Australia’s school funding model is widening inequality and weakening public education. Without reform, it risks undermining social cohesion, productivity and democratic stability.

Like many grandparents, we worry about the world we are leaving to our grandchildren. Climate change, geopolitical breakdown, nuclear weapons, pandemics – these are enormous challenges for democracies already facing threats from authoritarianism.

Having spent our working lives in the school system, we are asking: where do schools fit in this changing world?

There has never been a more vital time for our leaders to prioritise a strong, socially representative public school system as a pillar of democracy – and to confront the risks posed by the progressive privatisation of our schools.

The health of the public school system is the key to maintaining the health of the whole system

Australia will continue to have a hybrid system of public and private schools existing in a symbiotic relationship. Private schools, as currently operated, need public schools. In biological terms, they exist in a parasitical relationship with the host organism, public schools. This can be a mutually beneficial relationship in nature; or it can be one that damages or destroys the host on which their own existence relies. It is alarming to see parents with a longstanding commitment to public schools who are now unwilling to enrol their children in them for fear of teacher shortages and reduced curriculum options.

Public schools grow altruism – the love of strangers. They give each generation a place to practise equality and equity, and to learn the difference between them. Meeting global challenges like climate change will demand exactly this capacity for shared humanity across our many differences.

The funding problem

Schools funding is one of the most toxic, enduring and divisive political issues in this country. It is not the only factor driving enrolment share from public to independent schools, but it is a major one – locking in over-funding of private schools and under-funding of public schools.

With the rise of neoliberalism, governments began favouring market forces over prudent regulation, treating schooling as a private and positional good rather than a public one. This merged the market forces of schooling with those of the housing market, deepening inequality.

Australia is one of the few countries – possibly the only one – where there is no limit to the private income and wealth a school can amass without forfeiting public funding. This dubious distinction can be traced to the then Country Party’s influence during the Whitlam era, when the Commonwealth became a significant funder of both public and private schools.

The current funding arrangements are a smoke-and-mirrors system that fails to reflect the reality that schools are complex organisations with teaching at their heart. The Schooling Resource Standard (SRS), the per-student funding mechanism (effectively a voucher), and the Capacity to Contribute (CTC) measure are all proxies that, in combination, entrench a funding gap between the private and public school sectors. This then contributes to a serious maldistribution of teachers and to reduced equality of access to curriculum.

The result is that private schools can combine generous public funding with private fees set above their CTC, while redirecting their own private resources toward buildings, facilities and marketing rather than educational outcomes. As Barbara Preston has documented, the result is “a diminished nation.”

Social cohesion, productivity and intergenerational fairness

The Prime Minister has raised social cohesion. In relation to schooling, this evokes the common good, inclusion, equity, equality and reciprocity – a system greater than the sum of its parts.

The Treasurer has pointed to the May budget’s focus on productivity and intergenerational fairness. Yet current funding arrangements entrench intergenerational unfairness, undermine productivity, and create conditions that risk fuelling rising right-wing sentiment.

In the current economic climate, the worst outcome would be inducing more families to take on private school fees alongside mortgage, rent and cost-of-living pressures. The best protection for students is a strong public school system – one that can absorb those who need to transfer from private schools with minimum disruption.

For a government pursuing budget savings, there is no educational, social or economic rationale for continuing to publicly fund schools with resources beyond the dreams of avarice. No educational, social or economic justification has ever been provided by governments for providing this windfall. If removing such funding causes disruption to over-resourced school authorities, that is their responsibility – not the government’s. There is no equivalence between inconvenience to over-funded schools and genuine harm to students in under-funded ones. 

A challenge for the Albanese government

Whether the current arrangements reflect conspiracy, incompetence or ongoing political compromise, they are not contributing to social cohesion, budget savings or productivity. They are damaging public schooling and are inconsistent with Labor’s stated values.

This Prime Minister stands apart from predecessors in his personal commitment to public schooling. His education minister is a proud product of it. Labor has committed to a better, fairer system and has increased funding to public schools to achieve this over time.  But the value of this investment will be eroded by persisting with current funding arrangements.

The case is clear for a funding model based not on proxies, but on reality: measuring actual teaching staff and resources needed, accounting for student numbers, learning needs, location and community context.

This will take time, however, and immediate action is needed to prevent further damage.

As a first step, the government should act now to rein in over-funding, including:

• removing Commonwealth funding from private schools with fees twice or more their SRS;
• continuing current indexation for schools at or below their SRS; and
• freezing funding in money terms for schools operating above their SRS.

If the Albanese government is unwilling to take these steps, it owes an explanation to its own supporters – and to all Australians who still see public schools as a pillar of our democracy.