‘Elite’ schools? The education funding debate is derailed by such stereotypes

If you thought we would see the end of the school funding wars with the introduction of a fairer, needs-based funding model, think again.

It’s been nearly two decades since Mark Latham’s “hit list” contributed to Labor’s loss of the 2004 election and seven years since the Turnbull government’s 10-year funding plan would have resulted in 500 Catholic schools being worse off. The revised school funding model that was introduced in 2017, based on the recommendations of the Gonski review, was meant to put an end to the divisive public versus “private” funding debate.

The Victorian government has moved to make some private schools pay payroll tax.Credit: Dionne Gain

Now we have Premier Daniel Andrews targeting a handful of schools to help repay the state’s COVID-19 debt by removing payroll tax exemptions that are rightly in place to ensure non-government schools aren’t bearing costs their state counterparts do not carry.

As a key player in these debates over two decades, as a former senator and now as head of the National Catholic Education Commission, I attribute many of these nonsensical policy decisions over the years to a general lack of understanding of the complexity of school funding in Australia.

Too often the debate is railroaded by “experts” highlighting a few “elite” school stereotypes with mentions of heated swimming pools and annual fees of $20,000 plus, when the reality is most non-government schools serve a broad and diverse cross-section of the community.

Why is this debate so important?

In part, it’s the principle that is enshrined in international law that every child in Australia is entitled to a free, compulsory education. The Victorian government’s removal of payroll tax exemptions essentially erodes that right by forcing some schools to pay a tax that other non-profit community services – and state schools – do not. We estimate the new payroll tax equates to an unprecedented 10 per cent cut to government funding for non-government schools, based on forecast tax revenues.

In some cases, the amount of payroll tax would be greater than the amount of state government funding the school receives. For example, Xavier College is facing a payroll tax liability of more than $2 million a year. Yet, in 2021, it received only $1.5 million from the Victorian government. It’s absurd.

For families who choose to send their children to a non-government school, education is not free. Non-government school parents are means-tested to assess how much they can afford to contribute to their children’s schooling, through what’s called the Capacity to Contribute. This amount is then deducted from the base level of funding all students are entitled to, which is called the Schooling Resource Standard.

The parent contribution varies significantly from school to school. On average, Catholic school families are expected to contribute about 23 per cent of the resource standard through school fees.

In dollar figures, government schools received, on average, $20,940 in state and federal government funding per student in 2020-21. Non-government schools got $12,442 per student.

Catholic school parents and communities also contribute about 90 per cent of the costs required to support school buildings and other capital works, while capital works for public schools are fully funded.

School funding is highly complex and is regulated under federal legislation and national agreements between the federal government and states and territories. Any arbitrary decisions outside of these frameworks, as in the case of the Victorian payroll tax, not only set a precedent for other states and territories, but also have the potential to significantly affect a carefully calculated and considered needs-based funding formula.

Part of that impact is the financial burden on families who already contribute significantly to their child’s schooling and may need to pick up the cost of ill-conceived policy decisions. This could be the unintended impact of the Victorian government’s decision, which creates an additional burden on families experiencing the highest interest rates in more than a decade and increasing pressures on the cost of living.

The argument that the Victorian government makes, that this is just a handful of “high-fee” schools, is concerning. Once concessions are removed for some schools, what is to stop the threshold changing again to balance the budget and capture more non-government schools in the future?

Schools can’t be treated like businesses. We saw this with the unrefined JobKeeper measure. I argued strongly against JobKeeper for schools during the pandemic. A different approach would have better recognised the additional financial burden that our school communities – particularly those in Victoria – had to bear with decreased income from school fees due to financial hardship, and the increased cost of safety measures and technology. Schools that didn’t access JobKeeper could now be forced to pick up the tab again.

Policy decisions affecting school funding can’t be made in a vacuum. Of course, like any national policy, the school funding model requires ongoing refinement, and a review of the model will be conducted by the government in the next few years. However, it’s unhelpful and divisive to pit school sectors against each other for what may ultimately be a limited return to the budget. It continues to inflame the school funding wars when we should be getting on with the job of improving schooling.

Jacinta Collins is the executive director of the National Catholic Education Commission.

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