When leaving school at seventeen, I did not expect that my participation in the Australian school system would resume; or that adult life would bring opportunities to observe and experience it from a wide range of perspectives.
Our school system was never perfect, and in some ways it is better and fairer now than it was when I knew it as a student, a parent and, briefly, a teacher. But there are too many ways in which it has gone backwards.
The most dramatic shift during my lifetime in the ideas and values driving the nation’s school system came with the advent of the Howard Government.
It was this government which applied the gospel of neo-liberalism to the school system, adding fuel to market forces that are intrinsic to schooling, rather than attempting to mitigate them. The poor design and implementation of its programs left negative effects on schools planning, regulation and funding which linger to this day.
This added to damage that had already been done to the integrity of the Commonwealth’s funding of schools under the Whitlam Government. It established a large recurrent grants program for schools to overcome serious deficiencies and inequalities in the school system. This program introduced the concept of needs-based funding, measured against a specified target resource standard. But a conservative Senate exacted a price from the Whitlam Government for the passage of legislation to set up the Schools Commission: it demanded the inclusion in this funding of those (then few) private schools well able to meet that standard and beyond from their own private funding. This set up a tension between the concepts of need and entitlement which has continued to strain the logic and integrity of schools funding to this day.
Consumer choice and provider competition
These were the mantras introduced by the neo-liberals, consistent with their policy emphasis on schooling as a positional and private rather than public good. Consumer choice and provider competition were the golden rules that were promised to deliver excellence and equity in schooling.
Consumer choice is a catchy slogan, but neither the Howard Government nor those that followed it have ever managed to explain what they mean by it. It is what we could describe in terms of contemporary US political discourse as a ‘concept’ of a plan, rather than a concrete plan of action.
The criteria for choice have never been specified. As far as governments are concerned, a parental choice of school made for a reason that is risible is as worthy of public support and funding as one that is rational.
Nor have governments ever defined the extent of consumer choice. Is there any limit to the type or number of schools that should be available to consumers? (There must be at least two or there’s no choice, but what about 8 or 9?) And what about areas of the country where there is no capacity for choice? Governments seem to have no target or limit in mind for the range or total number of private schools they are aiming to achieve with their current policies. How far do they intend to go in expanding the private sector share and shrinking the public? Or are they just forging ahead to see where the market lands?
Is the public school system to be reduced to an agency for filling the gaps left in provision when individual consumers and providers have achieved their mutual selection process in the private market; and for absorbing the effects of market failure?
Australia already has twice the number of students in the private sector as the global average. Given the disturbing consequences to date of ongoing privatisation, it seems to defy common sense that these questions are not even being asked, let alone answered.
Provider competition. Once established, private schools compete in the market with other schools for enrolments. When it comes to the process for licensing the establishment (or expansion) of private schools, however, our governments provide no competitive process for the purpose of protecting quality, equity, value or cost to the system as a whole. A proposal comes forward from a private provider in the absence of any form of competitive tendering requirements by governments. A state/territory government then considers this proposal for registration. If the proposal comes from, say, a religious sect which discourages students from proceeding to higher education, should a government not ask whether there could possibly be a more appropriate provider?
The relationship between governments and a multiplicity of private, largely not-for-profit, providers of schooling in Australia does not fit any known descriptor in public financing literature on the standard forms of public–private partnership. It’s hard to think how to label such a process. In NSW, it might be given the quaint descriptor of an ‘unsolicited proposal’. In the jargon of the commercial business sector, a school established in this way would be called a ‘pop-up’.
According to the principles set out in the NSW Education Act (and on which the Act is based), ‘it is the duty of the State to ensure that every child receives an education of the highest quality’. The State does not deem it necessary, in line with this duty, to call tenders from prospective providers of private schools. But private housing developers have been stepping in to fill the breach. In 2021, the Sydney Morning Herald (SMH) contained an ad from a Greenfields Development Company for expressions of interest from private school providers in establishing a campus in ‘an emerging prestigious precinct’ in the Oran Park area. In 2023, the Daily Telegraph revealed the result:
plans for a “high end” Regis Grammar, K – 12, charging annual fees to match; with an inaugural principal and a planned opening date for 2026. According to the developer, this school would further expand choices available to residents beyond the established public schools as well as an Anglican and nearby Catholic schools. It appears that this school has yet to gain registration.
Then, in the SMH (24/9/2024), in an article revealing a growing shift in enrolment share from public to private primary schools, the principal of that Anglican K-12 school commented that “we were here before other schools…and the developer was keen on an independent school in the centre of Oran Park”. This makes perfect sense from the developer’s point of view. Being able to offer a “high end” school could well make it easier to entice potential buyers for the homes in a prestigious housing enclave. It appears that developers approaching Catholic and other providers to start up schools in such areas is now “a thing”.
It might be a “thing”, but it is not a good thing.
To meet its obligation to ensure that every child receives an education of the highest quality requires a state government to have a planning regimen – a concrete plan of action – designed for that high purpose. There is something seriously amiss, in my view, with a system which permits the profits of property developers, in concert with religious or other providers of their choice, to supplant proper planning based on educational, demographic, social and financial criteria. Our over-heated real estate market already contributes to this country having the second-highest rate in the OECD of concentrations of socio-educationally disadvantaged students in disadvantaged schools, and to dragging down learning outcomes overall.
Have we sunk to selling out to property developers the equal entitlement of our children and young people to a school system which supports them all to achieve their best?
Most providers are ‘not-for-profits’ and are mainly, but not all, religious organisations. These now bear very little of the share of risk in the operation of our school system. They commit a very small amount of their own resources: they act instead as brokers and gatekeepers. They arrange for public funding for their schools from both Commonwealth and state/territory governments and for private funding from parents. And when it comes to private providers who decide to close a school, governments seem to have few, if any, standard contractual arrangements to protect the ‘consumers’ themselves, let alone the other schools which may be affected.
The current arrangements would be unwise in any school system, but they defy common sense in a system where school registration is almost always accompanied by public funding on a generous scale.
Following the money trail
It is schools funding policy which has done most to tip the balance of our national school system towards entitlement rather than needs: Australia has drifted into a system designed to entrench the under-funding of public and over-funding of private schools.
Public funding is available to all ‘not-for-profit’ private schools. As noted above, governments provide an additional 20 per cent of the standard base SRS even to those operating, say, 100 per cent above their base SRS from their private fees alone. This is a formula for consolidating the resources gap between these schools and those operating at, or in all too many cases below, the standard.
But this funding bias was compounded by the Morrison government in 2020.
For most of the decades prior to 2000, the amount of public recurrent funding to private schools had been based on the level of educational resources provided for students from private sources (largely school fees). This approach was then replaced by the Howard government in 2000. It introduced a ranking system for private schools according to a socio-economic status (SES) index as a proxy for assessing parents’ capacity to pay private school fees. This shift to parental capacity to pay as a basis for determining the level of the school’s entitlement to public funding created a form of a differentiated voucher, but with the voucher being paid to the school not direct to the parent. A fundamental problem with this kind of device is the difficulty of pre-determining the amount needed per student without knowing the real cost of that student in their actual school setting.
In 2020, the Morrison government replaced the SES-based measure with one based on parents’ after-tax income, to assess each school’s capacity to contribute (CTC). This is now the proxy measure used by governments as the basis for determining the level of funding from taxpayers to which private schools are entitled. At the same time, however, governments turn a blind eye to the real, the actual, the demonstrated capacity of the school’s community to contribute private funding. The Commonwealth, the major provider of public funding for these schools, states in its official guidelines that it ‘does not have a direct role in the administration or operation of schools, and therefore is not involved in how schools structure and administer their fees’.
At this point, readers may feel they have been invited to follow Alice down the rabbit hole into Wonderland. This is a place where private providers of schooling are free to set the admission fees for their schools, depending on their target market. Those that set their fees higher than the amount set by governments based on parents’ after-tax income are not breaking the law. And it is perfectly legal for the provider then to combine this fee income (not to mention other sources of private income such as donations) with the amount of taxpayer funds generated by the CTC proxy measure — and thus to operate at a higher resource level than the SRS – and than a comparable public school.
This may be legal, but it amounts to a rort. It corrupts the concept of a Schools Resource Standard. Where private schools set admission fees which are higher than the level of public funding generated by the CTC proxy measure, the difference between the two generates a ‘profit’ for the school, courtesy of taxpayers. What governments are doing is telling such schools that they can ‘keep the change’. This could be seen as a reverse of the infamous Robodebt scheme…it is more of a roboprofit scheme. The scope of this rort is hard for the layperson to assess, since governments do not publish data in a form which enables a ready comparison between the fees parents do pay and the amount the CTC proxy measure says parents can afford to pay.
This is questionable enough, but there’s more. As a result of behind-the-scenes bargaining, the Commonwealth has allowed state and territory authorities to play around with accrual and other accounting practices in order to discount their contributions to public schools’ achieving their rightful SRS. No such ‘adjustments’ are applied to non-government schools.
A report by the Australian Education Union, A decade of inequity, September 2024, shows how governments have funded private schools above public schools since 2013. Across Australia, 56% of private schools receive more government funding than public schools of similar size that educate very similar cohorts of students. This increased from 45% in 2013. In NSW, it increased from 46.7 per cent in 2013 to 59.6 over the decade, while in Victoria it decreased slightly from 77.5 per cent to 75.5 per cent.
It will take time, effort and backbone on the part of governments to rectify the damage they have done to the school system through investing public funding in expanding a largely unregulated market in private schooling.
There is much evidence that strengthening the supply of quality teaching is the most effective lever available to governments for improving student outcomes.
In 1974, the Commonwealth took over formal responsibility for higher education funding from states. It would make sense, rather than continuing to position itself as the major funding source for private schools (for which it has no Constitutional responsibility), for the Commonwealth to take on a greater role in, for example: strengthening the supply and quality of teaching; exerting greater pressure on universities to lift their game in relation to the recruitment, pre-service and ongoing professional support of teachers; boosting its commitment to the teaching profession and affirming teaching as an intellectually demanding profession involving highly complex tasks; and sharing responsibility for creating the pay and conditions necessary to make teaching an attractive and rewarding career in order to recruit and retain quality entrants.
The role of government
A strong personal commitment to the ideas and values that underpin public education does not blind me to what I have learned from experience: that there are fine leaders and teachers in both private and public schools; and, in both sectors, that there are some who are far from paragons. While working in the public school system, for example, there were several times when I had to advise principals that, were they to refuse to enrol a student on the grounds that they were putting to me, they would find themselves in breach of the law…the point here being that there is a law, designed to protect the principles on which the public school system is based.
As Cathy Sherry pointed out in a fine article (July 17, SMH) there was a long time in the past when only men could own property and when there was a market in human beings – and this only ended when governments made a change in the law.
If we are to remain a true democracy, with a better and fairer school system as one of its cornerstones, this country needs its governments to commit to the maintenance and advancement of public schooling of the highest quality; and to strengthen the currently flimsy and opaque legal and regulatory arrangements for the operation of private schools.
Lyndsay Connors AO has held senior positions in education at both the national level and in NSW.
In 2015, she co-authored with Dr Jim McMorrow
Imperatives in Schools Funding: Equity, sustainability and achievement.