I was outraged when I first heard that PM Julia Gillard required the Gonski Review of School Funding to ensure that, in developing their options, ‘no school should lose a dollar’. I was not the only one.
It was a disgraceful requirement to impose on the first comprehensive review of school funding arrangements in 40 years.
Some observers might have wondered why there wasn’t more outrage. The reason is really very simple. Most of us who care passionately about a better deal for needy public schools didn’t like this imposed requirement but felt that getting more money flowing into public education, and establishing a more transparent and fair set of principles for needs based funding into the future, was so important that it was better to accept the terms of the Review and work for the fairest outcome possible under these terms.
The no loser stipulation was also seen by many as a possible circuit breaker to the highly polarized debate that pitted private school against public school funding. It was viewed as a win-win opportunity that would increase the probability of support for the model across from private sector school lobbyists, and consequently enhance the chance of success.
Immediately after the release of the Gonski report, there was a sense of optimism because the private sector did not publicly oppose the Gonski package.
But even then the undermining had begun. The private sector, almost immediately, initiated backdoor, undocumented meetings. This resulted in the Government response to the Gonski Report revising the modeling to ensure the Catholic sector share was maintained in proportional terms. For example, the needs based Gonski weightings were for students in the bottom 25% of the SES scale but the reworked model applied needs based funding for students in the bottom 50% of the SES scale. This shifted the proportion of the needs based funds from the poorest schools to the less poor schools and ensured that the Catholic Systemic schools retained their proportional share of increased pool of Commonwealth funding.
The Gillard Government also put the implementation of Gonski at risk by delays, by attempts to tie the funds to other Commonwealth initiatives, by making it an election issue and through delaying the bulk of the funding to the post budget period out-years.
Then when it looked like there would be a change of Government several outspoken private sector advocates started to spruik alleged negatives of Gonski. Ironically the high price ticket for the full Gonski, necessitated in large part by the no losers stipulation, made the package an easy target to shoot down by the very sector that benefited from this stipulation.
So we are back to fighting for a fair deal for the Public Schools. We need now to talk about why the ‘no losers ‘ framework was a bad bad policy idea. It’s time to speak out about the rank injustice and the waste of funds in a policy that gives tax payers education funds to schools that have resources other schools can only dream about and that simply do not need them. This is the focus of this article.
Why was Gillard’s no school will lose a dollar imposition bad policy?
This paper identifies five very important reasons why we should work towards a school funding policy that continues to support sector blind needs based funding fully without wasting much needed funds on schools whose level of resourcing means that they can manage perfectly well with no additional taxpayer funds.
The initial decision to fund elite private schools, 40 years ago, was not the result of considered policy
Government funding for a very significant number of elite schools had never actually been the policy intention of the initial review of school funding undertaken by the Schools Commission over 40 years ago.
The Karmel Review of school funding originally recommended giving priority in the use of public funds to schools whose standards were below certain agreed desirable levels, and deferring the eligibility for extensive support of schools with resources above this standard until others had been raised to a standard nearer to them. The report stressed that they accepted the right of parents to school choice but not their right to public assistance to facilitate this choice.
The Whitlam Government failed to get this through the Senate and was forced to amend the legislation to extend funding to all schools.
They won this ‘concession’ – now a sacred right – not through any merit of their case for funding, but in spite of it. They won it on the backs of the urgent and pressing needs of the Catholic parish schools, that with the demise of strong sacred orders to fill their classroom ranks, were unable to fund their local parish schools on their own.
Poor policy decisions and blatantly pro-elite schools decisions have progressively increased funding to elite schools
To explain how, and why, I need to give a potted history of Commonwealth Government funding to the private schools sector since the 1970s. In significant ways, this 40 year period can be divided into two distinct parts: the Pre Howard years and the Howard years.
1973-1996 The Pre Howard years
Before the 1970s, the common sense logic was no different from that which operated in most other countries: Governments fund schools out of taxes. These schools are designed to cater for all comers. Not everyone uses these services but they are part of the Common estate just like hospitals, unemployment services, parks, police, footpaths, roads, public transport, sporting facilities. Some people access and/or need, these services more than others. Some can effectively opt out but the services are available for all. Governments don’t fund private roads or private security services for those who don’t find the public system meets their needs. I don’t get a rebate if I don’t use public transport or footy ovals. This is still how most countries think about their schools.
According to Jean Blackburn, one of the key authors of the Karmel Review, the decision to push the school funding bill through the Senate, by accepting the inclusion of elite schools, led to school funding arrangements that can only be seen as unique and extraordinary in a number of respects, and not in a good way. By funding schools that did not need the funds, it established a logic, almost unique to Australia, that because the wealthy pay taxes for services like education they are entitled to have a ‘market share’ of those taxes applied to schools of their choice.
One of the other unintended consequences of this significant amendment to the legislation, pushed through for political reasons, is that the usual considerations essential to good policy development were skipped. The school funding arrangements put in place by the Karmel Review established accountability free funding, where monies were provided with no strings attached, unlike any other Government grant based program.
This mattered less when the funding recipients were struggling Catholic and other schools that needed the money for teacher salaries. They had no room for discretionary spending even with new funding. But as Jean Blackburn observed years later:
There were no rules about student selection and exclusion, no fee limitations, no shared governance, no public education accountability, no common curriculum requirements below the upper secondary level.. We have now become a kind of wonder at which people [in other countries] gape. The reaction is always, ‘What an extraordinary situation’.
The funding system established differential funding based on a measure of need. However, in the accountability free environment of the time, that had the perverse effect of rewarding schools that directed a greater proportion of the private income towards capital expenditure – towards buildings and facilities. This increased the inequality in building standards and services between school systems.
When one takes a longer term view of school funding in Australia, it is notable that for the first 60 odd years of the 20th century, school funding was entirely a responsibility for the states. The Commonwealth entered the picture in a minor way only through the specific funding of libraries and science centres.
But over the period 1973- 1996, it came to be understood that the Commonwealth had an ongoing role in core funding for the private school sector but only for specific purpose lines of funding for the public sector. This left all core funding for public education in the hands of the more financially impoverished states. As Connor and McMorrow note this had serious consequences over time:
This is a serious issue in a federal system in which the Commonwealth government raises the lion’s share of all revenues. The Commonwealth was readily able to increase grants to schools in the non-government sector, especially as this sector is only half the size of the public sector, at a rate that was far harder for States and Territories to match for the much larger public sector, given competing claims on their tighter budgets.
By the beginning of the Howard years in 1996, the operation of the private school funding policies had become normalized. The historical newness and the global uniqueness of these arrangements had been forgotten by all but a few, and the sacredness of parent choice had been enshrined in our commonsense thinking as a fundamental right (only for those that can afford it, of course).
Public education activists of the period feared that this approach would lead to the residualisation of the public school system, school segregation on the basis of race and class and greater educational inequality. In 1983, well before the Howard education reforms, Blackburn noted that:
In an ironic twist the achievement of long denied public support for non-Government schools has played its part in producing a situation where it is public schooling and public purposes in education that are now on the defensive.
1996 – 2007: The Howard Years
That was where things stood up until the early 90s. Then came the Howard years, where things went from bad to worse. Here is what Connors and McMorrow have to say about this period:
The next watershed in schools funding policies in Australia followed the election of the Howard government in 1996. The Howard government’s arrangements for Commonwealth recurrent funding of schools were grounded in the belief that the way to drive the quality of schooling was to use public money to promote parental choice of non-government schooling and by this means to stimulate provider competition.
I have emphasized the word promote because the first time I read this extract I missed the importance of this shift from supporting parent choice to actively promoting, not just choice, but private schools as the desirable choice.
This was a blatant attempt to privatize education provision for all but the most needy. Public education went from being the default option at the heart of our democratic vision for Australia to a necessary, but residual, second tier service. This quote in the Connors and McMorrow papers reveals the extent of this new vision:
In this policy scenario, the fundamental value and strength of government schooling was described by Prime Minister Howard as the ‘safety net and guarantor of a reasonable quality education in this country’ for the children of those with parents unable or unwilling to pay for private schooling.
This was a significant ideological shift. Prior to this the idea of residualisation was talked about as a potential unplanned outcome of school choice. But here we have Howard stating that this is now a Government policy goal – to residualise Government schools. This is quite extraordinary.
To support this policy goal, funding to the private school sector, over the Howard years, grew by leaps and bounds.
In 2001 a new funding formula was introduced that was described as needs based. The actual effect was the exact opposite due to a number of significant reasons.
Firstly, a new SES funding model was introduced which tied school funding levels to the average SES of the family’s residential postcodes. This was a windfall for schools that had sucked out wealthier families from socially mixed communities. For example, the inner North of Melbourne has a number of suburbs that have a bifurcated population where public housing high-rise estates abut the trendy new developments of the upper middle class. The SES classification for these suburbs will be an average of the 2 groups, but the families who opt out of public education will come almost entirely from only one of these two groups. They take with them to their private schools the funding levels of their postcode.
But it was an even bigger windfall for the large number of high SES schools whose historical level of funding was higher than the funding they would receive under the new classification. The Government agreed to maintain them at their current levels of over funding (another no schools will lose a dollar moment).
Thirdly, this new scheme tied the private school per-student metric to the average cost of educating a student at a public school (The AGSRC). This might sound sensible and fair. But as low needs students exited the public system in ever increasing numbers, and the concentration of high needs students grew, the average costs of educating this higher needs cohort also grew. This created an unearned windfall to the non-Government system (and by the way pushed up the costs of education with no returns on investment).
This new funding scheme increased funding overall to the private school sector above and beyond the pro-rata student increases. This was justified by claims that schools could use the increased funds to reduce fees and thus broaden the base of parents able to choose private schools. This did not happen due to other perverse incentives built into the new scheme. As Connor and McMorrow note:
At the same time .. the government removed all downward pressure on fees, arguing the non-government schools should be free to raise their private income without affecting their level of Commonwealth general recurrent grant; and that any restraint on fees constituted a disincentive to private effort. This was an example of either policy confusion or obfuscation. If the government’s intention was to broaden the socio-economic composition of those families with access to non-government schools, its policy embodied a powerful nudge in the opposite direction.
So the overall effect of these changes has been:
- An increasing private sector and a contracting public sector, especially at secondary level;
- Increasing numbers of the higher SES families across all suburbs opting out of public schools and into private schools;
- An increasing concentration of high SES students in private schools and an increasing concentration of low SES students in public schools;
- Increasing costs in the public school sector as the proportion of high needs students increased;
- A consequent unjustified increased transfer of funds to the private schools; and
- Increasing inequality of student outcomes tied directly to student background.
In funding relativity terms the funding story is very clear. As noted by McMorrow and Connors:
From 1976, a steady shift started to take place in the Commonwealth’s distribution of its schools funding between government and non-government schools. From a 70 per cent share of the Commonwealth’s total funding in 1974, the government schools’ share had dropped to less than one-third by 2007. The changing policies and priorities of successive governments had contributed to this reversal of the Commonwealth’s funding shares for government and non-government schools, until by the end of the Howard government’s term of office, there had been a complete reversal.
In summary then, by the time the Gonski Review of School Funding was announced, the initial 1970s Senate political compromise to include elite schools in Commonwealth funding arrangements had blown out through a succession of both poorly developed policy arrangements and deliberately constructed policies that pushed parents to the private sector. Public schools had become significantly residualised and poorly resourced, and funding for elite schools overblown and unfettered.
The no-losers stipulation meant that the Gonski review could never address the harm done through the creation of a highly segregated school system.
Putting more funds into public schools could assist schools to address the additional challenges of teaching the more needy disadvantaged students and could potentially stop further residualisation. However it would not help to break down the segregation that had already been established.
A socially mixed school helps students with the highest needs without any detriment to the lower need students. A highly segregated system imposes another disadvantage on high need schools that Chris Bonnor refers to as ‘ the school effect’:
…the ever-increasing social and academic divide between schools represents a looming disaster for the students being left behind and for a nation that is already feeling the effects.
…..This social pooling of enrolments is making the SES impact of the school itself, as distinct from the direct impact of family SES, far more significant. The impact of family SES on student achievement in Australia is close to the OECD average, but impact of school SES is among the highest in the OECD. ..
[This is because] … students themselves constitute a very significant intellectual and cultural resource for schools – they bring prior learning, family education, networks and know-how. Depending on which students they enrol, schools gradually look and feel different in things such as resources, student discipline and time on task, number and type of welfare issues, teacher qualifications and expectations, curriculum, achievement culture and more.
The only way to address this un-equalising ‘school effect’ is to desegregate our schools, by ensuring that our public schooling system comes to be seen as a high quality system that caters for all through the ability to provide targeted support for diverse needs.
The large funding quantum of Gonski made it a big target
David Gonski in delivering the Inaugural Jean Blackburn Oration reminded the audience that the reason for the $5 billion price tag is because the stipulation that ‘no school should lose a dollar’ required a lot more funding to be put into the system. The flexibility to redistribute would have delivered a lower cost package. For example the overfunding of the some schools could have been redirected. Alternatively, Gonski could have reverted to the funding principles of the original Karmel recommendations and cut funding to elite private schools.
The Gonski funding quantum is not high in GDP terms but the Abbott Government has used it as a reason to walk away from the Gonski model. Cries of, ‘we can’t afford Gonski,’ have reverberated around our newscorp media with a sense of glee. Almost no-one has responded by stating the obvious, that if you want to reduce the price tag, the solution is simple – lose the ‘no losers’ stipulation. That the Commission of Audit did not identify this option speaks volumes about their interests and ineptitude.
The no–losers stipulation was based on a myth
It’s a myth that has now hardened into a self-confirming truth – that the elite schooling sector is so powerful that no Government can ever roll back the unfair funding regime. Belief in this myth explains the backdoor, undocumented meetings that were not offered to the public school counterparts. Belief in this myth explains why the needs based formula was watered down to such an extent that the funding share to the Catholic system was sustained in spite of their higher SES intake. Belief in this myth explains why Julia Gillard, after a visit to an elite private school with world-class facilities, exclaimed, “Isn’t this great!”
This myth grew to ultimate truth status due to an event that came to be known as the “Latham school hit list incident”. Just weeks before the 2004 election Mark Latham, then leader of the opposition, declared that funding for the very elite private schools should be cut and the funds distributed.
The media exploded. It went nuts. Peter Browne on Inside Story in 2012 noted that the media touted it as act of provocative class warfare and electoral suicide:
The plan provoked a furore, particularly on talkback radio. The Prime Minister, John Howard, characterised it as “old-fashioned class warfare,” a phrase that appeared repeatedly – along with “hit list” – in media coverage over subsequent days and weeks. The churches “savaged” Latham (according to a headline in the Australian), and the private schools warned of fee hikes and an exodus back to government schools. Robert Manne described the announcement as “dubious politics.” Andrew Bolt described it as “abhorrent.
The media believed its own story and so the fact that Labor lost the election because of the Latham hit list was accepted a fact. Except that it is not true. Browne’s investigation shows that this is a misunderstanding of why Labor lost the election as the polls of the time tell another story entirely:
Just before Christmas 2003, Newspoll asked 1200 adults to say what they would “like” or “not like” to happen in 2004. Fifty-five per cent of respondents said they would like to see “a reduction in government subsidies for private schools.” Thirty-five per cent opposed such a move and 10 per cent were uncommitted. In other words, only a little over a third of respondents felt strongly enough to oppose what would later become Labor’s education policy for the election.
Latham announced the school funding policy on 15 September, three-and-a-half weeks before election day.
Ten days later, though, an ACNielsen survey of just over 1400 voters found that support for a shift in funding had actually risen since the Newspoll survey ten months earlier. Fully 66 per cent of respondents approved of Labor’s policy, with 27 per cent disapproving and the remainder uncommitted. Even among Coalition voters, the policy attracted support from 47 per cent of respondents, with 44 per cent opposed.
Now that this Government has walked away from both the funding quantum and the key principles underpinning the Gonski recommendations, we may feel demoralised and defeated but we are not right back to ‘before Gonski’. The Review process and the huge effort put in by the Australian Education Union and many others was not a waste of time and effort.
The funding principles of a ‘school resource standard’ and ‘needs based weightings’ have now been firmly established as the way forward on the basis of extensive research and consultation.
The inequality of resourcing and the needs of public education have been clearly demonstrated.
But we also now know that trying to work with the private sector, hoping for a win-win solution will not work, and that this Government’s priorities do not include a fair go for the old, the young, the marginalised, the sick, or even for future generations. This has become crystal clear through the budget., However, civil society is starting to get organised and to build a broad based pro-poor, pro-social justice, pro-environment, and pro-inclusive movement. Manifestos and priorities for this movement are in development through multiple social media based processes.
This is our opportunity to make sure the key school funding principles outlined through the Gonski process can be included in this broad based movement. Let us take what we need from the Gonski model and build a strong and clear narrative about what high quality equity based schooling system would look like in Australia. Let us place this narrative within the larger school funding historical narrative where the last 40 years can come to be seen, not as the sacred baseline, and not as the default position but as a foolish, unjustifiable, politically motivated aberration that has done immense harm.
 Although it is worth noting that while the poorer private schools had less freedom to squander their funds there were many questionable practices that were allowed to flourish because of high growth in evangelical Christian schools. Marion Maddox details some of this in her book Taking God to School
 Jean Blackburn, Changing Approaches to Equity in Education, John Curtin memorial lecture 1991 ANU
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