefits from the income of private schools may mean that total recurrent income is a reasonably comparable measure of public and private school income.

A further consideration in comparing the income of public and private schools is that public schools have to do more with their funding than Catholic or Independent schools. Public schools face much greater challenges because they enrol the vast majority of low SES, Indigenous, disability and remote area students. For example, about 82 per cent of all students in the lowest SES quartile in Australia attend public schools compared to 12 per cent attending systemic Catholic schools and six per cent attending Independent schools. In addition, 84 per cent of all Indigenous students attend public schools compared to 10 per cent in Catholic schools and six per cent in Independent schools. About 77 per cent of funded disability students attend public schools.

On average, these students have much higher learning needs than other students. Much higher costs are associated with ensuring that low SES, Indigenous and remote area students achieve adequate standards of education and improve their results relative to high SES students. Much higher costs are also associated with educating students with disabilities.

Clearly, it is public schools that are doing the heavy lifting in education in Australia. Catholic and Independent schools do not assume the same social obligations as public schools. They under-enrol higher cost students which means that they effectively have an even higher level of income.

School funding priorities in Australia are completely awry. Unfairness is at the heart of current funding approaches. Public schools need much higher per student funding than both Catholic and Independent schools to meet their challenges. Yet, they have much less total income per student than Independent schools and only a similar amount to Catholic schools.

The OECD says that fairness in resource allocation is important for ensuring equity in education opportunities and has labelled Australia as a low equity nation in the resourcing of schools [OECD, Pisa in Focus, No. 44, October, 2014]. Its data on the allocation of resources between advantaged and disadvantaged schools show that only four of the 34 OECD countries and only 10 out of 65 countries participating in the PISA tests have greater inequity than Australia.

The Gonski funding plan introduced by the previous Labor Government was designed to give more priority to improving equity in education by increasing funding for disadvantaged students in all school sectors. The large part of the $16 billion funding increase from the Federal and state governments would have gone to public schools. However, the plan has been sabotaged by the Coalition Government because it refuses to fund the final two years of the six year plan when the bulk of the $16 billion increase was due. It has also been sabotaged by the refusal of many state governments, with the notable exception of the NSW Government, to commit to funding increases. Indeed, some have cut school funding.

At the Federal level, nothing will change until the next election. Labor should re-affirm its commitment to the full implementation of the Gonski funding plan. State and territory governments should also follow the lead of the NSW Government in keeping to its Gonski commitments and step up their funding of public schools.

Trevor Cobbold