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Manning Clark House Inc. welcomes speakers from a wide range of backgrounds. Among those recent have been Stephen Moore, Justice Michael Kirby, Prue Acton and Bishop George Browning. Photographer: Peter Hislop

The public private balance:'setting the scene for change in education

Event

Reinvigorating Australia, National Library of Australia

Date

Wednesday, October 27, 2004

by Lyndsay Connors.

Presented at Reinvigorating Australia, National Library of Australia, Parkes, ACT, Wednesday, October 27, 2004

Introduction

In Australia, public policy governing the balance between education as a public and a private good has been moving in a radical direction by international standards.  We have set in train a process of de-mutualisation of our public school systems.  Unless we change direction, de-mutualisation will turn into dismantling.

This paper will deal mainly with the public/private balance in relation to schools.

Schooling has always been an arena for competition as parents seek to protect and to advance the educational interests of their own children, teachers seek career rewards and satisfaction and schools seek to protect their viability and reputation among parents and the community at large. Students, of course, also compete for the rewards of school success, both intrinsic and extrinsic.  At the same time, there are many circumstances where parents, teachers, schools and students find it in their interests to collaborate as well as to compete.

Australians have traditionally seen the role of governments in education as including the responsibility to protect the quality and standards of education being offered, both in the interests of the direct participants as well as of the wider community.  We have  also expected our governments to act in ways that spread the costs and benefits of education fairly across the population, based on the assumption that education is a public good as well as a private benefit, and that our system of education should contribute to greater social equality, cohesion and advancement, as well as to the research and the formation of a highly educated and skilled workforce that favours economic advancement.

In recent years, however, schools policies designed to protect the educational interests of the least educationally advantaged and the most vulnerable to failure are being counteracted by the effects of policies designed to entrench the privileges and to broaden the educational options of those already best placed, by market forces,  to complete successfully a full secondary education and to proceed to further study and employment.

Tiffen and Gittens (2004) report that in almost every country on which there is systematic data, public education expenditure's share of GDP fell in the last quarter of the 20th century. This includes all sectors, not just schooling.  Australia's fall in spending was greater than average, though the demographic justification for it was less than average.  In all these countries, education is primarily a public responsibility, in most of the countries overwhelmingly so.  But Australia now falls very much at the private end of the spectrum.

Australia is unique in the extent to which the schools in our large non-government sector are able to combine private resources with government funding to achieve a substantial advantage over the public system ( McGaw et al, 2004).

This paper focuses on this issue:  the public funding of private schools.  This is an issue that occupies an historically unique place in Australian political life.  (Perhaps it  could be argued that it occupies a similar place in our political history as the issue of the right to bear arms in the USA ' in terms of its intensity, its divisive potential and the political influence of key groups.)

Nothing illustrates better than the recent Federal election that the politics of schools funding provides a recurring distraction from education itself.  The ALP Opposition proposed reduction in the public funding of 67 of the best resourced schools and most economically exclusive schools in the country.  These are high fee private schools of the kind that do not receive public funding at all in comparable countries.  There was more public comment about this matter than about the funding proposals for the over 9,600 other schools; than about early childhood and pre-school education; the future of our public universities and of the vocational education and training sector.

In all sectors of education and training, Australians have made decisions about what are matters of public and what are matters of private responsibility and interest; and  about how the roles and responsibilities for regulation, planning and funding should be divided between the federal government on the one hand and the states and territories on the other.  It is hard to add up these decisions across all sectors and to find any coherent philosophy about how education might contribute to Australia's social and economic vigour and advancement; or about the role of governments in balancing public and private interests or in working with private providers.

Through their array of policies for the planning and funding of schools Australian governments are now providing three forms of educational entitlement.

The first form of entitlement is the entitlement of every Australian child, backed by law in every state and territory, to a place in a public school (or to an appropriate form of educational support provided by the public school system).  This is an inalienable entitlement provided to every  child or young person in her or his own right in the name of democratic citizenshipEeven when parents decide to send  their children to non-government schools, they do not relinquish their children's rights to take up their place in the public school system at any time of their choosing.

The second form of entitlement supported by governments is the entitlement of all children and young people to a decent standard of resources in the schools they attend whether parents have decided to send them to a public or a non-government  school.  The children who attend non-government schools, however, are those whose parents or carers are able to meet the conditions set by private school providers, financial and other.  This is a form of entitlement provided by state and territory governments through their regulation of curriculum and teaching, their funding of government schools and, less clearly but certainly by implication, of non-government schools.  It is a form of entitlement that has also underpinned the 'needs' rationale for schools funding adopted by previous Commonwealth governments prior to 1996.

The third and newer form of entitlement is the entitlement of parents to a return from their taxes to fund the non-government school of their individual choice of.  It is backed by a funding scheme that, as a matter of deliberate policy, takes no account of the resource standards able to be provided by any non-government school for its students.

It can be argued that there is some overlap among these forms of entitlement. The  third form of entitlement is unique to Australia ' an open-ended entitlement to public funding for non-government schools that has no regard to the obligations they accept for  overall educational outcomes, nor to resource standards, nor to the demographic demand for school places. 

Under the Federal schools recurrent funding scheme, non-government schools are ranged along a continuum whereby they received grants ranging from a minimum of 13.7% to 70% of a measure of the average cost of educating a student in a government school (AGSRC).  These are simply amounts generated by a funding scheme that ranks schools according to a  measure of the socio-economic status of parents, linked arbitrarily to government school costs and expressed as a percentage.  (I could express the cost of my shoes as a % of AGSRC with as much integrity!)  Gaps between the grant to the non-government school and the average costs of public education are described,  ingenuously, as 'savings' to the public purse.

Taken together, you will find a useful guide to the ways in which public funding policies have contributed to the  drift to private schools in Australia in two new papers ' one published in June 2004 by Louise Watson and one in in September 2004 by Chris Ryan and Louise Watson.

The link to AGSRC was originally adopted when the vast majority of non-government schools operated below the resource standards set by states and territories through the funding they provided for  their own public schools.  That link is now being used for the perverse purpose of  widening the gap between the resources available to students in those public schools and the resources available to the 55 per cent of private school students who, as documented by Louise Watson, attend schools with higher resource levels than government schools.  What this means is that decisions by State governments to improve the teaching and learning conditions in their public schools translate into increases for already better off non-government schools.  According to Watson's research, 27 per cent of private school students surveyed attend schools where the income from upfront parental fees alone exceeds the average resources per student in government schools.  These schools then receive sufficient in government grants ' over $0.3 b annually - to assist in raising their total average resources per student to more than 62 per cent above the government school average.  In policy terms, this is what is meant by 'incentives for private effort', and it comes with the removal of any disincentives to raise private fees to the point the market will bear.

The relationship that has developed between governments and private authorities in the school sector cannot be characterised as a 'public/private partnership' in terms of the relationships normally denoted by this term.  It is not a relationship where the balance of rights and obligations between governments and the private providers or authorities are set out in contractual arrangements to protect the interests of both parties. 

Non-government school authorities do not compete for public funding through a tendering process that specifies their obligations.    Non-government interest groups are quite right to remind the public that were they to withdraw their services that their students would then be the responsibility of government school authorities to educate.  That is exactly the case.  They are not contracted to use their public funding to provide services for specific students over any particular period of time, with penalties for defaulting.  This is only possible because there is a foundational system ' the public school system.

Schools in receipt of public funding in Australia are required to certify that those funds have been applied to the purposes specified, the bulk of it to teacher salaries; and to meet other reporting requirements, largely imposed by the Commonwealth.  They are also required to comply with state and territory registration requirements which vary from each other.  But access to public funding has not diminished in any way the control of non-government school authorities over their admission and exclusion practices.  Some practices would be outlawed, if they happened in the commercial sector, as constituting an abuse of market power.  Non-government school bear no formal or direct obligations for the demographic planning of schooling and largely leave it to the government school sector to bear the diseconomies and disruptions associated with peaks, troughs and shifts in the total school population.

The Federal government has picked out for itself the power of funding to these schools, relegating to the states and territories the political odium associated with any attempts to increase regulation or planning and the responsibility of dealing with the effects of funding decisions on the state's education system.

According to The Sydney Morning Herald, 21/10/2004, the Federal Government has no intention of abandoning its preferential option for public funding of private schools.  The SMH reported that, while agreeing to talks about trading powers with premiers, the Prime Minister intended  the Federal Government, ''far from ceding power, to maintain its role in the education system to ensure parents and students are provided with choice.'  Indeed it will now add a parallel vocational and education training scheme ' with 24 new technical colleges designed to bypass the state education system.

But when the Federal government needs to make arrangements for the enrolment of the school age refugee students that Australia accepts, who come from situations of trauma and who speak no English in schools, it is not the schools to which it gives priority in funding in the name of parental choice that it contacts!   The only place to which these students have an entitlement is to a place in a public school, owned and operated and largely funded by a state government.

Schools funding policies can only be understood in the broader social context in which they are operating. 

Schools are operating in the context of what NATSEM (2004) has identified in a recent paper as a growing spatial divide.  Despite overall economic growth during the late 1990s, and a general increase in upskilling among the adult population, the educational divide between the most affluent and the poorest 10 per cent of postal areas in Australia increased over these years.

In the context of theories of small government there is a growing gap between what we are prepared to invest publicly in each others' children in public schools and the aspirations of well educated parents.  When resources are limited, parents do not  want to put their children into a competition for teachers' time with students who take up more of it than their own children do ' whether for reasons of behaviour problems or educational needs.

In the conditions created by the overall level of public investment in schools and its allocation among public and private schools ' the latter with access to fee income (which, iin turn, governs entry)  and the spatial divide referred to above, what we are seeing is a breakdown in parents' willingness to engage in or rely on the reciprocity and mutuality entailed in public schooling as a means of protecting their children's educational interests.  Some are seeking to place their children in what they see as 'traditional' private schools as an alternative to the educational challenges presented by economic, ethnic and cultural diversity in a public school system that is open to all children without discrimination.    But those who see themselves as being a vulnerable minority in our culturally and ethnically diverse society may also seek to withdraw into their own schools outside the public sector.  This smaller group may  even be willing to have schools that lack a decent level of education resources by contemporary standards, in order to gain what they see as the advantaged of educating their children within the confines of their own community and its distinctive beliefs and values.

As a matter of deliberate policy, Australia is reducing the proportion of its publicly funded school places that are open to all children, by dint of their status as citizens.

It is slowly but surely converting these into places that can only be accessed by those children whose parents are able to satisfy the financial and other conditions for access set by non-government schools.  And, not surprisingly and as confirmed by Louise Watson's work, the group of students moving into private schools comes disproportionately from a higher SES group than those remaining in our public schools.

Australia is a nation that has taken pride in its openness and egalitarianism.  Barry McGaw, Director for Education at the OECD, noted at the Australian Council of Education Research Conference in 2002, that countries like Australia with competitive and highly stratified school education markets while producing high levels of excellence tend to do so at the expense of equity. His analysis of PISA data shows that the achievement levels of Australian students are just as closely linked with their socio-economic backgrounds as are those of the United Kingdom.

Australia is now advancing towards the 'market' scenario described by the OECD as appropriate for countries willing to tolerate significant inequality.

The practical effect, in my experience and observation, of current policies is that the total workload of schools is being allocated among schools and teachers in an increasingly unfair way.  Some schools are being left to do the really heavy lifting with an inadequate share of the public resources available.  Those schools are almost exclusively in the public system. Their situation is graphically described in Pat Thomson's study, set in South Australia, Schooling the Rustbelt Kids:  Making the difference in changing times.(Thomson 2002).

There is now, in my view, significant and understandable confusion within the public sector about exactly how its member schools should respond to these circumstances on behalf of the majority of students they serve.  

But are we so willing to tolerate inequality?  Are there politically viable options for moving ahead to reinvigorate Australia in education through rectifying the public/private balance?

I do not accept that Australians generally support the radical schools policies of the Federal government.  My experience has been that many are surprised to find just how far public policy has gone in the direction of policies that threaten to de-mutualise public schooling in Australia and that use public funding to widen rather than to narrow resource gaps in schools ' gaps that reinforce social inequalities rather than reducing them.   During the Inquiry into ACT schools funding in 2003, I found very little support for the Federal funding scheme on grounds of its inequitable effects.

There was an article in The Australian last week (Maher 2004) on Labor election polling obtained by that newspaper.  It reported that Labor research found 64 per cent of voters in marginal seats were aware of the Labor schools policy, which was designed to reverse the rate of increase in Federal funding in favour of government schools, and that two-thirds of those aware of it had a positive view.  The research was reported as being understood to indicate that Labor's schools policy, with its stronger educational rationale and greater emphasis on equality of educational opportunity, was rated among the top three or four vote-switchers.

The first thing we need to do is to reject the term 'residualisation' to describe the process whereby some schools in the public sector have a concentration of their students drawn from families in hardship.

It is not a term appropriate in a democracy, where we happen to believe in the value of equality.  Translated into the sphere of education, this is a belief that all children have a capacity for learning as human beings and that they share an equal entitlement to develop that capacity.  We do not believe, surely, in two classes of children, the chosen and the leftovers.  And surely we understand that children who are growing up in poor families and communities are doing so through no fault of their own.

There is another reason to reject the term 'residualisation'.  It sounds as if schools in the public sector with a concentration of their students drawn from families in hardship were subject to some form of disease or circumstances not of our making.  As Margaret Vickers has pointed out in her paper on Markets and Mobility (2004), neo-liberals might argue that this process was not consciously chosen by governments, and that it cannot be regarded as unjust. She argues that this neo-liberal discourse represents the problems experienced by these schools as a form of collateral damage that results from the freedom to choose.  Bu avoiding the use of the noun 'residualisation' we might avoid assisting that misunderstanding.

We did not, through the agency of our governments, create the schools where high private fees sustain an untypically high resource levels and at the same time exclude most of those who might need such a level of resources to learn successfully.  These exist in almost all societies without help from governments.  But the schools where there is a daily struggle to create the conditions where students can spend time in effective learning with their teachers ' those schools are the direct outcome of decisions taken or not taken by us, by our governments'not necessarily or even primarily all within education portfolios.   The noun 'residualisation' risks masking the fact that we as adults have not been passive observers in this process.

In the same vein, we need to stop having debates about dollars per student and to focus on the educational significance of those dollars ' to focus on the fact that recurrent grants are provided by governments to non-government schools largely to pay for teachers.

How many of us are aware that the recurrent grants provided by both Federal and state governments to non-government schools are now sufficient to cover the full costs of their teachers in all but a handful of those schools?  Around 95% of all Australian children are in schools where their teachers are publicly funded.  Teachers in the public systems, teachers in the Catholic systems and the equivalent of half the teachers in the non-systemic, independent schools sector are all on the public payroll.

When we ask how those publicly funded teachers should be shared out among schools we are asking a question that is more meaningful than asking how dollars should be shared.  To answer this question we need to understand more clearly the total workload of schools and how the tasks are distributed among schools.  We would then have a far clearer understanding than we do now about just how market forces affect this distribution of work within and between the public and the private school sectors in this country.

By focusing not on dollars but on the teachers whose salaries they pay, we might be able to frame some sensible questions about who should decide the conditions on which students gain access to those teachers.  How justifiable is a situation where many of those fully publicly funded teachers can be accessed only by students whose parents can pay upfront fees?  Especially when the research conducted by the Australian Council for Education Research and the Catholic Education Commission of Victoria has demonstrated quite clearly that even relatively low fee schools cannot operate as an alternative to public schools in terms of their capacity to be socially inclusive.

We need to understand more clearly the demographic changes that will affect schools as the lowered birthrate is reflected in the school population.  It is one thing to provide public funding incentives for the establishment of non-government schools in a growing population;  but what are the likely effects in circumstances where there is a stable or declining  population?

We can reinvigorate Australia by engaging in a rational and vigorous public discussion of how to recruit and retain good teachers and of what we want them to assist our children and young people to learn.

by agreeing to end wasteful forms of competition.  This can happen if we are prepared to agree that any public funding of non-government schools must be done in ways that complement the operation of the public school system, to avoid undermining its efficiency and the value of the public investment in both sets of schools.

We can reinvigorate Australia;s commitment to higher overall education outcomes by working towards the development of proper contractual arrangements between governments and non-government school authorities that protect the public interest in all our schools and the public investment in them ' that is, by ensuring that our public/private partnerships in the schools and other sectors are sustainable and just and rationally grounded in the achievement of educational and social objectives.



References

Doherty,  P, McGaw, B, & O'Loghlin B: 'Level the learning field', The Australian, 30 April 2004

Lloyd, R, Yap, M & Harding, A. 2004.  A spatial divide?  Trends in the incomes and socioeconomic characteristics of regions between 1996 and 2001.  Paper presented to the 298th Australian and New Zealand Regional Science Association International Annual Conference, Wollongong.

Ryan, C & Watson, L.  2004.  The Drift to Private Schools in Australia:  Understanding its Features.  Discussion Paper No. 479, ANU Cenre for Economic Policy Research

Thomson, P. 2002.  Schooling the Rustbelt Kids:  Making the difference in changing times.

Tiffen, R & Gittens, R.  2004.  How Australia Compares, p. 121

Vickers, M.  2004.  Markets and Mobility:  Dilemmas facing the comprehensive neighbourhood high school.   

Watson, L.  2004.  The total operating resources of Australian private

schools in 2004.  Discussion Paper No.4.  Lifelong Learning Network,

University of Canberra ACT 2601