School funding should be without fear or favour - The Centre for Independent Studies
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School funding should be without fear or favour

school education funding moneyThe collective gasp that resonated around the country when federal education minister Simon Birmingham said some schools are ‘over-funded’ demonstrated the extreme difficulty of achieving a satisfactory resolution to the debate over schools funding.

Everyone is committed to consistency and fairness—but no one is willing to compromise in order to achieve it.

The issue is not whether or not non-government schools should be funded fairly. That was settled a long time ago. Non-government schools play an essential role in Australian education. The Centre for Independent Studies report One School Does Not Fit All showed that non-government schools enrol children from a broad range of backgrounds and, in numerous cases, provide education to marginalised children who have no other options.

Thousands of families willingly contribute millions of dollars to educate their children in non-government schools―money that would otherwise have to be found in government budgets. Penalising these families while wealthy families get a free ride in the government school sector is hard to justify.

The issue is whether the current model is the right one. A funding model that requires one sector of schools to lose a disproportionately large amount of money is not a well-designed one. In an extraordinary article, Gonski review committee member Ken Boston acknowledged that the model is not evidence-based, saying that the disadvantage loadings were “pulled out of the thin Canberra air.” Ideally, the model should be revised — but that is not on the cards.

Senator Birmingham made a strategic mistake in mentioning only private schools in the context of ‘over-funding’ on the ABC this week, but he was essentially right. Under the current funding arrangements, some schools are receiving more money than they would strictly be entitled to if the model were applied uniformly, and some schools are receiving less. It is highly likely that schools from all sectors—independent, Catholic and government—are in both categories;­ but the details are only available for independent schools because they are the only ones funded directly by the federal government.

Even so, the horror expressed at the idea that a number of schools might end up with less funding―or more accurately, lower funding growth―if the rules were uniformly applied has exposed the incongruous positions held by many who are participating in this discussion. It is inherently contradictory to hold forth in support of ‘Gonski’ and at the same time argue against its redistribution effects.

The principle at the heart of the original Gonski proposal was consistency. Any need-based funding model that is applied consistently, without fear or favour, will have winners and losers. Any attempt to avoid this outcome would require either a large increase in overall funding levels or the implementation of a convoluted system of grace periods and guarantees.

Both these remedies to redistribution have been tried and have resoundingly failed. Julia Gillard’s fateful ‘no school will lose a dollar’ promise ultimately led to the unravelling of what was a promising set of proposals from the Gonski committee. It made the implementation inordinately costly, and the extra billions had nothing to do with educational priorities and everything to do with trying to achieve a political soft landing. It backfired spectacularly.

The previous non-government school funding model known as the Socioeconomic Status (SES) system was riven with clauses explicitly designed to prevent any schools being worse off. Only half the non-government schools were being funded according to the model. The rest had either been guaranteed not to lose money or were making a glacially slow transition onto the correct funding level. The incoherence of this system provided part of the impetus for the Gonski review to be commissioned in the first place.

Despite the war of words over the past week, we don’t know much more about what the federal government has in mind than we did in May. The budget confirmed what was already understood to be the intention—the federal government would not be allocating schools funding according to the so-called ‘Gonski’ model, and would instead come up with a new funding mechanism to put in place from 2017.

The reasons for this were articulated at the time—the model was too costly and was not actually the ‘Gonski’ model anyway, because it had been doctored to the point where it no longer met the fundamental criteria set down in the school funding review. Ken Boston described the model developed by the former Labor government as a ‘corruption’ of the report’s proposals.

Ahead of the COAG meeting last week, the federal government produced figures to prove this. They showed that the individual deals done with the states and territories had resulted in substantial differences in the amounts of money going to demographically similar schools. This is not what Gonski ordered. Schools with similar indices of need should theoretically have the same funding entitlement. Superficially, this contradicts the consistency principle but it was actually an unforeseen and unavoidable consequence of it. In software developer parlance, it’s both a bug and a feature.

The model is based on the calculation of a national Schooling Resource Standard that is a benchmark of adequate funding for each school, weighted according to their needs and circumstances. The aim was to ensure that every school eventually reached at least 95% of the resource standard; the cost of bringing all schools up to the designated funding level would be shared by state and federal governments.

Some states were closer to the benchmark funding level than others. This meant they required less federal funding to achieve the standard. If the federal government had given all states and territories the same amount irrespective of their starting point, some would have exceeded the benchmark, hence violating the consistency principle. Consistency in funding from the federal government would have led to greater inconsistency in total resources to schools.

Scott Fitzgerald said the test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time and still retain the ability to function. A first-rate school funding system faces the same challenge. It must be both fair and consistent and these will not always be seen as the same thing by everyone.

Dr Jennifer Buckingham is a Senior Research Fellow at The Centre for Independent Studies.