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Australia’s ‘Gonski Review’ of school funding

Australia’s Federal Labor government can expect a major headache come Monday. Pundits of all stripes are limbering up for the expected fracas that will erupt when the Government releases their long awaited commissioned report on school funding, and their response to it. The report, written by a panel headed by University of NSW Chancellor David Gonski, is expected to recommend a serious shake-up to the current funding system.

It is timely then to consider some of the ethical issues that arise when it comes to questions of school choice and school funding.

One of the key issues is equity. Australia now stands out among OECD countries in the extent to which it subsidises fee-paying private schools, and consequently the overall number of students who attend such schools. Currently 34.6% of secondary school students in Australia attend non-government schools (up by over 14.6% since 1975), compared with, for instance, roughly 7% in the UK, 6% in Canada and 1% in Finland. The OECD average is almost half the proportion at around 15%. According to a report by the Nous Group, commissioned by the panel, “a higher proportion of Australian students attend non-government schools than in any similar OECD country other than the Netherlands.”

But being private is not the issue, and the simplistic private/public dichotomy approach is mistaken. What we should be concerned about is ensuring that our funding system allocates resources based on need, and that it helps us realise a more meritocratic society, where high-paying jobs and rewarding opportunities are available to the most talented and hardworking. Currently Australia’s funding system fails on both counts.


How the Commonwealth funding system works

The hydra-headed funding system currently in place was introduced in 2001 by the Liberal Howard Government, and allocates money to private schools under an SES (socio-economic status) model. Under this approach, private schools are guaranteed between 13.7 and 70% of the average cost of educating a student in a government school (the AGSRC index), depending on the socio-economic profile of students in a school community. This is based on census data that indicates the SES backgrounds of those living in certain areas.

But the amount of funding that is allocated to private schools in no way takes into consideration the level of fees that they charge or the amount of resources available to them (including from donations or endowments etc). In 2008, fees and private donations – glossed over for funding allocation purposes – accounted for an average of 43% of the total income of non-government schools. Further, almost half (40% in 2009) of all private schools receive more than they would be entitled to under the SES model due to ‘Funding Maintained Agreements’ for schools that would have been worse off.


Values at play

Choice is a very important value in the school funding debate – government subsidisation undoubtedly makes available a larger number of schools for some parents to send their children to. But choice for whom, exactly? Whilst government schools have a legal obligation to open their doors to all, private schools get the best of both worlds by being selective in the students they admit, and still receiving government funding. They have no obligations to accept the poor, the disadvantaged, or the most expensive students to teach. It is government schools that educate 80% of children with disabilities and special needs, and 86% of indigenous students. They educate almost double the number of students from low-income families (as a proportion of enrolments), and are overwhelmingly the providers of education in remote and rural areas. What reasons might we have for subsidising that choice, then?

There are in fact reasons to subsidise private education in some instances. One reason is that education is a public good; a society of well-educated people is better than one where people are never afforded those opportunities. We have good reason to think that education makes people happier, healthier, and more productive, and that those benefits are enjoyed by all to some extent. It’s usually said that we should focus on increasing the size of the pie, rather than how we cut it. I think we should be concerned about both. That’s because education is a positional good as well as an intrinsic one, or one with public benefits. Access to rewarding jobs is to a large extent (but not wholly) a zero-sum game. If someone lands a great job, someone else misses out. Since education is one of the main ways in which we land such jobs and win out over others, there are good reasons for believing that its advantages should be based on talents and not money. Not doing so is not only unfair, but it’s bad for society.

Imagine you are about to finish high school and would like to study medicine. You are bright and you’ve worked hard. But unfortunately for you the university you’d like to attend, instead of admitting students on the basis of their grades or talents, has decided instead to auction off such opportunities to the highest bidders. Consequently, less talented and less hard working students with wealthy parents have an advantage bought for them. Surely we would have good reason to object to such a system; it would constitute not only a very serious injustice to you, but it would also be hugely inefficient for society; it would seriously distort the rising of talent and ensure we had a society of second rate doctors. If harms of this kind were great enough, it might justify banning such a practice – but certainly it should not be subsidised by government. We need to think seriously about whether the educational opportunities we make available to high school students are any different. My suspicion is our different response has more to do with the anesthesia of familiarity.

There are also practical reasons (not based on principles like equality of opportunity) for thinking that government should, through its funding arrangements, promote and incentivise the enrolment of students in schools that are diverse and open to all. One such reason is social cohesion. A society that incentivises the lumping together of students in schools based on the income bracket or cultural background of their parents is one in which we ensure cross-cultural and cross-class communication and interaction is kept to a minimum. Another practical reason for investing more in government education is simply that, that is where government will get the greatest educational return for their investment.

Empirical data from countries like Finland, Canada and Japan show us that it is possible to have a schooling system that is both equitable and exceptional in its educational outcomes. My point is that it is also desireable. In 2010, 86% of the 100 schools which had the highest Year 12 (final year) scores in Victoria were private schools. The tail of underperformance in Australian government schools is significant, and the influence of class background on educational attainment in Australia is, according to the Nous et al report, “well above the OECD average, and substantially higher than in any comparable OECD country.” Using government money in ways that reinforce rather than tackle that problem is highly objectionable.



There is a public interest in ensuring that everyone has a good education, and perhaps a market in schools is desireable (it’s certainly not something objectionable in and of itself). But government should not subsidise advantage. It should not help you buy your child an advantage over others, especially where that means other, more naturally talented students from less advantaged backgrounds will miss out. That’s unfair (it harms the life chances of others), and it’s bad for society.

My only hope is that the Gonski Review can propose a better metric of need for the distribution of educational resources. If private schools are educating a large number of disadvantaged students and they have a lack of resources, then they deserve funding too. But let’s not top-up schools to buy extra swimming pools or more after school tutorials while that money could be used to help, far more significantly, those who aren’t so well off elsewhere.

I want to end with a quotation from the late American political philosopher John Rawls. Rawls writes that it is neither just nor unjust that people are born into society at some particular position (rich or poor) – those are simply natural facts. However;

What is just and unjust is the way that institutions deal with these facts. Aristocratic and caste societies are unjust because they make these contingencies the ascriptive basis for belonging to more or less enclosed and privileged social classes. The basic structure of these societies incorporates the arbitrariness found in nature. But there is no necessity for men to resign themselves to these contingencies. The social system is not an unchangeable order beyond human control but a pattern of human action.”

We shouldn’t buy the ‘life isn’t fair’ rhetoric. We can, and should, have an educational system that minimises the effect of social background on educational attainment. The Gonski Review will provide the government with an excellent chance to make our funding system fairer and more efficient. Let’s not squander such opportunities.



All of my empirical notes and statistics come from either the Nous et al report ( or the book ‘School Choice: How parents negotiate the new school market in Australia’ (Allen&Unwin, 2009) by University of Sydney academics Professor Craig Campbell, Dr Helen Proctor and Professor Geoffrey Sherington.

A fully referenced version of this article can be provided on request.

You can find out more about the funding review here:

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9 Comment on this post

  1. I agree wholeheartedly with the points you raise and conclusions you draw Billy. It is also worth pointing out that in the current funding system it is possible, due to census data, for a private school to receive the highest level of funding for a student from a wealthy family in a country location if that property sits geographically in a low SES area.

  2. And what is worse, is that the fat cats who last monitored the funding system decided to have a no-private-school-left-behind policy. I think you alluded to it, but people need to know that it meant private schools judged to be needing less funding than they'd previously had couldn't get less – no one got less! Except state schools who routinely get less. Their contract teachers are not paid over the holidays; teachers acting at higher levels are paid at their classified rates when they're ill or on holidays. OK, the holidays I understand, but why am I worth less when I am sick? Did all the doctors suddenly charge less to because I am taking on extra responsibilities?
    Private schools serve a purpose, but they export their failures and import their successes.

    My guess is that the funding model will not change, despite clear evidence that it needs to, because that would be politically sensitive, and the government is too worried about upsetting their slim majority.

    Let's hope someone out there has the intestinal fortitude to make the changes that society needs!

  3. The article captures the imbalance that exists and has a clear cost to us, as a country, well into the future. The ever increasing number of refugees entering Australia also invariably puts more strain on the public system, unless they are gifted sportsperson who may be offered a scholarship to boost the flag waving at a private school. The private school recruiting officers also visit primary school award nights and compile their target list of new recruits to bolster their stables. Unfortunately in the wait for Gonski few of us could take heart at the probable outcome as we suffer from the two major political parties having moved into a neutral space on many issues so they are indiscernable to the public on many issues. Unfortunately education is one of those such issues and as a previous respondent has stated neither side of politics has the fortitude or moral conscience to right the wrong. When we already hear 'no new money' and 'no school left behind' in the press we translate that to the status quo remaining. The other danger I see is that often funds are thrown at the 'bottom end' to lift it to be average when in fact all students benefit from appropriate funding and some average students may well be brilliant if support funding allowed them the opportunities. This is not a new problem and Justice Lionel Murphy's dissent (1981) gave some insight into the lack of political will in this country. We should take a wider look at the manipulation of our society and the injustice of 'father son rules in sport', private ownership in sport and the like. I congratulate you on the article and your insight on the issue.

  4. William has put important arguments in his article. The choice in Australia is to choose to send your kids with poor, disabled, disadvantage or disruptive students or send your kid to a segregated school. It is ridiculous that government fund that choice. We have seen report that best teachers choose to go to school where they do not need to handle disable or disruptive or children from low ses background. Another report found that private schools use government funding to reduce students to teacher ratio, Consequently public schools ran out of qualified teachers and some schools do not have any teacher. If there is a choice in school, why there is no choice at University level. Why these parents want a choice establish a private university and reduce the burden on public. They know that at University level, their kids do not need to sit with disable or disadvantage or disruptive children as all the children are academically selected.
    I do not think average of OECD country private schooling is 15%. It could be simple average, not weighted average. Only two countries (Belgium and Chile) has more private schools than Australia but both of them are with small population. All the countries with large population (US, UK, Germany etc.) have less than 10% private schools.
    OECD Pisa survey is cheating. In 2006 survey they refused to report the proportion of private schools in Australia and claimed Australia has top quality, high equity world class education. We asked the question, why only Australia refuse to report about private schooling? In 2009 cycle they reported that Australia has 35% private school and accepted low equity. But in 2009 cycle, in NSW 52 government schools participated. Out of them 18 schools select the children based on academic record or using placement tests. One of those participated was James Ruse High School. 44 students participated. Out of 44, nine were at completing Grade 11 all the others were completing Grade 10. These students were asked to do a test given for Grade nine in other nations. Both parents of these were born in overseas. Australia take advantage of skilled migration, majority of them have received free education in poor countries like China, India etc but can't provide quality free education for its citizen. Many countries provide free education even their budget is in deficit and keep on increasing the money spent on education. But Australia would not increase its spend on education because having surplus budget is more important.

  5. What else did people expect of 40 odd years of State Aid for religious and other private institutions ?

    Institutions which select children on ANY basis religious, aility to pay, geography, ethnic preferences are never on about 'needs'. They are, at base,designed to perpetuate segregtion, privilege and tribalism.

    Back in 1973 the Karmel Committee romanced about équality of educational opportunity'and gave money to 'needy' schools that never did, and never would open their doors to all children. ANd then Karmel bemoaned what had happened to his 'Needs'policy, admitting that he felt he could not refuse money to schools that charged fees.

    The only system that ever could or would treat chidlren as equal is the public system which is open to all children, teachers, cleaners etc. etc. And look at the effects that pouring money into private schools has had on it.

    It is time to take over these expensive institutions ( we pay for them) and make them into p0ublic institutions open to all chidlre n.

  6. Billy

    It is heart warming to see your article, and to know that our education system has produced a mind that is willing to raise these issues of equity and social justice. As you now know the debate has raged since the 1800's about the role of government in funding education, and the dichotomous split between private and public still continues (although in more recent years we are seeing more complex blended models). In a pluralist and capitalist society where "self interest" is often explained as "economic responsibility" the threat of unjust policy will always be present, and we must maintain vigilance , and the ability to argue intelligently to maintain the balance between social justice and greed. So prepare yourself well, surround yourself with like minds, learn about the opposition and stay enthusiastic , because the fight will be long and you may never win completely, but the fight is important to prevent losing ground. As my hero once said , "Maintain your rage", because i think you must rage against injustice where you see it.

  7. I enjoyed reading your article and I look forward to seeing the results of the Gonski Review.
    Only this week, I was listening to a wonderful interview on ABC radio with Pasi Sahlberg, DG CIMO (Centre for International Mobility and Cooperation) Finnish Ministry of Education and Culture. He has written 'Finnish Lessons' about Finland's world class education system reforms over many years.
    He said that Finland has no private schools (apart from a few specialised schools eg for languages) – maybe these are the 1% you refer to in your article . In Finland, education is regarded as a right and as such, education should not be paid for. Therefore the government does not finance private education. It would be against the Finnish philosophy. Students are provided with the education that they need and this is the basis for funding. Sounds like something we could consider here – along with some of the other Finnish educational findings.
    I am still puzzled however about why many state schools, while outwardly upholding the philosophy of education being provided by the State, still try to present the appearance of being a private school.
    Why is that? What is that?
    Again – congratulations on the article – looking forward to more.

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