Pearls and Irritations

The ACT should be an ideal location for operating a Catholic school system – a land of milk and honey.

 For around two decades now, Catholic systemic schools in the nation’s capital have been receiving recurrent grants from Commonwealth and territory governments at a level sufficient to cover their total teacher salaries.

School fees make up most of the remainder of the income in Catholic and other non-government schools, and the ACT is a corner of the country that is blessed with a concentration of families on high incomes.

If the Catholic church cannot run a viable school system in the ACT in these favourable circumstances, where in Australia – or beyond – could it run one?

 So it was startling to hear the revelation by the head of the ACT’s Catholic school system, Ross Fox.  Following hard on the heels of the new PM’s announcing an extra $4.5 billion in Commonwealth funding for Catholic and other private schools over the next decade, Fox is reported as having stated that, only weeks prior to the announcement of this windfall, the Catholic system found itself on the brink of having to shed half its enrolments.

A 2017 press release on the ACT Catholic Education’s own website only made this alarming disclosure more perplexing.

Headed ‘Advocacy by Catholic Schools Wins Additional Funding’ (23/6/17), it consists in a fulsome acknowledgement of a funding increase:

‘On behalf of Catholic Education I acknowledge the hard work of Liberal Senator Zed Seselja to negotiate additional funding that recognises the needs of non-government schools in the ACT.

I believe this funding is sufficient to ensure no child who enrols in a Catholic school in 2018 will face pressure on fees or funding cuts during their time in a Catholic school.

I wish to thank the Labor Party for their support of the cause of Catholic education through this difficult legislative process.’

It is difficult to understand how this 2017 increase squares with the claim by Mr Fox that by 2018 the system was facing a crippling cut in its revenue:

‘As you can imagine, a 35 per cent reduction in your revenue is a dire situation to have to confront’

Without access to the Morrison government’s newly announced ‘affordability and choice’ fund, Mr Fox maintains that the ACT Catholic system was facing huge fee rises or having to downscale to half its current size, with around 7,000 of its students having to find other schools.  Mr Fox is also reported as saying that Canberra’s Catholic school system would need about $100 million from the $1.2 billion ‘choice and affordability fund’ to keep school fees steady – for a system that serves only around 1 per cent of private school enrolments nationally.

Ross Fox is reported as saying that ‘our fees at the moment are somewhere between 10 and 20 per cent of our revenue’.   Surely a competent administrator would have that precise figure at his fingertips.  For his information, fees in Catholic schools nationally amount to around 23 per cent of their revenue. Mr Fox’s figures, albeit sloppy, reveal that the relatively well-heeled clientele in the ACT is getting this service at a cut rate compared with the rest of the country; and that he deserves a disproportionate share of the new fund to keep things that way.

The $1.2 billion ‘affordability and choice’ fund is that component of the newly announced $4.5 billion for Catholic and other private schools over the next decade which is now being widely described as a ‘slush fund’ for the political purpose of ending the sectarian brawl within the private school sector between Catholic and independent school interests. The bulk of this extra funding is for schools that are ‘over-funded’ in relation to the Commonwealth’s new and more direct measure of parents’ capacity to pay to adjust over a decade to a lower funding entitlement.

Mr Fox’s most recent statement of the dire financial straits so recently faced by the Catholic system in the ACT is not only at odds with his own 2017 pronouncement but with other expert analysis.

Based on official figures published earlier this year by the Australian Curriculum, Assessment and Reporting Authority, Trevor Cobbold shows that it is public and not private schools that have suffered funding cuts in the ACT.

“Catholic schools in the ACT are vociferous in their complaints about inadequate government funding. Yet, they have had a great deal – better than any other sector. Their total government funding per student, adjusted for inflation, has increased by 20 per cent since 2009 compared to 8.4 per cent for Independent schools and a cut of 1.3 per cent to public schools.”

 Cobbold adds that ACT Catholic schools are massively over-funded at 139 per cent of their Schooling Resource Standard; and that the Commonwealth Government has also given them another special deal of an additional $36.1 million to 2027 beyond the planned increase under the new Commonwealth funding arrangements. This was prior to the recent announcement of the latest $4.5 billion for the private sector.

Cobbold’s analysis is consistent with other analyses of My School financial data as set out in the latest available National Report on Schooling (2016).  Research by Chris Bonnor and the late Bernie Shepherd identified a trend of increased government grants accompanied by fee increases above the rate of inflation in non-government schools.  By 2015, according to the latest official published data, this trend had reached a point where national net recurrent income per student had reached $13,167, $13,379 and $18,413 for public, Catholic and independent private schools respectively.

Grattan Institute’s Peter Goss, has demonstrated that, across Australia, such fee rises that are implied by the new, direct measure of parents’ capacity to pay will affect those Catholic schools charging low fees while largely serving higher income families who can afford to pay.

The way in which Catholic school fees are set is currently regressive according to Goss, with higher income families on modest incomes having to shell out more than twice the proportion of their pre-tax income than those on modest incomes.

And it is this issue that underlies the confusing pronouncements coming from the ACT Catholic school sector and elsewhere.  It is all to do with the Catholic system attempting to maintain its market share in Australia’s hybrid system of schooling.

Nobody has explained more clearly than the director of the UNSW’s Gonski Institute for Education and former NSW Education Minister, Adrian Piccoli, the difficult feat that Catholic school authorities are trying to perform – and to get governments to bankroll.

‘The real issue here is that Catholic schools in wealthy suburbs want to keep fees low to compete for enrolments against “free” public schools but keep their services high to compete against independent schools.’

Mr Fox invited the public to “imagine a 35 per cent reduction in revenue” for his system.  The problem is that it may well be that this reduction is a figment of his own imagination.

Before allocating even one additional dollar to the ACT Catholic system, let alone providing $100 million over the next decade, surely it would be prudent on the part of the Commonwealth (or the Commonwealth and the ACT government jointly) to inquire into the financial management and health of that system.

It would be understandable if the general public were to turn a deaf ear to threats of fee rises and a resulting exodus of students from private schools who would flood into public schools if the demands are not met for ever-increasing funding from the public purse.  For such outbursts have become a ritual in our political culture and are a regular feature at every election.

Complacency would be a very foolish response to such threats.

The point here is not whether Mr Fox can produce supporting evidence for his facts and figures. If he cannot, then it must be said that exaggerated or misleading claims are an unedifying and irresponsible response to the generosity the Australian public has shown to Catholic schools.

But the real point here is that governments, by default, have created the circumstances in which Mr Fox can issue threats to shut down places for 7,000 students with impunity.  There are no formal contractual arrangements between governments and private schools, to protect all students in Australian schools against the risks of ‘market failure’.  The potential for educational disruption would not only be to the 7,000 students left high and dry by the Catholic system but to students in the other schools that would need to absorb them.  And the only schools obliged to absorb them are in the public school system.  The collapse of stand-alone independent schools here and there does not represent such a huge problem.  But, in the absence of prudent contractual arrangements to protect the public’s investment, the Catholic systems, which educate around 20 per cent of the total school population, are too big to fail.  The Commonwealth may be their primary funder, but the fallout would be borne by the states and territories.

Such is the relationship between governments and the Catholic church in this country that Catholic schools are in a position, in political terms, to hold the community to ransom.

As further evidence of this extraordinary relationship, it seems to have been left to the CEO of the NSW Catholic system to make announcements on behalf of the Commonwealth government.   A press release from Catholic Schools NSW (20/9/18) headed ‘New funding package means families will have affordable schools’ ends with the statement that “Importantly, the government has committed to a full review of the funding model to consider the longer term challenges to systemic schools”.

It remains to be seen if or when the Morrison government itself will announce formally this commitment that appears already to have been given privately to the CEO of the NSW Catholic system, Dallas McInerney, according to his press release.

This cannot be a review conducted with the purpose of accommodating the needs of the schools operated by one particular religious denomination; or of making it the primary obligation of the Commonwealth to bankroll a scheme designed to maintain the market share of Catholic schools forever.

There are far better ways to end the culture of ‘special deals’ and to construct a system of school funding based on a primary obligation to high quality public schools; and with a more appropriate balance between the public funding to schools and the responsibilities that come with it.

Lyndsay Connors AO is the co-author with Jim McMorrow of the 2015 report Imperatives in Schools Funding: Equity, sustainability and achievement, published by the Australian Council for Educational Research. In 2002-3, she led the ACT Inquiry into ACT education funding.

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