The 'Gonski' funding model

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.