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Budget 1999-2000FACT SHEET MAJOR REFORM OF NON-GOVERNMENT SCHOOL FUNDING In its 1999-2000 Budget the Commonwealth unveiled new and fairer funding arrangements for non-government schools for the 2001-2004 funding quadrennium. From 2001 non-government schools will be funded according to a measure of the socioeconomic status (SES) of their school communities. The new SES funding arrangements replace a system that was widely seen as unfair, complex and an inadequate measure of need. SES is a better system. Since 1985 non-government schools (1,555 Catholic systemic schools and 964 independent schools) have received Commonwealth General Recurrent Grants based on an assessment of need measured by the Education Resources Index (ERI). The ERI measures a school’s ability to raise funds on its own behalf on the basis of financial data provided by the schools themselves. Under the ERI schools were placed in one of 12 funding categories. Category 12 is the highest level of Commonwealth assistance and is intended for the most disadvantaged schools. The ERI is no longer a fair measure of need. Schools are locked into a funding category and are unable to respond to changes in their communities. Schools wanting to raise additional funds risk a reduction in their Commonwealth funding if they exceed the limit on private income. In short the ERI acts as a disincentive to private effort. SES is an open and simple measure of need. All SES scores are based on independent information which is consistent for all schools. An SES approach links student addresses (but not names) with current Australian Bureau of Statistics (ABS) Census data. An SES index is then applied to obtain an SES score for each school. Addresses are matched to ABS Census Collection Districts (CDs) which each cover about 250 households in metropolitan areas and fewer in rural areas. At the last Census (1996), there were 34,500 CDs in Australia. No individual or family information is used. The ABS specifically prohibits identification of individuals’ details in Census data. The SES index uses data collected through the Census on family and household income, education and occupation for the CD as a whole. An SES based funding system provides more choice, especially for lower income families. Because funding is based on the socioeconomic mix of the student body, non-government schools which extend their services to lower income communities will benefit financially. More families will have a real choice in schooling options. Reforms to funding for non-government schools do not impact on the funding of government schools. State/Territory governments have the main responsibility for government school funding. Although the Commonwealth provides funding for government and non-government schools, it has always had a bigger role than the States in funding non-government schools. The Federal Government’s 1999-2000 Budget includes initiatives to strengthen both the government and non-government school sectors. No non-government school will be financially disadvantaged by the change to new funding arrangements. The Commonwealth accepts that schools operating under the current ERI arrangements should not be financially disadvantaged by the Government’s decision to change the approach to funding. Schools which would receive less funding under an SES measure will have their Year 2000 per capita entitlements guaranteed and adjusted in line with the most recently agreed Average Government Schools Recurrent Cost figure.
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