My AFR oped today is on school funding. Perhaps because I’ve been reading too many speeches by Barack Obama, I set out four principles that I thought all sides in the education debate should be able to agree on. I’d be curious if blog readers think that these are actually points upon which it might be possible to achieve consensus.
If I’ve counted correctly, this is my 100th opinion piece. By coincidence, it’s also the first time an editor has used my suggested headline. The article is a little controversial, but less so than my first op-ed, published in the Age on 27 November 1999, in which Justin Wolfers and I attempted to see whether the Donohue-Levitt abortion-crime link held up for Australia. For better or worse, all my opinion pieces – some 80,000 words so far – are on my academic website.
Getting School Funding Right, Australian Financial Review, 25 March 2008
Of all the policy debates in Australia, school funding is perhaps the feistiest. If you have children at school, you’re an instant expert. If not, you can always talk about how things were when you went to school. So even the merest whiff of change is guaranteed to prompt a barrage of talkback calls and bagfuls of letters to the editor. Add a dash of religion and a pinch of class warfare, and you have all the ingredients for a first order political barney.
Yet as Julia Gillard’s recent entry into the debate illustrated, school funding is an area that desperately requires reform. Indeed, it may be that the best way of delivering on the promise of equality of opportunity is to get school financing right.
The last revolution in school funding occurred with the Howard Government’s 2001 shift to fund private schools based on parents’ socioeconomic status. Introduced by then education minister David Kemp, the so-called â€˜SES formula’ aimed to ensure that schools with more students in poor neighbourhoods got more money.
Unfortunately, the 2001 reforms also included a guarantee to all private schools that if the SES funding formula made them worse off, then they would receive their year 2000 funding amount, adjusted for inflation in the education sector. Seven years later, this â€˜grandfather’ clause applies to about half of Australia’s private schools; making a mockery of the notion that private school funding is needs-based.
Another odd feature of the current school funding scheme is that private schools do not adjust their fees to take account of differences in the â€˜voucher amount’ that parents bring to a school. For example, high school students in the most advantaged suburbs last year brought their schools just $1333 in federal funding, while those in the most disadvantaged suburbs were worth a whopping $6807 apiece. Yet the typical high-end private school did not offer a $5000 discount to poor parents.
Rather than arguing over particular policies (which themselves often reflect the oddities of historical compromises), the best way of moving the school funding debate out of the ideological mire might be to see whether we can reach agreement over the basic principles that should guide the debate. Here are four core notions that I think all sides should be able to agree to.
First, the wellbeing of children is more important than anyone else. Teachers and school administrators matter, but the top priority of education policies is to help kids, not adults.
Second, we should not penalise parents for spending more on their children’s education. To the extent that education has â€˜positive externalities’ (higher productivity, more social capital, better civic engagement), we should encourage it. There is a real difference between a policy that says â€˜the richer you are, the less the government should give your child’ and one that says â€˜the more you spend on your child’s education, the less the government should give you’. The former targets resources to those who need them most, while the latter operates like an education expenditure tax.
Third, schools should be judged on outputs, not just inputs. At present, the federal government allocates billions of dollars to private schools, but asks little in return. Taxpayers who fund these schools have a right to demand that they provide empirical data such as test scores, dropout rates, or parental satisfaction surveys.
Fourth, funding should be transparent. Parents should know precisely how much government funding they bring to their child’s school.
Acceptance of these four basic principles could lead to better reform of our education system.
Recognising that kids come first, we might agree that it is good for a child to move to a better school (though we might still argue about how to help those who remain).
Accepting that we should not penalise education spending might allow us to revamp the private school funding formula so that all schools are financed according to their needs. Middle-income parents who choose to send their children to high-fee schools should get more government assistance than rich parents who opt to send their children to low-fee schools.
Measuring outputs would help parents select the best school, and let voters find out which private schools are adding value, and which ones are skimming the cream.
And making funding transparent puts the bargaining power in the hands of low-income parents, who can march up to the principal and ask why they’re bringing the school nearly $7000 in federal funds, yet not getting a discount on their tuition.
Ultimately, getting private school funding right is essential if the system is to be applied to public schools, as Gillard has proposed. Tantalising as it is to envisage public schools in the poorest neighbourhoods bidding six-figure salaries to attract the best teachers, there’s a long way to go yet.
Andrew Leigh is an economist in the Research School of Social Sciences at the Australian National University.