School funding: is it fair?

How is school funding calculated, and is the government on track to meet its funding commitments and promises?

Funding is always a hot topic in schools, and now, the debate is heating up. The current economic climate sees budget squeezed ever tighter, as schools make decisions about where to prioritise resources.

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In the lead up to the 2022 Federal election, Labor committed to ensuring every school in Australia was on a path to 100 percent of its fair funding level. This promise was repeated by Minister for Education, Jason Clare in March this year, when he announced an expert panel to inform a better and fairer education system.

“At the election we made a commitment to work with State and Territory Governments to get every school on a path to 100 percent of its fair funding level,” Minister Clair said. ““Funding is critical, but so is what it does.”

The Review’s Terms of Reference say it will focus on driving real improvements in learning and wellbeing outcomes for students, and consider how funding and reforms can be more transparent and better demonstrate links to student outcomes.

So how is school funding determined, and is the government on track to meet its funding promises? School News investigates.

The calculations

Recurrent funding is provided by the Australian Government for every student enrolled in a school. In 2023, recurrent funding for schools totals an estimated $27.3 billion, including $10.6 billion for government schools, $9.3 billion for Catholic schools, and $7.4 billion for independent schools.

Data from the 2023 Report on Government Services (ROGS) found that the majority of school students, including the vast majority of students from low socio-economic backgrounds, are educated in public schools, but that almost no public school is fully and fairly funded to cater for students.

Funding is a partnership between the Federal Government, and the states and territories. The Federal Government allocates funding to states and territories, which then distribute this funding to schools. To receive funding, states and territories must be party to a national agreement relating to school education reform – the National School Reform Agreement (NSRA).  Each state and territory is also required to have a bilateral agreement with the Australian Government. These agreements outline state-specific actions to improve student outcomes, including activities that support particular student cohorts. Minimum funding contributions state and territories must meet as a condition of receiving Australian Government funding are also set out in the agreements.

Funding in all schools, government and non-government, is based on the Schooling Resource Standard (SRS), a calculation made annually by the Australian Government to identify the cost of educating a child. The SRS was the central recommendation of the Gonski Review, handed down in 2010. Calculating the SRS comprises a base per student amount, and six loadings to help schools and students in priority cohorts. Loadings are provided for students with low English proficiency, disability, Aboriginal and Torres Strait Island students, socio-educational disadvantage, school location, and school size. For every student attending a government school, the SRS amount is fully funded regardless of the income of parents.

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SRS funding to non-government schools’ is reduced based on parents’ capacity to contribute. This is calculated according to the median parental income at each non-government school. From 2020, the Morrison Government introduced improved data collection and analysis to improve the calculation of non-government school funding, helping to target funding at students who most need it.

Beyond general funding provided through the SRS, additional funding is often made available to schools from state and federal governments in response to specific concerns or areas of need. Schools can also apply for a range of grants from local, state and federal governments to fund specific projects.

The controversy

In June this year, internal Department of Education figures appeared to highlight unfair and inequitable school funding for government and non-government schools. The figures, included in a departmental briefing prepared for witnesses appearing before Senate Estimates, was publicly released through freedom of information.

According to the briefing, 1152 private schools will be overfunded to the tune of $3.2 billion over and above their public funding entitlement under the SRS.

The briefing said that the Australian Government would provide close to $319 billion in recurrent funding to schools between 2018 and 2029. Funding is growing fastest for government schools at an annual average growth of 4.7 percent per student each year over 2018 to 2029. Non-government school funding will increase by 3.8 precent per student each year over 2018 to 2029.

The Australian Education Union (AEU) has been advocating strongly for equitable school funding, with President Correna Haythorpe vocal in funding debates.

“We cannot continue to accept the deep inequity in school funding in this country, where private schools are overfunded by billions, and public schools are underfunded by billions,” Ms Haythorpe said.

“It is public schools that enrol the vast majority of Australian students, and it is public schools that enrol disproportionately higher rates of students with additional needs, students that experience disadvantage and students with disability.

“The current funding agreements are so deeply flawed because they leave public schools way below the minimum funding standards set out in the 2012 Gonski review, with a report by economist Adam Rorris last year revealing that public schools remained underfunded by almost $6.5bn below their required Schooling Resource Standard (SRS) levels each year.

“The sad reality is that successive governments have failed a generation of public school students, denying their schools urgently needed resources for more teachers, support staff and additional learning programmes, especially for students with additional needs.”

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The potential

For Every Child: Fully Fund Public Schools is an advocacy campaign organised by the AEU. Data from the group indicates that, as well as 98 percent of schools being funded below the SRS, only 13 precent of teachers say their workload is manageable, and more than half of all parents and guardians say access to a small group and individual tutoring would help their child. Benefits of full-funding, then, would be felt well beyond the individual learner, with benefits for teachers, families, and the school community.

And the AEU has been heartened by recent funding commitments made by the government. In this year’s budget, the Federal Government committed $40 million to ensure every school in Central Australia is fully funded.

“For public schools across the country, it is the first, albeit small, step towards the delivery of Federal Labor’s 2022 election commitment – to get every public school on the pathway to 100 per cent of the SRS,” Ms Haythorpe said.

While this is a positive step towards funding equity, more work will need to be done to ensure schools are properly resourced. Funding must also remain fair for public schools, and their important contribution to the Australian education system recognised.

Independent Schools Australia (ISA) said that on average, independent schools in Australia receive half the funding of government schools. ISA Chief Executive Officer, Graham Catt, has backed calls for the Australian government schools to be funded to 100 percent of their SRS.

“We support the Australian Government’s objective of full implementation of the current funding model to ensure that all schools are funded to 100 per cent of the Schooling Resource Standard by the end of the decade. All school sectors face common challenges, including supporting wellbeing, addressing workforce issues, and improving outcomes for disadvantaged and at-risk students,” Mr Catt said.

“Independent schools not only provide choice and quality education to a wide range of families and communities, they are uniquely positioned to contribute valuable insights and evidence.”

A report released by the Australia Institute’s Centre for Future Work called for increased investment in public school funding to lift flagging completion rates and spark economic growth.

The report, titled “The Case for Investing in Public Schools: The Economic and Social Benefits of Public Schooling in Australia”, found that public schools are currently inadequately funded, and this is preventing students form reaching their full potential. Further, the benefits of high levels of school completion are unable to be enjoyed by the nation.

Key findings of the report included that inadequate funding is linked to falling school completion rates and declining performance in international achievement. Enhanced funding and resulting improvements in school completion, the report said, could lead to employment, economic activity, productivity gains and social savings equal to $17.8 billion and $24.7 billion after two decades.

“Australia’s economic success relies heavily on the potential of our young minds,” said Dr Jim Stanford, Director of the Centre for Future Work, and co-author of the report (with Eliza Littleton and Fiona Macdonald).

“Public schools play a critical role in ensuring that students have access to an education that provides them with choice and opportunity throughout their lives – regardless of their postcode or economic and family circumstances. With stronger school completion and academic achievement, our communities thrive and our nation benefits from increased economic activity, productivity and earnings.”

There are many winners if full funding is realised for all schools – students who will benefit from smaller class sizes and more focussed teaching; teachers, who may enjoy lighter workloads, and the ability to access more professional development opportunities; and families as their young people are able to enjoy access to better educational outcomes. These will all support the ultimate winner, the nation as a whole.

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