In Senate Estimates last month, Liberal Senator Maria Kovacic repeatedly questioned Department of Education officials whether the Fund will be continued after 2029.

Senator Jess Walsh, representing the Minister for Education, said no decision has been made about the future of the Fund.

In the lead up to the next election the Government can expect more pressure to continue this privileged funding which is additional to the current needs-based system.

To her credit, Senator Walsh pointed out that Catholic and independent schools are funded at 100 per cent or more of their Schooling Resource Standard (SRS) while public school funding is less than 100 per cent.

She said that the Government’s focus was on ensuring that public schools will be funded at 100 per cent of their SRS.

Clearly, Senator Kovacic was not concerned about the long period of huge underfunding of public schools.

She did not raise a single question about the continuing underfunding of public schools.

Her sole concern was that Catholic and independent schools do not lose their slush fund.

Officially called the Choice and Affordability Fund (CAF), it was notoriously labelled a “slush fund” by former NSW Coalition education minister Adrian Piccoli when it was introduced by the Morrison Government in 2018 as part of a new $4.6 billion funding deal for private schools.

Piccoli said the package was “throwing money at the powerful and well connected”.

The CAF funding of $1.2 billion over 10 years from 2020-2029 is split between Catholic schools receiving $740 million and independent schools $464 million.

Public schools are not eligible for this funding.

Over the five years 2020-2024, a total of $553 million has been distributed – $340 million to Catholic school organisations and $213 million to independent school organisations.

The Fund is just another special deal for private schools that adds to their resource advantage over public schools. It is funding provided to private schools outside their funding model and is not based on need.

There are five priorities of the CAF:

  • Funding for initiatives that facilitate parental choice;
  • Transition funding support for non-systemic independent schools to adjust to the new funding model introduced by the Morrison Government;
  • Funding for schools facing special financial circumstances; 1
  • Improving outcomes for schools and educationally disadvantaged schools and students; and
  • Improving student wellbeing and support.

In 2024 (latest available figures), CAF expenditure was $137.5 million which was provided to 1348 private schools.

The large part of this was spent in supporting choice and transitional assistance – $59 million to 634 schools for choice and $56 million to 448 schools for transitional assistance.

The funding for choice is used for a range of purposes, including:

  • Helping schools to understand how parents choose a school for their children, and strategies to increase and retain enrolments.
  • Direct grants for fee remission for disadvantaged schools or students and/or support for schools that provided fee concessions to families.
  • Supporting financial governance and professional learning on financial management and financial literacy, strategic planning for school capital assets.

The transitional funding assistance is to support non-systemic independent schools experiencing a reduction in per student funding as a result of the introduction of the Direct Measure of Income (DMI) method of funding introduced in 2020.

It is also available to schools transmitting to a new capacity to contribute (CTC) score that determines their recurrent Commonwealth Government funding.

It includes funding for:

  • Financial governance and management.
  • Assisting schools with access to expert knowledge in analysing existing business models and financials to support transition planning.
  • Additional staff support.

Under an extraordinary arrangement, the Fund money is distributed to schools by representatives of Catholic and independent school organisations, not the national Department of Education.

The Catholic and Independent Non-Government Reform Support Funds (NGRSF) allocate the funds to their affiliated schools.

Each fund is composed of representatives of state/territory Catholic and Independent schools associations.

They are required to submit work plans to the Commonwealth Government and annual reports on the funding.

The CAF was always a “slush fund”. It was introduced by the Morrison Government as compensation for the abolition of the system-weighted average socio-economic status (SES) score applied to Catholic systemic schools that was negotiated as a special deal with the Gillard Labor Government.

Under this deal, Catholic school systems were funded according to a negotiated state-wide average SES score instead of the SES score of individual schools as applied to Independent schools.

As a result, they got more funding than they would have if the needs-based formula had been strictly implemented.

The Turnbull Government’s Gonski 2.0 funding arrangements abolished this special deal and assessed parental capacity to contribute in Catholic systemic schools according to their individual SES score.

It means that Catholic schools would receive 2 less funding in the future than if the special deal continued to apply.

This was at the heart of the Catholic school campaign against the Turnbull Government’s Gonski 2.0 funding model.

The Morrison Government simply bought them off with a slush fund of just over $0.7 billion over the next decade.

The Independent sector’s share of the slush fund was designed to compensate them for a reduction in funding resulting from the shift to DMI funding model.

The Morrison Government effectively guaranteed that the funding of Independent schools would not be reduced.

Adrian Piccoli was prescient in labelling the CAF a “slush fund”. It is another special deal for private schools as icing on the private school overfunding cake.

The private school funding model is effectively a choice mechanism by providing highly subsidised access to private schools which is a major factor in the continuing enrolment shift.

The CAF undermines the Gonski funding model by selectively making additional funding available for private schools, but not for public schools. It should be abolished.

Clearly, continuation of the CAF beyond 2029 is on the campaign agenda of private school organisations for the 2028 federal election.

Public school organisations need to push against continuing the Fund.

This sweetheart deal for private schools should end by 2029 as planned.

No more special deals for private schools!

This piece was originally posted here on the Save Our Schools website.