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Curb education spending now to save hard cuts later

By Jennifer Buckingham - posted Thursday, 1 May 2014

Despite long-term and substantial increases in school funding during the past 25 years, student achievement has not ­improved. Levels of literacy and numeracy achievement in this time have stagnated and in some cases declined.

Government expenditure on primary and secondary education more than doubled in real terms between 1988 and last year, while student numbers increased less than 20 per cent.

The absence of a relationship between funding and achievement is a persistent and robust finding internationally, yet government spending on schools is conservatively projected to double again to reach $90 billion (3.4 per cent of GDP) in 2024-25.


Current and future funding for schools must be reviewed. Australian governments seeking to reduce public debt cannot quarantine school education budgets from their efforts, especially since history shows that increased spending at the system level is likely to yield only minimal benefits.

In addition, it is the responsibility of governments to ensure that existing resources are spent in the most effective way. Each dollar spent on a policy or program that does not benefit students is a dollar that could have been spent on a policy or program that does.

Constantly increasing spending on schools hoping for improved outcomes is lazy policy; it removes the motivation to find ways of improving education that do not rely on more funding - nor does it guarantee results.

A review of government spending in an uncertain economic climate should investigate means to rein in spending now, to avoid the need for more painful, drastic cuts later. It must also look for ways to improve the ­productivity of schools and maximise educational outcomes ­within the existing budget.

Finding large savings in education budgets is the very definition of a thorny problem - there is a high probability of pain. Fortunately, at this stage large spending cuts are not necessary, and will not be in the future if sensible decisions are made now. It is possible to identify ways of using funds more efficiently, and aspects of school operations that might be managed more ­productively.

One example is to facilitate low-income students to attend non-government schools by providing them with a government-funded bursary. If the amount of the bursary was set at a level sufficiently high to allow non-government schools to reduce their fees, yet still lower than the cost of ­attending a government school, the difference would be a saving to governments.


In 2011-12, average annual funding for government school students was $15,768. Each student with a bursary of, say, $10,000 enrolled in a non-government school would save government about $5000. If just 10 per cent of the one million low-income students in government schools enrolled in non-government schools, it would save $500 million each year.

Another example is the cost to government of the imbalance of supply and demand for teachers. There are thousands more tea­cher graduates than there are teaching jobs. At the same time, there is growing concern about universities accepting into teaching degrees many students whose academic achievement is lower than ideal. The highest performing countries in international tests draw teachers from the top 30 per cent of school graduates.

In Australia, almost half of ­students accepted into teaching degrees were below the top 30 per cent. Elevating the entry level for teaching degrees could significantly reduce the number of unused teaching degrees, with an estimated saving to government of $250m a year.

These are just two proposals (six more are included in the TARGET30 report School Funding on a Budget). Any savings accrued might contribute to budget reductions or perhaps be deployed in other areas of the schools budget where the money will do more good.

Endlessly increasing funding for schools, in the absence of other significant reform, is unlikely to provide a commensurate pay-off in student achievement and cannot be justified nor sustained. Now is the time to review and restrain school funding - before a thorny problem becomes a painful budget crisis.

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This article was first published in The Australian.

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About the Author

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

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