Australian Independent Schools Could Close After Funding Changes

May 11, 2020 Updated: May 11, 2020

Independent school associations around Australia have warned the federal government that private schools may close if the government changes the allocation of federal funding. However, private Catholic schools have said the new system works better for them.

In a submission to the senate inquiry into the Australian Education Amendment (Direct Measure of Income) Bill 2020 (pdf), the Independent Schools Council of Australia (ISCA) (pdf) noted that independent schools under the new funding calculation method would lose an estimated “$212 million between 2020 and 2029 compared to the funding the sector would have received under the current methodology.”

This loss of funding, the Coalition for Regional Independent Schools Australia (CRISA) noted in the inquiry would cause “fee rises that will cause families with more modest incomes to withdraw from the school,” and “result in further loss of funding, leading to more enrolment losses. Hence the school is placed in a downward spiral towards closure.”

According to ISCA, the federal government provided an estimated $11 billion in funding to independent and catholic schools around Australia in the 2017-2018 period.

Changes to the distribution of the funding were announced by the Minister for Education Dan Tehan on March 2.

Noting that the “Commonwealth funding for non-government schools will be linked to parental income from 2020” Tehan  said that this will ensure the “funding is targeted at the students who need it most.”

According to the federal Department of Education, schools now receive a Capacity to Contribute score (CTC) that is based on the school’s community’s ability to contribute to the recurrent costs of the school.

Based on either data from the 2011 and 2016 census or the federal government’s Direct Measure of Income (DMI) score—the median income of parents or guardians of students at a non-government school—the school will then receive more or less funding from the government.

Catholic Schools Do Better in the New System

Not all private school bodies are unhappy with the changes. The peak body for Australia’s Catholic schools, the National Catholic Education Commission, has noted it was pleased with the new method of calculation.

In a media release on February 26, Jacinta Collins, the Executive Director of the National Catholic Education Commission (NCEC), said that under the old geographical based system of funding family wealth was assessed on the area in which a family lives, not by their actual income.

The old system of calculations meant many low-fee schools would have to double or triple their fees, making them unaffordable to many Catholic school families.

Speaking to The Epoch Times on May 11, Collins said, “The new Direct Measure of Income is a fairer measure for assessing parents capacity to pay and the majority of Catholic schools (around 75%) will be assessed as the same or better off under the new model.”

Collins also noted that she believed that the NCEC would be able to mitigate any fee rises in the future from funding losses.

“The federal government continues to support the capacity of non-government school systems to redistribute funding to support local needs, which will allow Catholic schools to continue to offer affordable fees across the country. Catholic education is confident with this flexibility and the transition arrangements in place; we will be able to mitigate the impact on schools which will see a decrease in funding per student,” she said.

According to the federal education department, schools will have until 2029 “to fully transition to the direct measure of income method, ensuring they are fully able to factor this change across their operations.”