Academic journal article Australian Journal of Education

Choosers and Losers: The Impact of Government Subsidies on Australian Secondary Schools

Academic journal article Australian Journal of Education

Choosers and Losers: The Impact of Government Subsidies on Australian Secondary Schools

Article excerpt


This paper reveals what parents do and what schools do when private schools are provided with recurrent funding from government to subsidise their operating costs. In Australia, since 1974, every student who has enrolled in an approved private school has attracted a government subsidy worth between 15% and 70% of average estimated student operating costs, determined on a needs basis (Watson, 2003). Described as 'unhelpfully complex and exceedingly opaque' (Dowling, 2008), the Australian schools funding system effectively creates a school education market where private schools in receipt of government funding compete with public schools for students.

This article examines trends in school enrolment and participation data, changes in tuition fees and trends in student: teacher ratios in private and public schools since the introduction of government operating subsidies for private schools. We reveal how private schools have used the additional resources provided by government and how the average socio-economic composition of schools in both the private and public sectors has changed. Finally, we discuss the impact of these changed enrolment patterns on schools and students, and the policy implications.

The Australian school funding system

In Australia, the federal government provides a subsidy to assist students to attend the school of their choice in the private sector. Federal grants to private schools are supplemented by state government grants to a proportionate value of less than half the federal grant (Ministerial Council on Education, Employment, Training and Youth Affairs, 2004). Between 1974 and 1999, the Australian government's private school funding scheme allocated a government subsidy per student to each private school or system on the basis of the financial 'need' of the school or system, measured by its declared total level of private income. As most private school income was sourced from tuition fees, schools that charged high fees (mostly independent schools) received a lower per student grant than schools charging low tuition fees, most of which were Catholic schools. Since 2000, the level of federal funding has been linked more directly to the financial means of individual students' families (Watson, 2003).

Today, schools in the Catholic system receive combined (that is, federal and state) recurrent grants per student that are worth approximately 72% of their total income and source the remaining income from tuition fees and donations. Students attending independent schools attract total federal and state grants of varying proportions according to a measure of the socio-economic status (SES) of their students which amount to, on average, 40% of their total income (Ministerial Council on Education, Employment, Training and Youth Affairs, 2004).While some independent schools receive grants at the same level as schools in the Catholic system, the majority receive less than Catholic schools. The differentiated subsidies are paid in a lump sum to the school and all students attending a particular school are charged a common fee, regardless of their socio-economic status. There are both high-fee and low-fee schools in the independent sector. Public schools are, in theory, fully government funded, although many public schools receive 'voluntary' financial contributions from parents. In 2008, public schools enrolled 60% of all students at the secondary level (that is, Years 7 to 12), Catholic schools enrolled 22% and the independent sector catered for 18% (Australian Bureau of Statistics, 2008; Dowling, 2008; Watson, 2003, 2004).

The size of the private school sector in Australia has always been relatively large due to the high proportion of schools--traditionally at the primary level--supported by the Catholic church. In 1965, 24% of Australian school students were enrolled in the (then unfunded) private sector, of which 82% were in Catholic schools (Australian Bureau of Statistics, 1970). …

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