1. The existing funding system for private schools
The Howard Government introduced the existing funding system for private schools in 2001 during an intense debate. The current funding system works under the Howard Government's socio-economic status (SES) model, which measures the socio-economic status of children's parents based on their postcode instead of asking each parent questions about their income. The socio-economic status refers to the parent's ability to financially support their school.
Each private school is given a SES score, which ranges from 70 to 135. Schools with students coming from predominantly high socio-economic areas will get a higher score and less funding. The aim of this system is to allocate funding on a 'needs' basis. For non-government schools, most government funding is received directly from the Commonwealth.
2. Major criticism of the existing funding system
The major criticism of this funding method is that the system does not take into account a school's private earnings (eg: fees).
As a result of this, the overall trend has been to give the biggest increases to the schools that are obviously amongst the wealthiest.
While under the old ERI system (which measured the school's wealth and schools were put into 12 categories with Category 1 being the 'wealthiest') there were some anomalies and problems, the new system is criticised as being 'unfair, and awarding the largest increases to the schools that least need them".
In the AEU Federal Election Fact Sheet (issued April 2004) it shows the 50 schools that received the biggest increases (up to 300% increase). Of the 50 schools which received the highest increases, only one was not previously in Categories 1 - 3. "No one can justify a 200-300% funding increase for affluent schools that have already got ahead of the national standard based on their private...