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Why private school funding should be cut

SOME private schools are “absolutely” getting too much taxpayers money after being identified as being over-resourced as far back as the 1990s.

Bronwyn Hinz, a policy fellow at the Mitchell Institute, said some private schools were getting too much public funding and this had been identified by the Howard government many years ago.

She said the Howard government had overseen the development of the socio-economic status model, which has been criticised for favouring private schools.

But Dr Hinz believes the system was fairly accurate in assessing the needs of schools.

The problem was, the Howard Government decided to ignore it.

A lot of schools were found to be getting too much funding, Dr Hinz said of the models findings.

But the Cabinet made the political decision not to cut funding to any of the schools.

One explanation is that the Cabinet decided it didn't want to have the legacy of reducing funding to private schools, she said. It probably didnt help that many of the richer schools were located in safe Coalition seats. It was a political decision.

This meant there was less funding to go round to other more needy schools.

The Gonski school reforms didnt help matters much as the Gillard government promised no school would lose a dollar.

This meant over-resourced schools were allowed to keep their funding. The Gillard government instead relied on inflation to bring down the level of funding over time.

But in some cases, it was forecast to take 100 years before a schools funding would be low enough to be in line with the base level of funding suggested under the Gonski response plan.

Education Minister Simon Birmingham noted this problem during an appearance on Q&A on Monday night when he said: Some schools that are notionally overfunded take more than 100 years to come into alignment with the current funding model.

Mr Birmingham is trying to negotiate a new model with the states, and said it was possible that some private schools could be worse off. Understandably, he refused to produce a hit list when pressed further on the issue.

The targeting of private schools became deeply unfashionable after former Labor leader Mark Latham drafted a hit list of affluent schools during the 2004 election campaign.

He wanted to cut funding to 67 elite schools, and freeze funding for a further 11, as a way of boosting public education.

Schools targeted included the Kings School and Pymble Ladies College in Sydney, Caulfield Grammar and Melbourne Grammar in Victoria, and Adelaides Scotch College.

Dr Hinz said she was encouraged by Mr Birminghams comments on Q&A and it was indisputable that some private schools were over-resourced.

The current Schooling Resource Standard sets funding per student per year about $12,000 with top ups for those who are disadvantaged, including if they live in regional areas, are of low socio-economic status, non-English speaking background, indigenous or have a disability.

If other private schools charge over $20,000 or over $30,000 a year in fees, thats two or three times what is considered a good amount of funding, I would argue that is over-resourced, she said.

All governments have complained about having limited resources and this makes it important to target money to areas where it would have the greatest impact.

Gonski made it clear that we are not matching resources where theyre needed, Dr Hinz said.

But public funding has been increasing to private schools at a faster rate than public funding to public schools.

This suggests a mismatch of where funding is going, and where funding is needed.

While Dr Hinz was glad to hear Mr Birmingham was willing to look at the issue, change would be difficult as most of the money for public schools comes from the state and territory governments, not the Federal Government.

Even if the Turnbull Government did draw up a hit list of private schools, it has minimal control over how its funds are directed.

Its pretty difficult administratively to attach conditions to the funding because the government doesnt run schools, Dr Hinz said. Its very complicated.

Labor leader Bill Shorten has been critical of the governments decision to back away from funding the last two years of the Gonski plan, which was the subject of talks in Adelaide involving state and territory education ministers.

How out of touch is Malcolm Turnbull that he doesnt understand that, regardless of whether or not you live in a harbourside mansion or western Sydney, giving kids the best start in life is the number one priority of any self-respecting government? Mr Shorten said this week.

No formal funding offer has yet been put on the table but Mr Shorten is calling on the Commonwealth to honour its previous commitments under the Gonski model.

A deal is expected to be finalised at the first Council of Australian Governments meeting in 2017, likely to be in March or April.

Younger aussies want to tap into their superannuation to buy property

BREAKING into superannuation savings early is the answer for many younger Australians hoping to make the home ownership dream come true, new findings have revealed.

Millenials those born after 1982 want to fund stumping up a house deposit by using their hard-earned super savings to get their foot onto the property ladder.

New research commissioned by online loan-bidding platform LoanDolphin found of the 1000 respondents aged between 18 and 34, a majority (60 per cent) want to use super as a solution to their home ownership woes.

Administration assistant Melissa Hurwitz, 23, and her sister Faye, 24 both live with their mother in her Sydney home and Melissa says despite not paying rent, saving a house deposit has been tough for the pair who are joining financial forces.

Weve decided we want to buy an investment property together but we dont have enough money yet and probably need another six to 12 months of savings,’ she says.

I believe property is a good investment but its a bit unattainable, at the moment if we put our money together we have about $40,000 for a $400,000 property but we are looking to buy a $500,000 to $600,000 investment.

Using super is a fantastic idea, theres been times when Ive had more super in my account than money in my bank account.

Many lenders allow house deposits of five to 10 per cent but borrowers with smaller deposits will be hit with expensive lenders mortgage insurance, a charge that protects the bank, not borrower if the borrower defaults.

LoanDolphins chief executive officer Ranin Mendis believes tapping into super should be allowed to help get younger people begin building wealth.

Given the current housing affordability crisis, the time is right for the government to innovate when it comes to young Aussies and property,’ he says.

Saving the required deposit is moving out of reach for many young Australians so they are seeking more innovative ways to save or build a deposit.

Mendis suggests younger Aussies set realistic monetary goals, get rid of credit cards, work to boost their income and make direct savings from each pay packet to get started.

He says most of LoanDolphins customers take about three to five years of consistent savings to buy property.

But the Australian Institute of Superannuation Trustees chief executive officer Tom Garcia says while super is a long-term savings vehicle for retirement its a band-aid solution to allow this money to be used to buy a home.

Recognising that declining home ownership is a growing social problem, the super industry is working with the Government to investigate and potentially invest in large scale affordable housing solutions,’ he says.