Chaney nails the future of non-government school funding

Blaise Joseph, Jennifer Buckingham

10 July 2018 | The Australian

Another week, another education report. The first report from the National School Resourcing Board chaired by Michael Chaney is not a visionary narrative-shifter. It is a blessedly clear and explicit set of recommendations about improving the way non-government schools in Australia are funded.

Government funding for non-government schools is dependent on an estimate of the school’s socio-economic status. Non-­government schools receive less federal government funding if they have a higher deemed SES score. This score has been calculated by an area-based aggregate measure since the SES funding model was introduced in 2001.

The Chaney review recommends moving to a direct measure of parental income to determine school SES scores, to replace the current area-based measure.

This is good news for Catholic schools, who have been at war with the federal government over the issue and argue they are disadvantaged by the area-based method, relative to independent schools.

The proposed new direct method would see schools submitting student residential addresses every year (instead of every five years), which the government will combine with annual tax data sets to find the median income of a school’s parents to determine SES scores.

They would be calculated with a three-year “rolling average” to avoid excessive fluctuations while ensuring up-to-date and accurate information.

Until recently, a direct measure of income would have required schools to collect tax-file numbers, with attendant privacy issues.

Analyses conducted for the Chaney review vindicate the ­Catholic-school sector’s claims. The area-based model does play out differently in the Catholic and independent sectors with some resultant anomalies. It isn’t that the area-based model is “flawed” per se, but that the data available at the time it was devised is aggregated and therefore prone to measurement error. An indication that the current method isn’t completely defective is that only 20 schools have appealed against their SES score since 2009. And modelling suggests the overall effect of moving to a direct-measure method would not be particularly dramatic.

The majority of non-government schools would have little or no change in SES score. Catholic system schools would see a small increase in funding and independent schools would see a small decrease in funding, on average.

But there are many schools in both sectors with the opposite effect. The difference is the Catholic sector can smooth out these effects within their own systems.

Nonetheless, the Chaney report’s proposed revision to the SES model is inarguably an improvement.

If we must have a means test for public funding of non-government school education — the established policy position — then it should at least be as fair and consistent as possible.

One of the review panel members, professor Greg Craven from the Australian Catholic University, argued in a dissenting section of the report that the new SES model should also include a measure of school fees.

This would be a regressive move. The SES model replaced the education resources index, which took account of schools’ private income and assets. Irrespective of the incentives for schools to engage in some creative accounting, philosophically it was tantamount to punishing parents for investing their own money in their children’s education. It would be assessing parents’ willingness to pay, not their capacity to pay. These are not unrelated, but they are not the same thing.

It is important to remember federal funding is rising significantly for all school sectors, at rates well above inflation and en­rol­ments. And the Catholic system has the right to distribute money to its schools however it wishes.

The federal government must finally learn that increases in school funding never silence demands for even more increases in school funding.

A line has to be drawn at some point and the Chaney review should help the government do it.

Blaise Joseph is a policy analyst and Jennifer Buckingham is a senior research fellow in the education program at The Centre for Independent Studies. Disclaimer: Michael Chaney is a CIS board member.

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