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School funding: Time for new thinking
we need to find new ways to fund austRalian schools that aRe socially Responsible,
foR the good of all austRalians, says TiM hAWkes.
Fresh ideas are required on how to fund
Australian schools. So far, debate has been
unhelpful with most pundits repeating tired
clichés and doing little else than restating
re asons for their entrenched positions.
The Commonwealth government , to its
credit, is looking for new ways to fund Aus-
tralian schools. Its review of school funding,
led by David Gonski, will report later this
year. Pri me Minister Julia Gillard’s govern-
ment needs to get it right. With its slender
majority in the Lower House, it can’t afford
to make many enemies. For example, it
would probably not be wise if it to returned
to the infamous ‘hit-list’ mentality that
proved so devastating to Labor and to Mark
Latham’s aspirations to become PM in 2004.
Quite apart from the need to be politi-
cally aware, the debate about school fund-
ing requires fiscal wisdom. It’s worth
remembering that a student at an independ-
ent school typically gets half the funding of
a student at a state school. This results in
independent schools saving the government
billions of dollars a year.
Well-re sou rced independent schools usu-
ally receive about a quarter of the funding
given to an equivalent-sized state school.
According to figures from the Produc-
tivity Commission’s Report on Government
Services 2011, Commonwealth and state
or territory government recur rent expendi-
ture per student in government schools on
average in 2008-09 was $13,544, while in
non -government schools on average it was
$6,850. Every student that attends a non-
government school saves the taxpayer more
Those arguing that non-government
school funding be reduced are unwise. Costs
in non- government schools would rise and
drive students out, and the government
would have to pay more than twice as much
to educate them in government schools.
Detractors of independent schools often
wax lyrical about the facilities of some
independent schools. These observations
are sometimes accurate, but it needs to be
pointed out that most of these facilities are
a result of fundraising initiatives which,
if penalised, would put a stop to self-help
activities and usher in a welfare mentality
that this country can ill afford.
Another stick used to beat independent
schools is to compare the cost of educating
a student at an independent school with that
of a student at a state school.
The average extra cost is about $2,600.
This surprisingly small difference usually
requires the enemies of independent schools
to conveniently quote the amount spent on
students at selected high-fee schools, to show
that high-fee schools are, gasp, high cost.
Despite these costs, some parents will
still make the financial sacrifices necessary
to obtain the educational services of a par-
and mutually reinforcing policies of auton-
omy, accountability and per capita funding.
Providing public funding on a per stu-
dent basis increases the impact of choice
because it creates performance -conducive
incentives and extends the benefits of choice
to more families. Adequate public funding
means that fees can be kept low, bringing
non- government schooling within the reach
of more families and inc reasing the level
of private investment. Without this public
support, private education would indeed be
exclusive and available only to the wealthi-
est sections of society.
The majority of the funding for inde-
pendent schools, however, comes from the
private cont ribution of parents. On average,
independent schools receive 58 per cent of
their income from parental contribution,
although this varies considerably from
school to school. Many high-fee schools
which attract most media attention are in
fact 90 per cent funded by private income.
This substantial private investme nt
greatly increases the national investment in
education. It represents a saving to govern-
ment, estimated at about $7.9 billion per
annu m, and added to public subsidies, raises
the quality of provision . Parental cont ribu-
tions give schools greater autonomy and
increase their accountability to parents.
The payme nt of fees alters the relation-
ship between parents and school, giving
parents a stronger sense of engagement in
the school’s operation and outcomes , and
creating a contractual arra ngement, where
the school is committed to do the best by
School systems based on this kind of
public-private part nership have been found
to be the most effective in fostering edu-
cational achievement. The combination of
private operation a nd government funding
extends choice and results in better learning
outcomes. Allowing private investment not
only increases the level of funding available
to education, it is also a mea ns of making
scarce public resou rces go further. T
Bill Daniels is Executive Director of the
Independent Schools Council of Australia.
For references, visit http://resea rch.acer.
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