Independent Schools Victoria dispels school funding myths

An Independent school serving low income families was recently described as ‘overfunded’. It’s an example of the loose language and misunderstandings that sometimes cloud media reporting and public discussion, writes Michelle Green.

There’s a Melbourne school where 60 per cent of the students are in portable classrooms, where there’s no canteen, proper administration building, gymnasium or covered areas where students can gather at lunch or recess.


Some 65 per cent of the parents with children at the school are on low incomes that entitle them to Health Care Cards. Most of the students come from non-English speaking backgrounds; some have other diverse educational needs.

It’s an Independent school, charging low fees that in some cases are discounted when parents prove they can’t pay.

Through prudent management it operates with a small surplus so it can plan for the future and meet unexpected contingencies. If it wants to build permanent classrooms, the school – not the government – has to pay. It sounds like a needy school.

Yet it’s a measure of the complexity of the Australian school funding system that this school – Al Siraat College in Epping – can be nominally described as ‘over funded’. And it’s an example of the loose language and misunderstandings that sometimes cloud media reporting and public discussion about the system, that this school has recently been portrayed in a context that could imply it’s wealthy and awash with funds that should go to more deserving schools.

Of course the school funding system is overly complex with variations, loadings and technical terms that can lead to simplistic and even sneering commentary.

Take the term over funded. The words have a specific, technical meaning. They do not tell you how much government funding a school receives. They do not tell you how much funding a school receives relative to other schools. They only tell you about how much the Australian Government thinks a school should receive from both levels of government under current funding arrangements, relative to how much it received under previous arrangements.

The current arrangements stem from the 2014 Gonski reforms, when the Australian Government introduced the new Schooling Resource Standard (SRS) funding model. The SRS model is a mathematical estimate of how much money is required for students at a given school to receive an appropriate level of education, given their backgrounds and educational needs.

The model identifies a base amount of funding that is provided to all students, with loadings for students with higher levels of educational need. Government schools are entitled to the full base amount. In non-government schools, this is adjusted according to a school’s capacity to contribute to the cost of education. The more the school’s community can contribute, the less government money it receives.

When the new model was introduced, it came with highly complex, indexed transition arrangements to prevent significant disruption to school budgeting. Schools plan and budget for the programs that they want to implement well in advance, and short-term budget shocks usually lead to poorer educational outcomes for students.

Since all schools are transitioning from one funding model to another, by definition every school in Australia would have started as either over funded  or ‘under funded’.

Some of the recent commentary and reporting has clutched at the term over funded to assert Independent schools are getting an unfair share of the education budget and that needy government schools are missing out as a result. Yet the essential fact – overlooked by some who don’t understand the system or are motived by ideology and prejudice – is that students in Independent schools receive less government money than those in government schools.

Secondly, the question of who is over funded and who is under funded only applies to Independent schools. That’s because when the Australian Government calculated whether schools were over funded and under funded, they only looked at Independent schools – and that’s because these are the only schools that are directly and individually funded according to the SRS model.

Government and Catholic schools, on the other hand, are part of centralised systems that receive an overall funding entitlement that they redistribute to individual schools using their own calculations of need. As a result, we don’t know which government and Catholic schools are over funded and which are under funded – yet it’s certain that some would fall into both categories. The same applies to Independent schools.

To point this out is not to seek to pit one sector of our education system against another. The tone of some recent commentary, however, risks inflaming these divisions in a forlorn attempt to refight long settled battles over the principle of government funding for all Australian school students.

What’s required is an informed process involving governments and all school sectors to ensure every student in every school – government and non-government – is properly funded under arrangements that are clear, consistent and fair.

Given all the challenges facing all schools, the least they can ask for is some certainty. Then maybe they can provide the essentials, like permanent classrooms, canteens, administration facilities, gyms and covered areas for their students at lunch and recess.

This article appeared on the opinion pages of The Age on Thursday 13 October 2016.