The price paid for discounting the social and political impact of your decisions is going to be high.

The role of “Poster Schools” in funding a fairer, more cost effective education system.

Richard Wilson


National Commission of Audit member and former government minister Amanda Vanstone made comments recently in the Sydney Morning Herald[1]on the education bill facing the nation over the next few years which caused me to revisit some ideas originally compiled in a briefing paper for the NSW Parents Council in relation to its submission to the Gonski Committee in 2011. Vanstone says “Their (Labor’s) so-called “Gonski” system had different funding arrangements state by state for state schools, then different again for the independent and the Catholic system. Labor thinks money can fix everything.” The former minister went on to argue in that “money spent unwisely is money wasted”.

“Gonski” unfortunately has become a catch-all phrase for either all that is good or all that is bad with education in Australia depending upon which side you are on. However, for the record, all school systems (Independent, Catholic and Government) had significant input into the Gonski Committee and all were largely in agreement about insuring superior outcomes for their respective constituencies. It was the Gonski Committee’s job to provide a solution based on the bipartisan approach shown by the parent bodies across the three school systems. Parliamentary committee reports and policy decisions invariably get lost in translation and hence Gonski became a dirty word.

Kevin Donnelly cites in his May, 2014 article in the Australian[2]  under the heading “Complexity of the funding model”, section 9.7 APPENDIX Volume 1, “new school funding arrangements are complex, inconsistent and lack transparency”. He argues that instead of delivering a national funding model, “we have a situation where the states and territories and Catholic and independent schools sectors have their own approaches to allocating funding to schools”. This writer suspects that this was the result of expediency over-ruling all else in the drive by the then government to announce a national deal prior to last September’s federal election. This has resulted in a “dog’s breakfast” rather than a funding model.

Jennifer Buckingham’s (2014) recent paper for the Centre for Independent Studies[3] focuses on Vanstone’s “money spent unwisely is money wasted” argument. She puts forward eight ideas as potential money savers and value enhancers as follows:

  1. Abolish the federal Department of Education
  2. Reduce the cost of state and territory bureaucracy
  3. Remove mandatory class sizes and eschew class size education policies
  4. Revise the federal government funding model
  5. Remove mandatory class sizes and eschew class size education policies
  6. Provide bursaries for low income students to use at non-government schools
  7. Charge high income families to attend government schools
  8. Reduce the oversupply of teachers by diverting entry standards to teaching degrees and
  9. Decentralise teacher employment and make it easier for teachers to dismiss ineffective teachers

Buckingham’s proposals are well argued in her paper but a really steps to take rather than an overall framework that Vanstone, Donnelly and others are calling for. This paper is an attempt to a possible framework to work within; an unconventional approach which the writer argues enables many of the suggestions put forward by educationists to be handled in a less controversial manner than might otherwise be envisaged.


The central thesis on which this paper rests is that it is a parent’s right to choose how and where their children are educated and that no family is discriminated against in relation to that education.

As a free society we must invariably start from the position that the government is elected to serve the interests of the people rather than to control them and for this contract to work, the people must be capable of making reasonable judgments as to how they want their government to respond and how much “governing” of  them is necessary.

If this premise is accepted by the Australian people, then we should also agree that the responsibility for educating one’s children rests with parents, leaving government’s prime responsibility to ensure that educational opportunity is afforded to all regardless of class, culture, creed, colour or any other potential source of discrimination.

This paper submits that to achieve this any proposed funding model must necessarily be focussed on parents individually rather than delivered via a broad-based and consequentially discriminatory socioeconomic model.

On that basis it is essential that parents are placed at the centre of the funding model - not schools, not governments or any other group. It is parents who must decide where their children are to be educated and whether the education on offer is what they want for their children and within certain constraints related to acceptable educational content, be free to move them to somewhere more acceptable to their moral and social and intellectual world view.


Leading educationist Diane Ravich makes the following important observation in her 2009 book:


“The fundamentals of good education are found in the classroom, the home, the community and the culture, but reformers in our time continue to look for short cuts. Our educational problems are a lack of educational vision not a management problem that requires the enlistment of an army of business consultants.”  Diane Ravich[4]

Not all children are suited to, interested in or, have the capacity to complete university. Many writers are now seeing the “one size fits all” approach with a university endgame is narrow-sighted which is falling short of serving the interests of the community as a whole.

In the words of Mathew Crawford from his book Shop Class as Soulcraft  “if your washing machine breaks down you can’t call China” - likewise build a house, fix a car, mow the lawn, change a light bulb, repair a leaky tap and on it goes. Children need to be free to pursue their area of interest outside of an academic score which may be irrelevant to their chosen path. Crawford recounts:

 “I started working as an electrician’s helper shortly before I turned fourteen. When I couldn’t get a job with my college degree in physics, I was glad to have something to fall back on and went into business for myself…I never ceased to take pleasure in the moment when I would flip a switch and there was light” (Crawford, 2010)[5]

Learning is more than NAPLAN scores.

Federal governments have sought to exercise greater control over education by using minimum standards performance on Naplan as the basis of school funding regardless of the challenges a particular school may face e.g.

“When you are teaching in a school where the kids are “bouncing off the walls” a major breakthrough is getting them to sit down in class and start listening. Parents may regard a change in their child’s behaviour as every bit as important as reading when their child can do neither and is destined for reform school”. (High school teacher – anon)

This means that issues such as location, incidence of children with disability at the school, teacher quality, administration skills, social and cultural factors, psychological problems and socio-economic issues drop off the radar but all may be critical to successful outcomes on any test. Many educators are starting to seriously question the wisdom of evaluating the performance of a school purely in terms of a basic minimum standards measure with no regard to students who do not want a university career. High performing students across sporting, music, science, trades and other creative and physical endeavours are “thrown overboard” under this simplistic model of achievement measurement.

Acclaimed educators like Professor Ken Robinson are becoming increasingly critical of one dimensional testing. Creative educationists make the point that “we owe it to every child to help them find their “element”. The thing that they can do really well and that is what education is all about.”[6]

Reading, writing and arithmetic of course must be a precursor to any streaming to areas of interest and capacity but not the basis of an assessment as to the absolute worth of a school. Any principal knows that results year on year can be influenced by a large number of external factors including core competence of the student cohort itself, level of interest in academic studies, teacher movements (outstanding teachers may move on), level of distraction at the school e.g. construction programme and many other social, cultural, psychological and physical factors.

David Brooks has been op-ed columnist at the New York Times for twenty years. He is also a contributing editor at Newsweek and the Atlantic Monthly. He puts the case in an address to the Commonwealth Club in Palo Alto, California in March 2011 as eloquently as anyone:

“We have spent the last two or three decades rearranging the bureaucratic boxes – big schools, small schools, charter schools, vouchers and a whole series of reforms that produced disappointing results because they skirted the core issue which is that individual relationship between a teacher and his student and the reality is that people learn from people they love but of you mention that at a congressional hearing they look at you like you were Oprah!”

Brooks says we have an incredible paradox where politicians who are some of the most socially attuned people on earth when they are on the road being politicians but take a “completely dehumanised budget office view of humanity” once back in Washington.[7]

Even the Chinese are realising that their top down training system isn't working despite their stellar performance on international tests which many Western educators are currently lauding. A number of leading Chinese educators are openly questioning their approach which, while producing high test results, is failing to deliver any entrepreneurs or even people with any initiative. Sun Boohong Shanghai Academy of Social Sciences said “what we do is not education but academic training” and Jiang Xueqin, Deputy Principal Peking University High School argues that Chinese teachers are very good at preparing students for standardised tests and for that reason they are failing to prepare them for higher education. “Schools emphasised testing too much and produce students lacking in curiosity and ability to think independently and critically”.[8]

The cost of producing a successful school according to a range of agreed criteria can be readily identified today. This is not a “one-size-fits-all” solution but within the matrix of different schooling challenges, some schools are currently working well and producing great outcomes, notwithstanding the problems inherent in the system. We need to find out what it is or as Professor Robinson would say, “the element” that is enabling them to deliver on budget now.

It is often said that critical to the success of a child at school is the parent involvement in one way or another no matter their circumstances or their cultural background. Current approaches cement control of education in the hands of government and increasingly the federal government which has no constitutional brief other than financial in this area.

Problems with “high stakes” testing.

Notwithstanding, over the last fifty years we have seen some federal governments move to wrest greater control of the educational space from the states through funding and enforcement of national regulations. This has served to hamstring performance simply by increasing the amount of paperwork independent of the penalties for non- compliance. The ability of the federal government to deliver high stakes reward or punishment as is the case in the UK and USA using what are increasingly controversial and divisive testing methods, has led to a massive gaming of those systems, out and out cheating and all manner of deception simply because the stakes are so high. It is happening in Australia as well and will only get worse while NAPLAN remains the final arbiter on the direction of education and funding rather than acting within its original purpose as a guide to minimum standards. Further, with the high stakes approach, the opportunity always exists for the agenda to become politicized.

It is arguably advantageous to have a “federated” education system however strictly speaking there is no justification, financial or otherwise, for a “federal” education system.

A System in Balance

Although the funding mechanism and its adjudication may be broken, the system itself is largely in balance thanks to Australia’s history. The Australian education system is already one of the most equitable in the world short of perhaps small-population, culturally and racially- homogeneous western nations such as Finland, Iceland and some of Scandinavia. In Australia, unlike USA, UK and Canada where just 10% of children attend non state schools, the percentage in Australia is 35% overall and 40% for high school. Even in the preschool setting two thirds of registered providers are private education centres. This makes our situation unique. Not only has non-government school education been cheaper in Australia, it is also less elitist with a miniscule percentage of all non- government schools classified as elite. Parents of non-government school pupils come from across the socio-economic spectrum and often have little more in common than the desire to choose non-state-run education for their children. Curriculum issues aside, the system itself is largely in balance and any significant change to the mix of education options could crash it.

The Australian education system arose out of a social compact between church and state in the late 19th century.  The compact came about because the people of NSW, Victoria and the other states believed the “social good” needed protecting i.e. those things that cannot exist purely for profit but in the interest of all people. It continues today although the church itself is less prominent and non-denominational schools are more prevalent. More than nine ten non- government school options in Australia are still delivered by not for profit institutions supported by church or other groups. Under the not for profit model, any surplus funds are reinvested in the school rather than paid to shareholders as dividends. As a result of this and government support, Australia enjoys lower school fees than many Western countries and as a result, far more Australian parents are able to exercise choice over the type of education their children receive.

How would a Standardised Funding System Work?

As Vanstone, Donnelly and many other commentators have pointed out, the current system is a hotchpotch of different permutations which will render it almost impossible to administer at both state and federal levels. Therefore any successful funding model would need to work for both government and non-government schools although the source of funds may differ. State governments would ideally become solely responsible for funding and controlling their respective state education systems and the federal government would provide support directly to the non-government sector. At the present time both levels of government fund both systems. Under this proposal the states would finance and be responsible for only their own state education system. This would immediately eliminate conflict between state educators and the government over how much of state monies is being handed across to the private education system. If the federal Department of Education were abolished then the funding and administration might fall under either Finance or Treasury. The education system needs no duplication at the federal level. Education through the non-government sector is run by its various bodies and so long as it conforms to state requirements then it should require no other policing which would effectively be the domain of independent boards e.g. NSW Board of Studies whose role could be extended to the management of minimum standards for all schools in their respective states or even nationally if it could be agreed.

Establish a System of Funding Which is Fair

Any funding system must be fair for all Australians but particularly for those less able members of our society. However, this should not be entirely at the expense of the entire society. It is evident that  Australians arguably better off  already pay a substantial share of the personal tax take. Graph 1 indicates based on ATO figures for 2008-2009 that the top 15% of personal income tax payers account for 56% of all personal income tax receipts whereas the top 30% account for three quarters of personal income tax collected. In contrast, the bottom 40% of personal income tax payers paid less than 7% of all monies received in 2008-2009. [9]

Graph 1

60% of Households Under Water Every Week

The method used to determine the equity in wealth in a country is called the Gini index. [10] Australia’s comparatively low Gini coefficient shows it to be one of the fairest Western nations in terms of wealth distribution and considerably more fair than the US, the UK or the largest European nations. Despite this level of equity most Australians have no money left at the end of the week. Graph 2 below shows that only those in the top household income quintile i.e. Top 20% of household incomes after tax, are capable of saving anything based on the ABS National Household Expenditure Survey 2008-2009 and the reason that according to recent reports, 70% of households receive some type of government support.[11] Any additional taxes on either the middle or fourth income quintile would put them further under water which is why the idea of deficit tax is receiving so poor a reception. It is only at a point north of $200,000+ household income where there is likely to be sufficient surplus available to meet additional taxes according to Graph 2. Because education and health costs are rising at double the CPI annually, the situation is getting worse faster for families because they are the ones who use and pay for health and education services most - especially education.

Graph 2

Income Tax Discrimination Toward Australian Families

Despite Australia’s Gini coefficient, governments must be made aware that families are suffering most from the present tax system. They must also be made aware that those who choose to spend their disposable income on education as opposed to entertainment for example should not be discriminated against for their higher prioritisation.

Graphs 3a and 3b compare the Gross Household Income (GHI) measure with the ABS devised Equivalised Disposable Household Income (EDI) index of income. [12] This comparison demonstrates that when family income is adjusted for an equivalent cost of living to that of a single person, families lose out despite superficially appearing to be better off. When this situation is adjusted further to take into account issues such as remote location (high transportation and accommodation costs), students with disabilities (high personal care and medication add-ons) and other constraining factors, then those parent cohorts are even more hardly harshly discriminated. The H/H Expenditure Survey data presented in Graphs 3a and 3b clearly demonstrate how the tax system severely discriminates against families and the reason any mooted tax increase particularly for those currently paying the bulk of the income tax, has been so badly received notwithstanding so-called family allowances which we can expect to be “managed down” in the forthcoming budget.

In the Graph 3a it is clear that Singles and Couples become a far greater proportion of the top income quintile (at the expense of families) once the EDI test is applied to income. Families move out of these two top segments at a significant rate which is clearly evident in Graph 3b below. After adjusting for the cost of running a family and higher levels of taxation, 40% of parents previously placed in the Top Quintile purely on gross household income drop out. A further 21% also drop out of the Fourth Quintile and in reality sit in lower quintiles. The winners are dual income couples without children. [13] The impact on family households is clearly demonstrated in Graph 3b. When disability costs are estimated for families the position is far worse or this badly impacted cohort.

Graph 3a

Graph 3b

Graph 3b shows that while dual parent families (as opposed to single parent families) have the highest level of gross income of any segment, on an “equivalised” basis their position changes dramatically.

Disadvantage Vs Disability

It is important that in any funding model that disadvantage and disability are clearly distinguished. Disability refers to the actual person (body and mind), whereas disadvantage refers to circumstances e.g. home environment, location, cultural, socioeconomic factors and so forth.

Funding should apply to individual parents taking into account the extent to which these considerations mitigate their circumstances irrespective of absolute level of income.

What would the funding method be?

All families would receive a means tested schooling allowance based on their “equivalised disposable income” score. That allowance would range from 100% funding for state school attendees for the average recurrent cost per student at a state school to a minimum allowance of 10% for those in the highest income bracket in the country (e.g. annual household income of say $200,000 or more). Parents would be able to choose the type of school e.g. government or non-government, academic or skills based, religious or secular and so on that may suit their child’s disposition, core competencies or cultural orientation rather than to schools dictated by governments or international bodies with their own agendas potentially unsympathetic to the interests of Australian parents.

Under this model, is hoped that the greater personal responsibility for their child’s education placed on parents will for a majority produce greater engagement with their child’s school. As a consequence, schools will have to perform better and to a profile (ethical, trade-based, spiritual, artistic, sporting or academic) that parents seek. It should also be pointed out that this model would not usually apply in ddysfunctional family situations where a social safety net hopefully would already be in operation.

The Funding Model

School funding can be shown in two dimensions - Capital Expenditure  and Recurrent Expenditure which is day to day running of the school. The latter is presently 100%subsidized by federal and state government governments for state schools and up to 70% of average recurrent expenditure in state schools for nongovernment schools.  The amount received by non-government schools depends upon the type of school, fees levels and the socioeconomics of the areas in which the children come. It ignores individual circumstances and provides an average level of funds for each non-government school. Many schools, particularly Catholic systemic schools and smaller regional independents may be subsidized up near to the 70% maximum due to the lower socio-economic catchment areas from which the student body is sourced.  

In the case of state schools both capital and recurrent expenditure is paid by government although in well-off postcodes specific school parent and citizens associations may make a significant contribution. For non-government schools with the exception of the former federal government capital expenditure program, the school must find capital funding.

Identifying the “Poster Schools”

The key to having a successful model is being able to see it working. The truth of the matter is that there are already examples of successful schools within an apparently “dysfunctional” system. There is clear evidence that there exist within each state, within each region (however remote) and within levels of disadvantage and cultural difference, schools whose students are delivering above average performance despite their circumstances. This leads to the $64000 question…

What is it about these “poster schools” that enables them to perform at an above average level despite their circumstances?

The examples of “poster schools” across a range of educational cohorts provide a framework to enable an entire system to be re-engineered to the characteristics of those “poster schools” across the various educational cohorts to form the basis of a new system. That system should be able to operate on the same financial basis as the “poster schools” are already doing. Such an assessment would not be based purely on NAPLAN scores. It would include a wide range of educational criteria including social, cultural and personal development, creative expression and physical health as well as academic and intellectual performance. This is happening in some schools now. Not everywhere, but in some schools across all dimensions of difficulty as well as government and non-government sectors.

Poster Schools Approach Can Contain Costs

Many barriers exist to getting the education funding system right however the poster schools approach shows how some schools are getting it right now under present funding. We need to determine what it is about those schools that delivers positive outcomes no matter which cohort they belong to i.e. despite the dimensions of constraint that may be operating to impact outcomes. Table 1 below provides an example of the factors likely to negatively affect outcomes yet for some schools they have been overcome notwithstanding those constraints.

Table 1

The “poster schools” for each cohort will deliver at different cost levels depending upon the level of disability and disadvantage those schools have to manage in their communities and the degree of parent support they receive e.g. volunteering time for support roles at the school or where qualified personnel are available volunteer teaching, particularly in areas such as arts and crafts or basic skills. Whatever the process used at each poster school, a real life example of what can be achieved is available at the present levels of funding. 

The Poster School model of funding can be employed across an entire system, from poverty to privilege, from inner city to outer suburban because in each of those cohorts along with others equally important, are schools which are performing well above average for their cohort.

The role of research will be to map the features of those schools as the basis for building a working system cohort by cohort in order to determine how to optimise both capital and recurrent expenditure funds available and outcomes achievable cohort by cohort.  Evidence emerging from leading education researchers such as Whitehurst[14] is increasingly showing how superior teams – teaching talent and management might be the key to this but that is the subject of future work.

Using Equivalised Disposable Income as a basis for funding.

The present system is clumsy and unwieldy as well as politically unpalatable to those in the state school sector who see their employer (state) diverting its funds to its competition.  The trouble with the existing model is that it makes no allowances for the impact the tax system has on families and in particular, families with children with a disability a. Equally, the system makes no allowance for parents who have location or other disadvantages such as language, cultural differences and so on.

The ABS Household expenditure Survey 2009-2010 released (Sept 2011) offers one of the most valuable measures for those lawmakers wishing to remove inequity from the system. In other words the economic power of families can be more realistically equated to couples and singles in terms of their equivalised disposable income (EDI) on the basis of their differing obligations.

By looking at each family in terms of its EDI (equivalised disposable income) and then overlaying that with any additional deflators based on disability or disadvantage, it is possible to assign a score to each household in order to make the fairest possible allocation to that family which reflects its true economic position while not discriminating against those who place high value on education.

Optimising the Responsibility and Accountability Equation.

Responsibility for education rest with the states but responsibility for income tax collection lies with the federal government. This paper argues that this should not change although there is now dispute on creating a federated education system where the states agree to standardised practices across the country. This is entirely different from a federalised federally controlled system where the federal government  sets the agenda, manages it and polices it.

Under this proposal accountability is clear. The states can be held accountable for how they spend the expenditure allocation on the basis of the budgeted amounts required by the model to deliver the outcomes that have been achieved by the Poster Schools. The costs of delivering state education to the standards agreed must be identified within each state and territory against their GST allocation and delivered in accordance with the costs of operating each cohort in the matrix along the lines of its Poster Schools.  

State governments would no longer be required to contribute to non-government schools and would be free to use that money on state school expenditure. Correspondingly, the federal government would reduce that federally funded allocation to state schools by the equivalent amount and increase by that same amount the allocation to non-government schools. Table 2 below shows how in a zero sum game the reallocation of funds would occur with the state government controlling the purse on state education and the federal government subsidizing parents according to individual family means testing together with disability and disadvantage impacts, i.e. overall capacity to pay after income equivalisation and disability and disadvantage allowance.

Table 2

Determining individual student allocations in state and independent schools.

At this stage more work is needed on the allocation system based on household EDI (equivalised disposable income) and the additional impacts of disadvantage and disability, however we would envisage the process developing along the following lines:

  • Each family would be reviewed to receive education allocation for either a state or a non-government school education on a per child basis.

In the same way that schools could be reviewed to determine how much it costs to operate the “poster schools” to produce the outcomes achieved within each cohort, we need to determine how much more it cost parents to raise children where disadvantage or disability exists – e.g. costs of transport to and from school, cost of care for children with physical, intellectual and psychological handicaps, over and above normal family costs where such disadvantages were not present. This can be measured within existing ABS data and surveys e.g. the latest H/H Expenditure Survey as well as current tax returns. It is possible to review their expenditure on support services and medical over and above the average for similar families without children with disabilities. It may also be necessary to impute the cost of an unpaid full-time carer into the equation where applicable. Cost allowance attached to the care of children with disabilities would also need to be deducted from the incomes of families when assessing individual parent allocations over and above EDI correction factors.

  • The state allocation would be based on the cost per child at the Poster Schools within each education cohort e.g. region, location, socio-economic factors, cultural etc.)
  • Determine by equivalised percentile the size of the individual student allocation per family whether state or non-government school.  For example those in the 60th EDI percentile or lower may not be required to make any direct contribution to a state education but above the 60th percentile a sliding scale might operate increasing the percentage contribution on a progressive basis from the 61st percentile to the 99th percentile.

The allocation would be a percentage of the recurrent cost ranging from 10% to say 70% of the cost of educating a child under the baseline state poster school standard as proscribed. This amount allocated each parent would not be an average of all schools but the actual cost for delivering the accepted standard at the relevant poster school; the cost as identified in each school cohort within each region.

The family would not receive the funding but the school would receive the funding directly from either the state or federal government depending upon whether the school was a state or non-government school. This funding could not be used for anything other than education by states and territories.

  • On the basis of this assessment, each family would be allocated a per child amount for their education which would not be paid to the parent but allocated against the fees at the particular school attended whether state or non-government. In the case of a particular child attending a state school the parent allocation would come from the state and depending upon that allocation, they would be required to top up the balance of the fees to the fee payable. In many cases this will not mean additional tuition fees at state schools and a maximum 30% of fees payment in the case of non-government schools.
  • In the case of a child attending a non-government school the parent allocation would come from the federal government and again depending upon their means rating. [15]

     Now it is important to note what the parents would pay the school would now depend upon the school’s overall tuition fees less their government. Something similar already operates in the private health insurance system. The allocation to the school would therefore change depending upon the family and the child who would depending upon their means pay the balance in either the state or the private system..

  • Under this framework, non-government schools would be motivated to offer scholarships or even encourage lower and middle income families with talented pupils to participate to ensure their family mix was such that they received adequate government allocations to keep costs at a level that ensured their schools remained financially attractive to parents.

Capital Expenditure Funding

This area is not discussed in this paper but will be the subject of future investigations. Under a user pays system based on means testing operating in both the government and non- government system, school capital expenditure might continue to be funded through fund raising in the case of non-government schools but in both systems this could be supplemented through the issuing of school bonds to parents with a range of offset benefits.



With the maxim “money spent unwisely is money wasted” in mind, this paper presents a funding model which has the potential to improve equality of educational opportunity and superior education outcomes while managing costs more effectively.

At the centre of the thesis is the notion of parent-centred or family-centred funding which acknowledges that functional parents should be able to choose how and where their children are educated without fear of discrimination. The proposal sets out a method for assigning funding per child to each family based on its means rather than a generalised regionally based estimate of economic capacity. The funding is not paid to the parent but allocated to the school that parents choose for their child. In many cases this may be 100% of average annual state school recurrent expenditure per student if a state school or up to 70% of that amount in the non-government sector based on individual means testing.

Using ABS Household Expenditure data, this paper demonstrates how families are discriminated against under the present taxation system and in order to counter this, it is proposed that means testing of household income is based upon the ABS’s Equivalised Disposable Income (EDI) index together with an index of disadvantage and disability to further adjust misleading gross family income figures.

It can be argued that if funding were based on the income of individual families, there may be less chance that some schools could engineer a favoured financial outcome over and above the mix of children attending. As a result, they may be incentive to offer opportunity to those who may not otherwise have been in a position to take it.

Further, under the proposed funding model, the onus rests with the school to perform to the parents’ expectations rather than solely to government tests although these are not discounted as of value in determining basic abilities of student cohorts. Education it is hoped, will be restored to a more broad based approach and while not overlooking the basics skills at any stage, schools feel free to incorporate  sports, arts, crafts, creative writing, robotics and other general skills into their offering as a means broadening education and ultimately streaming students to their  areas of greatest interest and ability. These offerings may differ depending upon the focus of an individual school with some becoming strictly academic in focus and others more directed to arts and crafts or sporting and physical activity. Given that parents have an ability to choose the direction for their children a one size fits all education approach may no longer be necessary.

This paper also suggests that both state and non-government education should be based on a the same user pays system with the most financially able families making a contribution whether at a state school or a non-government school according to a series of formulae which take into account the present level of tax discrimination against families. Moreover, this approach provides the states with additional revenue from those parents who choose a state school for whatever reasons by allowing state governments to recoup some of the cost of state education from those who are sufficiently well off to pay. This will not only insure that acceptable standards at state schools can be maintained but also will reduce pressure on state education spending and borrowing.

The paper introduces the concept of the “poster school” as the basis of the new funding model. Poster Schools are schools that are performing well under the present funding model despite its flaws i.e. superior results within existing budgets. Despite problems with disability, location, language, cultural and social issues, some schools manage to post great results and the question is posed: “what is it that these schools are doing to create their success? By reverse engineering their approach to school management and teaching and other elements in the success mix, we can build a cost efficient working model for all schools within a particular cohort such as location, disposition, disability, disadvantage, location or cultural heritage.

The new model allows state and non-government schools to be readily accommodated within the same framework although their source of funding will differ.

It is proposed that state governments have sole responsibility for funding and managing state schools and the federal government provides funding for non-government schools. This is expected to eliminate a lot of friction presently in the system given that state school proponents argue that their employer is actually funding their competitors.

The paper also suggests that federal government responsibility should focus on funding rather than to duplicate the education departments of each of the states. It is suggested that funding could be managed through one of the existing financial departments at the federal level.

The paper also suggests there is virtue in a “federated system” of education where states agree to a standardised system more or less, but not a “federalised system” where control is largely in the hands of Canberra and has the potential to be used for political purposes.


The Author

Richard Wilson is a social psychologist with 30 years’ experience in marketing, communications and social and political research. Wilson pioneered lifestyle research and product based market segmentation in Australia and during the 1980’s launched Australia’s first farmer research panel providing ongoing statistics on all aspects of agriculture from the primary producer’s perspective. In the 90’s he created the MLI system linking media and markets in a way that had not previously been done in Australia. In more recent years however, Richard has focussed on the not for profit sector across community groups, health care and education.

Two young children moving though the school system has given the author a strong interest in where teaching and learning are headed and given the direction of education in much of the Western world centred on straight line thinking and simplistic notions of educational success, he is anxious to ensure that Australia does not follow the same disastrous paths as many other nations. The challenges of the century are vast and without a population capable of critical thinking who is able to hold its elected representatives and those so-called “experts and advisors” behind modern educational policy to account, we are destined to a second class existence in two generations.

Richard’s voluntary work extends across education, professional associations and local community representative bodies dealing with business and government at all levels. In recent years he has been a member of the executive committee for the NSW Parents Council, the peak body representing parents of children at NSW independent schools, Vice President of NSW Parents Council and NSW Representative on the Australian Parents Council. He has also been a member of the Sydney Branch Executive of the Australian Psychological Society. Insofar as local government matters are concerned, Richard has also been active in local precinct committees in his area and involved in liaising with his local council as well as State Government on matters related to roads, urban development and community services.

A consultant and advisor to political leaders, educational bodies and not for profits as well as mainstream corporations, the author provides a unique perspective on the nature of human action in the 21st century. His vision remains for a world where organisations through a sharper understanding of people, politics and media deliver a vastly superior level of “social good” thereby ensuring success beyond their wildest imagination. Richard Wilson is a member of The Australian Psychological Society, the Society of Australasian Social Psychologists, ESOMAR, the Australian Market and Social Research Society and other voluntary bodies.





[1] “The Audit of the present is the Vision of the Future”, Amanda Vanstone, SMH, p19 May 2, 2014.




[2] “Audit Commission better than Gonski, but wanting on schools funding model”, The Australian, May 05, 2014.




[3] Buckingham J “Target 30-Reducing the Burden for Future Generations”, Centre for Independent Studies, 2014.




[4] Ravich, Diane “Death and Life of the Great American School System”, Basic Books, NY 2010




[5] Crawford M.B. “Shop Class as Soulcraft” , Penguin, NY, 2009




[6] Robinson K & Aronica L,”The  Element- How finding your passion changes everything”, Penguin, London 2009




[7] David Brooks, Address to the Commonwealth Club, Palo Alto, March 22 2011,




[8] Articles appearing in WSJ Dec 8, 2010 and




[9] (ATO Personal Taxation Statistics 2008-2009)




[10] The Gini coefficient measures the inequality among values of a frequency distribution such as levels of income). A Gini coefficient of zero expresses perfect equality, where all values are the same (for example, where everyone has the same income). A Gini coefficient of one (or 100%) expresses maximal inequality among values (for example where only one person has all the income). Gini coefficient is commonly used as a measure of inequality of income or wealth. For OECD countries, in the late 2000s, considering the effect of taxes and transfer payments, the income Gini coefficient ranged between 0.24 to 0.49, with Slovenia the lowest and Chile the highest. Australia tends to hover around 0.30 on most measure of Gini which is below (i.e. more equal) US, UK and most of Europe. Wikipedia and




11. Business Insider Report, May 1 2014, "Audit Commission:15 Government Spending Areas That Are Causing Structural Budget Problems".

[12] Equivalised Disposable Household Income

Estimates of disposable income as opposed to gross household income are derived by deducting estimates of tax liability, Medicare levy and surcharge from gross income data in the survey of Income and Housing. Larger households normally require a greater level of income to maintain the same material standard of living as smaller households and the needs of adults are normally greater than the needs of children. The income estimates are therefore adjusted by equivalence factors with respect to household size and composition while taking into account household economies of scale.

EDHI is expressed as the amount of disposable income that a single person household would require to maintain the same standard of living as the household in question regardless of its size or composition. Clearly this and not SES measures must be used in any formula if there is to be no discrimination against families in this review.




[13] (Source ABS Household Expenditure Survey 2009-2010 released September 2011)




[14] Chingos MM & Whitehurst GJ (2011), “Class Size: What Research Says and What Research Says and What it Means for State Policy” Brookings Paper, May 11, 2011. Also see Russ Whitehurst, Testimony on early childhood education to the Committee on Education and the Workforce of the U.S. House of Representatives on February 5, 2014.




[15] For children attending non-government schools the situation may be as follows:

Set a maximum allocation level as a percentage of the average recurrent expenditure at the acceptable standard state school that matches the non-government school. At present the maximum is 70% of an average but it may be 75% of the equivalent poster school’s recurrent and maintenance expenditure. Allow for all parents with household income falling under the 61st percentile a full allocation for their children attending a non-government school with equivalent profile to the state school.

Then, on a progressive basis from the 61st quintile to the 99th quintile adjust the allocation accordingly, initially on a small scale. Upon reaching say, the 85 percentile, then the allocation reductions would become more progressive falling to a minimum allocation of say 10% of the recurrent expenditure at the 95th percentile.

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