The 'Gonski' funding model

A new model for the funding of schools was introduced in 2014. It followed on from the Gonski Review of Funding for Schooling undertaken during 2010 and 2011 and is provided for under the Australian Education Act 2013 which was rushed through Parliament by the Gillard Government in June 2013.

The "Gonski" model has dominated education debate over the past three years. Paul Kelly in his recent account of the Rudd-Gillard-Rudd Government ("Triumph and Demise", Melbourne University Press) writes "the 2011 Gonski report, commissioned by Gillard as minister, was high on ambition but weak on implementation and practical detail".

What can we conclude about the "Gonski" model almost 12 months after its implementation?

The model is not "national" as often claimed, given only five States/Territories signed up and different transition arrangements apply in different States/Territories and school sectors.

Under the implementation arrangements, an additional $10 billion would have been invested in schools over a six year period (2014 to 2019). This would have meant significant additional funding flowing to those schools assessed as operating with Government funding levels below their entitlement. Much of the additional funding was scheduled to be delivered in the fifth and sixth years of implementation.

It would be impossible to argue that the new model is more transparent and less complex than the previous socioeconomic status (SES) model for non-government schools. It has been a frustrating year for schools as they have grappled with the technical details of the model and changes in provisional funding figures. It has been almost impossible for schools to project their funding into the future.

There is no doubt that some of the data used to calculate loadings is less than rigorous and the transition arrangements have thrown up a range of issues, with schools realising that the loading for students with disabilities does not deliver the funding required for these students.

The "Gonski" model was rushed and not properly tested. Many of the technical issues could have been addressed through such a trialling and testing process.

While it is far too early to make any assessment as to whether "Gonski" has impacted on the delivery of education in schools, there is a view that simply providing more funding will not be enough to address the perceived issues with flatlining student outcomes.

The Coalition Government elected in September 2013 doesn't believe the "Gonski" model is right for the future, and has committed to a new model from 2018.

As a result, the policy focus must be on the funding arrangements to be implemented from 2018.

These will be determined by the outcomes of the 2016 Federal election. The major political parties will need to reveal their funding intentions at the election.

There are some significant issues that need to be resolved about the overall funding framework before a post-2017 funding model can be considered.

Most important is the Federation debate with the National Commission of Audit recommending the Australian Government hand over funding and policy responsibility for all schooling to the States and Territories.

More than one third of Australian children attend non–state schools that are not run by State Governments. The circumstances of these schools should not be forgotten in the Federation debate. Despite the popular support of Premiers, absolute control of schooling in the hands of the States which are the regulators, partial funders and competitors for independent schools would be an unacceptable outcome.

Resolution of the associated taxation debate will also be important. Australian Government funding for state schools is a function of Commonwealth/State financial relationships and should remain as such. Funding for the independent sector should be the result of direct negotiations between the sector and the Government.

The third important framework to be determined for the next funding model relates to indexation arrangements. TheCoalition's current policy setting of indexation at Consumer Price Index (CPI) rates will be difficult for all schools. There is a compelling case for indexation to be based on movements in education costs.

Once these big picture issues are resolved, the task of determining an appropriate funding model for independent schools becomes much easier.

The options are limited but any model must continue to be student-focused. Although funding models have for decades been needs-based, there is a renewed focus on this aspect, so a future model should also be needs-based.

The policy work required for a radical change in the funding model could not be completed for 2018, so the focus must be on achievable improvements to the current system which provides three options.

The first is retention of the "Gonski" model with some adjustments. This would be a fiscal challenge for the 2016 elected Government.

More likely is the option for significant changes to the current model including addressing the base/loadings split, dismantling the loadings for students with disabilities and perhaps indigenous students in favour of genuine targeted funding for these groups, and winding the low SES loading into Capacity to Contribute calculations for non-state schools.

The third option is a return to a modified version of the previous SES model for non-government schools with Australian Government funding for state schools separately determined as part of Commonwealth/State financial relations.

The reality is there is unlikely to be sufficient time for the policy development and research required to adopt a radically different funding model from 2018. Modifications to the existing or immediate past model (SES) are therefore most achievable and practical. Significant changes to the existing model potentially will have the highest chance of bipartisan political acceptance.