Public Schools Face a Funding Crisis; Private Schools Are in Clover

      Trevor Cobbold / June 30, 2020 /


Government funding increases continue to massively favour private schools over public schools according to new figures published by the Australian Curriculum, Reporting and Assessment Authority (ACARA). As a result, Catholic and Independent schools are far better resourced than public schools in every state even though public schools enrol over 80% of all disadvantaged students and 95% of all disadvantaged schools are public schools. This funding trend is set to continue under current funding arrangements and more special deals for private schools from the Morrison Government. This is a recipe for continuing educational, social and economic inequality.

Total income

Catholic and Independent schools are far better resourced than public schools. In 2018, income per student in Catholic and Independent schools was much higher than for public schools in 2018. The average total income per student in public schools in Australia was $14,940 compared to $23,029 per student in Independent schools and $16,401 in Catholic schools [Chart 1]. The total income per student of Catholic and Independent schools exceeded that of public schools in all states.

Between 2009 and 2018, the increase in total income per student, adjusted for inflation (“real” income), of private schools was nine to ten times higher than for public schools. The real total income of Independent schools increased by $2,585 (16.9%) per student and by $2,096 (19.7%) in Catholic schools compared to an increase of only $241 (2.1%) per student in public schools [Chart 2].

Real total income per student in private schools increased by large amounts in all states. Real income in public schools fell by large amounts in Western Australia, the ACT and the Northern Territory and the increases in the other states were far less than in private schools.

The increase in the resource advantage of private schools was due to much larger Commonwealth funding increases for Catholic and Independent schools than for public schools, a significant cut in state and territory government (“states”} funding for public schools and increased income from fees and other sources for private schools.

Government funding increases have been pivotal in ensuring that private schools have far more teacher and physical resources than public schools. Government funding accounted for 77% of the increase in Catholic school income and 62% of the increase for Independent schools.

Government funding

The increase in real government funding for Catholic and Independent schools between 2009 and 2018 was over five times that for public schools. Catholic school funding increased by $1,620 (21%) per student and by $1,603 (25.4%) for Independent schools compared to only $306 (2.9%) per student in public schools [Chart 3].

Government funding changes massively favoured private schools in all states. Catholic and Independent schools received large funding increases in all states while public schools in NSW, Victoria, Queensland, South Australia and Tasmania received much smaller increases and funding was cut for public schools in Western Australia, the ACT and the Northern Territory.

The increase in real Commonwealth funding for private schools was over twice that for public schools. Catholic school funding increased by $1,502 (26.2%) per student and for Independent schools by $1,427 (31.5%) compared to $637 (39.7%) for public schools.

Commonwealth funding increases for private schools far exceeded that for public schools in every state except for Independent schools in the Northern Territory. The increases were over double that for public schools in several states.

The states cut their real funding for public schools by $330 (-3.7%) per student while increasing funding for Catholic schools by $118 (6%) per student and $166 (9.5%) for Independent schools. Every state government except Victoria cut its funding for public schools while five governments increased their funding for Catholic schools and six increased funding for Independent schools

Public schools bear the large burden of disadvantage

Government funding increases have favoured advantage over disadvantage. Public schools enrol the vast majority of disadvantaged students; disadvantaged students in public schools comprise a much higher proportion of total enrolments than in private schools; nearly all disadvantaged schools are public schools.

In 2018, public schools enrolled 82% per cent of all low SES students; 84% of Indigenous students, 77% of high disability students and 82% of remote area students [Chart 4]. Disadvantaged students accounted for 46% of all public school enrolments compared to 20% in private schools.


Moreover, 95% of schools with 50% or more students from the lowest socio-economic status (SES) quartile were public schools, 3% were Catholic schools and 2% were Independent schools [Chart 5].


Private schools are in clover

The priority given to funding advantaged students and schools over disadvantaged students and schools is set to continue indefinitely. Several special funding arrangements will ensure that private schools continue to receive large funding increases beyond 2018 regardless of need while public schools are condemned to remain underfunded.

Under the current Commonwealth/state funding agreements, public schools will only ever be funded at 91% of their Schooling Resource Standard at most while private schools will be funded at or over 100% from 2023.

The Morrison Government is providing a $3.4 billion funding boost to private schools over ten years through its direct income measure of parent capacity to contribute in private schools. This amount was announced before the direct income measure was even determined. A report by the Senate Education and Employment Legislation Committee unequivocally showed that its financial cost was never properly calculated. Evidence presented to the Committee showed there is no rational basis to the figure. It is yet another special deal to placate the Catholic Church.

In addition, it will provide private schools with an increase of $1.2 billion over ten years by way of its Choice and Affordability slush fund. In his memoirs A Bigger Picture, former Prime Minister Malcolm Turnbull said the Fund was introduced by the Morrison Government “without any particular rationale, other than as a way of buying some peace” with private schools.

The Morrison Government is also providing over $200 million in special assistance funding for private schools over several years from 2019. It includes transitional assistance to the new direct income measure of capacity to contribute, drought assistance, hygiene assistance for COVID-19 and adjustment assistance for ACT private schools. None of this funding is available to public schools.

Public schools face a funding crisis

Public schools face the prospect of being underfunded indefinitely. Under the current arrangements, Commonwealth funding increases will continue to heavily favour private schools for at least the next ten years while the states will continue to underfund public schools and overfund private schools. Cumulative under-funding of public schools will amount to about $60 billion over the period 2018 to 2027 under the current Commonwealth/state funding agreements.

As a result, the large majority of disadvantaged students are condemned to an inferior education than their advantaged peers. It is an appalling social injustice that will continue the reproduction of educational, social and economic inequality. It will also restrict Australia’s economic growth and prosperity.


2 Replies to “Public Schools Face a Funding Crisis; Private Schools Are in Clover”

  1. Richard Copnall says:

June 30, 2020 at 4:00 pm

Could you explain how you decided to use CPI for the non-staff costs when this is a measure of household costs. Would the results be significantly different had you used the same weighting for public and private schools rather than applying different apportionment (70/30 and 85/15)? I did not notice any discussion of the increase in the size of the typical public school during the period. Education has relatively large economies of scale. An additional student adds very little total cost to the school. As a school enrolment grows the cost per student is likely to fall quite significantly. Thus a fall in funding per student does not indicate that schools are necessarily being underfunded, other things being equal. Similarly I did not notice any discussion of the Catholic schools being relatively smaller than public schools. Other things being equal and with the same funding per student, smaller Catholic will tend to provide a lower standard of education than larger public schools. I did not notice any discussion of the new small private schools created during the period. Other things being equal, to provide the same standard of education these small schools will need to spend significantly more per student than the relatively larger public schools. I feel it’s important not to create the impression that the standard of education at public schools is inferior to private schools just because of a mathematical calculation. I wonder whether it might also be relevant to consider that over the period the exclusive private schools have increased their fees to parents to maintain their exclusivity and to differentiate themselves from the newly established low-fee paying private schools. It’s not clear that their students are getting an increase in educational attainment in proportion to their increase in fees paid by parents.


    1. Trevor Cobbold says:

July 6, 2020 at 1:22 pm

The CPI is used as a proxy for the price of materials in schools. Not aware of another index that could better adjust for price increases in school materials. Happy to consider an alternative measure that you can suggest.The combined WPI/CPI is also used by the Government in indexing the Schooling Resource Standard.
There is no point in testing the sensitivity to using the same composite price index for public and private schools. The composition of wages and materials in the two sectors is very differnet and so should adjust accordingly.
Interesting point about economies of scale, but there does not appear to be any data available on the extent of economies of scale in public and private schools. Nor is there any data on the average size of public and private schools. School size is partly taken into account through the Schooling Resource Standard which has a loading for small schools. There is extensive research evidence that small schools provide as good an education as large schools.
Your overall concern seems to be that the paper gives the impression that private schools are better than public schools because they have more income. The reality is that private schools do have more resources than public schools. OECD data show that there are large teaching and material resource gaps between public and private schools. It reflects the large disparity in income/funding increases over past decades. Despite their resource advantage, private schools do no better than public schools when results are adjusted for the socio-economic composition of schools.
Reducing the huge achievement gap between diadvantaged and advantaged students remains the fundamental education challenge facing Australia and it requires, in the first instance, a fundamental change in government funding policies. Increased funding for disadvantaged students is a necessary first step in improving equity in education as numerous research studies show.