Private schools the big winners from taxpayer funding

By Leith van Onselen

The Centre for Policy Development (CPD) has produced a new report entitled Uneven Playing Field: The State of Australia’s Schools, which projects that under current policy settings, mid-range private school students are on track to receive $1,000 more in taxpayer funding than average public school students by 2020.

Below are key extracts from the report:

..two key events occurred in the later 20th century that laid the foundations of what we have today. Firstly, in the 1970s, government funding was extended substantially to non-government schools, and from the 1980s, the principles of market-based competition and consumer choice were introduced to the schools system in general. The present system is aptly described as ‘quasi-market’ as we have a mixture of government and non-government schools, each receiving a portion of federal and state funding, but each operating under different conditions and serving different populations – while assuming quite different obligations to the Australian community.

Using data from 2009 to 2015, we have been able to identify a series of concerning trends that lead us to conclude that the present state of the education system is unsustainable and beset with structural problems. By maintaining a quasi-market in our schools, we are creating an uneven playing field that benefits a portion of the community more than it does the remainder. We are drifting away from our ambition to provide high-quality, accessible education for everyone.

We’ve long known that a more equitable system of schools has a better chance of lifting achievement for all students. But our schools are becoming less equitable… Our report shows that, in the few years since Gonski reported, school equity is declining, especially in metropolitan areas and amongst our secondary schools. A child’s background is having a greater impact on their ability to succeed at school…

It is an inescapable fact that our funding arrangements exacerbate these deficiencies. Governments of all political persuasions have been at pains to ensure that any new school funding arrangements created ‘no losers’ in the government/non-government school mixture. This has simply perpetuated the schools hierarchy and an uneven playing field, ensuring a continuation of the framework of losers and winners created over decades of misapplied competition theory and skewed funding policies.

For some years total funding of private schools has exceeded the funding of government schools with similar types of enrolment. However our data analysis reveals that most Catholic schools are presently on track to receive more government funding than their equivalent public schools. The data also reveals that we are in fact over-investing in many advantaged students. They receive, depending on sector and level of advantage, between $1,300 and $14,000 extra each year in combined funding from both parents and governments, but have similar achievement levels to lower-funded students…

Meanwhile, as the graph below shows, we are seeing a convergence of public funding for all three school sectors, with public funding for non-government schools projected to outstrip that for similar government schools in the next few years based on recent trends…

ScreenHunter_13296 Jun. 02 10.21

The report calls for a freeze on funding increases to non-government schools until a review of how the funding should be more fairly distributed is conducted.

I don’t know about you, but giving substantial taxpayer funding to already well-resourced and affluent schools doesn’t make a whole lot of sense, and is highly inequitable.

Full report here.

Unconventional Economist


  1. I don’t know about you, but giving substantial taxpayer funding to already well-resourced and affluent schools doesn’t make a whole lot of sense,

    If you have a long term goal of completely eliminating public education, or even just crippling it, it makes perfect sense.

    • By subsidizing these schools it means the state does not need to provide places for those children and therefore saves costs. Most of those schools (except that Greenacre one) are non-for profit and operate on very slim margins. If you have a school of 400 children and they receive $1,000 each more than public that costs the government $400,000. Without that money in some instances the school could go broke and then the public system needs to make way for those 400 students.

      Not that schools would realistically break if they lost $400k but if your talking about winding it back further than the $1,000 what if it is $3,000 that means $1,200,000 and that could be the straw that breaks the camels back.

      Paying for semi private schools helps keep kids out of an already strained public system.

      • But if we are currently paying $2k for each in government, and $3k in non-government, wouldn’t we save money ($1k) if the non-government was forced to close and the students moved into government, or are there additional costs not included in this model?

      • Strange Economics

        Look at the pricing curve. A reduction of $ 2k in subsidies, would not result in a large no of private students going public. Private school entry is not very elastic.
        If they did, then each new public student would receive 10k instead of 8k of public resource.
        If the entire school left, then turn it into a state school.
        This class war was won long ago, and the subsidies to the winners are now bigger than to state students. Bizarre if you compare to say Finland, the role model for education, where there are no private schools.

  2. Recently a teacher at one of the more well-to-do schools told me of a gift from a former student of a painting that was potentially worth from $20 to $50k, based on recent sales.
    It got me thinking as to whether the assets that a school possesses are included in calculating how much assistance a school receives.
    Can anyone provide me with an answer?

    • No, school funding generally does not take into account school fees/wealth, but there are exceptions. E.g. in Victoria a small share of government grants to non-government schools is allocated between non-government schools based on their private income. But that’s about it.

    • Independent Schools (particularly the GPS schools) have become expert at hiding assets within Foundations and other separately incorporate business entities to maximise their funding. They also know how the game the system in terms of attracting higher Govt grants for capital projects (i.e. shifting income from ancillary businesses, reducing cash on the balance sheet, increasing debt per student),

      The sector is now a monster vested interest dictating public policy.

  3. adelaide_economist

    Remember of course that the Coalition (via the IPA) approach to education is that (at least in public) the amount spent on education is a poor indicator of the value of the service provided. In theory of course, this is true but is taken a priori to mean we should be able to cut public education spending and get the same or better results. Just hand out vouchers!

    So that’s all well and good but what do we observe when we look at public funding of private education? Endless grasping and demands for access to more funding, even when their financial resources are (per student) usually well above the public standard. Remember the outrage at any attempt to rebalance *public* funding back towards *public* schools and yet silence when Turnbull basically announced an intent to cut Federal public funding while maintaining funding to private schools.

    This is how I know we have reached and moved past peak neo-liberalism. We are no longer at a point where neo-liberals are interested in having a productive workforce across the board but rather they are now trying to cut loose the entire public education system while *still* (hypocritically) demanding access to the public funding honeyjar to fund rowing sheds and indoor olympic sized swimming pools.

    • Look, I think Turnbull is a fraud and won’t vote for him but what he suggested on schools funding made some sense. It’s been misinterpreted. The proposal went like this: give the states more revenues (possibly a share of income tax) and in return they could fully fund govt schools. It was going to be revenue-neutral for the states and the Fed. It was supposed to iron out school funding accountabilities. At the moment it’s a real mess, some states have reduced funding for govt schools in recent years as the Fed has increased funding (i.e. they have cost-shifted). Turnbull’s proposal would make it crystal clear who is funding what. States could no longer cost-shift. That has to be better than what happens now.

      • As I recall it Turnbull still wanted to retain Federal funding to private schools …
        Otherwise agree that the man is a fraud.

    • Bingo. The funding of schools (particularly gaming of govt grant funding) is an outright scandal, worthy of its own royal commission. And given the money that indirectly flows through to religious organisations from school funding, it ties in nicely with the lack of governance in churches becoming apparent in the current royal commission into child sexual abuse .

  4. Ronin8317MEMBER

    It’s not just government funding, but ripping off parents as well. Private schools shouldn’t be receiving ANY funding at all unless they cap their fee increase to inflation. A year 12 student in Ravenhood pays 30K in school fees, a 50% increase from a decade ago. That is a huge increase.

    • Pfft. Why invest in a child’s education when you can invest in property and have it double every 7 to 10 years. That’s the Aussie way. Get with the program!

    • At the risk of missing the sarc tags, you can choose not to send your kids to a 30k pa school.

      • Yep, and as a society and taxpayers we should be able to discriminate against independent religious schools capable of raising that level of fees from parents – clearly able to thrive and survive without public funding.

    • Strange Economics

      Yep, and like all govt rentseekers, they pay their CEOs well. Didn’t it turn out the MLC principal was on approximately 1 million. Then they take the scholarship students, to increase their results. All paid for by the parents of the regular kids. The irony is that with the increase in University enrolments, complained about, any student of ability will get into uni, so the private school fees are no benefit educationally.

  5. The report makes some good points but in some areas its analysis is laughable.
    Two examples. Their forecast on funding, that non-govt schools will receive more govt funding than govt schools by 2020, is based on extrapolating historical trends. However the Australian Government introduced a new school funding model in 2014 that will change those trends (with more $ directed to govt schools). So the forecasts are rubbish. Also, many of their comparisons between govt and non-govt school funding compare govt primary schools against non-govt secondary schools, which is ridiculous, because secondary schools are much more expensive (so tend to receive higher grants than primary schools). So these comparisons are frankly misleading. The authors would know this too.
    The good points they do make are overshadowed somewhat by these things. Their agenda becomes pretty obvious, the authors are well-known barrackers for govt schools.
    And yes, I did read this report as part of my day-job…

    • What are your thoughts on the current state of education in Australia?
      (This is a genuine question as you appear to be knowledgeable.)

      • Gee that’s an open-ended question…I’ll just write about a couple of things that might interest you…
        You might be aware our education performance has been pretty woeful for the past 15 years, by international standards. It’s true. We’ve been enormously wasteful over that time, by doing/funding the wrong things – smaller class sizes, teaching aides, too much funding for certain non-govt schools etc. – but I’m quite optimistic things will get better from here. We now have a much better understanding of how we can improve schools, of things that “work”, and things that don’t. And the AEU seem to be on-board with the strategies now being implemented, so that is encouraging.
        The other thing I find extremely interesting – and you may not be aware of this – is how important the “early years” (0-5) are in schooling outcomes. Student performance in Year 9 is highly correlated to student performance in Year 3….in other words, schools aren’t really doing much to change the “learning trajectory” of students from the start of primary school. Hopefully schools can get better at doing that, but there will be limits. What children are doing from 0 to 5, their early cognitive development, is absolutely critical – and if we are going to improve our schooling outcomes this simply will not happen unless we act in this area too. Yet there seems to be a bit of confusion over which govt is responsible for this, which is a big worry.

      • @bp2, +100.

        The first 5-6 years of a child’s development is absolutely critical, arguably more so than the whole of primary school. There is absolute neglect in this regard from an education system perspective. Support for child care from the government’s viewpoint is all about dumping children somewhere so mothers (and fathers) can earn an income to be taxed, taxed, taxed. It’s all about bleeding people for tax rather than developing children.

        I’ve been lucky with the child care centre my little ones go to, but it costs an arm and a leg – significantly more than what I pay for a roof over our heads, and that’s only for two children 2-3 days a week. My advice – do not skimp on early childhood development.

    • yes – good points. I am wondering if this goes part of the way to explain this article from last year implying public schools get 60% more funding per capita than private. Definately the authors could not be this lazy, lots of half truths coming into an election year.

    • Original John

      I read your comments below on the importance of the early years. When I was young, we had kindergarten (basic drawing and talking and interaction with kids from the neighbourhood) and straight to grade 1. I was part owner in a child-care centre (in Boston) for a while and I can really understand the elements of this you are talking about. The structure and transition from family to school I understand, but are we introducing too much pressure on the kids at an early age to perform?

      • There need not be any pressure! At that age kids just need to feel loved and valued and their parents should read to them as much as possible. Did you know that one of the best predictors of student performance in primary school tests is the number of books in their family home?

    • Given the power of the Catholic and independent lobby, a bit of analytical exaggeration to fight the non-Govt sector propaganda is understandable.

    • Torchwood1979

      Thanks for all your informed input to these discussions bp2.

      My Wife is a maths/science teacher who has taught in low SES schools and now works part time doing 1-on-1 numeracy with kids in Grades 7-9 and she totally agrees with your statements.

      Also great point regarding 0-5. Both our kids are in this age group and we’ve put the hard yards in with them early because we know 0-5 is make or break. We spend hours reading, doing craft, gardening, cooking, music, dancing, learning numbers and letters and going to the pool as a family to swim or spending time at the park riding bikes, learning to climb safely etc. It’s exhausting but worth it!

      However my Wife and I are both well educated and also have the blessing of getting the kids involved in play groups at the local church and having two excellent grandparents in the same suburb.

      However many young families and single parents don’t have these advantages and from what we’ve heard only the gold plated day care centres which cost a fortune are capable of providing comparable education for the crucial early years. Not sure how society or government goes about improving the first few years, but I’m heartened to hear we’re finally getting some sense on schooling policy.


  6. So what will happen when the next recession hits and middle class family’s illusionary wealth disappears? How will the public school system handle the inevitable influx of students?!

    • Could be interesting.

      The other part is, what happens to the schools?

      Liquidators of failed schools such as Mowbray College have forced parents to sell assets to cover unpaid fees. However, in a wide spread recession, such assets are likely to have zero value anyway.

      In some of the newer schools with less reserves, it may only take the loss of a few families to send the school under.

    • Same will happen to the public health system when people can no longer afford private health insurance.

    • Many – particularly those that have taken on big expansion programs funded by debt – will be absolutely screwed. They have no capacity to lower fees. This is the crisis looming on the horizon. Hopefully out of that crisis should come an honest examination of just how sustainable the tax cuts of the past two decades really were, given that it was only the policy pursuit of ‘creating’ housing equity as a perpetual line of credit which allowed for abrogation of public funding of education, health and pensions.

  7. In addition to reduced private school funding, receiving any taxpayer funds at all should require a school to be non discriminatory; they must accept all sexes, races and religions!

    • This times a billion. I resent taxpayer money being paid to organisations whose mission is to divide society and keep us in the dark ages.

  8. this is a misleading article from so many angles. 1) it is an absolute fiction that private schools receive more funding per capita than state schools. There are a number of funding sources for public schools (eg capital fundings etc) which dont seem to be included in this report. My understanding is that on average pvt schools get somewhere beteen 70 to 80% of what the public schools get (happy to do the research when i get the time, but have to wade through all the misinformation fairfax are deliberately producing on this topic.
    have a look at this article from last year ( – it implies govt schools on average get 13k in Vic, only 8k for independant. So someone somewhere is fiddling with the numbers. Whatever they are, independant schools save us all a lot of money.
    2) its a fiction to imply that most independant schools are wealthier. Most catholic schools (the bulk of independant schools) have roughly the same demographic or often poorer given the Catholic schools dont tend to turn away people from housing commissions like is happenning in posh areas of inner melbourne. ( The catholic primary schools dont tend to have big flash gyms like so many public primary schools becasue govt expectation if for Catholic schools to fund their own capital works (hence the need for most catholic primaries to charge around 2k per family.)

    Catholic schools save the govt bucketloads and at the same time provide choice that many people are happy to exercise despite having to make up the difference in public v private funding out of their own pockets and go without flash gyms etc. The opposition to funding is idealogical not financial.

    • Ronin8317MEMBER

      You can go to MySchool and see exactly how much each school receive per student from the government. It’s under ‘School Finance’. I’ll compare my old school Arthur Philips High School (APHS) against a Catholic school close by. APHS gets $12, 263 per student, of which $1,982 is from Federal, $9,819 from state, and $324 from school fees. (I used to pay $20 a year @[email protected]), and $137 from ‘other sources’. Parramatta Marxist gets $16,734 per student. Of which Fed pays $7,421, State pays $2,348, school fee is $3,237 and $3,727 from ‘other sources’. Catholic school cost the government less, but it’s not ‘bucket loads’ less.

      • your example seems states the Marxist (Marist?) school get $3000 more. So the Catholic school gets more in that example not less?

      • Yes, Catholic schools receive less but not bucket-loads less. Don’t forget to look at capital funding too.
        Also, be wary of figures for individual schools. Individual school funding for Catholic schools and government schools is determined through different formulas (a Catholic system formula, or a state government system formula). The formulas are different, so would allocate different amounts of funding to the exact same school.The bigger picture is that, as a whole, Catholic systems tend to receive 80-90% of the recurrent grants that government systems do (on a per student basis), depending on the state/territory.

      • thansk BP2, you seem to know what you are talking about. And non Catholic independant schools? What is their relative funding?

      • Their funding level is lower again, prob 60-75 percent of govt schools on average – but there is a lot of variation depending on the specific school. The average is much lower because independent schools mostly educate kids from the most advantaged families

  9. So if you have kids in Australia your choices are two:-

    1. Raise your kid (in a government school) to essentially be a second class citizen, or
    2. Pay the dough for the right ‘brand’ get your kid mixing with the right type of other kids, and turn your kid into a condescending snob.

    Or the third alternative is (for those who can) to take your kid overseas and do it in a world which has good educational outcomes without the social prejudice.

    1. Basically involves apologising to your kid for not providing the opportunity, and more than likely consigning them to second class life outcomes.
    2. Basically involves taking on a very large fiscal commitment (particularly if you have more than one child – although it appears the taxpayer is contributing more to that if you do) for very little by way of actual educational outcomes – the latest data I have seen suggest that although privately educated people are more likely to go to university, the publicly educated are likely to do better (academically) there.

    Good thing my kids are biligual…..

    • “the latest data I have seen suggest that although privately educated people are more likely to go to university, the publicly educated are likely to do better (academically) there.”
      … This shows private schools DO work if university is the goal. ie less able people from private schools are more likely to get into University than less able people from public schools. if you go to an independant school you do not need to be a highly intelligent over achiever to get to uni as the education is better. Once at uni you would expect the highly intelligent overachiever with a previously average education to outperform the average intellect. but the average intellect from private school will still generally get through their course and join Dad’s law firm. Surely a better option than not getting there at all.

    • JacksonMEMBER

      Sorry Gunna, can’t agree with you on this one. No one gives two licks of a sh*t which school I went to, and I couldn’t care less which school my staff went to. It is completely irrelevant, and has never ever come up in any conversation. If they are qualified and they have the right personality, they will succeed. I’m often thrown this line about the importance of networking at high school, it is total crap from what I’ve seen. The elite private school kids I was at Uni with did no better than anyone else.

      • I’d go a step further. I’ve had the final say on hiring plenty of people over the years (mostly people with Commerce and or Law degrees). I will almost always place a premium on someone who hasn’t gone to a posh private school because I know they have generally had to work harder to get where they are.

      • That’s commendable, for you both. Unfortunately, in my organisation, and as far as my experience is concerned, the exact opposite occurs.


      • Tend to agree Joacko. In Canberra the private school thing is out of control with so many parents spending so much for so little yet many people I know here say that private schools have offered them zero advantage. It’s a con and there are shit tins of people falling for it.

      • It depends on your industry. In banking, finance and medicine old boy networks make a big difference. In other sectors not so much.
        There was a really interesting study published a few weeks ago which found that people who attended non-govt schools have higher incomes than those who didn’t, after controlling for all other (observable) factors. This was for the USA, UK and Australia. Suggests the old boy networks do matter (unfortunately)

      • For banking at least, I’d say the university is more important than the school.

    • Yes, indeed. LEAVE

      Have kids enrolled at school in Holland even as we speak.

      Australia’s becoming a cesspool of social inequity.

    • Ronin8317MEMBER

      Public school education is not second rated, and it’s good for a kid to have experience with people from different social class and background. The bigger issue are selective high schools that gather all the smart kids from the public education system into one spot. Academically they’re doing well, but it is a ‘pressure cooker’ environment and they’ll end up with no empathy for the average person.
      My perspective on education is people don’t always remember their lessons from their high schools, but they always remember their friends.

      • Spot on about selective entry schools. Disgrace. Also, their record at producing leaders (in business, in politics or in government) given their student base is appalling.

    • The data on university performance says the higher a student’s ATAR, the more likely they are to complete university. And, all other things equal, students from non-govt schools tend to gain higher ATARs (but they do not tend to perform better in tests prior to senior secondary school, such as NAPLAN).

  10. No mention of charter schools?

    Mr Elon Musk started his own school for his kids where they take apart engines – instead of reading fiction I hope.

    I hated reading fiction as a kid and I hate it now!

    • Ronin8317MEMBER

      Technically, all independent schools in Australia are ‘charter’ schools. It’s really a US term that doesn’t apply to Australia.

      • I think charter schools are exempt from teaching the usual curriculum – otherwise what is the point of having charter schools.

        At uni I had a foreign student who did not know how coal power stations work.

        I would say it is more important for school kids to know how debt and currency work instead of getting them to decipher Shakespeare.

  11. Take away the GST exemption for school education. Use the $ raised to put back into disadvantage schools.

  12. I think we should completely end public funding of private schools, and nationalise the ones that can’t survive on fees alone.

  13. File under meritocracy by ability to spend in identity certification….

    Disheveled Marsupial… or when democracy become public choice theory or “Expressive interests” and democratic irrationality….

  14. Public and semi public schooling = mixed ability classes. Because inculcating Marxist ideals matter more than educational outcomes. Hence 12 years schooling to achieve minimum wage job.

    • What in God’s name are you babbling about? If you want to rubbish the public education system without any reference to anything except ‘Marxism’, then I suggest you phone in to 2GB.