Comment: Education does not need Commonwealth in schools

Ahead of the federal government’s ‘white paper’ on reform of the federation, an issues paper will canvas the specific aspects of federalism that pertain to education.

In a federation where the states have the residual constitutional power for the provision of schooling, what is the appropriate role – if any – of the federal government in school education? And does that role require a federal department of education?

It is easier to say what the federal government should not do. It should not duplicate existing state programs, just for the sake of national ‘consistency’. It should not direct the educational priorities of the states, and should not let reasonable accountability requirements veer into micromanagement. It should not, as Richard Bolt, secretary of the Department of Education in Victoria has said, distract schools from their core business by sending out ‘gravy trains’ of temporary cash for programs of dubious long-term value.

Federal government funding grew in real terms by 78% to government schools and 49% to non-government schools in the decade to 2011-12. Budget forward estimates show federal funding will increase by a further 40% to government schools and 17% to non-government schools in real terms by 2017-18. This by far exceeds growth in enrolments in either sector. Federal funding now accounts for more than a third of all government spending on schools and is therefore a major driver of the ongoing levels of funding expected for schools in both sectors.

Increasing levels of federal funding for schools are partly accident and partly design. The ‘accident’, or at least the non-deliberate aspect, is the vertical fiscal imbalance in a system where one level of government (federal) has much higher revenues than the other (state). The ability of the states to raise extra revenue to increase spending on education is limited.  The ‘design’ aspect is that increased spending by the federal government has been used as leverage to achieve its own educational agenda, ranging in scale from ‘flagpole funding’ under the Howard government to National Partnerships under the Rudd/Gillard government.

The pros and cons of a federal system in general are writ large in school education. Governance arrangements for school education are plagued by duplication, asymmetry and buck-passing between and within levels of government. On the other hand, school education could be greatly enhanced by harnessing the positive features of a functional federation – competition, subsidiarity, and efficiencies.

Two levels of government competing with each other for political and policy ground is not the hallmark of a functional federation. The existing complex mix of recurrent and capital funding, conditional and unconditional grants, and specific purpose funding from federal and state governments to the government, Catholic and independent school sectors, make education a prime example of the way in which federalism can be done badly.

But it’s not just about the money, it’s also about the strings attached. This is why we should treat with caution the Commission of Audit’s recommendation to devolve the administration of both federal and state funding to all schools – government, Catholic and independent – to the states. Its simplicity is appealing, but it carries heavy risks.

Even if the total funding to each school sector is quarantined, preventing a transfer of funds from one to the other, the reality is that one school sector will have authority over its competitors. The risk is not so much that state governments might seek to reduce enrolments in non-government schools; the financial incentive is in fact in the opposite direction since non-government schools attract less public funding. The larger risk is that non-government schools will have to dance to the state government’s tune, one often composed by anti-non-government school teacher unions.

Some functions of government beg a national approach, such as testing and reporting (NAPLAN and My School) but this does not necessarily mean federal government involvement. These things and others could arguably be achieved through the collaboration of state and territory ministers, also known as ‘horizontal federalism’. Such an arrangement is more likely to result in national policies and programs derived from adapting and adopting the best state government models – a superior and more efficient approach than starting a new federal program from scratch, and one of the key characteristics of a federation.

It is one thing for the federal government to withdraw from the business of school education when it comes to the state governments’ management of their own schools. It is another thing to withdraw from school education altogether. If the federal government has useful contributions to make, they are administering funds to the non-government school sectors to protect their independence, setting expectations for the quality of schooling and outcomes, and ensuring that universities provide high quality initial and post-graduate teacher education. None of these functions require a large federal department of education. Given that education is so politically galvanising it is unlikely that any federal government will relinquish schools entirely, but a recasting of its role is welcome.

Jennifer Buckingham is a research fellow at the Centre for Independent Studies.