The Education Funding Shortfall: Are Schools Financially Dependent on the Hip Pockets of Teachers and Parents?

08 November 2018

According to Federal Government figures, total Commonwealth recurrent investment in Australian schools for the next 10 years will be $243.5 billion, with an increase of 56.6% for government schools and 55.6% for non-government schools.

Despite these kinds of numbers, who exactly is paying for that ‘well done’ sticker proudly worn by a primary student for their performance in the class test? Who supplemented the cost of lunch the day a student came to school without food money, or the cost of the sports excursion? In many cases, a teacher probably paid for it all out of their own pocket, according to a recent national survey which found that more than nine in ten government school teachers use their own money to purchase supplies for their school or students and cover basic school ‘necessities’.

The Australian Education Union released its annual ‘State of our Schools’ online survey on 26 October, conducted between 20-31 August 2018. 7,804 individuals were surveyed, including 697 government school principals, 6120 government school teachers and 987 government school support staff.

According to the survey, 93 per cent of teachers use their own money to purchase supplies for their school or students.

While 45 per cent of these spend under $500 per year, a further 25 per cent spend more than $1000 per year on supplies. In an equivalent survey conducted in 2017, it was found that 10 per cent of teachers are spending more than $2000 on these classroom basics.

Of teachers spending their own money:

  • 78% buy stationery for their students
  • 76% buy classroom equipment for students
  • 44% buy library resources and textbooks for their students.

The AEU’s deputy president, and president of the NSW Teachers Federation, Maurie Mulheron, stated that the "more disadvantaged the area, the more teachers are reliant on making their own purchases”.

Is School Funding the Main Culprit?

Mr Mulheron commented that the survey results, with such a significant proportion of teachers buying their own “classroom basics”, were indicative of school funding issues, alleging that there have been $14 billion in school funding cuts by the Federal Government as a result of the funding arrangements of Gonski 2.0. He stated that public schools required “a massive funding injection to give those kids half a chance."

Federal Education Minister Dan Tehan said the Federal Government was providing record funding to all Australian schools and would honour its commitment to fund 20 per cent of the Schooling Resource Standard (SRS), with the states expected to fund up to 75 per cent.

The SRS is an estimate of how much total public funding a school needs to meet the educational needs of its students. The SRS is made up of a base amount for every primary and secondary student, along with six ‘loadings’ to provide extra funding for disadvantaged students and schools. The base amount is set at $10,953 for primary students and $13,764 for secondary students in 2018.

According to the Federal Government’s website, commensurate with the constitutional responsibility of the states for financing schools, the Commonwealth will fund:

  • 20% of the total SRS for government systems, reflecting the Commonwealth's role as the “minority public funder” for government systems
  • 80% of the total SRS for non-government schools/systems, reflecting the Commonwealth's role as the majority funder for non-government schools/systems.

'Loadings' were developed by looking at how much additional funding on top of the base amount was required to help students facing different types of disadvantage. Loading categories include:

  • students with a disability
  • low English language proficiency
  • Aboriginal and Torres Strait Islander students
  • socio-educational disadvantage
  • school size/location loading.

However, according to a report by The Conversation in 2017, there is no clear plan for the allocation of loadings. A key example is with respect to disability loadings, where the definition of ‘disability’ differs between jurisdictions.

The Fundraising Shortfall

Of the principals who responded to the 2018 survey, 86 per cent said that fundraising and voluntary contributions by and from the school community are important to the school budget, with 32 per cent of schools reportedly using fundraising for basic infrastructure maintenance.

As stated in a previous School Governance article, schools understand that fundraising is valuable and that it can assist schools to ‘add value’ to their general educational and social programmes. Successful fundraising events such as dinner dances, annual school fetes and a myriad of other activities have been known to generate income in the tens of thousands of dollars. NSW Parents and Citzens (P&C) Federation president Susie Boyd said that schools directed fundraising dollars to anything from curtain cleaning to speech pathologists.

Mandy Weidmann, owner of the Fundraising Directory, has stated that school fundraising has become an industry of its own, and parents are often relied upon to provide core services:

"Ten years ago it was the electronic whiteboard before they became really a core item … now air conditioning is a big flavour of the month because not all schools get air-conditioned by the government….

Schools shift their budget to the more essential items and leave these holes where parents have to jump in."

Some schools have very clear policies regarding fundraising, while others leave this type of activity solely to the discretion of their teachers or P&C association. Pro-active P&C associations have been known to ask school staff to prepare a ‘wish list’ for items that will enhance student learning outcomes (add value) but are not covered within the next year’s budget, which is then prioritised by the school executive, and money raised accordingly.

There are specific state and territory and local government requirements that need to be met before a school can run certain types of fundraising events. For example, some jurisdictions and local councils have specific food preparation and occupational health and safety (WHS) requirements for sausage sizzles. It should be noted that breaches of workplace safety and privacy laws can also result in quite severe financial penalties that may far outweigh any small financial gains made through an ill planned or poorly executed fundraising event.

The Not-For-Profit Overlap

While the AEU's survey focused on the experience of government school teachers, all not-for-profit (NFP) non-government schools also receive some form of government funding. In recommendations from the recent Australian Charities and Not-for-profits Commission (ACNC) Charity Compliance Report, and submissions to the current review of the ACNC legislation (refer to previous School Governance articles here and here), the accountability and financial management of NFP entities seems to be at the forefront of discussion, and may precipitate increased regulatory scrutiny.

For example, NSW non-government schools are required to comply with the NSW Department of Education's Not-for-Profit Guidelines for Non-Government Schools (Guidelines). Under the Guidelines, non-government schools must only use “income and assets” for the operation of the school. The Guidelines are likely to change soon due to the passage of a recent law which provided definitions for the meaning of financial accounting terminology (asset, income and payment). The definitions were provided for the purposes of the prohibition on giving financial assistance to for-profit schools, in line with recommendations of the Non-Government Schools NFP Advisory Committee. Another proposed change, but which did not make it to the final amendment as passed by the NSW Parliament, would have made it clear that NFP requirements extended to payments made by the school's proprietor for or on behalf of the school.

How Should Schools Respond to the Survey?

With the prevalence of teachers supplementing government school budgets, it is critical for these schools to have financial management procedures in place to keep track of teacher spending, and decide whether such practices can be supplemented by budgetary shifts or fundraising activities. Schools should also have clear fundraising policies in place to ensure that, like any income-generating activity, fundraising is planned, monitored and executed efficiently (and in compliance with all relevant laws).

All schools, including non-government schools, should also ensure that they have procedures in place to monitor compliance with any NFP requirements set by local regulators. In particular, low-fee non-government schools that rely heavily on per capita grants should make every effort to ensure compliance.


Kieran Seed

Kieran is a Legal Research Coordinator at CompliSpace. In his position, Kieran assists with drafting and review of governance, risk and compliance content programs and client-requested policies, while also writing regular articles for School Governance. Kieran’s key focus areas are student duty of care and school registration. Kieran studied at the University of Sydney, completing a Bachelor of Law and Bachelor of International and Global Studies majoring in Government and International Relations.