A new study has put a dollar figure on what Australia’s public school infrastructure crisis is costing the economy.
New Centre for Future Work research, published on 31 October 2026, found that a permanent increase in public school infrastructure funding would lift the national school completion rate by 1.36 percentage points, meaning a potential $7.3bn boost in annual productivity.
The Australian Education Union (AEU) welcomed the findings, saying the evidence showed school infrastructure spending was an investment, not a cost.
“On World Teachers’ Day, we recognise that improving the infrastructure of Australia’s public schools would not only see more students finishing school, it would also provide huge benefits to Australia’s economy,” said Correna Haythorpe, AEU federal president.
Haythorpe said recognition alone was not enough. “World Teachers’ Day needs to be more than just acknowledging teachers. We need to provide them with the facilities and infrastructure to deliver high-quality teaching and learning programs for all students across the nation.”
For school principals and education executives managing ageing facilities on constrained budgets, the findings add economic weight to longstanding calls for federal action.
What is driving the push for public school infrastructure funding?
The report’s release comes amid a deepening national debate over public school infrastructure, which the AEU has described as a crisis years in the making.
According to the AEU, the Commonwealth ceased long-term capital funding for public school infrastructure in 2017, leaving states and territories to manage construction and upgrades alone.
Over the past decade, private schools nationally have outspent public schools on capital works by $38 billion, including $5.4 billion in 2023 alone. The gap between sectors has continued to widen even as demand on the public system grows.
The AEU launched Australia’s first national inquiry into public school infrastructure in March 2026 to quantify the scale of the problem. The inquiry is chaired by Sharan Burrow AC. It is examining the condition of public school facilities and their impact on student outcomes, inclusion and teacher workloads.
What would $1 billion in annual funding actually change?
The Centre for Future Work report adds an economic dimension to what has largely been framed as an equity issue. Its modelling shows that the construction spending itself generates a significant economic footprint before any long-term productivity effects are factored in.
The research concludes that spending on public school capital infrastructure will pay off in economic, fiscal, human and social terms.
How significant is the gap on the ground?
For school leaders working in ageing facilities, the figures carry immediate weight. The AEU’s 2025 State of Our Schools Survey captured the scale of the problem in the Australian Capital Territory. Only 36% of public school principals said they could deliver the full curriculum with their current infrastructure.
The federal government’s Schools Upgrade Fund provided one-off capital grants to public schools — a measure the AEU says falls short of what sustained investment requires.
For school leaders, the report raises some important questions. Will a permanent funding mechanism follow? Or will public schools continue to manage growing enrolments without the school infrastructure funding the evidence now clearly supports?
The Capital Works report may mark a turning point in that debate. For the first time, the economic case for permanent public school infrastructure funding has been quantified — and the numbers are hard to ignore.