Budget 1999-2000

Answer

The socioeconomic status (SES) funding model is a better way of measuring the ability of a non-government school community – the families of students at the school – to support their school.

The SES approach links student addresses with current Australian Bureau of Statistics (ABS) Census data. An SES index is then applied to obtain an SES score for each school. Schools which draw students from areas of predominantly high SES should need lower levels of Commonwealth funding than schools which draw from areas of average or low SES.

SES funding in 1998 dollars is estimated to range from a base entitlement of $597 per primary and $829 per secondary student (for schools with an SES score of 130 or above), through to the maximum funding of $3049 per primary and $4235 per secondary student (for schools with an SES score of 85 or below).

Student addresses are linked to a Census Collection District (CD) of about 250 households or slightly less in rural areas. The SES index uses data collected through the Census on family and household income, education and occupation for the CD as a whole.

No. The only information schools will need to provide to enable their SES score to be calculated is the home addresses of all students. Addresses only, not names, are collected. These addresses are then linked to Census Collection Districts. No individual or family information is used. The ABS specifically prohibits identification of individuals’ details in Census data.

The current Education Resources Index (ERI) is no longer a fair measure of need. Schools are locked into funding categories 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-based methodologies for the distribution of funding have been widely used in education for some time. The particular methodology to be used for the allocation of recurrent funding in the next quadrennium was trialled in 1998 with the help and cooperation of about 90% of non-government schools. This simulation showed that an SES approach is a fairer way to assess a community’s capacity to support its school.

No. Funding for Government schools is predominantly the responsibility of State/Territory Governments. 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.

No. The Commonwealth accepts that schools operating under previous 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 2000 funding levels maintained in real terms.

The Commonwealth does not determine school fees, but no school will have their Commonwealth funding reduced as a result of this change. Schools will also have the flexibility to pursue other fundraising efforts without fear of losing Commonwealth funding.

The base level of funding for non-government schools at present – that is, the funding of a category 1 school – is maintained as the base in the new model. This base entitlement has been set at 13.7% of the Average Government School Recurrent Costs (AGSRC) for a secondary student, which is broadly equivalent to the current category 1 secondary rate ($829, compared with $832).

To maintain a consistent primary-secondary funding differential in the new funding model, and a consistent link with government school costs, the primary rate is also set at 13.7% of the AGSRC primary rate. This is $597, compared with the category 1 primary rate of $525.

Schools serving the wealthiest communities, that is schools with SES scores of 130 or more, will not get large gains from the changed arrangements above their base level entitlements. The benefits of this reform flow to schools serving needier communities.

The SES funding approach has been adopted so as to be fairer for families choosing non-government schools. Arrangements have been put in place to ensure that no school is financially disadvantaged in the change.

More families will have a real choice in schooling options. SES funding is based on the socioeconomic mix of the student body, non-government schools that extend their services to lower income communities will benefit financially.

Catholic systemic schools will be funded on a basis that essentially preserves the equivalent of their current ERI funding category. This honours the Government’s 1998 election commitment. All other schools will be funded on the basis of their SES scores, except where they would be financially disadvantaged. Schools which would receive less funding under an SES measure will have their year 2000 funding levels maintained in real terms.

The SES model provides a good measure of a school community’s capacity to support its school. Analysis of a range of other measures of family income and wealth, which is presented in a separate report (SES Simulation Project: Validation Report) shows that the SES methodology is a valid measure. Statistically it is likely that a school drawing the most disadvantaged students in a higher SES area will also draw many of its students from lower SES areas. The SES score will fairly reflect the overall SES of its student body.

The Howard Government made a commitment in the 1998 election context to recategorise Catholic systems in New South Wales, Victoria, Queensland, South Australia, Tasmania and the Northern Territory, on the basis of their need as established under the existing ERI arrangements.

In reforming the funding arrangements for the next quadrennium, the Government will honour this commitment. All current category 11 Catholic systemic schools will therefore be funded at an SES score of 96, which is broadly equivalent to category 11 funding; schools in the ACT Catholic system, which is currently category 10, will be funded at an SES score of 100.