Implement the Gonski model as the fairest way of funding schools

AN elite private boys school is holding an opening next week for its new recording studio, built to allow students to extend their musical studies with "exposure to music-industry practice".

The school charges parents almost $30,000 a year in fees, raising almost $35 million in 2011, and is sitting on net assets of $105m. Like most private schools, it will again raise its school fees next year by about 6 per cent.

The school also received more than $2.5m from the federal government and $1.4m from the state government in 2011.

Across town, public and private schools teaching children from disadvantaged backgrounds would struggle to have recorders, much less an industry-grade recording studio.

It raises the question, does the private school really need that extra $4m a year from government? Or would that money be better invested in schools teaching children who struggle to read words, much less music?

It's not as if the government funding is used to offset the increases in private school fees, making the top private schools more accessible to less wealthy families. Despite the millions they receive each year from government, elite private school fees climb regardless.

It's an example of the inequity in the school system that the Gonski review of school funding sought to redress.

As Education Minister Christopher Pyne is fond of saying, it's not all about money. The crucial issue is how and where that money is best spent.

And this is where the Labor government made a fatal error and lost control of the school funding debate. It focused on the extra $14.5 billion it was pouring into the system rather than the fundamental structural reform the Gonski model heralds.

The problem facing Pyne is not that the Gonski model is bad and unworkable; the problem is the way Labor mishandled its implementation. It would be a mistake for him to throw out reforms that provide a fair, transparent and equitable way of giving schools the money they need.

The Gonski reforms redistribute money to schools that need it most, but the main message conveyed over the past two years was that Gonski means more money. It was fed by the perception that Labor was offering sweetheart deals to get states to sign up.

In fact, the extra money is the least of the changes.

The new model starts with the premise that all children, regardless of their family background, are entitled to some funding from government for their education. It is provided as a uniform base payment with private school students receiving a percentage depending on their family circumstances.

On top of that, the need of each student in every school is addressed through supplementary payments called loadings, which are fully funded by government for public and private schools regardless of a student's background. In this way, the Gonski model is blind to a school's sector and focused on the individual students.

It replaces a system that funded government schools for the number of students, and private schools for the socioeconomic status of their students, based on their home postcode. Targeted funding for disadvantage was provided separately and changed regularly, but the Gonski loadings bring special needs funding into recurrent spending.

This is the heart of the transformational reform under the Gonski model. It is also what Labor spectacularly failed to explain to the public about its reforms.

The Gonski committee conducted its review with one hand tied behind its back, and was committed from the outset to increased funding because of Julia Gillard's promise no school would lose a dollar. Later, Ms Gillard went further and guaranteed every school, no matter its financial circumstances, an extra 3 per cent in funding.

If the review had been able to redistribute money and (the horror!) cut government funding to some schools that manifestly don't need it, it's likely that some extra money would still have been required to bring all schools on to a level playing field.

While federal funding previously was based on what states spent in schools, which went up and down, the Gonski review calculated the cost of educating all students to a high level.

The biggest winners under the Gonski reforms are the "average" schools, which are not disadvantaged enough to attract extra funding and whose communities are not rich enough to raise millions of dollars. Under the new arrangements, every indigenous student in those schools attracts a loading, and every student in the bottom half of socioeconomic measures attracts extra money.

A clear illustration of the Gonski model in practice is in NSW, where the government has published full details of funding for each school sector over the next six years and for every public school next year.

Because the system is transparent, principals and schools understand the way funding is allocated and why funding might move from one school to another. It is considered fair: even cutting funds to 200 of the 2200 schools has passed with little comment.

But Labor oversimplified its argument for reform, and in the process underestimated the capacity of the community to understand the need to reform school funding. Pyne does not need to develop an alternate model, he just needs to implement the Gonski model and finish the job Labor started.