Private schools are guzzling taxpayer funding

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By Leith van Onselen

Two former school principals, Chris Bonnor and Bernie Shepherd, have penned a well-reasoned piece in The Guardian arguing that private schools are rapidly morphing into public schools, given the large amount of public funding they receive:

Over the years our federal and state governments, apparently without comparing notes, have raised private school funding to the point where those schools can no longer be considered to be private…

The public funding of private schools has risen to the level where the running costs of most private schools are now substantially met by combined state and federal funding. If a private school is defined by who pays then they are rapidly becoming public.

They still collect fees, a hangover from when they needed the money to match the investment in public schools. But for all but the wealthiest schools the fee income seems to be icing on the cake. When we realise that schools enrolling similar students churn out similar results, it becomes harder to justify the icing – especially when governments are such big partners…

In short, by getting the public funding and holding on to the privacy of their operation they have got the money and the box. As a consequence our playing field of schools has become very tilted: in the fair go country there is very little in our framework of schools that is fair.

Solutions to this seemingly intractable problem might range from abolishing all private schools through to integrating most of them into the state’s provision of education and having them operate under consistent rules – something that is standard practice overseas. Maybe an alternative might be to seek a stronger alignment between each school’s level of public funding and the “publicness” of their obligations and operation.

The authors of the article were also behind last year’s report, entitled Uneven Playing Field: The State of Australia’s Schools, which projected 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:

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Federal funding to private schools increased massively during the Howard Government’s reign, rising by $1,584 for each private school student between 1999 and 2005, versus an increase of just $261 per public school student.

A recent analysis published in The SMH also found that more than 150 private schools across Australia are over funded by around $215 million a year based on the Gonski resource standard.

Research has also shown that many private schools use taxpayer funding to improve their facilities rather than reduce fees.

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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 seems highly inequitable.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.