How school funding works

If non-government schools receive public money, why do they charge fees? And why do some charge so much more than others? The answer lies in the way Australian school funding works. Since the reforms that followed the 2011 Review of Funding for Schooling, often called the Gonski review, funding has been based on a needs-based measure called the Schooling Resource Standard, adjusted for non-government schools according to their community's capacity to contribute. This guide explains the system in plain language, using information from the Australian Government Department of Education.

The Schooling Resource Standard

The Department of Education describes the Schooling Resource Standard (SRS) as an estimate of how much total public funding a school needs to meet its students' educational needs. It's based on the work of the 2011 review.

The SRS has two parts:

• A base amount per student, with different amounts for primary and secondary students.
• Loadings for students and schools with extra needs. The department lists up to six loadings: for students with disability, Aboriginal and Torres Strait Islander students, students with low English proficiency, socio-educational disadvantage, school size and school location.

Every school, government and non-government, has an SRS calculated in this way.

Who pays: Commonwealth and states

The Australian Government and state and territory governments share school funding. According to the department, the Commonwealth funds at least 20 per cent of the SRS for government schools and 80 per cent of the SRS for non-government schools. States and territories are the main funders of government schools and contribute a smaller share for non-government schools.

Capacity to contribute

For most non-government schools, the base amount of the SRS is reduced according to the community's capacity to contribute (CTC). The idea is that families who can afford to contribute to their children's schooling are expected to do so, so public funding for the base amount is reduced.

The department explains that CTC reduces the base amount by between 10 and 80 per cent. Loadings for disadvantage are not reduced in the same way, so schools with high-need students still receive funding for those needs.

The Direct Measure of Income

Since 2022, CTC has been calculated using the Direct Measure of Income (DMI), based on the median income of parents and guardians of students at each school. This replaced an earlier area-based measure. Schools whose families have higher median incomes have a higher CTC score and a bigger reduction in base funding.

Exemptions

The department lists schools that receive full base funding, without a CTC reduction:

• special schools for students with disability;
• special assistance schools;
• majority Aboriginal and Torres Strait Islander schools;
• sole-provider schools in remote locations.

Transition

The funding arrangements are being phased in over time. The department notes that schools above their target share of the SRS are transitioning down, with the transition to be completed by 2029. This means some schools are receiving funding increases above or below the average while they move toward their target.

What it means for fees

Putting it together:

• a non-government school receives public funding for its loadings and a reduced share of its base amount;
• the higher its families' median income, the bigger the reduction;
• fees cover the gap between public funding and what the school spends.

Schools also choose how much to spend. Some invest heavily in facilities, small classes, boarding or extensive co-curricular programs, which pushes fees higher. Others keep costs lower. So fees reflect both the funding formula and the school's own choices.

Seeing a school's funding

ACARA's My School shows each school's recurrent income by source, including Australian Government funding, state or territory funding, and fees, charges and parent contributions. Looking at the mix can help you understand how much a school relies on parents and how its funding compares with similar schools. Our guide to comparing schools explains how to read My School.

Systemic and independent schools

Many Catholic schools, and some other schools, are part of a system. The Australian Government funds the system authority, which can redistribute funding among its schools according to its own needs-based arrangements. That can mean fees at individual systemic schools differ from what the formula alone would suggest. Independent schools are usually funded directly.

Common misunderstandings

"Private schools get no public money." They do. Non-government schools receive substantial public funding, with the base amount reduced according to CTC.

"Funding is the same for all private schools." It isn't. It depends on the school's SRS, its loadings and its community's capacity to contribute.

"High fees mean the school gets no government funding." Not necessarily. Even schools with high CTC receive some base funding plus loadings.

Why the funding debate matters to families

School funding is often debated in politics and the media, and the arguments can be heated. For families choosing a school, the practical points are simpler:

• Fees are not the whole story. A school's income comes from governments as well as parents, and My School shows the mix.
• Funding follows need. Loadings mean schools with more students facing disadvantage, students with disability or students with low English proficiency attract more public funding.
• Parents' incomes affect funding. Under the Direct Measure of Income, a school community with higher median incomes receives less base funding, which tends to push fees up.
• Funding changes over time. Transition arrangements and policy changes can affect a school's income, and therefore its fees, during your child's enrolment.

Questions to ask a school about funding

You don't need to become a funding expert, but a few questions can be revealing:

• How is the school funded, and what share comes from fees?
• Is the school part of a system, and how does that affect its funding and fees?
• How do changes in government funding affect fee decisions?
• Are there building projects that will be funded by levies or fees?
• What happens to fees if enrolments fall?

A school that explains its finances openly is helping you plan.

Where to read more

The Department of Education's pages on the Schooling Resource Standard and capacity to contribute explain the system in more detail, including how the base amounts and loadings are calculated and how the Direct Measure of Income works. ACARA's My School shows each school's income by source. Together they give a much clearer picture than headlines about "rich" or "poor" schools.

Funding for students with disability

The student with disability loading is one of the six SRS loadings. It's based on the level of adjustment a student needs, as recorded through a national data collection. If your child has a disability, ask schools how they support students with similar needs and whether any extra costs apply. Funding goes to schools or systems, not directly to families, so the school's approach to support matters.

Key points

• The Schooling Resource Standard is a base amount per student plus up to six loadings.
• The Commonwealth funds at least 20 per cent of the SRS for government schools and 80 per cent for non-government schools.
• Capacity to contribute reduces non-government schools' base amount by 10 to 80 per cent.
• Since 2022, CTC has used the Direct Measure of Income, based on parents' median income.
• Fees fill the gap between public funding and what each school chooses to spend.