Federal funding of public and private schools: is the States Grants (Primary and Secondary Education Assistance) Act equitable?

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The issue
On December 7, 2000, the States Grants (Primary and Secondary Education Assistance) Act 2000 became law. The effect of this Act was to give a greater proportion of Commonwealth education funding to private schools. This Act had provoked substantial debate since it terms were first announced by Dr David Kemp, the federal Education Minister, in 1999.
The steady decline in the proportion of Commonwealth funding going to government schools over the last 30 years together with the current large increases to private schools appear to have re-opened the state aid debate.
The new Act will mean more than $800 extra funding per student for Australia's 61 wealthiest private schools, some of which charge fees of about $10,000 a year.
Which schools should be funded, to what extent and why have once more become live issues.

Echo Issue Outline 2001 / 15
Copyright © Echo Education Services

First published in The Echo on-line newspaper information site.

Issue outline by J M McInerney

The States Grants (Primary and Secondary Education Assistance) Act 2000
The Act replaces the States Grants (Primary and Secondary Education Assistance) Act 1996.
The Act apportions $22 billion over the four-year period 2001-2004. Sixty-five percent of this is directed to non-government schools and 35 percent to public schools.

Some of the changes the Act introduces are:
1. It introduces two new models of funding for private schools - the SES (socio-economic status) Model and one for Catholic systemic schools, and a mechanism to ensure that schools are placed on the model that is most beneficial to them.
2. It introduces establishment grants for new private schools.
3. It makes some changes to targeted programs.
4. It makes signing up to performance targets a condition of funding for all sectors/schools.
5. It also continues to allow the operation of the Enrolment Benchmark Adjustment (EBA).

This Act and the overall education policy of the current federal government represent a major shift from the policies adopted when Australia's public education system was set up or when state aid to private schools first became government policy in the 1960s and `70s.

The history of Government aid to private school (1872 to 1973)
Between 1871 and 1895 each colony passed 'free, compulsory and secular' Education Acts that stopped most financial assistance to church schools and made primary education a state responsibility.
It was argued that this was a new country with a mixed religious legacy and that it would not have an established church or a state-funded system of religious education. It was also argued that education was a fundamental entitlement that should not be based on wealth and therefore that citizens should not have to pay fees to send their children to government-funded schools.
It was not until the 1950s and `60s that the Liberal and Country Parties, under the prime ministership of Robert Menzies, started to relax their opposition to government assistance for church schools. In 1951, private school fees up to a certain amount were made tax deductible; gifts for school buildings were made tax deductible in 1954.
The Commonwealth first began direct funding to non-government schools in 1964, largely in response to the problems being faced (overcrowding, inadequate buildings and poorly trained teachers) by Catholic schools at that time. The Federal government gave private schools special purpose grants intended to address particular needs, such as the building of science laboratories, and supplied merit-based student scholarships.
Substantially greater assistance to private schools came under the next Labor government.
In December 1972 the Whitlam Labor government was elected federally with a policy of funding all schools on a needs basis. Wealthy private schools were to receive no assistance, while the majority of Catholic schools, which were poverty stricken, would receive most of their running costs plus assistance with capital grants. State schools were also to receive major assistance with the guarantee that 70 percent of the new Commonwealth education funding would be directed to them.
However, the Liberal and County Parties (who controlled the upper house of parliament) threatened to block Labor's education measures unless all private schools, including the most wealthy and presitigious, received some government assistance.
Consequently, all private schools became eligible for aid based on a formula that assessed their resources. The most needy schools (mainly Catholic) obtained approximately 80% of their costs from State or Federal Governments, while the more financially well off received about 33%.
Both sides of politics now supported state aid in part pragmatically, as each wished to attract the substantial Catholic vote.
Thus by the 1970s state governments were funding state schools, as they had been for a hundred years, being legally obliged by the various Education Acts to do so. However, the Commonwealth's role in funding education had become less clear.
Initially the Commonwealth government had supplied special purpose grants to both state and private schools. However, under Whitlam, the Labor government had, in addition to making a far greater contribution to state schools, assumed virtually full financial responsibility for funding Catholic schools and was making significant contributions to the elite non-Catholic private schools.
The rationale for these funding initiatives was mixed. For the Labor side of politics state aid was predominantly a social justice issue. Aid was to be needs based and was to allow impoverished Catholic schools to catch up. For the conservative side of politics there was also the question of respecting parents' freedom of choice. They, therefore, pushed for funding to private schools not on a basis of need but rather as a direct entitlement.
Both positions marked a fundamental change from the established practice that government funded only free, secular and non-exclusive education.
Further, the needs based principle meant that the Commonwealth now funded some Catholic schools to approximately the same degree that the states funded Government schools. Over time the percentage of Commonwealth funds being directed to non-government schools grew and the funds given to government schools correspondingly declined.
In 1973, 70 percent of Commonwealth education funding went to government schools. By 1980, 50.8 percent of federal funds were directed to public schools. By 1996, this had declined to 41.5 percent.

Government aid to private schools (1996 to 2000)
The Howard Government, which was elected in 1996, made two immediate changes to Commonwealth funding of state and private schools.
One change was to abolish the New Schools Policy. (The New Schools Policy had been introduced in 1986. It attempted to ensure that any new private school was economically viable, had a substantial enrolment base and would not become too large a burden on the budget.)
Since the removal of the New Schools Policy private schools may be established without the former restrictions on size, location and curriculum.
This change was introduced as a means of making it easier for special interest groups to establish new schools and so for parents to choose a suitable school for their children. It is anticipated that this policy change will result in a significant growth in new private schools.
The other change was to introduce the Enrolment Benchmark Adjustment (EBA) The EBA obliges the states to repay the Commonwealth 1,700 dollars of education funding for every student who leaves the public system for a non-government school. In 1999 the federal government took $26.74 million from public school entitlements because of a growth in enrolments in private schools.
This deduction from public school entitlements is intended to compensate the Commonwealth, which contributes far more to funding private school students than do the states. However, these deductions occur even when the overall number of students in the state system has risen.
These changes have been praised by some as likely to promote further growth in private school enrolments. They have been criticised by others as undermining public schools.
The States Grants (Primary and Secondary Education Assistance) Act 2000 is seen as an extension of the above changes.

Internet links

One excellent Internet source on this issue is the submissions made to the Senate Employment, Workplace Relations, Small Business and Education Committee Inquiry into the States Grants (Primary and Secondary Education Assistance) Bill 2000
There were 30 submissions made. They represent a full range of views on the Bill.
Readers need to be aware of the position from which each of these submissions was written.
Of the 30 submissions received, 21 can be read on the Internet either as Word documents or using Adobe Acrobat Reader. (You will need a recent edition of Internet Explorer and the latest Microsoft Word.)
A full list of the submissions, with 21 in hypertext, can be found at http://www.aph.gov.au/senate/committee/eet_ctte/stategrant2/submissions/eet_sg2.htm

The Centre for Independent Studies (CIS) is a privately funded, conservative think-tank and lobby group.
CIS has produced numerous articles and press releases on school funding. It supports strong government support for private schools.
On January 24 2001 CIS policy analyst Jennifer Buckingham had published an article titled 'A Fair Go for all Schools'. The article defends the private school system against charges that it gets a disproportionate share of public funds. It also suggests a tax credits system for parents who send their children to private schools.
The article, originally published in The Herald Sun, can be found at http://www.cis.org.au/media/opeds2001/E240101.htm

On November 11 2000, CIS policy analyst Jennifer Buckingham had published an article titled 'Lessons to Be Learnt About School Funding'. The article defends private schools under six general headings. It was originally published in The Courier Mail and can be found on the Internet at http://www.cis.org.au/media/opeds2000/E151100.htm

Professor Brain Caldwell, dean of education at the University of Melbourne, has written a monograph titled 'Toward a new view of "education for the public good": implications for private schools, partnerships and professionalism'. This has some interesting comments to make about the advantages to be gained from removing the distinctions between private and public schools.
The monograph can be found at http://www.edfac.unimelb.edu.au/EPM/papers/BCaldwell/AHISA.html

The Institute of Public Affairs, a right-wing think tank and lobby group has published another of Professor Caldwell's monographs titled, 'Reinventing public education in Australia'. It develops further arguments supporting fundamental changes in education provision. This article can be found at http://www.ipa.org.au/pubs/Intouchdocs/intouchfsMarApr98.html

The Australian Education Union (AEU) has opposed the States Grants (Primary and Secondary Education Assistance) Act 2000. An index linking to a range of documents dealing with the Act and the AEU's opposition to it can be found at http://www.aeufederal.org.au/Debates/Statesgrantsbill.html#BI
This is a very useful set of links. Please note, however, that some of the documents being linked to are in pdf form and can only be read or downloaded using Adobe Acrobat Reader.

Professor Alan Reid, Associate Professor of Education at the University of South Australia, has written a monograph titled, 'The Redefinition of Public Education'. This is a defence of the current public education system as a promoter of cultural tolerance and plurality.
The monograph can be found on the Australian Education Union's site at http://www.aeufederal.org.au/Debates/ReidPaper.html

The Australian Council of State School Organisations (ACSSO) opposes the States Grants (Primary and Secondary Education Assistance) Act 2000.
An information sheet making detailed criticisms of the SES can be found at http://www.acsso.org.au/Issues5.html
An ACSSO criticism of the Act can be found at http://www.acsso.org.au/Issues4.html
An ACSSO document titled, 'Six Myths About Private Schools in Australia', which suggests that many of the advantages claimed for a private education are false can be found at http://www.acsso.org.au/Issues3.html

On October 18 2000, the World Socialist Web Site published a comment titled, 'Australian government to pour billions into private schools'
The article is a detailed critique of the new funding system. It suggests it will severely undermine state schools. The comment can be found at http://www.wsws.org/articles/2000/oct2000/edu-o18.shtml

On December 13, 2000, the World Socialist Web Site published an article titled, 'Australian Labor Party votes for Bill to boost wealthy private schools'. The article outlines the terms of the States Grants (Primary and Secondary Education Assistance) Act 2000.
The article is critical of the Act, claiming it is inequitable and will be socially divisive. The article can be found at http://www.wsws.org/articles/2000/dec2000/educ-d13.shtml

The four articles following were all published in The Sydney Morning Herald in 2000. Each offers detailed information and a valuable perspective on this issue.
However, as newspaper articles, these sources are likely to be short-lived. We recommend that these sources be printed out by interested readers and apologise for any inconvenience caused when they are removed from the Sydney Morning Herald's Internet site.

On October 10, 2000 the Sydney Morning Herald published an opinion piece titled 'No losers, just the risk of a national asset lost'. It was written by Dr Ken Boston, the director-general of Education and Training in NSW.
The article is a critique of the federal government's new scheme for funding public and private schools. In addition to its criticisms of the SES (socio-economic status) measure, it criticises the EBA (Enrolment Benchmark Adjustment).
This comment can be found at http://www.smh.com.au/news/0010/10/features/features5.html

On November 3, 2001, The Sydney Morning Herald published an analysis titled 'Emotive politics teaches hard lessons' by Michelle Grattan.
This is a valuable analysis. It contrasts the old and new funding systems. It also gives the justification of SES offered by Associate Professor Stephen Farish, from Melbourne University, a specialist in education statistics, who devised the new formula. Further it comments on the difficulties likely to be encountered by the Labor Opposition in effectively countering the new scheme.
The analysis can be found at http://smh.com.au/news/0011/03/features/features5.html

On November 21, 2000, The Sydney Morning Herald published an editorial titled, 'Labor and education'. Despite it title, the editorial primarily outlines the provisions of the States Grants (Primary and Secondary Education Assistance) Bill 2000, which it correctly predicts would become law.
It also gives an interesting overview of the history of Commonwealth funding support to non-government schools.
The editorial can be found at http://www.smh.com.au/news/0011/21/html/editorial.html

On November 25 2000, The Sydney Morning Herald published an analysis titled 'The $9 billion man'. It was written by Gerard Noonan. This analysis looks at the negotiations that occurred around the federal funding scheme accepted by the Catholic Education Office.
The analysis can be found at http://smh.com.au/news/0011/25/review/review10.html

In 1997, Anthony Potts of the La Trobe University, Bendigo, published an interesting overview of the history of government aid to private schools in Australia. It is titled, 'Public and private schooling in Australia - historical and contemporary considerations'. This can be found at http://ihr.sas.ac.uk/ihr/esh/public.html

Greg McIntosh, produced a current issues brief titled, 'State Aid for Non-Government Schools: The emerging debate' for the Social Policy Group federal Parliament's Social Policy Group.
This was dated 1996/7. It can be found on the Department of the Parliamentary Library site of the Australian Federal Parliament at http://wopared.aph.gov.au/library/pubs/cib/1996-97/97cib2.htm
It discusses some of the key questions in the current debate and gives another historical overview of the provision of state aid to private schools in Australia.

The Parliamentary Library of the Australian Federal Parliament has a bill digest of the States Grants (Primary and Secondary Education Assistance) Bill 2000.
This is a full copy of the bill prepare for debate purposes. It also gives its purpose, background and includes concluding comments.
It can be found at http://www.aph.gov.au/library/pubs/bd/2000-01/01bd030.htm
Australasian Legal Information Institute (AustLII), a joint facility of the University of Technology Sydney (UTS) and the University of New South Wales (UNSW) Faculties of Law has a full transcript of the States Grants (Primary and Secondary Education Assistance) Act 2000 as it was passed into law on December 7, 2000.
The Act has 130 sections. An index listing each section can be found at
Clicking on the blue hypertext numbers in front of each section of the Act will take the reader to that section.

Arguments in favour of the School Grants Act 2000
1. As taxpayers, parents who send their children to private schools are entitled to a share of Commonwealth education funding
Those who claim this argue that the parents of children who attend private schools are taxpayers in the same way as are the parents of children who attend state schools. It is therefore claimed that they are entitled to government support in the education of their children. Their taxes support the state education system that they do not use and they then pay additional fees to send their children to a school of their choice. It is argued that this exercise of parental choice does not free the government from a responsibility to support financially the education of children attending private schools.
It is further claimed that not all parents who send their children to private schools are wealthy and thus there are those who need, rather than are merely entitled to, some level of government financial assistance in the educating of their children.
Dr Kemp, the federal Education Minister, has referred to the number of parents sending their children to private schools who are 'battling' to do so and has argued that they should receive support.
Mr Rick Tudor, the headmaster at Trinity Grammar, has made this point.
Mr Tudor claims that in many of the families of students attending his school both parents work and make financial sacrifices to give their children a private education.
He asks, 'Why shouldn't they get back a share of their tax dollar through non-government school funding?'

2. The new grant scheme is based an a more accurate and equitable assessment system
Under the old Act private schools received a level of Commonwealth funding that was determined by their position on the Educational Resources Index (ERI). The ERI was meant to be a measure of the wealth of a school both in terms of its capital assets and its capacity to generate income.
Critics of the ERI argued that it was imprecise and inflexible and so often did not reflect the current financial situation of a particular school. A number of the private schools that made submissions to the Senate inquiry into the States Grants (Primary and Secondary Education Assistance) Bill 2000 argued that the ERI did not give a full or accurate picture of their position.
Under the new Act the wealth of parents is assessed rather than the wealth of the school. This is done using the socio-economic status (SES) of the areas from which schools draw their students. This means that the addresses of each student are matched against census figures giving the average income of those living in that area.
This is defended as a more equitable or fairer measure as it gives an indication of how financially difficult it may be for some parents to send their children to the school of their choice.
Federal Education Minister, David Kemp, has claimed, 'What the non-government schools prefer about the SES formula is that it provides an objective measure based on the needs of communities.'
Criticisms have been made that the SES should be based on the actual income of those sending their children to a particular school rather than on the average income in the areas from which students come.
Supporters of the SES argue that it would be administratively difficult to get more precise income information, that some parents would not supply the information and that it would be a violation of their privacy.

3. The new grant scheme will make it possible for a larger number of parents to send their children to private schools
One of the objects of the new Act is to enable private schools to cap or reduce their fees. It is also hoped that some private schools may be able to give greater assistance to parents having difficulty making fee payments.
The apparent intention is to extend parents' effective range of choice so that a greater number of parents will be able to send their children to private schools.
Mr Simon Gipson, the principal of St Michael's Grammar, has stated that the extra funding will mean that his school can work towards pegging fee increases, 'making [the school] more accessible' to a larger group of parents.
Mr David Loader, the principal of Wesley College, has said that the extra government funding should enable the school to lower its fees by $200 a year. Fees are currently about $11,000.
Trinity Grammar and St Michael's Grammar School have indicated that the extra cash could be used to curb future fee increases and to offer 'bursaries' to students in need of financial assistance.

4. The new grant scheme respects the rights of parents with non-mainstream religious beliefs to send their children to schools that support those beliefs
Since 1996 private schools have been largely deregulated. Previous conditions on eligibility to recive Commonwealth funds-size, location and curriculum- have been removed.
New private schools, often affiliated to a religious organisation, have sprung up, many with quite small student numbers. These schools have been given generous government subsidies.
This trend has been continued under the new funding scheme.
The Act includes establishment grants for new private schools for "one or more years". The cost is put at $800 000 in 2001 and $1.2 million thereafter. Given an average of 40 new schools a year, this amounts to about $30 000 per school.
This funding assists those who wish to establish a school that supports their particular cultural or religious position to be able to do so. As Australia becomes more culturally diverse some groups will welcome this opportunity. The recent growth of Islamic schools in Australia is a case in point. Ten new Islamic schools were established in 1997-8.

5. When added to state governments' education spending, the new grant scheme does not discriminate against public schools
According to this line of argument, though private schools are receiving approximately 65 per cent of Commonwealth education funds and state schools only about 35 per cent this reflects only part of the total funding picture.
Funding Government schools is primarily a state responsibility. State and territory governments allocate the vast majority of their school education funding to public schools, while the federal government's school education funding is weighted toward the non-government sector.
In the 2000-2001 budgets, government schools are allocated 36 percent of Commonwealth funding and about 92 percent of state and territory funding.
In total, government expenditure for children in non-government schools is significantly less than that for children in public schools. Average per capita funding in 1998 was $6037 for government school students and $3451 for non-government school students.

6. The new grant system acknowledges the increasing proportion of the student population that is educated at private schools
It is claimed that a growing number of parents are choosing to send their children to private schools and that the federal government should respect this choice in its funding formula.
Angela Shanahan, writing in The Australian on October 21, claims, 'For two decades, and at an accelerating pace, Australian parents have been voting with their feet. The movement away from government education to a school that seems to give parents more control over their child's education is indicative of a level of dissatisfaction that permeates all facets of a child's education - both philosophical and academic.'

7. Private schools reduce the cost of education to the taxpayer
It is claimed that those who send their children to private schools are actually subsidising the state school system. Firstly they support the state school system through their taxes and secondly they pay fees that result in governments contributing to private schools only about half what they give to run schools in the state system.
The federal Education Minister, Dr Kemp, has made this point. Dr Kemp has noted that while government school students got subsidies of $5970 a year, non-government school students received on average $3770 a year in subsidies.
Dr Kemp noted that parents sending their children to non-government schools 'have to make up the rest in fees, so of course every parent who sends their child to a non-government school saves the taxpayer money.'
Dr Kemp has estimated that the fees paid by parents sending their children to private schools saves taxpayers $2.2 billion annually.

Arguments against the School Grants Act 2000
1. Parents who send their children to private schools decide to reject the state system and to pay the fees required at a private school
Critics of the current level of Commonwealth assistance given to private schools argue that the federal government should be under no obligation to fund multiple forms of education to cater for the preferences of particular parents.
If, it is argued, parents desire a form of education different from that offered within the Government-funded public system they must be prepared to pay for this.
It is further claimed that those who send their children to private schools do so knowing the fees that will be required of them.
The public purse should not have to provide financial support to private schools for parents who reject Government-funded schools and want to educate their children somewhere else.
On the question of all parents' supposed entitlement, as taxpayers, to Government support in the education of their children, it is argued that those who decide on a private education have rejected that entitlement.

2. The new grants are based on a faulted assessment system
Assessing students' socio-economic status (SES) through their home addresses has been criticised as a faulted measure for determining levels of private school funding. The average income in regions where private school students live does not necessarily indicate the income level of particular students' parents, as there is often income variation within particular areas.
It is claimed that families living in less prosperous areas who manage to send their children to private schools are likely to be better off than the average income earner in their area. Roslyn Guy, The Age's education editor, has criticised what she refers to as 'the post-code approach to fairness'.
It is further argued that the new grant system is suspect because it seems designed to boost Commonwealth funding to private schools and applies a variety of funding formula to achieve this end.
Less than 30 per cent of private schools will actually be funded on the basis of the SES. The Catholic system has opted out of the SES, and 26% of non-Catholic schools will continue to be funded under the ERI system.
All non-Catholic private schools will be funded at or above their SES as there is a clause in the new Act that guarantees that no school will be worse off under the revised scheme.
Under the previous system of funding the wealthiest private schools, those placed in Category 1, were guaranteed 12 per cent of Average Government School Recurrent Costs (AGSRC). Under the new system all schools are guaranteed at least 13.7 per cent of AGSRC.
Thus, irrespective of their SES results or their wealth and level of resources, all private schools will receive increased funds under the new system. This has been criticised as unjust.

3. The new grant scheme ignores the existing wealth of the private schools receiving federal funding
The original motive behind Federal funding to schools, both state and private, was to bring all schools up to a common or community standard. When Commonwealth funding was first given to private schools, Catholic schools were targeted because of their relative poverty.
Funding was based on the resource level of schools and under-resourced schools received the greatest assistance. Traditionally this has meant that the wealthiest private schools have received the least funding.
Critics of the new arrangements claim that they turn the old funding system on its head.
It has been argued that current funding system is inequitable because it ignores the assets, facilities and revenue-raising capacity of a school when giving it a grant.
Roslyn Guy, the education editor of The Age, has argued, 'To divorce funding of non-government schools from consideration of their assets is to deny fairness. Just drive past schools like MLC, Wesley, Scotch College and you can't help but be impressed by the expansive gardens, the grand buildings and the state-of-the-art sports grounds.'
Ms Guy then compares such facilities with the relative poverty of most state schools.
'If there is any such place as an average government school, it is more likely to be squeezed onto a much smaller plot of land and will boast a number of portable classrooms.'
It is claimed that the fact that the new Act will result in $53 million being directed each year to Australia's 61 wealthiest private schools indicates the wrong-headedness of ignoring the existing assets of the schools being funded.

4. The new grant scheme does not require private schools receiving extra government funding to reduce their fees
There is no obligation on private schools under the new Act to use their increased funding to reduce fees. The Prime Minister, Mr John Howard, has acknowledged this.
Mr Howard has stated, 'They [private schools] are not forced to bring down fees, they never have been. We think that represents too great an interference in the independence of the schools.'
If, it is argued, this system is supposed to secure a fairer deal for 'battling' parents struggling to pay their children's school fees, it should have some mechanism to ensure that these parents are actually assisted by the additional funds being directed to private schools.
Some critics have also argued that the overall pattern of funding to private schools suggests the federal government is either misguided or not genuine in its supposed attempt to bring private school education within the range of a wider section of the Australian population.
Under the new scheme the largest funding increases have been given to those schools charging the highest fees. Even if these schools were to reduce their fees somewhat this is unlikely to attract most Australian families considering where to educate their children. One private school, for example, has foreshadowed a fee drop from $11,000 per annum to $10,800. Critics claim that for most parents this fee level would still be out of reach.
It has further been argued that many private schools are likely to spend the additional money improving their facilities and on promotion so that they can attract a larger share of the market that can already afford their services.
Georgiana Cameron put this view in a letter to the Age published on October 4, 2000.
Ms Cameron wrote, 'It disgusts me to think that Wesley will get more money to spend on attracting prospective parents through campaigns involving trashy extravaganzas ...'

5. The new grant scheme encourages the development of small independent schools that are potentially unviable and are culturally divisive
The concern has been expressed that many of the new private schools that have been established and have attracted government money may be short-lived, as they do not meet the previous viability requirements. When such schools fold they are said to have simply wasted the government resources they were given.
More concerning is the claim that such schools are socially and culturally divisive. It has been argued that the public education system has historically acted as a melting pot drawing together different classes, religious and ethnic groups. It is further argued that this develops a population that is accepting of difference.
The fear has been expressed that if schools are further able to differentiate themselves on basis of the class or ethnic or cultural group they serve then this may develop intolerance among their clients.
Alan Reid, Associate Professor of Education at the University of South Australia, has written, 'The common spaces we call public schools should be places characterised by plurality and diversity because it is here that we can teach that a respect for difference is precisely what binds our society together.'
The new Act further encourages the establishment of narrowly based private schools with the provision of establishment funding.

6. State schools provide an education for a majority of Australian students, accept all comers and have the majority of disadvantaged students
It is argued that public schools should receive a high level of funding from both state and Commonwealth governments as they educate the vast majority of Australian students.
Even on current figures state schools educate some seventy percent of the Australian student population. Catholic schools educate some 20 of the student population and other private schools 10 per cent.
It is further claimed that public schools should be funded at a higher level because they service a more varied clientele. Unlike private schools, state schools are obliged to, and do, accept all comers. State schools cannot establish special selection criteria, either academic or social.
It has been argued that one of the functions of the fee system in private schools is to draw students from predominantly one social stratum. Professor Richard Teese, associate professor in the education faculty at the University of Melbourne, has made this point. Professor Teese has argued that fee levels have been used by private schools 'to discriminate between potential clients'.
Public schools should receive a higher level of funding as they service the overwhelming majority of students identified as disadvantaged - such as those from low socio-economic backgrounds and Indigenous students. In the case of Indigenous students, for example, over 88 per cent attend government schools.
Students from disadvantaged backgrounds frequently need greater support within schools if they are to succeed. These students therefore make greater demands upon the resources of the school.
An Age editorial of September 3, 2000, noted, '... 7 percent of year 5 to 10 students in Melbourne's socially disadvantaged west regularly skipped school'. It further noted that some 30 percent of children entering high school, mainly from Government and poorer Catholic schools, could not read and write properly. It is argued that the Commonwealth should focus its spending on those students in greatest need.
Conversely, it is claimed, students from wealthier backgrounds need less school-based support as they generally have access to a wider range of culturally enriching experiences outside school.

7. The new grant scheme will disadvantage state schools that are already relatively impoverished.
The core criticism made here is that of inequity. It is argued that governments, state and federal, have an obligation to direct resources to the state system where need is greatest. Critics of the new Commonwealth funding system argue that not only does it not do this; it discriminates against the state system.
It has been claimed that the new Act directs an historically low level of Commonwealth funding toward government schools and an historically high level toward non-government schools.
Through the 1970s public schools received between 60 and 70 per cent of Commonwealth schools funding. In the early 1980s the percentage was just over 50 per cent. In 1983 it fell to 46.2 per cent. When the Howard government took office in 1996 it had declined to 41.8 per cent. On the basis of the Government's forward estimates, by 2003 the public sector's share will be have dropped to 32.2 per cent.
Between 1989 and 1999 the percentage of students attending private schools rose from 27.61 percent to 30.34 percent - a rise of 2.73 percent, yet Commonwealth funding to private schools has increased between 1993/94 and 1997/98 by 23.5 percent in real terms. In the same period Commonwealth funding to government schools has fallen by 5 percent.
Critics of the new Act also condemn it for perpetuating the Enrolment Benchmark Adjustment (EBA) as the EBA disadvantages public schools.
In 1996 the Howard government introduced the EBA. This formula takes money away from a public school whenever a student transfers to the private system, even if the public school's overall population is increasing. Australia-wide, in 1999 there was an increase of 8300 students in public schools, but the federal government took away $26.74 million from government school entitlements because of a growth in enrolments in private schools.

Further implications
Thirty years ago state aid to private schools was largely justified by reference to the needy circumstances of the predominantly Catholic schools receiving Federal assistance. The pattern of recent years does not allow for this justification.
The Commonwealth Government currently cites 'parents' freedom of choice' to explain its readiness to give some 70 per cent of public funding to private schools educating in total only 30 per cent of the nation's students. State aid, which was once seen as boost-up for impoverished private schools, is now seen as an entitlement of all private schools irrespective of their wealth.
The 'freedom of choice' justification has the Commonwealth government supporting private schools in direct competition with government schools for students and funds.
This represents a huge shift in what the Commonwealth government sees as its obligations with regard to education.
Once the state education system was regarded as a universal provision, freely available to all citizens and funded exclusively by the public purse. Now, so far as the Commonwealth Government is concerned, the state education system is a secondary responsibility and the government's primary responsibility is to fund a range of competing systems.
This redirection of emphasis concerns many people.
What would a growing number of private schools competing with a diminishing number of government schools be likely to achieve?
There are those who fear it will further institutionalise social, religious and cultural divisions within Australia as parents use these differences to decide where they will educate their children.
It is also feared that competition between state and private schools will marginalise the state education system as it loses funding and students to increasingly better-equipped private competitors.
The concern is that this will reduce what was once a vigorous and inclusive public education system to one that provides an education of last resort to only the most socially disadvantaged in our society.
This would mean that free education would be used only by those who could afford no other.
The Prime Minister, Mr Howard, has said that the provision of Government funds to private schools is 'a bit like private health insurance'. The comparison is interesting.
The federal government has used taxpayers' funds to encourage Australians to take out private health insurance. The Federal government believes that those who can should insure themselves rather than rely on Medicare. Similarly, it appears to believe that those who can pay fees to help educate their children should do so, rather than rely entirely on the state education system.
Professor Brian Caldwell has outlined the up side of this picture.
Professor Caldwell is dean of the education faculty at the University of Melbourne. He was a principal adviser to the Kennett government in Victoria as it developed its education policy, Schools of the Future.
Professor Caldwell posits a future where the distinction between public and private schools would disappear. Commonwealth and State or Territory governments would pool their resources to provide a single grant.
As all schools would receive government funding, all schools would be termed 'public' schools. They would be attended by students all of whom had 'an entitlement' to state resources. Their parents would have been able to choose the school that best suited their values and aspirations for their children.
All schools in this system would work in 'harmony' with each other and with industry and community agencies.
Professor Caldwell also suggests that all schools be permitted to charge fees, taking account of the kind of schooling to be offered and the capacity of parents to pay. He proposes large contributions from corporations and 'massive support directed mainly at students and schools where there are special education needs'.
This private-public amalgam is not the education system currently proposed by the Federal government, though the government's policies could proceed in that direction.
It would appear that as a society we are moving toward a point where education is no longer a right or even a public benefit but a commodity. In the name of individual consumer choice we are increasingly ready to sacrifice our current legal entitlement to a free and secular education.
Some 30 percent of parents are saying, "Let me pick my preferred product and I'll pay." If this arrangement becomes general let us hope it is not one we come to regret.

Newspaper items used in the preparation of this outline
Available as a press cuttings package (with an issue outline reprint): price: $48.00 (NO LONGER AVAILABLE)

The Age
1/9/00 page 13 comment by Kim Carr, 'How Kemp is killing public education as we knew it'
3/9/00 page 14 editorial, 'The right to a fair start'
29/9/00 page 1 news item by Melissa Marino and Philip Hudson, '$700m for private schools'
29/9/00 page 2 news item by Farah Farouque, 'We have battlers, too, says Trinity head'
30/9/00 page 9 news item by Philip Hudson, 'No certainty school fees will fall: PM'
30/9/00 page 26 letter from Kathy Hilton, Ardoch Youth Foundation'
30/9/00 page 27 comment by Roslyn Guy, 'Why Kemp fails the schools funding test'
4/10/00 page 4 news item by Melissa Marino, 'Funding in balance for private schools'
4/10/00 page 18 letter from Georgina Cameron, 'Wesley is already privileged beyond belief'
8/10/00 page 3 news item by Larry Schwartz, 'Voice of better-off youth cries foul'
8/10/00 page 3 news item by Larry Schwartz, 'Son of immigrants speaks out in defence of "Wesleyland"'
8/11/00 page 6 news item by Melissa Marino, 'Kemp has a shot at the "usual suspects"'
9/11/00 page 18 editorial, 'Dr Kemp fails the education debate'
13/11/00 page 17 comment by Kenneth Davidson, 'Kemp "fixes the schools'
16/11/00 page 19 comment by Kenneth Davidson, 'Public services at the shark's mercy'
21/11/00 page 17 comment by Judith Brett, 'Kemp: a dangerous individualism'
25/11/00 page 3 (News Extra section) analysis by Carolyn Jones and Melissa Marino, 'Schools: inside the new deal'
29/11/00 page 17 comment by Dr Janet McCalman, 'One in ten get Kemp's freedom of choice'

The Australian
9/10/00 page 1 news item by Ebru Yaman, 'Lift your game or lose students, Kemp warns'
9/10/00 page 12 editorial, "Kemp funds policy ignites class battle'
26/9/00 page 31 analysis by Ebru Yaman, 'Part of the union, but Fitzgerald won't come to the party'
30/9/00 page 29 news item by Guy Healy, 'Fees not linked to school handout'
11/10/00 page 13 comment by professor Richard teese, 'Public education marked down'
11/10/00 page 13 comment by David Kemp, federal Education Minister, 'Resources go where they're needed most'
21/10/00 page 28 comment by Angela Shanahan, 'Quality quest isn't elitist'
28/10/00 page 16 letters under the heading, 'Give our children the best schools'

The Herald Sun
29/9/00 page 14 news item by Andrew Probyn and Nicola Webber, '$91m in extra funds to 27 top schools'
29/9/00 page 25 analysis, 'Money for schools'
30/9/00 page 26 news item by Andrew Probyn, 'Taxpayers save $2.2b'
5/10/00 page 29 news item by Andrew Probyn, 'Big boost for elite schools'