Gonski model should go back to the chalkboard

Christopher Pyne is right. The Better Schools funding model is “incomprehensible” and its development has been a “shambles”. While it retains elements of the model originally proposed by the Gonksi committee, it is no longer simple and transparent. It has been tweaked and massaged to the extent that it no longer meets the objectives it was designed to achieve.

Pyne has made no secret of the fact he didn’t like the Better Schools reforms, on the basis that they were too expensive and involved too much federal government bureaucratic interference.

Now that he has all of the information, this week’s decision to revert to his original position of scrapping Better Schools is not surprising. It is also unsurprising that the states that signed six-year funding agreements, with the incentive of large amounts of federal government money in 2018 and 2019, are resisting.

The furphy in the response of the states, and most commentators, is that scrapping the Better Schools funding model will inevitably affect the funding of individual schools. The model does not actually determine what individual public schools and Catholic schools receive. It calculates a figure for each school, then these amounts are bundled up and provided to state governments as a block grant. State governments distribute this funding to state schools using their own models. Catholic schools receive their funding via systems devised by state-based authorities.

Fewer than 10 per cent of Australian schools would have been funded according to the model: the independent schools. Independent schools authorities were never big fans of the policy either – some schools wouldn’t receive their full funding entitlement for 50 years – but with no alternative funding deal on the table, they could not afford to turn it down.

The legal obstacles have also been overstated. The model itself is embedded in the Australian Education Act and this will need to be repealed, but it has been reported that the funding agreements with the states are not legally binding. The main obstacles to scrapping the Better Schools funding model are therefore political.

How did this mess come about?

The Gonski review committee had an extremely difficult task: to come up with a new funding model that accounted for enormous variations in students and schools and treated them all equitably.

The committee proposed a model that had at its core a “student resource standard”, a minimum level of funding for every student in every school. It was also sensitive to student need by giving schools with greater levels of educational challenge higher funding in the form of “loadings”.

The model was not sector-neutral, as is sometimes claimed. Non-government school funding would still be dependent on the wealth of students’ families, whereas government school funding would not, but the committee attempted to find a middle ground between treating students fairly and consistently, without giving more money to already highly resourced schools.

One objective of the reforms was to end the acrimony over funding between the state and non-government sectors by creating a single system. Another objective was to make the funding of public schools more transparent. In some states, public schools funding was a dark art that seemed to have no rationale. These objectives, and the model proposed by the Gonksi committee to achieve them, were widely accepted.

Unfortunately, six little words have held Australian schools to ransom for five years, “no school will lose a dollar”.

This promise prevented the review committee from proposing a new system that re-distributed the existing education budget differently – all schools had to be given more money.

The result was a too-high price tag, and the federal government spent a year negotiating, manipulating and reverse-engineering the model to keep its no losers promise at the least possible cost. Only 28 per cent would be delivered in the first four years of the Better Schools deal. The irony is that the NSW model, which distributes the funding, will leave some 200 schools worse off.

If Pyne keeps his promise to maintain the “funding envelope” for each state for the next four years, reviewing the model will not necessarily affect individual school funding for state or Catholic schools. It is the potential loss of the 72 per cent of funding promised by Labor for delivery in 2018 and 2019 – more than $3 billion for NSW – that has state education ministers in a lather.

Issues of convoluted models aside, this unsustainable and largely unjustified level of extra funding is reason enough for a rethink. It is not as simple as keeping the ‘SES’ model, though; it applied only to non-government schools. Successive federal governments, for better or worse, have also made state schools dependent on federal dollars. This federal government will have to work out how to deal with this problem fairly.

Jennifer Buckingham is a research fellow at The Centre for Independent Studies.