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Major reform of non-government school funding.

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Minister for Education, Training and Youth Affairs



11 May 1999




Families will now have greater choice in selecting which school best meets their children’s needs under n ew funding arrangements for non-government schools announced in the budget today by the Minister for Education, Training and Youth Affairs, Dr David Kemp.


In a significant departure from previous funding methods, Australia’s 2,519 non-government schools will now get Commonwealth funding based on the Socio-economic Status (SES) of school communities. This new system, based on ABS data, will come into operation in 2001.


“The Education Resources Index (ERI), the basis of current non-government school funding, will be abandoned,” said Dr Kemp.


“The ERI has been shown to be inequitable in its application, is easily manipulated and discourages private effort.


“This is an historic decision which will produce a transparent, simpler and fairer funding system for non-government schools.


“The new arrangements will give non-government schools drawing enrolments from low income communities a substantial increase in funding. Schools serving the neediest communities at present receive 56% of Average Government School recurrent costs. Under the new arrangements, they will receive 70%. This represents in 1998 dollars an estimated increase of $672 per primary student and an estimated increase of $762 per secondary student in schools serving the neediest communities.


“The new arrangements will particularly extend choice to low income families. This is a significant step forward for educational equity.


“The new system will also remove disincentives to private investment in education.”


SES based payments in 1998 dollars are estimated to range from a base of $597 per primary and $829 per secondary student through to the maximum funding of $3,049 per primary and $4,235 per secondary student (for schools serving the lowest SES communities).


The Commonwealth provides, on average, 37% of the non-government sector’s funding, with the schools raising 45 % of their funds privately and the remaining 18 % coming from State and Territory Governments.


“The Government will legislate to secure a base level of funding of 13.7% of Average Government School Recurrent Costs to each non-government school student,” said Dr Kemp.


Dr Kemp said that no non-government school would be financially worse off in the move to the new SES arrangements, including the Catholic education systems which were recently re-categorised as a result of the Coalition honouring its 1998 election commitment. Non-government schools which could be financially disadvantaged, will have their year 2000 per capita funding maintained in real terms.


A pilot study of the SES approach was trialled in 1998 with the help and cooperation of about 90 per cent of non-government schools and was accepted as a fairer way of working out what funding a school needed. The SES funding arrangements will not affect Commonwealth funding arrangements for government schools.


Media contact: Samantha Herron 0412 639 754 or 02 6277 7460