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School ownership

By David Leyonhjelm - posted Tuesday, 4 November 2014

Governments should ensure that a great education is available to every poor kid in Australia. But there is no need for governments to own a single school or employ a single teacher to achieve this.

The whole of society benefits when children are educated. This is why governments attempt to promote school education by making schooling compulsory for ages six through sixteen, and by regulating schools, including what must be taught. This should continue.

Governments also attempt to promote school education by devoting tax revenues to schooling. This similarly should continue.


But governments currently do this through discriminatory funding of schools. Funding to government schools equates to more than $13,000 per student excluding capital costs. Meanwhile, funding to non‑government schools comes to less than $9,000 per student. This preferential funding of government schools is inequitable. Many kids of poor parents go to non-government schools (such as religious schools), while many kids of rich parents go to government schools. A far more effective way to help the children of poor parents would be for funding to be determined only according to the circumstances of the children and parents, not according to who owns the school.

The Gonski reforms took baby steps towards this goal. They led to government schools with lots of poor kids receiving a bit more funding than other government schools, and non-government schools with lots of poor kids getting a bit more funding than other non-government schools. But this still means that poor parents effectively get less funding if their children attend a non-government school. And rich parents, who have more capacity to fund their children's education, effectively get more funding if their children attend a government school.

The real solution - where government funding doesn't hinge on who owns the school - is not that radical. The Howard Government provided parents of school‑aged kids with a subsidy to cover half of their education-related expenses other than school fees. In its last election campaign the Howard Government proposed extending this subsidy to cover school fees. This would have been a huge step towards funding the children rather than the school.

Funding children rather than the school means that support can be accurately means-tested. This means that the poorest parents would receive funding to cover all the costs of a high quality education, which is more than they indirectly receive under current arrangements. Such means testing would leave rich parents to pay more or even all of their children's schooling costs.

Under this equitable and parent-focussed scenario, it is not necessary for any schools to be owned by the government. They could either be privatised or taken over by community groups. This approach would not only deliver the most 'equity' bang for the taxpayer's buck, but would also empower parents.

Consider the case of unhappy parents who want to pull their child out of a slack school and into a good school.


Under current arrangements they might not be able to do this because enrolment in good government schools is restricted to those who live in certain suburbs. And if they did pull their child out of the slack school, this would be of little consequence for the principals and teachers in the slack school.

But where funding is inextricably tied to the child, the principals and teachers in the slack school would suffer a proportionate drop in their incomes, while the principals and teachers in the good school would receive a boost. Since parents tend to have greater regard for their own children than schools, this would represent an important discipline on schools.

Currently, government schools are owned according to state and territory boundaries. With private or community ownership, schools with a common owner could be grouped according to less arbitrary criteria, such as school philosophy, teaching style or extra-curricular focus. Some schools could offer low fees and pay teachers at current rates, while others could pay more for the best teachers and charge higher fees accordingly. Parents would decide which they prefer.

Privatisation would reduce the risk of a government bailing out an unpopular, and hence loss‑making, school. This would avoid protecting underperforming principals and teachers at the expense of students. It would also end the ridiculous situation where the funding arms of state education departments exist simply to move money around in an arbitrary fashion.

By removing the government from ownership of schools, poor parents would be able to get their kids into a quality school of their choice. And the schools would compete to attract them.

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About the Author

David Leyonhjelm is a former Senator for the Liberal Democrats.

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