All power to the states: keep out the Commonwealth to fix education

By David Donaldson

August 19, 2015

Reducing most or all Commonwealth involvement in school funding and policy would likely improve school outcomes, argues Melbourne School of Government Research Fellow Bronwyn Hinz in a report out this week.


Schooling Federalism: Evaluating the Options for Reform (right) assesses the four reform options proposed by the Reform of the Federation Taskforce on the six metrics set out in the Reform of the Federation discussion paper: subsidiarity; equity, efficiency and effectiveness of service delivery; national interest considerations; accountability; durability; and fiscal sustainability.

Hinz found that the proposal for full devolution best met those criteria. Returning full responsibility to the states for both private and public schools in their jurisdiction “will greatly enhance subsidiarity and likely enhance accountability, efficiency, effectiveness and fairness,” she told The Mandarin.

Bronwyn Hinz
Bronwyn Hinz

“Maintaining national authorities such as ACARA and the Education Council will facilitate cross-border policy-learning and performance reporting against agreed benchmarks and national goals using comparable data. Such an arrangement enhances strategic coordination in pursuit of national goals agreed intergovernmentally. It would also minimise unhelpful overlap and improving service delivery.”

But, for full devolution to be successful, the states would require an increase in revenue equivalent to current Commonwealth expenditure on schooling — approximately $15 billion a year. Hinz explained:

“Disjointed decision-making on school funding and competing state and Commonwealth policy objectives has made it difficult for schools and school systems to plan strategically and target funds and programs effectively.

“Our intergovernmental arrangements explain in large part why schooling outcomes (learning outcomes, student engagement, year 12 retention and post-school outcomes) have largely remained stagnant or fallen despite dramatic funding increases.

“The alignment of responsibilities for system design, policy development, program implementation, regulatory and accountability frameworks, and funding for all schools in a state with the state governments would enhance all these key functions.”

Recurrent general funding for schools, by level of government and school sector, 2013. Total: $47.9 billion. Source: Productivity Commission 2015 report on government services.
Recurrent general funding for schools, by level of government and school sector, 2013. Total: $47.9 billion. Source: Productivity Commission 2015 report on government services.

An appetite for change?

Unfortunately, however, Hinz concedes the federal government probably won’t be jumping over itself to hand over all power to the states.

“It is politically difficult,” she thinks. “Every Commonwealth government since the late 1950s has intervened more in schooling than its predecessor.” Both sides do this, of course, and in many ways it’s understandable why the federal government would want to play a role in as important a policy area as education.

And yet, while well-intended, Commonwealth intervention is often unhelpful.

“It’s a matter of which government is better placed to do it. States can target funding and are close enough to the ground to have an appreciation of the needs of students. They can figure out what is and is not working much more easily than the Commonwealth government,” she says.

“There is a very compelling case for government involvement in school funding, policy and regulation. But it’s a matter of which government is better placed to do it. States have superior experience and expertise in schooling, and closer relationship to schools and students. They can better target funding, develop programs and assess what is and what is not working much more easily than the Commonwealth government,” she says.

Tied grants ‘ineffective’

The main way in which the Commonwealth government attempts to direct education policy is through tied grants — payments made by the Commonwealth to the states with conditions on how they are spent. But these tend to be ineffective at improving education and may even be damaging.

“National and international research on tied grants in schooling indicate they are a weak policy instrument, with limited effectiveness and often unintended negative effects. It is likely policy outcomes could improve if tied grants for schooling were converted into untied grants, allowing states freedom in how they allocated the funding” she said.

“States might find that putting some of this funding into welfare-programs for children or investing more heavily in early childhood education could result in greater improvements in educational outcomes for example, and would be freer to do so.

“States can watch and learn from each other’s policy innovations, and if they appear successful, adapt them to suit their own state. Conversely, a new policy approach does not work as intended, it is easier to reform it than if it had applied across the whole country” she argues.

Commonwealth self-restraint

If full devolution is politically unachievable, Hinz thinks reduced Commonwealth involvement in school programs would be the next best option. This, she notes, was basically what David Gonski argued for, and accords most closely with the stated views of the Prime Minister.

This option would offer the same benefits as full devolution “although to a far lesser degree”. In the words of the Discussion Paper, it:

“would essentially retain the status quo, but reduce the Commonwealth’s involvement. The Commonwealth would reduce its involvement in a large number of programs that are duplicative or could reasonably be done by the States and Territories. It would not substantially change relative funding levels between governments, but there could be a relatively minor decrease in Commonwealth expenditure as it phases out some of its programmes.

“The Commonwealth would continue to reduce its involvement in overarching policy, and limit that to the national education functions set out in the introduction to the reform options. Commonwealth-funded programmes (i.e. those outside of ongoing, or what is known as ‘recurrent’, funding) would be limited to a small number of nationally-significant priorities.”

Full or partial devolution, she adds, “needs to be done carefully and is contingent upon retention of national institutions such as ACARA and the Education Council and on those institutions becoming more truly intergovernmental and collegial, with the Commonwealth direction removed.”

Although Hinz thinks this is probably the way the government will choose to go, its key flaw is that it basically relies on the Commonwealth to exercise self-restraint — something successive Commonwealth governments have found difficult — making it prone to backsliding. If the Commonwealth agreed to restrict its interventions to ‘nationally significant priorities’, as the Discussion Paper calls them, there will inevitably be disagreement about what constitutes a nationally significant priority.

The National School Chaplaincy Programme, for example — would that be considered nationally significant by the Commonwealth? Probably, given its favourable treatment by the Commonwealth “despite the states being better placed to develop and implement pastoral care programs in collaboration with schools, and using appropriately qualified professionals such as social workers, youth workers and psychologists.”

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6 years ago

No point discussing this unless we say ‘hi’ to the federal elephant in the room. No other OECD country would do as we do, giving nearly 30% of the national schools kitty, no-strings-attached, to religious schools that can charge uncapped fees and discriminate as they choose in admissions.

We can have John Howard’s ‘values and choice’, or we can have high equity and performance. Pretty hard to maintain both at the same time. The reality is that both Liberal and Labor are firmly wedded to the current grossly unfair funding model. There’s a cone of silence.

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