Funding Review

Young girl in school blazer looking to camera. Update on Latest Developments

School Funding Review Briefing Paper
18 July 2013

Recently, many Member Schools received an email letter signed by the new Minister for Education, Mr Bill Shorten, which says ‘the extra funding that will flow to your school from January 2014 will provide extra resources to support your school to implement the reforms outlined in the Better Schools Plan’.

The figures quoted in Mr Shorten’s email are based on modelling undertaken by his Department of Education, Employment and Workplace Relations (DEEWR) for each school, but may not accurately reflect the funding amounts that schools will receive in 2014.

The Australian Government is developing its financial arrangements for the Review of Funding for Schooling – the Gonski Review.

Review of Funding for Schooling – Situation Report

The Australian Government has considered the recommendations of the Review of Funding for Schooling and produced a model that is largely, but not completely, in line with the principles of the recommendations.

For more details, access the Situation Report.

The state and territory governments are to consider the Commonwealth’s proposals at the Council of Australian Government’s (COAG) meeting in Canberra on 19 April, 2013.

The ALP promised to investigate ‘all funding for all schools’ as part of its 2007 election commitment. The Review of Funding for Schooling was commissioned in 2010 by the Australian Government ‘to develop a funding system that is transparent, fair, financially sustainable, promoting excellent outcomes’.

However key elements of the funding arrangements are open to question. Independent Schools Victoria has spelt out its funding principles and our view is that the principles underlying the Gonski Review are worth pursuing as long as funding can be found.

Our Four Messages are:

  1. Focus funding on students, not schools
  2. No funding freeze for individual schools
  3. Schools’ income from parents or elsewhere must not affect government funding
  4. Defend choice in education by law

We support the Victorian Government’s position and believe that the Federal Opposition policy has merit.

Resolving the question of funding for non-government schools is urgent because the current government funding arrangement finishes at the end of 2013.

Independent Schools Victoria welcomes the possibility for the introduction of a funding model that will assist to improve the educational opportunities made available to all Australian students, regardless of the schools that they attend, and will continue to participate in the important discussions being undertaken regarding the future of government funding for Australian education.


As part of the Australian Labor Party’s 2007 election platform, the party indicated that, if elected, it would undertake a review of government funding for school education. On 15 April 2010, the (then) Education Minister, Julia Gillard, provided details about this process, stating that the Review would ‘examine the funding of all schools from all sources’.

Following Ms Gillard’s announcement, the Australian Government circulated draft terms of reference for comment on 30 April 2010. Independent Schools Victoria provided a response to the draft terms of reference on 31 May 2010. The final terms of reference were released on 9 July 2010 and updated on 11 November 2010. In 2010, it was also announced that the independent Review Panel would be chaired by Mr David Gonski, AC.

Submissions to the Review Panel

Following consultation with stakeholders across Australia, the Review Panel released its Emerging Issues Paper on 16 December 2010, which summarised the views of stakeholders. Interested parties were invited to provide a response to the Review Panel by 31 March 2011.

The Independent Schools Victoria submission maintained four fundamentals which would provide direction to its response to the Review of Funding for Schooling. These were that:

  • choice in education is defended in legislation
  • a freeze of funding on individual Independent schools is unacceptable
  • funding should be centred on students, not schools
  • personal or private contribution towards a child’s education should have no bearing on the level of government funding they receive.

The submission also outlined two possible funding models:

  • a Portable Funding Allowance, which would comprises a base component, topped-up with evidence-based loadings for individual special needs, and would be available to government or non-government schools, and would treat all Australian students equally, regardless of schooling sector
  • a Community-Based Funding Model, which proposed an alternative to the current SES funding model, and which aimed to retain the key strengths of the existing model, while introducing some variations that addressed some of the key criticisms of the SES model.

A series of fact sheets and posters, summarising Independent Schools Victoria’s position, was also produced.

Commissioned Research

Following the receipt of submissions from the public on the Emerging Issues Paper, on 31 August 2011, the Review Panel released four research reports commissioned from external organisations and its own summary Paper on Commissioned Research. The research reports were designed to raise issues for discussion and public comment about specific funding issues. The four research reports were:

In addressing the specific details of each of the research papers, Independent Schools Victoria reiterated its commitment to the four funding fundamentals and to the two possible funding models outlined in the response to the Emerging Issues Paper.

Review Panel Recommendations

The Review Panel handed its report to the Australian Government in December 2011. Included in the report were 26 findings and 41 recommendations. Some of the key recommendations of the report were:

  • Resources should be targeted towards supporting the most disadvantaged students
  • Government funding for all Australian schools should be based on a School Resource Standard, which would be set so that it enabled all Australian students to achieve agreed outcomes and goals of schooling
  • The School Resource Standard should include loadings for
    • school size and location
    • the proportion of students who are Indigenous
    • the proportion of students who are from low socioeconomic backgrounds
    • the proportion of students with limited English language proficiency
    • students with disability
  • Australian, state and territory governments should fund the full cost of the School Resource Standard for government schools
  • Australian, state and territory governments should fund a maximum of 90 per cent of the School Resource Standard for most non-government schools
  • Funding for non-government schools should include an assessment of the anticipated capacity of parents to contribute financially towards their children’s education
  • Legislation should be introduced to ensure that the total level of government funding is guaranteed for all Australian schools over a 12 year cycle.

The Review Panel estimated that, in order to implement its recommendations, it would cost an additional $6.5 billion per annum in 2010 dollars.

National Plan for School Improvement

On 3 September 2012, the Prime Minister, Julia Gillard, announced the Australian Government’s official response to the Review Panel’s recommendations – the National Plan for School Improvement. She indicated that the Australian Government did not accept all of the Review Panel’s recommendations, but that it would introduce a model which would start in 2014 and which would be phased in over six years. The plan would ensure that government funding increased for all Australian schools, and included:

  • a new funding model for schools which would include a School Resource Standard as a benchmark amount for every Australian student
  • additional training for teachers and principals, and ongoing professional development and support throughout their careers
  • targeted assistance for schools that needed extra support to improve their results
  • extra support for students with high degrees of educational need who need it most, like children with disability and children from low income families
  • more information for parents and the community about school performance.

In launching it, the Prime Minister confirmed that, under the Plan:

  • all government schools and all non-government special schools would be fully funded by government
  • funding for other non-government schools would be based on the capacity of parents to contribute financially to the school
  • indexation of funding for schools would be based on a measure of cost increases across all Australian schools
  • all Australian schools would receive funding increases each year.

Australian Education Act

As part of the implementation of the National Plan for School Improvement, the Australian Government introduced legislation into the House of Representatives on 28 November 2012. While the initial Bill did not contain any details about the funding arrangements for Australian schools, significant amendments were made to the Bill in June 2013 to provide further detail about funding allocations and government accountabilities for Australian schools. The Australian Education Act has been passed by the Australian Parliament and received Royal Assent on 27 June 2013. It will come into operation on 1 January 2014.

When the Bill was first introduced, Independent Schools Victoria welcomed the confirmation by the Australian Government in the Australian Education Bill that every Australian school student will have access to a high-quality, high-equity education, no matter where they live, the school they attend or their personal circumstances.

Once the Bill was passed, Independent Schools Victoria noted that the legislation provided much needed additional information about funding and accountability for schools. However, the Act did not provide sufficient information for schools to determine accurately how much funding they would receive in 2014 and beyond. At the same time, Independent Schools Victoria indicated that it would monitor the release of the associated regulations, in order to guard against increased bureaucratic regulation and any moves that impinge on the independence of Member Schools in Victoria.

Links and Downloads


PDFAddress by Julia Gillard to the Sydney Institute, A Future Fair for all School Funding in Australia, 15 April 2010

PDFAddress by Michelle Green to the Nous Group, Focus Future Education Funding on Students, 21 April 2010

PDFReview of Funding for Schooling Discussion Paper and Draft Terms of Reference, 30 April 2010

External linkReview of Funding for Schooling Final Terms of Reference, November 2010

Submission to Review Panel

External linkReview of Funding for Schooling Emerging Issues Paper, 16 December 2010

PDFISV Submission to the Emerging Issues Paper, Review of Funding for Schooling Response

PDFISV Fact Sheet 1 – Facts and Figures about Victorian Independent Schools

PDFISV Fact Sheet 2 – Recommendations

PDFISV Fact Sheet 3 – Portable Funding Allowance Proposal

PDFISV Fact Sheet 4 – Community Based Funding Proposal

PDFISV Freedom of Choice in Education poster

PDFISV Fair Funding poster

PDFISV What do these Students have in Common poster

PDFISV Look at the Figures poster

PDFISV Government Funding for Independent Schools poster

Commissioned Research

External linkACER, Assessment of Current Process for Targeting of Schools Funding to Disadvantaged Students

External linkDeloitte Access Economics, Assessing Existing Funding Models for Schooling in Australia

External linkThe Allen Consulting Group, Feasibility of a National Schooling Recurrent Resource Standard

External linkThe Nous Group consortium, Schooling Challenges and Opportunities

ISV, Response to Commissioned Research: Assessment of Current Process for Targeting of Schools Funding to Disadvantaged Students

PDFISV, Response to Commissioned Research: Assessing Existing Funding Models for Schooling in Australia

PDFISV, Response to Commissioned Research: Feasibility of a National Schooling Recurrent Resource Standard

PDFISV, Response to Commissioned Research: Schooling Challenges and Opportunities

PDFISV, Review of Funding for Schooling – Fair Funding for Independent School Students

Review Panel Recommendations

External linkReview of Funding for Schooling, Final Report, December 2011

PDFISV, What They Have Said About the Review of School Funding, 30 January 2012

PDFISV, Examination of a National Schooling Recurrent Resource Standard, 30 January 2012

PDFISV, Review of Funding for Schooling Issues Paper, 24 February 2012

PDFISV, School Funding – Too Many Ifs and Buts

PDFISV, Gonski Review Update, 15 March 2012

Independent Schools Victoria Media Release

PDFSchool Funding Review must not be a Carve-Up of Dollars, 16 April 2010

PDFEquity Essential for Future Education Funding, 2 May 2010

PDFAEU Deliberately Distorting School Funding Discussion, 28 July 2010

PDFSchool Funding Review Proposal to Treat all Students Equally, 11 April 2011

PDFSpecial Needs Students Require Equal Funding, 11 April 2011

PDFSchool Funding Research – Not Uninformed Rhetoric, 31 August 2011

PDFIndependent Schools Victoria Fails Funding Research, 9 October 2011

PDFFunding Review Changes Could Cost Taxpayers – Victorian Government, 4 November 2011

PDFFederal and State MPs Hear Parents’ Fears about School Funding Review, 14 February 2012

PDFJury Still Out on Gonski Review, 20 February 2012

PDFSchool Funding – Alice Through the Looking Glass, 3 April 2012

PDFSchool Funding Model – Designed on the Run, 3 April 2012