Investing in education - private, selective and the rest

In New South Wales you may have seen the placards and signs as you wander past your local public school. “The issue is public education” they shout. The signs, an initiative of the public education lobby (essentially the alliance of Parents & Citizens Association and the Teachers Federation), are basically designed to hit parents where it hurts the most - their kids education. If you have your child in public education, then the purpose of the sign is to remind you what you’re missing. If, on the contrary, you have your kid in private education, then they are designed to play the guilt card - the educational price other kids are paying for your decision to go private.

Of course, this is exactly how the schools debate has played out for years. Public versus private. One side in the corner of poor resourcing and exclusion, the other on the side of entitlement and choice. No need to repeat the debate, because everyone has heard it before. But what is interesting about the schools debate is not what is said, but what is always left unsaid. And like Basil Fawlty never mentioning the war, the public education champions would not want us to utter selective school. Why? Because it is an admission that the public sector itself operates on exclusion and adverse selection.

In NSW, there has been an explosion of selective schools, particularly post Premier Greiner and his former Minister for Education, Terry Metherell. Bob Carr, also conscience of the popularity of selective public education, has not (quite correctly) put the selective school genie back in the bottle. And John Brogden, in the 2003 NSW State election promised to radically expand the system - especially in Sydney’s expanding suburbs in the north west and south west. Apart from a few diehards in the teachers union, there is a broad consensus on the preservation of the NSW selective school system. This is as it should be.

But the public education lobbyists have failed to adapt to this huge change. In particular, they fail to acknowledge that what we have in NSW is not a two tier, but a three tier system. Education in NSW is no longer public versus private. It is public selective, independent or non government, and public residual. Public education is not comprehensive because it does not operate on a universal model. Adverse selection is a notable characteristic of public education as well.

Cream skimming has been going on for years in the state school system but the public education lobby have so far failed to either acknowledge it goes on or comprehend its impact. The system encourages the best students to go into selective schools and failing that, the remainder to go into the residual system or private schooling. The economics and decision making are simple. Unless it’s for religious or cultural reasons, why would a parent pay fees for an elite education service when they transfer that cost to the State? A place at one of the top schools - such as James Ruse Agricultural - is the equivalent of getting the best education service at no cost to the family. The taxpayers fund the best education money can buy. It is little wonder the competition for places is fierce.

A comprehensive education system can only work if it operates in the same way as Medicare. If you peel off the best, then the system declines over time. It is the equivalent of two pools of risk in insurance - the low risk and high risk. The low risk pool can only get better and more attractive and the high risk pool can only survive through cross subsidy from somewhere else. This is what we have today in schooling. Contrary to what the public education lobbyists would have you believe, it is the public system that has driven the adverse selection. Non government and independent schools only pick up where the public system leaves off.

The competition for selective schools has spawned a new, privatised form of schooling - the private coaching college. Private coaching has expanded at the same time as the selective system. With places limited, parents are complementing their child’s public education with private coaching designed to ensure their child succeeds in gaining a selective place. Although private instruction is frowned upon by the public education lobbyists, a child’s education is the ultimate public private partnership.

A child in a public school can not solely gain education services from the public sector. This is obvious to any parent who complements their child’s education with additional coaching, whether academic, music or sport. Education and instruction exists beyond the school gate too.

The decision to send a child to private tuition can be purely a rational one. A parent can invest in the cost of private tuition and following this investment, secure a free selective place. The investment today pays off in the future.

Alternatively, failure to invest may result in missing out on the free selective place, leaving the parent with either the cost of private schooling or potentially having to face the educational cost of a residual public place.