Ensuring Australia’s economic sustainability

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National goal: Establish more effective, equitable and sustainable funding and operational models to reverse Australia’s falling educational performance.

Current performance

In higher education, we continue to perform well, with half our universities in the world’s top 500. But the trends for early childhood education and care (ECE&C) and K-12 are heading in the wrong direction.

The Better Schools Review of Kindergarten to year-12 (K-12) education – Australia’s first since 1973 – found growing gaps in student achievement. While Australia remains a high achieving nation in education relative to OECD peers, our overall performance has fallen in the last decade. In both absolute and relative terms, Australia has slipped behind in terms of reading, maths and scientific literacy.

Of great concern, we are way behind other OECD countries in terms of equity. We have an unusually large and growing gap between our lowest and highest performing students, with a long tail of low performers.

In Australia, good educational outcomes appear to be ‘a lucky dip’: they depend on where children are born; the socio-economic status of their parents; the physical ability or disability of the student; their language background; and whether they are indigenous. The resulting inequity in education outcomes becomes compounded during a life time, feeding further inequities in income, health and general well-being.

Our early childhood education engagement is also considerably below the OECD average, in terms of both participation and funding. On average across the OECD, 80% of 4 year olds participate in ECE&C. In Australia, despite intense and growing demand for places, this figure is just 50%. Similarly, Australia only invests 0.1% of GDP in ECE&C, compared with the OECD average of 0.55% and top performers investing 1.01% of GDP.

This under-performance in ECE&C has a ripple effect across the economy. In the short-term, lack of access to ECE&C is preventing many parents from returning to work, reducing household incomes and hampering national productivity. In the long-term, low participation in ECE&C hampers individual performance in K-12, affecting future workforce capability.

Education issues

  • More funding doesn’t equal better outcomes – Those involved in the daily cut and thrust of education policy are acutely aware that simply increasing funding doesn’t necessarily boost learning. This depends on how the funding is structured, where the funding goes and who is accountable for getting a return on its investment.
  • Different funding models across the education system – the funding models for each level of our education system reflect quite different philosophical and practical approaches. Universities and, progressively, our vocational and TAFE sectors, are adjusting to a market-based funding model, while K-12 funding models are outmoded:
    • Early Childhood Education and Childcare – full cost paid by users, offset by Federal Government support for low SES groups
    • K-12 Government Schools - largely fully funded centrally by State Governments, at little/no cost to parents, including selective schools, which offer higher quality education to elite students
    • K-12 Non Government Schools – largely paid for by parents, augmented by fixed Federal Government subsidies to school systems, and schools - not to parents
    • Universities/TAFEs/VET - funding support follows the student, with fixed, subsidised prices that vary by course, and by institution depending on the course structure and special allowances for low SES profiles
  • Inequities for students with disabilities – in the current system, students with disabilities are limited in their choice of where to go to school. They are constrained to the public system. Often the public sector does not have the capacity to recognise much less accommodate those with special needs. There is no incentive for private institutions to accommodate children with special needs, beyond the non-commercially driven advantages derived from living in diverse school community.
  • Outmoded management systems – school principals do not have the authority to make local decisions regarding budgets and staffing that improve the quality of education provided by their school although most State Governments are working towards increased autonomy.
  • Little incentive for quality graduates to enter the profession – teachers face diminished status and remuneration, not to mention increasing stress from growing classroom management issues.
  • Patchy access to early childhood education and quality childcare – although child care services are transforming into early childhood education services, in Australia education at an early age is not accessible to all, even though demand is growing rapidly. The problem is that childcare services is a ‘cottage industry’ in which the quality is variable and provision inefficient, making fees increasingly – often prohibitively – expensive.

    The resulting lack of participation is both dragging down educational outcomes and keeping parents out of the workforce – two alarming outcomes in a time of declining national productivity.
  • State and Federal Governments at loggerheads – over control of the State school system and particularly over what represents appropriate curriculum and who should pay for what.
  • Public-private divide – wealthier parents, who have become sophisticated “consumers” of education, are increasingly abandoning the public education system, intensifying the disadvantage of those left behind.
  • Slowing economic growth – this is putting pressure on funding, together with a wave of public sector reform sweeping across all State and Federal Governments

Education recommendations

To protect our national competitiveness, Australia urgently needs national education reform, for which we have workable and largely accepted guidelines at the K-12 level in the form of the Better Schools Review recommendations. There is widespread agreement that Australia’s K-12 education system needs:

A well trained and motivated teaching profession – the only way to improve learning outcomes is to improve teaching quality. This will require better collaboration between the universities, the teacher’s union, school management and the community to better prepare, support, monitor and reward performance of educators.

  • Adequate infrastructure
  • The right level of autonomy at a school/community level
  • Clearly articulated pathways between the various stages of the system
  • The right metrics

However, there is a real danger that this important work will either be derailed by the States quibbling over funding issues or perceived lack of control, or labelled a ‘Gillard platform’ and sidelined by the incoming Government. We therefore recommend:

  • Embracing the Better Schools
  • Changing the national funding model
  • Fixing Australia’s Early Childhood Education

Education conclusion

Turning around Australia’s educational performance is critical to our economic sustainability. The review work of Better Schools Review has been done – now we need to implement its broad recommendations across K-12 education as a matter of priority.

At the same time, we need to urgently address the next target, ECE&C, which needs a similar national review and followed by reform and not the other way round.