Chris Bonnor. Eroding human capital in our schools

Jun 9, 2015

Policy Series  

There are a number of givens about schools and their students. Both are critical to economy and society. The level of collective student achievement can create future dividends – or deficits. The quality of school education not only matters but the extent to which this quality is distributed around schools also matters. Even the length of time students spend at school impacts on GDP. The experiences of young people at school, who they mix with and what they learn – including about each other – also has implications for our future social and community lives. In short: developing the human capital in our schools must be a national priority.

Beliefs rule…

We know all these things. But there are more givens about school education that we either don’t know or choose to ignore. Far too often evidence about education policy and practice ends up being cast aside in favour of rusted-on beliefs about what matters and what doesn’t. As one American writer once observed, where education is concerned, the old adage holds true: facts are negotiable; beliefs are rock solid.[1]

Even after decades of research, the provision, organisation and funding of Australia’s schools is surprisingly influenced by beliefs, with successive governments recycling policies which don’t seem to make much difference. Yet, on a whole range of policy options, the jury is in: for ages we have known, if only from the OECD, that some school system characteristics are associated with success, others seem to impede this success and still others have little impact either way.

…but quality and equity matters 

The features associated with success for schools include accountability, standards, teacher quality and other things we do quite well. But even more success, at least in measurable student outcomes, is achieved by countries which have comprehensive and equitable systems of schools with little separation of students in terms of socio-educational status and ability. Competition can improve quality to a point, but it more often segregates students on social and academic grounds. The OECD states that governments can prevent school failure by using two parallel approaches: eliminating system level practices that hinder equity; and targeting low performing disadvantaged schools.[2]

Alas, for well over a decade we have not done this well, if at all. Policy has instead encouraged competition and choice between schools and, for the last 15 years, funding has disproportionately flowed to schools where students already achieve at quite high levels. This has happened against a background of headlines about falling student achievement – and recurring moral panics about Australia slipping down various international school league tables.

Some of this matters and some doesn’t, league tables always deserve far closer scrutiny than they receive. But we’ve been slow to join the dots between the relative decline in our performance and decades of neoliberal policy on schools. The policy framework wasn’t and isn’t working, the funding of schools especially has become quite risible. It became inevitable that a government would initiate a review on the scale of the Review of Funding for Schooling, the Gonski review.

Let’s hear it for Gonski…and My School!

The Gonski review is significant for a number of reasons. It came up with many findings and recommendations and it will forever remain a benchmark statement of what was going wrong and what we should do about it. It was widely welcomed in early 2012, but, as we know, its implementation has been very patchy and has fallen well short of what the Gonski panel recommended.

The Coalition at the federal level, supported by key non-government school peak groups, has essentially walked away from any long term commitment, as recently evidenced by the review of federal state relations. Labor dragged its heels from day one and its current commitment is at best ill-defined.

It is almost as if we need another review to press the urgency of Gonski’s findings and solutions. That is unlikely. The good news is that, in an unconnected way, Australia has accumulated and published massive amounts of data about schools which shows whether things have improved or further deteriorated.

More important, all this data – annually presented and updated on the My School website – can help us assess policy decisions made by governments at state and federal level. The data which lies behind My School, tells all. It would be hard to find a better template against which to assess policies being proposed, implemented – or avoided.

How have our schools progressed, under a mix of governments, in the five years since the Gonski panel visited all those schools, waded through a mountain of submissions, commissioned deep research and scrutinised all the evidence? It is certainly possible to find out; for a couple of years I have worked on this data with Bernie Shepherd and our reports don’t reveal much cause for optimism.

Progress report 1: schooling performance and outcomes

The Gonski review found that Australian schooling needs to lift its performance, particularly that of the lowest achievers. National tests in reading, writing, language conventions and numeracy show that this hasn’t happened. Certainly there is a debate about the adequacy of such tests as a measure, but they are quite wide-ranging. They show that student overall performance has, between 2009 and 2013, been more inclined to stagnate or fall rather than to improve, with trends in middle secondary school of particular concern.[3]

Gonski’s concern about the lowest achievers was and is very well justified. Fortunately we can now track their performance: My School allocates a socio-educational advantage (SEA) index created by the enrolment in every school and we can measure the ongoing achievement of the advantaged, the disadvantaged and those in-between. Unfortunately, student achievement scores have clearly diverged between schools with higher SEA enrolments against those with lower SEA enrolments. This diverging trend was also most noticeable in middle secondary school.

Progress report 2: equity and disadvantage

So our students aren’t doing much better, if at all – and the differences between them are increasing for all the wrong reasons. Hence Gonski recommended that new funding arrangements for schooling should aim to ensure that differences in educational outcomes should not be the result of differences in wealth, income, power or possessions. This is the OECD definition of equity. In short, we need schools – not the circumstances of birth and upbringing – to create each child’s future.

The review published social gradients for various countries, showing the relationship between student achievement and level of advantage. Australia had, and has, one of the steeper gradients amongst the higher achieving countries. Bernie Shepherd used My School test data to calculate equivalent gradients and found that the gradient appears to have steepened in just a few years, 2010 to 2013.[4] Differences in education outcomes indeed seem to be increasingly impacted by “differences in wealth, income, power or possessions.” School-to-school equity has declined measurably. The gradient was particularly steep and worsening for metropolitan and for secondary schools.

Progress report 3: funding arrangements

Presumably with this in mind, Gonski wanted school funding to be targeted in ways which would close this gap – with allocated funding to reflect the different needs of students, lift the strugglers and elevate student achievement across Australia. Funding of schools was overdue for an overhaul – Gonski found that it lacked logic, consistency and transparency.

Not much seems to have changed. The old funding arrangements have continued, with some variations, in the process often compounding existing problems. My School reveals hundreds of schools funded in ways which defy logic and consistency. In one out of every two federal electorates there is at least one lower SEA school less well funded by governments than a nearby school enrolling more advantaged student.[5]

Gonski came up with sector-blind solutions but the problems are partly sector-based. Government schools disproportionately enrol higher needs students – My School’s SEA index is consistently lower for government schools. But the distribution of government recurrent funding has continued as if the reverse was the case: between 2009 and 2013 government funding (per student) increased by 12.8% to government schools, by 23.5% to Catholic schools and by 24.6% to Independent schools.[6]

The combination of public and private funding, mainly through fees, creates greater differences. The vast majority of non-government schools have higher, and often much higher, net recurring incomes per student. Parents would argue that they have a right to pay fees to achieve a perceived advantage – but to what extent should governments be party to such arrangements when they undermine efforts to shift the whole system towards levels of equity to deliver improved national performance? Gonski had a sector-blind solution to this problem.

Progress report 4: Australian and state government funding 

Gonski reported an imbalance in federal and state school funding and recommended a school resourcing body be established to coordinate the allocation of funding. Labor didn’t implement this essential recommendation – and the current federal government certainly won’t. In the meantime the lack of coordination proceeds apace, worsened by the time-honoured pre-election sweetheart deal with various school authorities – best illustrated early in 2015 by that between Labor in Victoria and Catholic schools.

In the meantime state-level recurrent funding (per student) increases to schools has little consistency across state boundaries. Lowest increases between 2009 and 2012 were around two per cent and highest around twelve per cent. Capital funding variations between the states defy explanation. In the same period Queensland provided almost as much capital funding (per student) to non-government schools as South Australia provided to government schools.

Separating and concentrating advantage and disadvantage…

The Gonski panel found that increased concentration of disadvantaged students in certain schools was having a significant impact on educational outcomes, a finding supported by research commissioned for the Review.[7] We’ve known about this concentration: six years ago the OECD reported that almost 60% of our students were enrolled alongside their peers in disadvantaged schools – quite a high figure in comparison with equivalent countries.[8]

We also know about the processes driving this concentration. Those with the means to exercise choice have moved to higher SEA schools in every sector, especially but not only to non-government schools. The search for a perceived more desirable peer group has long driven school choice.[9] A part consequence is that lower SEA schools have been losing, and higher SEA schools gaining, student enrolments.[10] The movement is such that only around a quarter of Australia’s schools now have an enrolment which reflects the level of social advantage of the town or suburb in which they are located.[11]

…and what it costs

The problem is that this compounding of advantage and disadvantage into different schools exacerbates the existing impact of family SEA on student achievement, in ways which are quite complex but well-researched.[12] This resulting SEA effect on levels of student achievement is also quite pronounced in Australia – and increasing.[13] The end result is that some schools develop (and/or import) a high profile of achievement and success, while others become places where middle class Australians especially avoid.

This tends to confuse the debate about school quality: ‘good schools’ end up being those which enrol “good” students. My School actually shows that, when student background is taken into account, the achievement level of students doesn’t significantly vary from school to school.[14]

What does vary, however, is the amount of money going to different schools. Substantial amounts of both government and private funding ends up in schools where the extra investment makes little difference to measureable student outcomes. It is possible to argue that $3.3 billion each year is misdirected in this way[15] – such an amount would more than sustain full implementation of Gonski’s recommendations.

It is inevitably argued that the government’s contribution to this $3.3 billion overspend is still a good investment. It mainly goes to private schools but it still represents a saving to government. But the recurrent funds saving to government of having private schools is less than $2bn each year – much less than figures thrown around by non-government school peak groups. When viewed alongside other costs created by having an increasingly class-based hybrid school system the question that has to be asked whether private schools represent much of a saving at all.


Clearly business as usual in policy affecting Australia’s schools is not working. We are continuing to widen the gaps, with all that this means for achievement, equity and the future human capital represented by our students. What Gonski found to be bad has worsened. The Review’s findings are still waiting for implementation of the Review’s solutions.

It is hardly the first time that a major review in Australia has been followed by inaction or half-hearted solutions. The difference now is that we can track the progress of our school education in unprecedented ways using the most recent data about real schools. The data from My School is telling us more than was previously known about our framework of schools. At the very least, ongoing revelations about student achievement, school quality, equity issues and funding have the potential to create a better debate. At the most we have the right to expect better policy.

Chris Bonnor 

[1] Gene V Glass, Fertilisers, Pills and Magnetic Strips – the fate of public education in America, Information Age Publishing, 2008, p. xii

[2] Organisation for Economic Co-operation and Development (2012) ‘Equity and Quality in Education: Supporting disadvantaged students and schools’,




[6] These are the latest figures available (My School 2015) and yet to be published in any report.










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