DISPELLING MYTHS

Debunking mistaken beliefs and theories about Independent schools and the sector.

There are many misconceptions about how non-government schools are funded, the nature of the Independent school sector and how Independent schools operate. Because the sector is diverse and doesn’t lend itself to generalisations, these often go unchallenged.

MYTH: Independent schools are over funded.

FACT: On average, Independent schools receive around half the level of government funding of public schools.

Funding in all schools, government and non-government, is based on the Schooling Resource Standard (SRS) which is an annual calculation made by the Australian Government that identifies the cost of educating a child.

In 2022, the primary SRS amount is $12,462 per student and the secondary SRS amount is $15,660 per student. This funding is to cover ‘recurrent’ spending such as salaries, power, water, insurance and general maintenance (not building works). for every school student.

State/Territory and Commonwealth governments jointly fund the SRS. The difference between government schools and non-government schools is that non-government schools’ SRS funding is reduced based on parents’ capacity to contribute. This capacity to pay is calculated according to the median parental income at each non-government school. For every student attending a government school, the SRS amount is fully funded regardless of the income of parents.

For example, an Independent school with the wealthiest parents attracts only 20 per cent of the government funding that a public school in the same suburb would receive. Non-government schools serving the lowest socio-economic areas only receive 90 per cent of the SRS base funding amount.

This means that the base funding an Independent or a Catholic school receives is less than the funding a government school receives because the funding model takes into account a non-government school community’s capacity to contribute to the ongoing costs of running the school.

Chart comparing average government funding per sector

Source: Department of Education Non-Government Schools Financial Questionnaire

On top of this base amount, additional funding (or a loading) is provided for six types of disadvantage: students with disability, low English proficiency, Aboriginal and Torres Strait Islander, socio-educational disadvantage, school location and school size. Loadings are fully funded by State and Commonwealth governments and apply to all eligible government and non-government schools.

All non-government schools are in the process of transitioning to their entitlement under the current needs-based funding model and all schools will be funded according to the SRS model by 2029.

Learn more about funding here.

MYTH: Funding non-government schools means less funding for public schools.

FACT: Funding in government and non-government schools is based on number and type of students – there is no fixed bucket of money. In non-government schools, funding is reduced according to parents’ income.

This myth is based on the mistaken belief that all schools compete for a fixed bucket of money – that is, if funding is increased to one sector, it must go down in another. This is not the case.

Funding is driven by the number and type of students in each school based on an annual calculation made by the Australian Government that identifies the cost of educating a child, the Schooling Resource Standard (SRS), supplemented by additional loading for disadvantage such as low English proficiency, being a remote school or educating Indigenous students.

Consequently, as enrolments increase so too does the total amount of government funding. If a sector or school’s enrolments fall, it receives less funding, however, in non-government schools the base funding or SRS schools receive is impacted by parents’ capacity to contribute – wealthy schools receive less base funding than government schools.

Over the last decade enrolments in the Independent sector have increased so the amount of money coming into the sector has increased.

State governments are the main funders of government schools, whereas the Commonwealth Government is the main funder of non-government schools. If the Commonwealth Government were to withdraw funding from non-government schools, it does not follow that state government schools would increase funding for government schools.

Learn more about funding here.

MYTH: Independent schools get more money than government schools.

FACT: Non-government schools save governments money and contribute significantly to the economy.

Independent schools rely primarily on parents for funding, with around half of recurrent income coming from private sources, although the proportions vary between schools.

Misleading comparisons are often made between school sectors based solely on the amount of Australian Government funding they receive. School funding operates under a shared-responsibility model where the Australian Government is the majority funder of non-government schools, and state and territory governments are the majority funders of government schools. So, the only meaningful way to compare funding between school sectors is to compare combined Commonwealth and state/territory funding.

In 2021, Independent schools received an average of $12,462 per student in total government annual recurrent funding compared to an average of $15,660 for a student in a government school.

Independent schools not only get less government money than government schools, they make a major contribution to the Australian economy

  • 110,412 people are employed in Independent schools, earning $8.8 billion in salaries and wages, and contributing PAYG tax of $1.6 billion and a further $882 million in superannuation.
  • Parents whose children attend Independent schools contribute $7.65 billion annually through school fees.
  • Nearly 90 per cent of all capital development in Independent schools is funded by parents.

Learn more about funding here.

MYTH: Government funding for private schools increases faster than it does for public schools.

FACT: Funding is tied to student numbers and enrolments in independent schools are growing at a faster rate than Catholic or government schools.

Several factors are important in understanding funding growth.

  • Independent schools have had the largest national increase in enrolments of any school sector over the past five years. This has resulted in funding growth.
  • The bulk of growth in Independent school enrolments has been among students from low to middle income families, who attract more government funding. This pushes up the average funding per student for the whole Independent school sector. By contrast, because every government school student is fully funded at the same level, the average for government-funded schools only grows with indexation – regardless of parents’ income.
  • State governments are the main funders of government schools, whereas the Commonwealth Government is the main funder of non-government schools. For some years, state funding for government schools has not been increasing at the same pace as Commonwealth funding for either government or non-government schools.

Learn more about funding here.

MYTH: Independent schools charge very high fees and are exclusive to wealthy families.

FACT: Independent school fees vary widely, with half of independent schools charging less than $5,000 per annum.

In 2021 half of all Independent schools charged fees of less than $5,000 per annum. While the large, well-known Independent schools form an important part of the sector they are not reflective of most Independent schools with only 8 per cent of schools charging fees of $20,000 or more.

The Independent sector also has schools serving extremely disadvantaged communities that charge no fees including;

  • high-needs students with disability attending special schools
  • Aboriginal and Torres Strait Islander students attending remote Indigenous schools
  • highly-disadvantaged students who are no longer in mainstream schools.

Many Independent schools also offer scholarships, all-inclusive fees, discounts for siblings or lump sum payments.

It is also important to remember half of high-income families choose to send their children to government schools.

MYTH: Government funding is used for extravagant building programs in Independent schools.

FACT: Around ninety per cent of funding for capital works comes from the school community and not from government.

Around ninety per cent of the capital costs in Independent schools is provided by parents and donors. Independent schools also finance capital projects by using their reserves, fundraising or borrowing.

Only 11 per cent of capital investment for facilities such as school buildings, grounds and equipment in Independent schools is provided by governments and this relatively small amount of funding is directed to Independent schools with the greatest need. These Independent schools are typically low-fee, outer suburban or regional schools and they often need to contribute additional funds to complete works..

Government and Independent capital expenditure by source

Source: Department of Education Non-Government Schools Financial Questionnaire

Learn more about capital funding here.

MYTH: Independent schools are not as accountable as government schools.

FACT: Independent schools are governed by boards or councils and are also subject to a greater level of educational and financial accountability requirements than government schools.

All Independent schools, regardless of teaching philosophy, faith affiliation, location or the socio-economic status of their students, must be registered by state and territory authorities to operate. Without registration, schools cannot operate or be eligible for any government funding. An Independent school’s registration is reviewed regularly and must be kept up-to-date.

All non-government schools must comply with both Australian Government and state and territory government educational and financial accountability requirements. These requirements include participation in national testing; implementation of the national curriculum; the provision of data on schools, staff and students for national reporting; and completion of an annual financial questionnaire, financial viability assessment and reporting against government grants.

Independent schools also have reporting obligations as charities to the Australian Charities and Not-for-profits Commission, as well as complying with a range of other requirements and regulations covering occupational health and safety, privacy and child protection, human rights and equal opportunity, local government planning, and building and fire codes.

Much of the information about an Independent school is publicly available either in annual Australian Bureau of Statistics reporting, on the My School website, in the National Report on Schooling in Australia or on the Australian Charities and Not-for-profits Commission website.

As not-for-profit entities, Independent schools do not make ‘profits’. Any surplus must be reinvested into the school and cannot be dispersed as ‘profit-taking’ the way that corporate organisations can, where shareholders may receive a share of profits.

Learn more about accountability of Independent schools here.