Fueling Australia’s Two Speed School System


In recent decades state and federal Australian governments have been providing funding to both state and non-state schools.

The difference between the levels government funding for state and non-state schools has been shrinking.

At the same time, the terms and conditions that apply to government funding of schools in the various sectors remain much as they were prior to government funding for independent and catholic schools. This is particularly significant in relation to the enrolment of students.

It is no longer meaningful to think in terms of government, independent and catholic school sectors as if they were separate and distinct.

With few exceptions

Legacy Issues to be resolved

As a result there are several legacy arrangements that have not been addressed, and are now creating serious structural inequality resulting in disadvantages for many students, many of whom are already seriously disadvantaged.

1. Student enrolment

Parent, School or Government choice?

Currently, non-state schools (and a small number of state schools) have the ability to be selective. That is, they can choose to enrol particular students from all those whose parents apply for their enrolment.

At the same time they can exclude certain students from being enrolled. Doing so makes the school “exclusive” in both a positive and negative sense. Students are denied enrolment for a wide range of reasons including lesser ability, common disabilities, lack of sophistication, family social status, physical needs, social and emotional issues…

In selective schools, enrolment is the school’s choice and the process is really one of exclusion.

In contrast, state schools are typically required to enrol all students whose parents apply unless there are quite exceptional circumstances, or the family does not live in the school’s area as defined by government policy. Governments do not zone non-state schools.

Lack of Mutual Obligation

When independent and Catholic schools did not receive government funding there was no case that would require them to accept all students. But as the government funding gap between state and non-state schools shrinks the case strengthens for mutual obligation between the school and the government.

Non-government schools claim government funding on the basis that the parents pay taxes some of which goes towards funding education of Australia’s children. Therefore the children in the school should benefit from the taxes paid by the parents.

But there is an important corollary:

Parents applying to enrol their children in a school similarly pay taxes...therefore any school receiving government funding should not be able to refuse to enrol a child without proper justification.

A practical benchmark

The enrolment benchmark for refusing to enrolment a student should be whether or not a local government school could reasonably refuse to enrol the student. This would put all schools receiving government funding on a ‘level playing field’ in relation to this issue.

Government funding for education is not provided to assist some schools to attract and enrol  students they are pleased to enrol, e.g.,  high performing , low-cost students who can be highlighted to bring credit to the school and so attract more students of the same ilk.

        Cost savings for government?

In the early days of government funding for non-state schools it was claimed that enrolments in non-state schools were a cost saving for government. This may have been true at the time. However, as the gap between government funding for state and non-state schools shrinks the savings (if any) also shrink.

Selective enrolments - a school growth strategy

By being selective/exclusive it is easy for non-state schools to attract additional enrolments. This, in turn, enables such schools to attract significant additional government funding for new facilities even when nearby state schools could easily accommodate the students.

As a result, selective enrolments by non-state schools often increases the cost to government. Ironically state schools closed because of falling enrolments are sometimes purchased and redeveloped by non-state schools using government funds, at least in part.

Government funding - an obligation to enrol

The more exclusive a school is (in the literal sense) the less justification it has for government funding. The more government funding a school receives the less justification there is for a school to be able to exclude students. It is for this reason that there are so few selective government schools.


  1. All schools receiving government funding should have equivalent obligations to enrol students
  2. The benchmark for the obligation to enrol students should be the obligation of a local state school
  3. Student enrolment in all schools receiving government funds should be a parent choice, unless there are exceptional circumstances.
  4. When a school declines to enrol a student they should provide the parents, and the Minister, with an explanation of their decision.
  5. The Minister should consider the explanation and, with the parents,  initiate an appropriate response such as special provision or other intervention.
  6. If the school is “full”, parents may elect for their applications to be placed on a waiting list[1] and have their application registered with the Minister
  7. All schools receiving government funds should fill student vacancies, firstly from the waiting list, strictly in the date order of enrolment application[2]

Parents wishing to enrol their children in genuinely exclusive schools[3] may well be prepared to pay higher school fees for the privilege, and to offset the lack of government funding. Parents who can afford school fees and costs that are already two or more times the typical state school funding are likely to continue to do so.

2.  School entitlement to government funding

Most forms of government funding of individuals and organisations involve some form of means testing and/or needs testing, e.g., welfare benefits of all kinds, pensions, federal funding for states, various grants.... Claimants (in any field) with few needs and substantial means are unlikely to qualify for government funding.

Means testing

Before non-state schools received substantial government funding there was no case for means testing. However, the introduction of government funding for all schools would indicate that schools should be means tested.

Many schools currently receiving government funding have very substantial means at their disposal: assets,  fees paid by parents, social capital, fundraising capacity, families that can readily accommodate cost shifting for equipment and activities, income streams not related to the education of the enrolled students…

There are clear indicators that schools differ greatly in terms of the means they have available to educate their students. High means / low needs schools frequently have

Needs testing

State schools are typically resourced using various departmental; formulae. Such funding is fundamentally needs based. Gonski is another form of needs based funding.

The current discussion of a “base allocation” for all schools is likely to be most generous to those schools that need it least.

Needs  testing is a complex matter. Needs are not uniform across all schools and students. For example, two students with similar levels of autism, or attention deficit, but from different families and social situations can have very levels of need for support and interventions. Also the concentration of need in particular schools has a compounding negative effect.[5] 

Scales and cut-off points

With government welfare benefits such as the aged pension, means/needs testing includes a cut off point beyond which government funding is scaled back, and another point at which government funding becomes zero.

There are schools with incomes, assets resources and facilities that are well beyond any reasonable cutoff points for any government funding.


  1. Basic government funding for a school should be scaled back when it reaches  (?)[6]  adjusted for needs and means
  2. All government funding should cease when a school’s non-government income reaches (?) adjusted for needs and means

3.   Avoiding responsibility - “Lifters and Leaners”

Schools receive government funding because they are sharing the task of educating the nation’s children. If they then select mainly (or only) high performing, low cost students they are effectively gaming the system. Such schools may claim to be “lifters” in terms of educational provision and student outcomes. MySchool data often appear to confirm such claims but this would only be true only if the comparisons were based on a level playing field for all schools.

In reality, it is easy for selective schools to become “leaners” while appearing to be “lifters”. By selecting higher performing, low needs students they lean on the rest of the system to do the heavy lifting of addressing disadvantage, disability, trauma and neglect… often with significantly less resources.

4.  Economic selection as double dipping

The most exclusive schools may charge fees that are two or three (or more) times the level of funding provided to state schools. This in itself is a form of selection and exclusion.

Accepting government funding on top of this income could be argued to be a form of double dipping hence the need for means/needs testing.

5.  Compounding selection/exclusion for more government funding

Many schools use their capacity to be selective to increase enrolments by being more attractive to parents. This in turn, can increase their capacity to be even more selective and so on. This phenomenon underpins much of the recent growth of many non-state schools.

Schools can make themselves more attractive to parents by selecting and highlighting high performing low needs students. This is a core marketing strategy for many selective schools.

Many parents do not want their children educated alongside high needs students: those with low abilities, social and emotional issues, lower social status… Selective schools can make themselves more attractive to parents by excluding high needs students but this unlikely to be made explicit in any school marketing program.

Also student selection can also include consideration of the parent’s social status, social skills and its implications for the status of the school community. Who is being assessed in the enrolment interviews conducted in schools with the capacity to select/exclude very young students?

By using their capacity to be more attractive to parents, selective schools can enrol more students. As enrolments increase schools need additional, and more sophisticated, facilities and resources to cater for more students and a wider range of curriculum provision. That is, their case for more government funding increases.

Issue 6. Generating the “two-speed” education system

Levels of government funding are similar across all school sectors but this is not yet leading to a level playing field, nor better learning outcomes. The core issues may be about fairness, school performance and the nation getting ‘value for money’ from its investment in primary and secondary education.  But the net result of all the above include is Australia’s “two-speed” education system

The key factor is that, only some schools receiving government funds are permitted to select/exclude particular students. Doing so makes them more attractive to parents and  increases the burden on those schools which are not permitted to refuse enrolment to students excluded by the selective schools.

MySchool data shows that selective schools regularly “outperform” other schools yet there are no call for all schools to become selective schools. Who would then educate the most needy and disadvantaged children, those most in need of excellent educational provision? This is not a rhetorical question. The answer is clearly, the schools that were least attractive to parents.

Resolving this matter is not simple but it does require a proper understanding of the mechanisms in play, whether they are intended or not.


Ivan Webb


November 2016

APPENDIX     School Improvement - Business Models

Non-selective Schools


Selective Schools

[1] A similar system already operates in Aged Care

[2] State Ministers for Education may need to operate a central register to ensure

[3] Many parents choose a school in order to avoid their children being with undesirable classmates - those who are less likely to be enrolled in selective schools or attend government schools in high socio-economic areas.

[4] An irony is that many high means schools have benefitted significantly and financially from government development grants

[5] The fact that some schools can be selective increases the concentration of need in other schools.

[6] Some similar government arrangements involve the use of a statistical measure. The medium combined state school funding per student (MCF) or something similar could be considered.