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Don't be fooled - public education is disadvantaged from the start

By Neil McCrossin - posted Monday, 5 April 2004

There are parallels between providing education and providing other essential services such as transport, health or telecommunications. Some categories of consumers are more expensive to provide for than others and some of these consumers may not be provided for if it is just left up to the market.

If the service is regarded as essential, then the solution is what is known as a Community Service Obligation (CSO). A CSO is a non-profitable community service which a business or other organisation takes on in return for government funding which is specifically calculated for that circumstance. Examples can be seen in health, marine rescue and forestry.

The telecommunications industry provides a particularly well-known example, known as the Universal Service Obligation (USO), which is largely borne by Telstra but which other providers can compete for under some circumstances. A system of levies and subsidies is in place to ensure that providers are treated equitably in terms of how much of the USO they provide. To do otherwise would be absurd – those doing the right thing would be penalised, those not contributing would be rewarded, and the provision of the USO would break down.


In education, community service means educating those students who are more difficult and more expensive to educate. The situation is handled by having two systems: the state system, which is obliged to carry out the vast majority of the community service while only receiving slightly more funding per student, and the private system, which has no such obligation (although segments of it do carry out some of the community service voluntarily). The funding is divided between the two systems with little apparent regard as to how much of the community service each system carries out. Sound absurd? That’s probably because it is.

The state system, with 68 per cent of the students, receives 76 per cent of the funding – hardly a dramatic margin. Yet the state system is obliged to bear the expense of providing education in a large number of far-flung locations and of educating all students who require education, not just those low-maintenance students who are able to pass through a selection process. It would be surprising if the extra government funding received by the state system covers more than a fraction of this additional cost.

Australian state schools educate 82 per cent of students with disabilities, 85 per cent of students in remote areas and 88 per cent of indigenous students. Without selection processes to screen their intake, the state system also takes in large numbers of students who although not disabled are classified as having learning difficulties or who come from difficult family backgrounds. Without the economic screening effect of fees state schools take in a much higher proportion of students from low socio-economic backgrounds who are likely to have less of an affinity for formal education than the children of the educated, professional classes.

These higher needs categories of students are much more difficult, time consuming and expensive to educate. Just ask any state school teacher.

Certainly, some of these factors are taken into account when dividing up money within each system (such as the postcode-based SES system used to divide money amongst private schools, flawed as it is). What is the philosophical basis, however, for determining the split of funds between the state and private systems? The current funding arrangements are often defended with the statement that "State Governments fund the state system, the Federal Government funds the private system", which is just a description of the funding mechanics chosen by the Federal Government; hardly a philosophy.

You will also hear that "private school parents pay taxes too" and "parents are entitled to choice". Now we are getting closer to a philosophy but what sort of philosophy is it? One of equal or close to equal funding per student across both systems is usually what is being implied. This sounds completely fair, until you remember the unequal community service load. It is often forgotten in this debate that rights (i.e. funding) should go hand in hand with responsibilities.


State school parents also pay taxes and are also entitled to choice; the choice to send their children to a state school without financial penalty. Take two above average, middle class, urban students, one of whom attends a selective private school and the other a state school. Unless the state system has dramatically higher funding per student to cover the extra expense of all its high needs students, the amount left over for the state school student will be much lower than that for the private school student, despite what the averages say.

We seem to care enough about phones to have a clearly articulated and rational system which ensures Community Service Obligations are adequately funded. Since the future of our society depends on the education of our children, you would think we would expect the same of our education system.

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About the Author

Neil McCrossin has a child who attends a state primary school in Brisbane. Neil also happens to be married to a state-school teacher. He works as a technical team leader for a software company.

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