Australia must develop a national and transparent model of school funding based on comprehensible measures of need applying equally across the sectors if the funding debate in this country is to rise above a sterile ideological battle, argues a policy paper released by the Australian Council for Educational Research (ACER).

In the first of a planned series of policy papers from ACER, Dr Andrew Dowling describes the processes of school funding that currently exist in Australia and argues that more can be done to implement a consistent and transparent system.

Dr Dowling points out that while Australian Governments spend over $30 billion on primary and secondary schools each year, the process of school funding, including the way in which amounts are calculated, distributed and reported upon, is unavailable not only to the wider public but, to some extent, even to those working in education.

The current system for funding schools is fragmented by level of government (State of federal), type of sector (government or non-government), location (state or territory), accounting approach (cash or accrual), and even time period (financial or calendar year).

Several sources of income flow into schools, but they do not operate in unison and there is no reporting at an individual school level in a timely manner.

School funding, which is the area of education that should be most amendable to quantification and measurement, is plagued by inconsistency. Arguably the lack of consistency and transparency in this area has a broader impact, as all other aspects of education are dependent on the primary issue of funding. It is theoretically possible to measure and report school resourcing in a clear and logical fashion yet it remains resistant to greater comparability, transparency, and accountability.

Dr Dowling argues that this situation must change and that inconsistencies plaguing the current system also encourage blame shifting between governments while important debate is stymied.

In the past, the Commonwealth and the states ritualistically allocated blame to each other using different sets of data while the real knowledge needed for a new debate - one about the relationship between student performance and school resources - failed to materialise.  

The system encourages blame shifting between governments and high level claims that the Commonwealth under-funds government schools and counter-claims that most public funding goes to government schools anyway, rather than informed debate. The end result is that members of the education community, much less the general public, have no clear idea what individual schools actually receive from both levels of government nor if their income is appropriate to their needs.

The paper notes that education commentators, opposed on many issues, are united in their frustration with the existing system. Every side of the debate wants a more coordinated approach. However, the force for change is being held up by comfort with the status quo and uncertainty about change.

The paper concludes with a call of support for a recent recommendation that the Ministerial Council on Education, Employment, Training and Youth Affairs (MCEETYA) adopts a common financial reporting instrument for government and non-government schools based on principles of comparability and transparency.

If any change is to occur in this area, it will occur through MCEETYA, the clearing-house for government coordination on education issues. This body should consider carefully a recommendation from a recently completed, long-term study into the future of Australia’s primary schools. Recommendation eleven of this report suggests MCEETYA adopt a common financial reporting instrument for government and non-government schools based on principles of comparability and transparency.

This recommendation should be adopted because the current system is unnecessarily complex and fragmented. Funding reform is an essential plank for broader educational reform in Australia, dependent as all aspects of education are on the primary issue of funding. Improved consistency and transparency in this area would improve efficiency (by understanding better the impact of school resources on student outcomes) and equity (by understanding better the level of real need in individual schools, and funding appropriately) and as such is a worthwhile goal.

Employing similar funding methodologies at both State and Commonwealth level and between school sectors would sufficiently improve transparency and accountability to positively affect student outcomes as well as create a more sound footing for future debates.

Australia’s School Funding System, by Andrew Dowling, Principal Research Fellow with ACER’s Policy Analysis and Program Evaluation Unit, is available for download from this website.

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