Australian government funding for private schools still growing faster than for public

Government funding for non-government schools is still growing at a faster rate than for public schools, according to the Productivity Commission.

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Photograph: Daniel Pockett/Getty Images

The latest chapters of its review of government services, released on Tuesday, reveal that in the past decade spending per student on non-government schools increased by 3.3% per year compared with just 1.4% for government schools.

The review also paints a picture of declining employment outcomes for school leavers, with fewer finding work as a result of the coronavirus recession.

Related: The post-high school hole: how to help school leavers in a time of transition

All levels of government now spend a total of $16,748 per student per year on average. Public school students receive a higher level of government funding, $19,328 if capital costs are included or $16,399 if excluded, compared with $11,813 for non-government schools.

© Photograph: Daniel Pockett/Getty Images
Public students receive more government funding, but it has increased more for students at non-government schools.

But despite passage of the Gonski 2.0 needs-based funding legislation in 2017, government funding of non-government schools is still growing at a faster rate while receiving higher fee income from parents.

Between 2017-18 and 2018-19 the federal government spent $116 more per student per year for those in the public system, but $336 more for those in the non-government system.

The states and territories, the primary funders of the public system, boosted government schools by $412 per student per year, compared with just $33 more tipped in to non-government schools.

In 2017 the Turnbull government passed needs-based funding legislation, contributing an extra $23.5bn to schools over a decade.

After Scott Morrison became prime minister in 2018, the Coalition then added a further $4.6bn over a decade for Catholic and independent schools, including a $1.2bn fund to improve “choice and affordability”, labelled a slush fund by Labor.

The Productivity Commission found that the proportion of school leavers in full-time work or employment fell from 68% in 2019 to 63.2% in 2020.

Those who finished year 12 fared better than those who completed year 11 or below, with 65.1% in full-time work or study compared with 58%.

Even before the Covid-19 pandemic, schools recorded decreasing rates of attendance. In 2019 attendance rates for years 7 to 10 dropped from 91.9% to 88.4%.

Non-government schools had higher attendance rates in that age group (92.1%) than government schools (88.4%).

Attendance rates for year 1 to 6 have also “decreased slightly” by 1% since 2015, with “similar decreases across most jurisdictions and within each state and territory over time”, the Productivity Commission said.

The review found the proportion of children aged 0 to 5 in early childhood education increased from 44.4% in 2019 to 45.1% in 2020.

After the federal government revamped subsidies to offer free childcare in the first few months of the pandemic, total government spending increased by 5.6% in 2019-20. Total spending on early childhood education is now $7,173 per child.

The review found a decrease in recurrent spending on vocational education and training, down from $18.52 per hour in 2018 to $17.67 in 2019.

Related: Australian universities warn of economic ripple effect if international students remain locked out

Although government spending increased by 0.1%, this was outweighed by an increase in the hours covered by that investment, up 4.9%.

Earlier in January the commission called for reform of the $6.4bn of government funding for vocational education, citing declining rates of employer satisfaction with graduates’ skills.

The commission also suggested the government should try to recover unpaid student loans from people who have died and vocational students should be charged minimum upfront fees to avoid perceptions of “free money” to study.

The minister for small business, employment and skills, Michaelia Cash, said the government is working on a new national skills agreement with states and territories to “improve transparency around fees and [make] the system easier for students to navigate”.