The public education lobby misrepresents the current funding system while concealing the extent to which the Gonski panel has endorsed it.

The private education lobby pretends there is a threat to private school funding in the Gonski report when it offers the best deal ever to private schools.

The small government brigade tells us that spending money on education makes no difference as the system has been captured by the “providers”. The providers themselves, who are worse paid relatively speaking than decades ago, see no evidence of this.

The current system is illogical and unjust. Indeed, the systemic private school authorities saw how absurd it was and only took part when their schools were offered compensation for the losses it would otherwise have forced on them.

The public education lobby never tires of pointing out that the federal government allocates the majority of its spending to private schools even though they educate a minority of our children, while ignoring the facts that state and territory governments allocate the majority of their spending to government schools and that this makes overall public spending twice as high for government school students.

The Gonksi report fixes this problem as it recommends that each level of government allocate the same percentage per student to each sector. If the federal government contributes 70 per cent of its per student spending to government schools and 30 per cent to private schools, the states and territories would do the same.

The first step in funding private schools is to determine the cost of educating a student in a government school. This cost is calculated separately for primary and secondary schools by dividing the total recurrent expenditure by the number of students enrolled. The result is called the average government school recurrent cost (AGSRC).

The AGSRC formula includes the cost of running lots of small country schools and is then used to fund large private schools with economies of scale.

The AGSRC formula includes the cost of students with additional needs and ignores whether or not they are enrolled in the private school being funded. If a student who needed English as an Additional Language teaching left a private a school and enrolled in a government school, the private school he or she left would get more money.

The Gonski report fixes this problem by separating the cost of educating a mainstream student from that of educating a student with additional needs. It proposes a school resource standard (SRS) for the former and additional loadings for the latter.

However, the method it uses to calculate the school resource standard is complex and unnecessary, as it is based on the adjusted costs of so-called high-performing reference schools when more than 80 per cent of the recurrent costs of a school are teacher employment. What we need is a staffing formula.

Currently private schools with the lowest socio-economic rating are given 13.7 per cent of the AGSRC. Those with the highest rating are given 70 per cent.

The socio-economic status (SES) rating is one of the most bizarre features of the current system because it pays schools on the basis of the wealth of the other people who live in the streets where their students come from. The SES model ignores the fees charged by schools and thus penalises low-fee private schools whose students come from better-off areas; i.e., the very schools in the private sector that try to remain inclusive. It is like being charged a fee for a hospital stay based on how well off your neighbors are.

The SES model is so bad for private schools that almost half of them are not funded under it, but under the Hawke and Keating Labor governments’ education resources index (ERI). Thus, despite unceasing propaganda to the contrary, the Labor Party, not the Coalition, is more generous to private schools.

The public education lobby, in a classic own goal, calls this compensation “overfunding”, scaring private school parents and driving them into the arms of the Coalition, even though the Coalition model is worse for private schools than Labor’s old ERI model, making a Coalition government more likely and thus making public education worse off.

The Gonksi report does not fix this problem. It keeps the SES model and then refines it to use a smaller number of neighbours and eventually an assessment of the SES of every parent. It wants to pays schools between 20 or 25 per cent and 90 per cent of the SRS.

It calls this “capacity to pay” and is quite explicit about pressuring parents to pay more. There are two serious defects in this approach.

The first is that it socially stratifies the education system. It does this by punishing low-fee schools that take students from well-off areas by making them increase their fees and thus drives the poorer students out of them. This is what the current SES system would do too, if it were not for the compensation paid to schools that would be worse off under it.

The government has guaranteed that no school would be worse off under the Gonksi system, meaning that any continuation of an SES model would require it to keep paying compensation. The systemic private school authorities know from their experience of the compensation paid under the current model that it will be misrepresented as “overfunding”. It beggars belief that they would allow themselves to be conned again.

The second defect of “capacity to pay” is that it will increase pressure on public schools to charge means-tested fees on the “what’s good for the goose is good for the gander” argument.

The Gonski report is a meticulous and comprehensive document based on sound social justice principles. It sees the problems clearly and solves some of them, but at least two changes are needed to it.

Firstly, the government needs to simplify the determination of the SRS by basing it on a staffing formula.

Secondly, the government needs to end the discrimination brought in by the Howard government against low-free private schools and, rather than attempt to refine the absurd SES model, revert to some version of the Hawke government’s education resources index.

Chris Curtis is a former teacher, who held leadership positions in Victorian schools for 28 years. His submissions to the review can be found via http://community.tes.co.uk/forums/t/576719.aspx?PageIndex=1.