Victoria has had the lowest per capita government funding for public schools in Australia for at least a decade, due to relatively low levels of state government funding compared with other states and territories. However, Victorian students’ performance on national and international assessments is competitive.
According to the most recent publicly available information from the Productivity Commission’s Report on Government Services 2018, recurrent funding per student in Victoria in 2015-16 was the lowest in the country at A$13,301 per student, which is A$1,589 lower than the national average of A$14,890.
The next lowest spending state is Tasmania, spending A$14,372 per student, and the highest spending state is Western Australia at A$17,306.
Source: Productivity Commission (2018). Report on Government Services 2018. Table 4A.15
How is government funding allocated to schools?
All schools in Australia — government (public) and non-government (Catholic and independent) — receive public funding from both the federal government and their respective state or territory government.
Under the Commonwealth Constitution, school education is the responsibility of state governments, and therefore the majority of government funding for schools comes from state governments. In 2015-16 (the most recent finalised accounts provided by the Productivity Commission), total government funding for schools was $55.7 billion — 28% from the federal government and 72% from state and territory governments.
However, the balance of funding sources in the government and non-government school sectors is very different. Non-government schools receive the majority of their funding from the federal government, while government schools receive the majority of their funding from state and territory governments.
In 2015-16, 86% of the funding for government schools came from state and territory governments and 14% from the federal government — the latter an increase over the past decade from the 9% of federal funding for government schools in 2006-07.. This increase in the federal government contribution is largely the result of the various iterations of the school funding model that arose from the ‘Gonski’ review of school funding in 2011. In Victorian government schools, the federal government’s share of funding increased from 9% to 15% in the decade to 2015-16.
The current funding model under the Australian Education Act 2013 has two components: a base level of funding, and additional loadings for disadvantage. All government schools are allocated 100% of the base level, while non-government schools have their base level adjusted according to the socioeconomic status of the school population. The loadings — which are allocated for socioeconomic disadvantage, indigenous students, students with limited English language proficiency, students with disabilities, and small/remote schools — are not subject to any means-test adjustments.
The funding model sets each school a theoretical or aspirational School Resource Standard (SRS) that combined federal and state/territory funding should meet. As the SRS represents a large increase in funding for some school sectors, it is being phased in over several years. While both levels of government produce budget forward estimates projected over four years, it is not possible to predict funding levels or enrolments with sufficient precision to know if Victorian government schools will continue to have lower per student funding than other states in the future.
Do Victorian schools perform worse than other states and territories?
Although Victorian schools have, on average, lower public funding than other states and territories, they have higher performance in national and international assessments.
Since the start of the National Assessment Program for Literacy and Numeracy (NAPLAN), Victorian students typically have had the best, or equal best, average scores in most domains — often out-performing the much higher-funded schools in the Australian Capital Territory.
Victorian students also perform well compared with other states and territories in the Program for International Student Assessment (PISA) and the Trends in Maths and Science Study (TIMSS). In PISA 2015, Victoria’s average performance in reading, mathematical and scientific literacy was among the top three states and territories (but had relatively low proportions of high achieving students). In TIMSS 2015, the average performance of Victorian students in maths and science in Year 4 and 8 was either equal first or second among the Australian states and territories.
Why do Victorian schools get better outcomes with less money?
One possible reason for their greater efficiency is that government schools in Victoria have more autonomy than in other states and territories. Since the late 1990s, funding and governance in Victorian government schools have been devolved to the school level. Compared with other states and territories, principals in Victorian government schools have more control over how to spend their school budget, and more say over teacher hiring decisions. This allows them to respond more effectively to the needs of their students. International studies have shown that school and principal autonomy is positively associated with student outcomes in school systems with high levels of external accountability (eg. NAPLAN and external Year 12 examinations) like Australia.