The Problem with Vouchers- See the Education Policy Section

Vouchers are often touted as the solution to all sorts of educational problems. After all, what could be simpler than working out what it costs to educate a child, handing over that amount to the parents of each child either directly or notionally for them to pass to a school of their choice, allowing them to add their own money and then letting the free market rip (à la the private vocational educational providers about which so much has been revealed in the past year)?

The most obvious problem is that not every child costs the same to educate. Voucher advocates have considered this and propose a system of basic vouchers for all children and supplementary vouchers for those who cost more because of a particular disadvantage, such as a disability, a low socio-economic level or a non-English-speaking background. This system seems to make sense, and has, to some extent, been in place in Victoria for the last ten years, but there are factors that it cannot deal with.

Most obviously vouchers for individuals cannot deal with concentration of disadvantage; i.e., the fact that large numbers of disadvantaged children in one school will lower educational achievement in that school by a greater degree than would each child multiplied by the number of such children. This fact demands that we think of education as a system, not as a collection of competing small businesses.

Parents have every right to do the best by their own children, but the state has an interest in all children, including those from backgrounds that do not value learning. The state has an interest ensuring that all its citizens are educated to their potential and are productive and committed members of a democratic community. The state has an interest in a socially integrated education system because that system will improve learning across the whole community. It does not need to own every school there is to achieve that end. It just needs a funding model that supports that end.

A socially stratified education system lowers overall educational achievement, so it is in the interests of all us that we have the socially integrated system that lifts achievement. Therefore, the state should not pay for parents’ choices that detract from the overall educational achievement of the nation.

Some governments have promoted the marketisation of education. Intelligent governments understand that education is better run as a system in which the government takes responsibility for all schools and does not leave some to fade and die, an attitude which shows a disgraceful disregard for the children in them.

There is also the question of efficiency. To grant every child the same voucher would make it impossible to run a school in a small rural community. A primary school of ten students granted the current de facto Victorian voucher of $7,133 each (for a prep student) could not even afford one teacher’s salary, much less the other necessary costs of opening the door. It would be possible to create a supplementary voucher of, say $7,000 per student in a rural area, but that would not be enough if the school had only six students and would be far too much if the school had 60 students.

Funding schools solely on their enrolments, which is what a true voucher system does, would prevent some areas from even having a school.

It is much more efficient to allocate each school a base amount, being the minimum necessary to run a school, irrespective of the number of students it has. This is what Victoria already does (though it phases the base out for larger schools). It would defeat the whole purpose of having this base amount if anyone could establish a school anywhere and then claim base funding from the government. We could have a school of ten students next to another of six and be paying two base amounts when the public purse should be paying only one base amount for a school of 16 students.

Efficiency is not the only factor that argues against an unrestricted voucher system. There is strong evidence that choice in education does not actually work. Superficial reporting suggests that non-government schools outperform government school students in year 12 results and in NAPLAN. However, once the data is analysed to show the difference the school made, given the students that enrolled, the differences in achievement disappear (see below for references). Students in non-government schools achieve higher scores because they are more likely to come from higher socio-economic groups and thus have higher cultural capital and less likely to have disadvantages. It is not only the individual students in such schools that make the difference but also the fact that such students are in a milieu with others like themselves. Any education system that funnels children into like social groups will under-perform because the cultural capital is concentrated in some schools and rare in others.

A voucher system that pays the same amount for each child and allows parents to top it up with their own money will increase social segregation as wealthier parents will be able to spend the extra, get their children into more exclusive schools and pay for better teachers.

This is not an argument against non-government schools or even against the public funding of such schools. At least 21 OECD countries fund non-government schools, several more generously than Australia does. Denmark spends $US6,393 from government funds (by purchasing price parity) per student in a private school (OECD Education at a Glance 2014, Finland spends $US9281. Iceland spends $US6204. Norway spends $US13,630. Sweden spends $US10,028. Belgium spends $US9576. France spends $US5491. Slovenia spends $US5684.

The UK gives 100 per cent funding to most non-government schools, which are integrated into the public system. It does not fund elite non-government schools, but most non-government schools are not elite. They are open to all, but they are privately run. New Zealand is similar with Catholic schools that are integrated into the public system. It is a complete myth that Australia is the only OECD country that funds non-government schools.

The difference between Australia and the rest of the world is that the rest of the world imposes stricter conditions on the funding of non-government schools.

The Victorian Labor government introduced a mostly voucher funding model into its schools in 2005. This model, called, the Student Resource Package, pays $7133 for each student in prep or year 1, $6624 for each student in year 2, $6071 for each student in years 2 to 6 and $8063 for each student in years 7 to 12. The model also pays a base amount for each school, varied according to school type and characteristic. It also pays loadings for disadvantage, such as disability, non-English-speaking background and low SES.

The Victorian Labor government introduced a similar model for non-government schools at the same time. Contrary to media hype, this Financial Assistance Model does not pay 25 per cent of the cost per student in a government school to every non-government school student. It works like the SRP and pays a varied amount per student according to the financial resources of the school being funded plus loadings for disadvantage. These payments come from a pool created by calculating 25 per cent of the costs of educating a student in a government school and multiplying that figure by the number of students in non-government schools.

The federal government also pays money to non-government schools, but it does so on the basis of how well off the neighbours of the children in the school are. This socio-economic status funding model, introduced by the Howard government, was so bad for non-government schools that about half of them would have lost money under it, so they were left on the Hawke government’s education resources index model, the model that takes account of each school’s actual resources.

The problem with the SES model is that it funds students according to how well off the neighbours of all the students in the school are. It thus punishes the most inclusive non-government schools, the ones in middle class areas that try to keep their fees low so that all can attend. It cuts their funding, forcing them to put their fees up and drive the poorer children out of them into the local government school, thus increasing social segregation and lowering overall educational achievement in Australia. The Gonski panel recommended forcing all the compensated schools on to the SES model, and the federal Labor government legislated to do so via the Australian Education Act 2013, thus entrenching the Coalition’s much-condemned funding model.

The most effective funding model would be voucher-based, but it would not hand vouchers out in an unrestricted way and it would have base funding for government schools only. It would adopt the Victorian SRP for all schools, government and non-government, but it would reduce the amount of the voucher as schools increased their fees in order to promote a socially inclusive education system.

If Australia is to lift its educational achievement, one of the key moves it has to make is to move from a 60:40 system to a 90:10 system - if it can’t create a 95:5 system. In other words, the socio-economic make-up of non-government schools has, as far as possible, to match the socio-economic make-up of government schools. Non-government schools ought to be able to retain their individual character without forcing government schools to be the residual ones.

Evidence on the failure of choice, the idea behind the unrestricted voucher model, to improve learning can be found at:

Chris Curtis