Under the Australian Government’s new needs-based funding arrangements, the socio-economic status (SES) score of individual schools will be a significant factor in the determination of Australian Government funding to non-government schools.
Concerns have been raised about the accuracy of this measure. The National School Resourcing Board (the Board) was asked to review the methodology used to calculate the SES scores as a measure of the capacity of the school community to contribute to the recurrent costs of the school, and to provide the Australian Government with findings and recommendations relating to:
- the strengths and weaknesses of the current SES measure in determining the capacity to contribute
- possible alternative methodologies or refinements for the calculation of the capacity to contribute or SES measures
- how frequently any new measure might be updated
- timeframes for possible implementation of recommendations
The full terms of reference are included in Appendix A.
The funding of non-government schools in Australia is a shared responsibility between the parents and guardians of students attending those schools, the Australian Government and state and territory governments.
Under the Australian Education Act 2013 (the Act), Australian Government funding is allocated based on an estimate of how much government funding each school requires to meet the educational needs of its students, as recommended in the 2011 Review of Funding for Schooling—Final Report.
This estimate is calculated by reference to the Schooling Resource Standard (SRS), which provides a base amount for every primary and secondary student, along with six loadings that provide extra funding for disadvantaged students and schools. It is estimated that the base amount will account for 75.9 per cent of Commonwealth recurrent school funding expenditure in 2018.
For most non-government schools, the base amount is discounted or reduced by the anticipated capacity of the school community to financially contribute towards the school’s operating costs. This is called the ‘capacity to contribute’ assessment and it is based on the SES score of the school.
This Review focuses on the methodology used to determine the SES score.
To assess the strengths and weaknesses of the current SES measure and alternative approaches, it is important to understand the purpose or policy intent of the capacity to contribute assessment.
There is a longstanding expectation in Australia that parents or guardians of children in non-government schools make a financial contribution to the cost of schooling. Coupling this expectation with the allocation of funding based on need, the capacity to contribute element of the school funding model is designed to provide more financial support to non-government schools where parents and guardians have less capacity to contribute.
For the purposes of the review, the Board has defined capacity to contribute as the financial capacity of parents or guardians of students at a school to contribute, as determined by their income and wealth.