Coalition to pork-barrel Catholic schools

By Leith van Onselen

In June last year, the Australian Senate cross-bench voted with the Turnbull Government to pass its $23.5 billion ‘Gonski 2.0″ needs-based schools funding bill.

In the lead-up to the Senate vote on Gonski-2.0, several education experts voiced their opposition to Labor’s original flawed Gonski model, urging reform. These included:

the Grattan Institute’s Peter Goss, who contended that the lion’s share of the extra billions that Labor promised to spend at the 2016 election would represent wasteful investment that would not deliver any notable improvement in student outcomes;
the left-leaning Centre for Policy Development, which urged politicians to pass Gonski 2.0 so that past mistakes in school funding could be undone; and
the former head of the Australian Education Union, Dianne Foggo, who also urged the Senate to back the Gonski 2.0 legislation on the grounds that it is better than the existing system.

Indeed, the original botched Gonski program implemented by Labor would have seen non-government school students – and those in Catholic schools in particular – receiving greater taxpayer funding than average public school students by 2020:

By comparison, the Gonski 2.0 package proposed by the Turnbull Government would redirect some funding from these privileged Catholic schools to public schools, improving equity and saving the Budget billions in the process.

With this background in mind, the Turnbull Government has caved in to the Catholic Schools lobby, backing away from its Gonski 2.0 funding formula and promising to provide the sector with an additional $4 billion in funding. From The Australian:

The deal was being finalised last night in talks between new minister Dan Tehan and the Catholic sector, led by Sydney Archbishop Anthony Fisher, and independents.
It is expected to be ratified by national schools bodies…

It is understood the deal offered under Mr Turnbull was worth about $3.8bn…

The final arrangements will be highly complex and provide significant assistance to both the Catholic sector and independents. The Catholic sector was estimated to be at least $3.4bn worse off under the Birmingham-era SES deal…

The government is exposed to a voter backlash in 13 marginal seats along the east coast. Analysis of the 13 seats in NSW, Queensland and Victoria shows almost 70,000 children were Catholic-educated in those seats in 2016.

Needs-based funding necessarily means that some schools will receive more funding and some will receive less. For example, a school in a well-off area will see parents expected to pay more, whereas parents of a school in a poorer area will be expected to pay less. This broadly makes sense and lines up with how Australia does means testing in a range of public policy areas.

However, the way that the capacity to contribute for each school had historically been on where the people live. While this is broadly indicative, it is arguably not granular enough and misses variations that inevitably occur.

Catholic schools have argued that in each of the areas deemed ‘well-off’, the richest families sent their kids to the independent schools, whereas the poorer families sent their kids to Catholic schools. And to be fair, there’s some truth to this claim, as revealed in the Chaney Review, which recommended a more granular approach that looked at parents’ income.

That said, this new deal reeks of another weird ‘special deal’ brought about by the Catholic school system flexing its muscle politically.

Rather than special deals, the government should have implemented a transparent funding formula that is independent of sector and stuck to it. Now the Catholic school system has gotten its way, expect the other sectors to follow suit, leaving needs-based funding to wither on the vine.

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Leith van Onselen

Leith van Onselen is Chief Economist at the MB Fund and MB Super. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.