The Albanese Government is entitled to proclaim that the agreements they have now reached with every state and territory will put all public schools on a path to full and fair funding.

And Education Minister Jason Clare is also entitled to state that The Better and Fairer Schools Agreement (2025-2034) marks “an historic day for Australia’s education system”. This agreement will lift the Commonwealth’s share of recurrent funding for public schools from 20% to 25% of the Schooling Resource Standard over the next 10 years, an estimated additional $16.5 billion.

Both are to be commended for their wisdom, however, in avoiding the furphy published by The Sydney Morning Herald that “a landmark school funding deal to finally end the war over public versus private is here”.

This is not a case of “mission accomplished”.

Labor has taken an important, overdue and necessary step on the long and winding path towards full and fairer schools funding. Inequity and inequality within and between the private and the public sectors are now so deeply entrenched that our country’s school system will continue heading in the wrong direction without a far greater commitment to reform.

Key problems are the asymmetrical and dysfunctional division of responsibilities for schooling between the Commonwealth and states; a funding system with a reliance on proxy measures for assessing “need”; and a deviant form of public-private partnership for private schooling.

Think about a family after a divorce… one parent on a high income has custody of one of the children. The other parent has custody of the second child and is on a lower income (possibly a Centrelink Parenting Payment, topped up by a child maintenance payment from the wealthier parent).

That scenario has a parallel in Australia’s schools funding arrangements.

The Commonwealth has progressively assumed responsibility for looking after the private schools: 80% of their public funding entitlement comes from its budget. Public schools are largely reliant for their upkeep on the less well-heeled funding partners – the states and territories.

Under current arrangements, all public and non-government schools are either operating at — or transitioning to — their public funding entitlement against the SRS, consistent with provisions in the Australian Education Act.

But when it comes to funding private schools, Australia has invented a unique form of public-private partnership. The Act provides that all schools have an SRS, and that non-government schools are entitled to public funding amounting to at least 20% of their base SRS entitlement from governments. This includes even the minority of non-government schools which charge private fees more than twice the level of their SRS.

Meanwhile, the majority of non-government schools operate above their SRS because of this bizarre form of public-private funding partnership. While the level of public funding for private providers is based on a measure of “capacity to pay”, private schools can charge fees which exceed that measure. This capacity to combine public funding with unregulated private fees and income from other private sources continues to lock in inequality between the sectors. And this inequality is compounded by reliance on the public sector to do the major share of the “heavy lifting” of the school system as a whole.

In the context of the imminent election, it is essential for voters to consider the kind of society to which we aspire and the contribution of our school system to shaping that society. So we have considered here, in very broad terms, possible options for dealing with the problems raised above.

One option: allow current trends to persist

This option needs to be taken seriously, especially given the daunting politics of schools funding. Without further reform and if current trends persist, we are positioning public schooling essentially as a safety net, rather than as the primary obligation of government – the means of ensuring the provision of schooling for all our children of the highest quality the country can afford.

Some might argue that the total level of resources invested in schools in Australia from public and private sources is ample, and that as long as the public schools are adequately resourced by governments they could still provide a standard of education that is better than what many children in this world receive, despite the fact that many students would enjoy superior resources to others.

This amounts to an argument that, if you are at the bottom of a heap, it is preferable to be at the bottom of a heap that is well-resourced on the whole than of a generally under-resourced heap.

It would be unwise, in our view, to buy this argument. There is too much evidence that it is the experience of those at the bottom of the heap which, in itself, generates anxiety and anger that can lead to the kind of social division any intelligent society would see as a threat to democracy and would wish to avoid.

A second option: further increases in public investment in public schools would be to achieve more comparable resource levels between the public and private sectors

Commonwealth and state governments could achieve fairer funding by facing up to the realities of the double standards they have created in our hybrid school system. Total recurrent income per student in the private school sector is about 15% higher than for the public sector. Governments could opt to justify the resource standards to which they have contributed for private schools by setting these as the standards to which they would raise public schools.

This would require a bigger increase in Commonwealth expenditure on public schools.

And this raises the issue of the many other claims on the nation’s budget. Dealing with the effects of climate change, environmental challenges and volatile global economic and political shifts will be an enormous financial challenge. This will limit governments to relying on the politically safer and traditional strategy of additional funding to deal with resource disparities between sectors, rather than redistribution.

More comprehensive and in-depth investigation into maldistribution of resources from the use of proxy measures and a lack of proper demographic planning, might show that with careful redistribution, the current level of resources would be sufficient and more effective for educational outcomes.

There is much evidence that the school system is like a ship heading in the wrong direction, and that strong political leadership and sustained commitment are needed to turn it around. This change must be achieved without disrupting or damaging school education.

The Better and Fairer Schools Agreement (2025-2034), supersedes the previous National School Reform Agreements. It contains some key changes which include reviews of how school funding is calculated as well as a review of the measures which provide a broader and clearer understanding of how the realities of schooling are measured. These are examples of reform needed for a steady change from the directions in which the system has been headed.

A third option: a reverse of the second

To achieve comparable resource levels between public and private school sectors, governments could reduce funding to non-government schools to the level of equivalent public schools. They could even opt to remove public funding immediately from those private schools with, say, fees twice their current SRS. For those remaining schools operating above their current SRS levels, enrolments could be frozen and their funding could be maintained until they reached the same resource standard as comparable public schools. Both levels of government could agree that states and territories would make registration for new private schools conditional on being able to deliver an acceptable standard of education using both private admission fees and public funding to bring their resources to the SRS of public schools.

To say that this would be politically difficult would be a gross understatement. So…..just saying.

A capital idea

The focus of the schools funding debate has long been on recurrent funding. And rightly so, since the primary purpose of recurrent funding is to provide the teachers.

The Commonwealth’s contribution to schools funding has expanded to the point where its expenditure on recurrent funding for private schools exceeds the full costs of staffing for that sector overall. This largesse has enabled private providers to channel more towards capital expenditure.

If readers were thinking the 15% resource advantage of the private sector over the public was significant, what about the disparity in capital funding?

Capital funding is a relatively small proportion, about 10%, of total expenditure on schools. But it contributes greatly to inequality. Capital expenditure per student in private schools is about double that in the public sector.

Now that the Commonwealth’s share of recurrent funding for public schools has been increased from 20% to 25% of the SRS over the next decade, the next government could immediately start funding the expansion of state-of-the-art, educationally-based, capital works in public schools. The costs could be shared by Commonwealth and state governments.

Such a program would give priority to schools that are disadvantaged, including those in outer metropolitan, regional and remote areas. Facilities could include regional centres of excellence for professional development, with strong links between schools and universities.

This may help to cut enrolment drift from public schools, influencing both parent and student preferences; and provide teachers in public schools with facilities better suited to their professional status and requirements than the existing facilities.

Consideration could also be given to government bonds to fund capital facilities in public schools. This could prove attractive to superannuants who want to support public schools for their grandchildren and the future of democracy.