Changes to school funding: eggs shouldn't be in the one basket

The recent release of a report commissioned by Independent Schools Queensland entitled 'Reform of the Federation: Implications for Independent Schools' (Report) provides some insight into the uncertainty that would arise if the funding and policy responsibilities for school education were to be transferred totally to the States and Territories from the Federal Government.

The size of the Australian independent school sector, with over 1,015 independent schools and 520,000 students, demonstrates the amount of funding, and quality of education, at stake.

Produced by Professor Kenneth Wiltshire AO, the Report is focused on the status of independent schools in Queensland, but it is also intended to provoke informed public policy debate generally. Its findings have implications for all non-government schools.

Funding changes

Independent schools currently receive some 50% of their funding from the government, with the majority coming from the Federal Government.

Funding from the Federal Government is received by independent schools via their State/Territory Treasuries - without administration fees.

As the Report points out, independent schools would be 'materially affected' by any shift in funding arrangements between Federal and State/Territory governments.

If funding for independent schools became the responsibility of the States and Territories, the Report predicts that the following major issues would arise:

• the division of a new augmented State/Territory education budget between government, independent and Catholic sectors, including the philosophy and principles that would underpin this decision;
• the significant conflicts of interest which would face State and Territory governments, as they would assume the roles of funder, owner, competitor, regulator, and accreditator of all schools, plus a number of other roles; and
• the necessity to reform the 'regulatory quagmire' that currently impacts independent schools...requiring a reform of governance arrangements to ensure greater autonomy and transparency for regulatory bodies.

Reduce political uncertainty

According to Professor Wiltshire, schools would have greater certainty if the Queensland State parliament moved to four year terms (like other jurisdictions) - to encourage longer term and less political consideration of schooling policies. The same argument could be made for the term of the Federal Government. This would be especially relevant if, one day, the State receives total control over school education.

This would create greater certainty for school educators, parents, and students themselves.  However, it is interesting that although Victoria currently has a four year electoral cycle, this period of time can still create uncertainty and confusion upon the transition to a new government, as was recently demonstrated by the recent change between Victorian governments and the legislative overlap that resulted.

Prompters for debate

According to Professor Wiltshire, the need to consider the impact of a devolved funding model from Federal to State/Territory models has arisen because of various events, including:

• successive Productivity Commission and Council of Australia Governments (COAG) Reform Council Reports which have compared uneven performance across jurisdictions and progress against agreed national goals;
• Review of Funding for Schooling (Gonski Report), which, apart from recommending a new approach to school funding, also raised the possibility of changing the mix of national and State/Territory funding for both government and non-government schools;
• the Prime Minister's announcement of a new approach to Federalism to enhance the role of States and Territories, including a White Paper on the Federation; and
• the current review of national competition policy which will relate to non-government schools, because if funding becomes the power of States and Territories they will end up being funded by the same governments which are their competitors.

In closing

The Report is an interesting read.  Although a change to State/Territory control of non-government funding appears a long way off, the issues that such a reform would create are significant.

Professor Wiltshire is cautious about the uncertainty that would result for independent schools if it did happen.

As he put it, 'it is never a good position to have all your government funding eggs in the one basket'.