Federal budget and education funding

Education Funding – what did we get out of the last federal budget? Rhetoric was the big winner at federal budget time as usual. We have heard about “needs based” and “sector blind” so much, it is hard to remember that the new funding allocation formula is based on differentiating school sectors. We hear about “Kids before politics” when there is so much horse-trading and meaning-less mud-slinging going on, it is hard to say whether we have ended up with a donkey or a stallion in last night’s passing into law of the so-called Gonski2.0 funding.

The Australian parliament passed the Gonski2.0 federal budget package in a late-night session Thursday 22 June after a week of deal-making. The A18.5 billion original package was supplemented by an extra 5 billion in a deal with the Greens that turned out to be an offer the government could not refuse.

The $23.5 billion is in addition to previous funding allocations and will be distributed over the next 10 years. This allocation is still short of what Labor had proposed and this is what has been a bone of contention in the recent discussions about the schools funding.

Here is what you need to know about the changes. This article will look at: what is the Gonski about, How is schools funding structured and recent discussions about cuts to Catholic schools.

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Federal Budget and the Gonski: The SRS and the ICSEA explained

The Schooling Resource Standard (SRS) and the Index of Community Socio-Educational Advantage (ICSEA) are two of the most important federal budget tools the government is using to set the funding standards in the new Gonski package.

The minimum standard for funding per student – the SRS

The Gonski report sets out suggestions to improve schooling in Australia through the Federal Budget. It is based on the concept of needs-based funding that is sector blind. The practical implementation tool for this is the Schooling Resource Standard, the SRS. The SRS consists of a base funding level for each student and a loading for special needs like disabilities. How this loading will be calculated and what standards will trigger it is “subject to further analysis”.

The SRS score a school will get is different for state and private schools. Private schools will receive a partial allocation of the SRS depending on the ability of parents to contribute to school funding.

How much can you pay – the ICSEA

The ability of the parents to pay is assessed depending on socio-economic factors. This is implemented through the Index of Community Socio-Educational Advantage, the ICSEA. The ICSEA is post-code based. Quite simply, if a school draws its students from rich post-codes, they get less money.

A post-code based socio-economic index became the basis for funding allocation in 2001. John Howard and successive governments have kept to the principle that no school should be worse off. This means that a school gets its post-code based funding allocation regardless of how much they decide to charge in fees.

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Single-sex schools

The funding is allocated by student post-codes for each school but is not given to the schools directly but to state governments, the Catholic Education Offices in each state and Independent schools administrative bodies for allocation as they see fit.

For systemic Catholic schools, this means that they receive less funding allocated to schools in well-off post-code areas and will allocate extra funds they receive from poor post-code areas to those “rich” schools in order to be able to offer an education alternative also in good post-codes to those families who live there but cannot afford to pay higher fees to attend the school.

Stanford Professor Ray Chetty is researching education, socio-economic environment and life outcomes.
Stanford Professor Ray Chetty is researching education, socio-economic environment and life outcomes.  Good teachers providing better futures

The Turnbull government’s Gonski2.0

The Turnbull government has promised to use the federal budget to iron out differences in funding allocation, vowing funding should be allocated according to parents’ ability to pay for schooling. This they have proposed to do over a ten-year period. They have announced that 24 private schools will have their funding reduced and 17 will have funding frozen.

To look at the Turnbull government’s changes, let’s first look at funding to schools generally to see it in context.

How is schools funding structured – a general historical overview

All Schools

State and Territory governments provide most of the schools funding. They pay about two and a half times what the federal government does. In the 14/15 budget year, Commonwealth recurrent funding for schools amounted to 14.9 billion and state government funding of schools amounted to 38.1 billion.

Federal budget and State and Territory funding. Funding for all schools in Australia in billion dollars
Funding for all schools in Australia 14/15 in billion dollars Source: Productivity Commission, Report on Government Services 2017, VolB, Ch.4 Table 4A.7

State and Private Schools

State governments almost exclusively fund state schools, with 91.5 percent of funds going to state schools and the remaining 8.5 going to private schools. The majority of federal government money fund private schools, being 63.8 percent to 36.2 percent to public schools, that’s about 3 in every 5 dollars going to private schools.

This is what the dollar amounts looked like in 14/15

Federal budget and State and Territory funding. State school funding 14/15
State school funding 14/15 in billion dollars Source: Productivity Commission, Report on Government Services 2017, VolB, Ch.4 Table 4A.7

 

Federal Budget and State and Territory funding. Private school funding 14/15 Source: Productivity Commission, Report on Government Services 2017, VolB, Ch.4 Table 4A.7
Private school funding in billion dollars Source: Productivity Commission, Report on Government Services 2017, VolB, Ch.4 Table 4A.7

 

Commonwealth funding in 14/15 was as we have seen $14.9 billion, in the current budget year of 16/17 it is $17.5billion.

Schools and STEM subject
STEM subject investments

Federal Budget cuts to Catholic schools

About a third of school students in Australia attend private schools, Catholic schools taking about 20 percent and independent schools about 14 percent of students.

If there is an increase in funding compared to current budget allocation, why does everyone complain?

What are the pundits saying about it

The Turnbull government started out by offering an 18.5 billion federal budget package in additional funding to address the concerns raised in the Gonski report. Labor leader Bill Shorten then criticised it because this package was $22 Billion short of Labour’s proposed Gonski package for schools. This included a $4billion cut to Catholic schools alone. Michael Lee, principal at the Catholic St Mary MacKillop College in the ACT, commented on the budget proposal in his typical rhetorical fashion, saying their music program will have to include an a capella choir soon as they won’t be able to afford the instruments.

The government didn’t help itself by starting out with the claim that their federal budget proposal would save 22 billion with its education reforms.

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Gonski funding – uncertainty may be greatest challenge

Senator Birmingham talks a lot about secret deals, 27 deals to be exact. He is referring to the Labor Gonski funding model. The funding allocation formula is supplemented by 27 deals with State and Territory governments and Catholic schools.

Labor says that a standard funding formula will not adequately address needs in education and therefore have proposed special deals that they reckon will result in fair, needs-based funding.

The Liberals want no special deals and to fully rely on a standard formula for education funding.

Senator Birmingham defends the government’s position by saying that comparing Labour’s Gonski 1.0 with the Turnbull government’s Gonski 2.0 is like comparing apples and pears, only that the pears are mythical as funding was only allocated for the first 6 years, 5 for Victoria.

Federal budget putting kids before politics
Is the federal budget putting kids before politics

Practical examples

Even considering the facts set out above, the impacts of the reforms are still entirely unclear. This is mostly because there are no specific plans in place because the implementation is still “subject to further analysis” and they say.

This article will leave you with some practical examples.

The school-funding estimator that has been available on education.gov.au has been taken down, presumably to update it. It is entirely unclear how the additional 5 billion will be rolled out apart from the promise it will be applied over 6 years rather than 10. The funding formula and loading for special needs always was and still is up in the air.

Below I have included the effect of the previous funding formula on three schools in the ACT, one from each sector. It still gives an impression of how the government imagines it will iron out differences in school funding.

Catholic systemic school:

St Mary MacKillop College Isabella Plains, Australian Capital Territory

Index of Community Socio-Educational Advantage (ICSEA) 1041

Funding decrease 2018-2027: -$4,6 million

Per student Commonwealth funding 2017: $10 473

Per student Commonwealth funding 2027: $9 706

Total money available per student last year available 2015:

Excluding capital expenditure: $14 444

Total capital expenditure 2009-15: $22 240 323

Independent school:

Canberra Girls Grammar, Deakin Australian Capital Territory

Index of Community Socio-Educational Advantage (ICSEA): 1147

Funding increase 2018-2027: +$8,7 million

Per student Commonwealth funding 2017: $2 892

Per student Commonwealth funding 2027: $3 267

Total money available per student last year available 2015:

excluding capital expenditure: $19 092

Total capital expenditure 2009-15: $ 41 746 740

State High School

Canberra College, Woden Australian Capital Territory

Funding increase 2018-2027: +$9,4 million

Per student Commonwealth funding 2017: $2 537

Per student Commonwealth funding 2027: $4 427

Total money available per student last year available 2015:

Excluding capital expenditure: $13 692

Total capital expenditure 2009-15: $29 515 713

 

Lise Copeland
Author: Lise Copeland

I like to write about current topics concerning young people, education and mental health. I developed this website to help other parents and it is used by several hundred people every week. I have two kids at University and one in high school. They have attended State, Catholic and Independent schools in three States and Territories as well as overseas, giving me lots of first hand experience of how different schools can contribute. Education: BA(Hons) with Philosophy, Latin and Ancient Greek languages and BA Law (LLB).

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