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How to fund schools

By Kevin Donnelly - posted Wednesday, 24 June 2015

Even before its public release the section of the Commonwealth government's Green Paper on federal/state relations dealing with school education has caused an immediate response from those condemning the implied suggestion that government school parents should pay for their child's education. Something, under existing models of funding, non-government parents are forced to do.

At the moment, based on the policy that government education is 'free, compulsory and secular', parents are not expected to contribute and school fees are voluntary. The first thing to note is that there is no such thing as a free education and many government schools pressure parents to pay so-called voluntary fees.

The second thing to note is that the Green paper has not been publicly released and it is not government policy – it is simply a discussion paper that suggests a number of options for discussion and debate. Such is the pitiful standard of public and political debate in Australia that even hypothetical ideas are attacked and jettisoned before they see the light of day.


Such debate is vital as the current system of school funding involving state, territory and commonwealth governments is due to expire in 2017 and, given the complexity and sensitivity involved, it is important to begin the process of planning what any new model might look like beginning in 2018.

It's also necessary to note the school funding is only one aspect of the Green Paper; equally as important are broader issues such as: what level of government should be responsible for school education? What is the most effective way to ensure accountability and transparency and what is the right balance between school autonomy and government control.

Under the Australian constitution the states and not the commonwealth are responsible for school education and commonwealth's involvement in education, including funding, is relatively recent.

As a result, the option in the green paper to gives the states and territories full responsibility sounds reasonable. One major concern, given the commonwealth controls most of the nation's revenue via GST and taxation, is that it would still have a major financial investment in schools and initiatives like the national curriculum, national NAPLAN testing and national teacher accreditation would, most likely, still be compulsory.

The second option involves state governments funding government schools while the commonwealth funds non-government schools. Given the commonwealth government, based on 2102-13 figures, already provides 73% of the state and commonwealth funding received by Catholic and independent schools such an option appears reasonable.

Given the conflict involved in state governments managing and controlling state schools while also regulating non-government schools (schools that increasing numbers of parents are seeing as a better alternative than government schools) it also makes sense to give oversight of non-government schools to the commonwealth that does not have the same conflict of interest.


The third option involves minimal change and is closet to the current situation. State and commonwealth governments would continue to fund government and non-government schools but there would be an attempt to reduce commonwealth involvement.

Prior to 1964, with minor exeptions, the commonwealth government had no direct involvement in funding schools or seeking to control what was taught, how schools were managed or teacher education. Since that time, under ALP and Coalition governments, commonwealth control has exploded, both in terms of finances and interventions in areas such as the curriculum, assessment and testing, teacher accreditation and registration and billion dollar initiatives like the Building the Education Revolution infrastructure program.

Over the years 1999-00 to 2013-14 it is estimated that commonwealth funding for schools increased from $4.8 billion annually to approximately $13.5 billion – an estimated 181.0 per cent increase.

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About the Author

Dr Kevin Donnelly is a Senior Research Fellow at the Australian Catholic University and he recently co-chaired the review of the Australian national curriculum. He can be contacted at He is author of Australia’s Education Revolution: How Kevin Rudd Won and Lost the Education Wars available to purchase at

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