School funding change to socio-economic base

The Howard government’s school funding reforms were sold to ­cabinet on the basis they would better target taxpayer assistance.

The Howard government’s school funding reforms were sold to ­cabinet on the basis they would better target taxpayer assistance amid concerns some schools were unfairly “attracting close to the maximum commonwealth funding”.

In a detailed submission to cabinet from education minister David Kemp, received on March 26, 1999, it was proposed the government shift its model for funding non-government schools from a mechanism known as the Education Resource Index (ERI) to a measure assessing the Socio-Economic Status (SES) of parents.

The submission was released as part of the National Archives’ publication of 1998 and 1999 cabinet records on Wednesday.

Mr Kemp explained that under the shake-up, funding would no longer be provided based on a ­determination of a school’s own resources but on the income of families supporting non-government schools.

Census data would be used to determine the wealth of school communities, with a simulation showing the methodology was “workable, fair and transparent”. It was also seen as a new vehicle to smash the system whereby schools would manipulate their fees and private donations to maximise their funding under the ERI.

“Non-government school fund­ing arrangements have become increasingly subject to manip­ulation,” the submission warned. “They act as a disincentive to private effort, as increased private income … can result in reduced government subsidies.”

Mr Kemp said the new model would not discourage private investment and provided a sustainable needs-based funding mech­anism into the future, although the details of the transition to the new system were critical.

A couple of SES funding models were canvassed in the submission, with one option warning that some independent schools could lose up to 65 per cent of current funding and be “forced to close” while others could be forced to raise fees thousands of dollars.

Overall, the reforms were aimed at maximising the educational impact of commonwealth funding while delivering on an election commitment to review the ERI. On April 19, cabinet confirmed its decision to adopt the SES model