Excellent proposal for school funding reform from ISQ head David Robertson

In today’s Courier-Mail, the head of Independent Schools Queensland has come out in support of reforming school funding arrangements, either through a levy on wealthy parents whose children attend state schools or a means-tested voucher scheme. ISQ head David Robertson writes:

DAVID Gillespie’s latest outcry against private schools totally misses the point that the parents of students at independent schools pay their taxes and are entitled to government support for the education of their children.

In fact, these parents in Queensland contribute $1 billion annually (from their after-tax income) to school education. Across Australia, fee-paying parents save governments $4.3 billion each year…

…Perhaps a more useful public policy debate might be whether or not affluent parents who choose a state school for the education of their child might make a contribution to the costs through a Medicare-type levy.

Alternatively, a school voucher system could be considered, with students allocated financial support according to their needs.

This would give all families the opportunity to choose the school, no matter which sector, that best suits their needs and aspirations.

Levies or means-tested vouchers make a lot of economic sense. There are many parents who would be willing to pay (and would be able to pay) to send their children to particular state schools, and this is a revenue source that the State Government could use to help meet the costs of schooling. In a way, many parents are already spending significant sums to send their children to favourable state schools through buying properties in the catchments of top schools such as Brisbane State High. Means-tested vouchers would have the added benefit of encouraging greater choice, as they may allow many parents to send their children to better schools by making small financial contributions in addition to the vouchers.

Obviously, a lot of work would need to go into designing a new funding model. The ideas advanced by ISQ, which have long been supported by economists, deserve further development and consideration by Government. The idea of co-payments for state schools was actually raised in the abandoned draft Economic Action Plan from the Queensland Department of Premier and Cabinet last year, and I have commented previously on the desirability of reforming school funding arrangements along the lines proposed by ISQ:

Qld private independent schools saving taxpayers $1 billion per annum

Catholic schools still benefiting from very favourable funding deal from Howard Govt days

Large savings for Qld Govt from shift to private schooling

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4 Responses to Excellent proposal for school funding reform from ISQ head David Robertson

  1. Glen says:

    Gene the issue I have with this and other similar proposals is what constitutes ” wealthy parents” , what is the wealth line and what legislation can be put in place to stop it reducing to include more parents as time goes by. Do we really want to create a situation where people defer incomes until their children are post school age and put extra effort into income minimisation than they otherwise would. There is already enough disincentive in the system for parents to question wheather working is worth the effort, particularly as a second income, surely these types of levies or fees would only add to the case of not working.

    • Interesting point. The effective marginal tax rates of families are highest of any group, so this would be another scheme phasing in/out across the same income spectrum.

      Also, there is a framing issue here. The default seems to be private schooling, and that somehow public schooling is a type of welfare that wealthy parents are cheating on. The same logic would hold for any publicly provided good, say public transport. It’s foolish in health insurance. It’s foolish in schools. Have a public scheme, and those who want something else can pay for it.

      Gillespie seems to think you are entitled to government funding for any education choice you make for your children, rather than entitled to attend publicly provided education. It’s a different thing. I don’t say “Hey, I walked today instead of taking the bus, give me the money you would have spent subsidising buses because of my private transport choice”.

      As to the argument that sending kids to private school saves the government money because ALL of those kids would go to State schools in the counterfactual world is nonsense. Parents willing to spend $20k + per year on private school will still do it if government funding to these schools was withdrawn. If there is one thing we know it is that parents are not very price-sensitive to school fees.

      • Gene Tunny says:

        Thanks for the comment, Cameron. Certainly some parents are not price-sensitive, but many are. The growth in low-fee independent schools in the suburbs, which has been enabled by favourable Commonwealth funding arrangements, is partly a response to much higher fees at inner city private schools. Also, a lot of the attraction of schools like Brisbane State High is that they produces such excellent educational outcomes without high fees, and this encourages families, even high income families, to move into the catchment just so their children can attend the school. I’m sure if we saw a substantial withdrawal of government funding to private schools you would see a large reduction in enrolments and a rush to the better state schools.

        Regarding the default, I would say the default should be promoting competition in the delivery of schooling. The current system results in too many students attending poorly performing and inadequately resourced state schools. (Of course, many state schools are very good, but they tend to be in higher socio-economic areas.)

    • Gene Tunny says:

      Thanks, Glen. Yes, these are important considerations that would need to be taken into account in designing a new system.

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