Investing in schools: Funding the future

Investing in schools: Funding the future

In his recent budget speech, the Treasurer repeated the Coalition’s usual line about the “record funding” that the Federal Government is providing to schools.  He neglected to mention that the bulk of this funding will be directed to private schools. Nor did he whisper anything about $1.9 billion for capital improvements strictly reserved for the use of private schools only.  

During the last four years the Coalition government has withdrawn all Federal capital funding for public schools. But it did eagerly cough $630 million for private schools during the same period.  

Recently, I published a new report on the vastly inequitable way in which funds for building and capital improvements are distributed among schools, public and private, in Australia.  We have all heard the most egregious examples of over-the-top spending by some of the richest private schools in the country – the orchestra pits, Olympic swimming pools with retractable floors, the libraries modelled on Scottish castles and the helicopters suspended from the ceiling.  But what is often unexamined is that every public school student in Australia misses out on essential buildings and facilities because governments continue to discriminate their funding system in favour of private schools.  

The new analysis of capital investment in Australia’s schools covers the decade from 2009 to 2018. This is a crucial time period as it includes the Rudd government’s unprecedented, Building the Education Revolution stimulus package of 2010-2012 and also the first five years of the current Coalition Government.  

The results of this comparative analysis are shocking and demonstrate how the Coalition’s ideologically blinkered approach to everything to do with school funding have prevented them from picking some of the lowest hanging fruit when it comes to stimulus. There is a huge need for capital improvement works in Australia’s public schools. 

Economists of many stripes have been calling on all governments to engage an aggressive capital investment program to deliver growth and promote future economic development. Schools are ready made sites for investment. As essential social infrastructure, public schools deliver benefits across all communities and support communities doing it hardest

The report cites decades of international evidence from the UK, USA and Europe on how improvements to school environments translate to long term educational and economic benefit. It demonstrates how capital investment in the poorest 20% of Australian public schools, along with targeted increases to recurrent spending, could help generate approximately $5.2 billion every year in economic activity. More than $100 billion in benefits over the next twenty years. An additional annual investment of $3.8 billion per annum would bridge the gap between public and private schools in per student capital investment.

Closing this gap would deliver an ongoing annual return of 37% above investment and an additional 37,000 full time construction jobs – many more than the 1,000 or so jobs that the much vaunted JobMaker has been able to provide to date.

In order to gain this benefit, the coalition needs to be willing to look past their rhetoric and accept the horrible inequity they are literally cementing into place. Ratio of Inequity (ROI) is a new measure I have devised to measure the deep capital investment disparity between school sectors. The difference in capital investment between private and public schools is so extreme that private school capital investment per student can be expressed as a multiple of public school capital investment per student. For example, in every year over the last decade (with the notable exception of the Building the Education Revolution years of 2010-12), this ratio of inequity has stretched from 2.1 to as high as 3.7.  This means that private schools have received per student annual investment in school facilities that is at least twice and as much as nearly four times that received by public schools.

This Ratio of Inequity in investment between school sectors is so extreme that it is more a ratio of shame than inequity. It frames the failure of public policy to provide any semblance of balance in the provision of facilities across school sectors.

This glaring inequity is both costly in its long-term impact and shameful in its discriminatory treatment of Australia’s children. We have seen that the Coalition government is now willing to abandon their rhetoric of debt and deficits. One would hope that soon they become pragmatic enough to be able to see the opportunity of 37,000 ongoing jobs. They would also help realise a recurring $5 billion annual return on investment that bringing our public schools up to standard would provide. 


Adam Rorris is an education economist and policy analyst who has worked for the World Bank, Unicef, Unesco and the Department of Foreign Affairs and Trade. He has worked with all state and commonwealth departments of education as well as representatives of the non-government school sector.