Let us follow the money backwards starting with Government schools.  Government schools receive the bulk of their funding through the state funding authority, typically its education department.  For each school its allocation will have been calculated according to a state-specific funding formula.  In most cases this is a base plus loadings model, where the loadings are adjusted to reflect student and school characteristics.  That is, similar in some ways to the SRS, but with important differences to reflect funding formula innovations, the local situation and state priorities.  The state education department will in turn have received its money via a Budget appropriation from the state government and an allocation from the Commonwealth.  The Commonwealth’s funding is determined as a share of calculated SRS funds for all Government schools in the state.  As a small top up to public funding, Government schools receive voluntary parental contributions and funding from other private sources.  They cannot and do not charge fees.

With me so far?  Because it is about to get a whole lot more complicated!  Catholic schools receive the bulk of their funding through the Catholic system education body, and the rest from school fees and other private sources.  The Catholic system education body will allocate funds to schools according to its funding formula.  Its primary source of funds is the Commonwealth Government, determined as a share of the SRS for schools within the system and adjusted for Catholic parents’ capacities to contribute.  State Government funding contributions into the system are a top up that comes via the state education department, according to its formula.

Still with me?  The primary source of Independent schools’ funding is fees and other private contributions.  Commonwealth funding is the secondary source, which is calculated on the same basis as for Catholic schools, but with one important difference: the funds are received directly by schools.  That is, there is no intermediary funding authority.  State government funding is received directly by Independent schools via the state education department according to its funding formula.

Got it?  Now multiply the situation I have just described for one state by the eight states and territories in Australia.  And overlay this with transitional provisions.  There is no single funding formula.  There are more than twenty.

Some may argue that this does not matter.  They may even argue that different states and different systems should be able to cater as they judge best to address local needs and priorities within their systems and schools.  This is the principal of subsidiarity.  Alternatively, they may point to the gains in dynamic efficiencies arising.  That differences in funding approaches are healthy as they allow for live experiments and an ability to learn from each other, innovate and continuously improve their funding approaches.  And they would be right.  To a point.

Jurisdictional differences and flexibilities can be a good thing, for many of the reasons just argued.  But what is the justification for the public funding entitlements of the same student within a state being different merely on the grounds of the school sector that his or her parents ‘choose’?

Public and private funding is tied to ownership

The statement made in the opening paragraph to this section - that public and private funding is tied to school ownership ahead of student need or the capacity of all parents to pay - is prima facie at odds with the earlier discussion about needs-based funding approaches and public funding adjustments based on parental income.  But hear me out.

Let us look at the two cases of Jack and Jill, conveniently contrived in order to illustrate my point.  Jack’s fifth birthday is fast approaching.  He is a very clever little boy.  His proud parents recognise Jack is well ahead of his peers and, like all good parents, they want to provide Jack with the best start in his school life.  They have done their homework and identified a school that they judge will allow Jack to excel.  However, it is a Non-Government school with fees beyond their means.  Jack is the middle child of five.  He has a stay at home father and a mother whose single income struggles to meet the needs of a household of seven.  Both parents feel frustrated as they have no option but to send Jack to the local Government school.

Jill is also about to turn five.  Her parents grew up in the area where they continue to live, and both went to the local Government school.  That is how they met.  For a mix of nostalgic and philosophical reasons they would love it for Jill to carry on the family tradition.  However, they have also witnessed the relative demise of their old school, and noted that the children of friends they grew up with were attending the Catholic school around the corner.  Jill is an only child.  Her parents both work full time and have good jobs.  They would willingly contribute towards the cost of Jill’s education at their old school.  But that is not an option.  They are likely to follow in the footsteps of their friends and send Jill to the school around the corner.

Are Jack’s and Jill’s situations nonsensical?  Yes, of course.  Contrived?  Yes.  I already told you that.  But without grounds?  No.  When private sources of funds are accounted for, the per student rate in each sector is on average (yes, there are those words again) greatest for Independent schools and least for Government schools.