Key Challenges for the Funding Review

A new report released today highlights the six key challenges that must be addressed by the expert panel conducting the funding review.

The Real Reform report by funding expert Dr Jim McMorrow says the funding review and the Government’s response to it early next year was critical and could determine the long-term future of schooling in Australia and, in particular, the nature and quality of public schooling.

The McMorrow report, which was commissioned by the Australian Education Union, warns that schools funding in Australia has got to the point where “dysfunction, if not corruption, is evident on a number of fronts”.

Dr McMorrow identifies six key challenges for the review, headed by Dr David Gonski, as part of the reform of school funding arrangements.

 Those challenges are:

*Achieving a mature partnership between Commonwealth and State and Territory governments

Dr McMorrow said the current imbalance in public funding of public and private schools between the two levels of governments has serious consequences and must be addressed. Despite its superior revenue raising power, the Commonwealth Government was providing a small proportion of funding for public schools.

He found that the public school share of Commonwealth funding has totally reversed since the mid seventies. At that point public schools were getting over two thirds of the funding and had 79 per cent of students. They now receive just over one third of the funding despite having 65 per cent of the students.

“The accretion of policy principles and funding formulae over time has had the effect of reversing the balance of Commonwealth funding for government and non-government schools over the period since 1976,” he said.

Dr McMorrow said a national agreement on funding for all schools across all levels of  government should be the objective with the most effective way to re-balance funding responsibilities, a pooling of Commonwealth and state/territory funding. That funding would be allocated according to agreed objectives and principles.

*Putting public schooling back at the centre of national priorities and agreements

Dr McMorrow said the de-facto positioning of the Commonwealth Government as the major source of funding for private schools had obscured its responsibility for adequately and appropriately funding public schools.

He said all governments should be required to formalise their responsibilities for resourcing all schools and, in particular, public schools, by including a statement of principle in relevant legislation.

*Adopting national target resource standards for schools to guide planning for greater public investment

One of the research reports produced for the funding review examines the feasibility of creating a resources standard as a way of providing a measure of the funding that schools need to achieve specified educational goals.

Dr McMorrow said a resources standard was critically important as a replacement for the current flawed system that sees private schools funded according to the average costs of delivering education in public schools.

“The Commonwealth currently provides general recurrent grants based on arbitrary linkages to a contestable funding benchmark of political convenience,” he said.

“Without explicit standards of school resourcing, educational policy decisions will continue to be taken in a resources vacuum; and schools funding decisions will continue to be taken in an educational vacuum.”

Unlike the resources standard proposed in the Allen Report to the review, Dr McMorrow said a resources standard should have higher target resource levels as its centerpiece rather than current expenditures to allow for an increase in funding over time.

*Use public funds to narrow resource gaps between schools that cannot be justified on educational grounds

Dr McMorrow said the removal of any means test for private school funding in 2001 had profound consequences.

It had led to a growing inequity in schooling outcomes and a widening of the resource gaps between public and private schools.

He said the wealth and resources of private schools should again be taken into account when the funding for them was being decided.

*Protecting public investment against erosion through inflation

One of the problems identified with the current federal funding system, Dr McMorrow said, was the fact that private school funding was indexed according to rises in the average cost of delivering education in government schools.

That had led to unjustified windfalls in funding to private schools equivalent, in total, to $1 billion over four years. A new indexation system was required that better measured actual increases in costs.

*Consolidating funding in the interests of efficiency and effectiveness

Dr McMorrow said there needed to be a consolidation of the many short-term targeted programs with different conditions and accountabilities that currently exist into the proposed national resource standards.