Monday, May 08, 2017

Gonski 2.0 in the Balance as Turnbull Takes on Catholics

The future of Simon Birmingham's school funding plan hinges on his gamble that the political power of the Catholic lobby is not what it was.

Gonski 2.0 in the Balance as Turnbull Takes on Catholics


Twenty years ago, when the still youthful education minister was only 22, then prime minister John Howard went to great lengths to win Catholic support.

With generous funding for Catholic schools and a conservative approach to social issues, Howard tore a large chunk of the Catholic vote away from Labor and locked it in for the Liberals.

But last week Birmingham and his boss Malcolm Turnbull ripped up the Howard playbook and announced that Catholic schools would no longer be getting special funding deals from Canberra

Birmingham has made it clear he wants all schools, including Catholic ones, to be funded according to a consistent formula, without anyone getting special treatment.

No consistency

At the moment, under Labor's implementation of Gonski, there is no consistent formula. As Birmingham never tires of saying, Labor made 27 different school funding agreements with states and school jurisdictions, which made their version of Gonski school funding cost way more than it should have.

Once it would have been political death of take on the Catholic lobby. But Turnbull and Birmingham are gambling that they can win this stoush and, in their favour, is the fact that the church is not as strong as it used to be.

One reason is that the Catholic system's share of school students has started shrinking. This is a major turnaround. For nearly four decades government schools have been losing student share to Catholic but this trend recently reversed.

Catholic schools decline

Now government schools are now growing in student share and its mainly at the expense of the Catholics. In 2016 the decline in student share suffered by the Catholic system was equivalent to the loss of 8300 students.

Another reason is the reputational damage and loss of authority the Catholic church has suffered as a result of the child sexual abuse scandals. It's difficult to say how deep this runs, but because of the nature of this issue it probably has a significant effect.

For Birmingham, this stand-off with the Catholic lobby is a must win to hold onto support from independent schools.

So far they have avoided criticising Birmingham's Gonski 2.0 plan. This is partly because about two-thirds of independent schools will be winners. But more than 300 independent schools will lose in real terms, with 24 losing in absolute terms, over the 10 years of the scheme's implementation.

So if the Catholic system gets a special deal, independent schools will want one too and Birmingham's funding plan will be falling apart at the seams.

Key concept

The disagreement between Birmingham and the Catholic system comes down to something called the "system weighted average", which is used to calculate how much funding Catholic schools lose as parent wealth increases.

It's a tricky concept, but it's worth taking the time to grasp.

First, remember that a principle of Gonski is that non-government schools (including Catholic schools) have their funding level adjusted according to school parents' capacity to pay tuition fees.

If a school has a lower SES (socio-economic status) level then it gets more funding, and the reverse is also true. A high SES level means less funding.

But for school systems like the Catholic schools, it is done differently. The funding level is not worked out for each school. Instead school systems are allowed to average parents' SES levels over the whole state, treating it as if it were one school.

This system is called the "system weighted average" and sounds reasonable. But, as it turns out, it leads to a significant increase in funding for Catholic schools.

Special deal in disguise?

Why is that? The major reason is that there's an oddity in the formula for funding non-government primary schools.

The relationship between parents' SES level (that is their capacity to pay) and government funding is not a simple linear one. Instead there is a big bow shape in the graph.

It means that at middle levels of SES (right where the average of Catholic schools comes in) schools will get higher funding than if it was a simple linear relationship.

Why did the former Labor government, which did the school funding deal with the Catholics, draw the curve with this odd shape? Was it a special deal which was subtly disguised? It's not clear.

But whatever the motive, the impact is that a large, non-government school system – and the Catholic system is the only large one – gets a significant advantage from using the system weighted average. It's currently worth about $80 million extra a year compared to what they would get if their funding was worked out school by school, as it is for most independent schools.

Line in the sand

Now the "system weighted average" – which leads to this benefit for the Catholic system – has become the line in the sand from which the Catholics say they won't budge.

But it is difficult to see why Catholic schools should get this advantage. Why should they, as low-fee, non-government schools, get more funding than the many low-fee, non-government schools that are not Catholic?

Both groups serve a similar demographic of families who are looking for an affordable alternative to government schools, often for religious reasons. The government shouldn't favour one over another.

There is also another reason why the Catholic school system argues it is disadvantaged and it also has to do with measuring the SES level of school parents.

Quite separately to the issue over the system weighted average, the Gonski funding scheme gives schools a funding loading based on how many low SES students are in the school.

Not exact science

But measuring SES of school families is not an exact science. It is done using census data, and each family is given the average SES level of their immediate neighbourhood, which is a group of about 400 households.

This method can produce interesting anomalies. Let's say there is wide variation in the SES level of a neighbourhood unit and the richer families send their kids to an elite private school while poorer families choose the local Catholic low-fee school.

But, under the funding formula, all families in the area are assigned the same SES level. This means that the SES level of families at the elite private school is understated, while those who go to the Catholic school have their SES level overstated. As a result the private school could get a higher funding loading than it deserves while the Catholic school could see its loading reduced.

This is a sound argument, and describes what is probably a real problem, but no reliable estimates of its impact are known to have been made.

And neither does it make a good case for compensating Catholic schools with more funding, because the argument can equally well be used to say that low-fee independent schools are underfunded.

The key issue in this funding debate is about the system weighted average. If the Catholic school system wins its battle to keep it, then Turnbull's whole Gonski plan is at risk.



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