Fighting for Equity in Education

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Victorian Private Schools Get Funding Windfall from Andrews Government

Monday September 28, 2015

Victorian private schools will receive a hidden windfall dividend of nearly $200 million following the recent announcement of the Labor Government to increase funding for public schools by $747 million over four years. The windfall would be better spent on public schools which enrol the vast proportion of disadvantaged students in the state.

The windfall is the direct result of a pre-election deal between Labor and private school organisations last year to legislate a link between private and public school funding. The Andrews Government delivered on the deal in February with the Education and Training Reform Amendment Act. It guarantees that state government funding of private schools is at least 25 per cent of state government funding per public school student. Twenty-five per cent of any recurrent funding increase per student in public schools now automatically flows on to private schools. In this case, private schools will get a funding increase over the next four years of $187 million and will be even higher if private school enrolments increase.

The very large part of the welcome funding increase for public schools is directed at disadvantaged students. However, the increase for private schools has no regard to the proportion of disadvantaged students in private schools. Indeed, the proportion of disadvantaged students in the private sector could decline over the next four years but it would still get the same 25 per cent of the public school increase.

It is absurd that the amount of state government funding for private schools should be determined by the level of funding and disadvantage in public schools rather than need in private schools.

Public school funding is heavily influenced by the fact that low SES, Indigenous, remote area and disability students comprise a much higher proportion of total enrolments than they do in private schools. For example, according to figures provided to Senate Estimates in July by the Australian, Curriculum, Assessment and Reporting Authority (ACARA), students from the lowest SES quartile comprise only 8 per cent of the total enrolments of Independent schools in Victoria and 15 per cent of Catholic school enrolments compared to 29 per cent of public school enrolments.

The cost of educating disadvantaged students therefore adds much more to the costs of public education than in private schools. The link ensures that private schools get a windfall funding gain each time a government decides to increase public school funding to reduce the impact of disadvantage on education outcomes.

The link also provides an additional and ongoing windfall gain to private schools through the gradual shift of higher SES students to the private sector. High SES students are, on average, lower cost students and their declining proportion in public schools tends to increase average expenditure per student over time without any policy change by governments. Twenty-five per cent of the ongoing increases then flow on to private schools as pure windfall without regard to need or any other factor. Paradoxically, then, the shift of higher SES students to private schools results in an increase in government funding per student in these schools.

The absurdity of linking private school funding to public school funding was recognised by the Gonski review. It said such a link “lacks a convincing educational rationale” and recommended that it be replaced by a resourcing model based on educational need. However, instead of getting rid of this absurdity, the Andrews Government has formally endorsed it in legislation.

The Labor Government’s defence is that its funding of private schools is distributed according to need. This ignores the fact that the total bucket of money for private schools is determined by funding of public schools, not need in private schools.

It also ignores the fact that 40 per cent of state government funding for private schools is distributed as a per capita component without regard to need. The most wealthy, exclusive private schools such as Geelong Grammar, Scotch College, Brighton Grammar, Lauriston, etc. all get a per capita funding amount, even though they have few or no disadvantaged students.

The other 60 per cent of state government funding for private schools is nominally distributed according to a needs formula. However, there is no assurance that this occurs in practice, at least in private schools systems such as the Catholic, Seventh-Day Adventist, Lutheran and Ecumenical systems which account for the large part of state government funding for private schools. In these systems, the government funding is provided to the system authority, such as the Catholic Education Commission, to distribute to individual schools as it sees fit. There is no requirement for the authority to distribute the money according to the needs formula or, indeed, reveal how the money is distributed. The Catholic Education Commission, for example, has consistently refused to divulge how its funding is distributed.

The undeniable fact is that private schools in Victoria have received massively preferential funding increases over public schools for many years. Figures provided to Senate Estimates by ACARA in May show that Victorian Government funding per Catholic school student, when adjusted for inflation, increased by 17.6 per cent for 2009-2013 and funding per Independent school student increased by 11.2 per cent compared to a reduction in funding per public school student of 6.5 per cent. The funding increases for private schools were the largest of any state/territory.

Federal Government funding has similarly favoured private schools. Federal Government funding per Catholic student increased by 9.5 per cent and by 11 per cent per Independent student while funding for each public school student fell by 3.8 per cent.

These trends are scandalous. It is unconscionable that successive governments – Victorian and Federal, Labor and Coalition – have so favoured more advantaged private schools over disadvantaged public schools.

The big problem in Victoria is that the Andrews Government has created a legislative barrier to any change in school funding policy. It has made it impossible to increase funding for the large proportion of disadvantaged students in public schools and improve their education outcomes without providing a windfall increase to private schools. All private schools, even those with few or no disadvantaged students, get a bite of any funding increases to public schools. It is indefensible.

Trevor Cobbold

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