Education funding in Australia is changing. Learn how public and private schools are funded, what the SRS means, and why funding equity matters.
Education Funding in Australia: Is the System Fair?
Every Australian child should have access to an excellent education regardless of their parents’ income, postcode, disability or family circumstances.
Yet education funding in Australia has been one of the country’s most persistent political disputes.
The debate is often reduced to a simple claim: private schools are overfunded while public schools are underfunded.
The reality is more complicated.
Both government and non-government schools receive public funding. States and territories provide most public funding for government schools, while the Commonwealth provides most public funding for non-government schools.
The more important question is whether every school receives the resources it needs to meet its students’ educational needs.
Australia has now embarked on a major funding transition. Under the Better and Fairer Schools Agreement 2025–2034, governments have agreed to put public schools on a pathway towards receiving 100 per cent of the Schooling Resource Standard.
That is significant progress.
But reaching the target will take years, and money alone will not eliminate Australia’s substantial educational inequalities.
Quick Answer: How Are Australian Schools Funded?
Australia has three main school sectors:
- government schools;
- Catholic schools;
- independent schools.
In 2025, about 62.8 per cent of Australian students attended government schools, 20 per cent attended Catholic schools and 17.2 per cent attended independent schools.
Funding comes primarily from the Commonwealth and state or territory governments.
The responsibilities are divided differently:
Government schools: states and territories provide most public funding, with the Commonwealth providing a smaller share.
Non-government schools: the Commonwealth provides most public funding, with states and territories providing a smaller share.
Private schools can also receive tuition fees, donations and other private income.
This makes simple comparisons of Commonwealth funding alone misleading. To understand whether a school is adequately funded, we need to consider total public funding and the needs of its students.
What Is the Schooling Resource Standard?
The central concept in Australian school funding is the Schooling Resource Standard, commonly known as the SRS.
Introduced following the 2011 Review of Funding for Schooling led by David Gonski, the SRS estimates the amount of public funding a school needs to meet its students’ educational requirements.
It consists of a base amount for each student plus additional funding—or loadings—for particular needs.
These include:
- students with disability;
- Aboriginal and Torres Strait Islander students;
- students from socio-educationally disadvantaged backgrounds;
- students with low English proficiency;
- small schools;
- regional and remote schools.
For 2026, the estimated SRS base amounts are $14,509 for a primary student and $18,233 for a secondary student.
Those figures are starting points rather than identical payments for every student. Schools with greater educational needs can attract additional funding through the loadings.
This needs-based principle is important.
Equality does not necessarily mean giving every school exactly the same amount. A remote school, a school serving a highly disadvantaged community and a school with many students requiring disability support may legitimately require considerably more resources.
How Much Does the Commonwealth Spend on Schools?
In 2026, Australian Government recurrent funding for schools is estimated at approximately $33.3 billion.
This includes approximately:
- $12.7 billion for government schools;
- $11.1 billion for Catholic schools;
- $9.5 billion for independent schools.
At first glance, those numbers can appear surprising because government schools educate most Australian students.
But Commonwealth figures alone do not represent total government support.
States and territories provide the majority of public funding for government schools.
In the 2023–24 financial year, total recurrent government funding for Australian schooling was about $91.04 billion. State and territory governments provided $61.88 billion, or 68 per cent, while the Commonwealth provided $29.16 billion, or 32 per cent.
Understanding this division is essential to having an informed debate about school funding.
Are Australian Public Schools Fully Funded?
Historically, many public schools have operated below their full SRS entitlement.
That is now supposed to change.
Under the Better and Fairer Schools Agreement – Full and Fair Funding 2025–2034, the Commonwealth has committed to increasing its contribution for government schools in the states and ACT from 20 per cent towards 25 per cent of the SRS.
States and territories are expected to provide at least 75 per cent.
Together, those contributions are intended to put public schools on a pathway towards 100 per cent of the SRS.
The Northern Territory has different arrangements reflecting its exceptional educational circumstances. The Commonwealth contribution there is intended to reach 40 per cent, with the Territory contributing at least 60 per cent.
This represents a major change from the situation described in earlier debates about chronic underfunding of public schools.
However, there is an important qualification.
A promise to reach full funding over time is not the same as every public school being fully funded today.
The transition extends throughout the agreement period, with timing varying by jurisdiction.
The Important Change to the 4 Per Cent Accounting Provision
One relatively technical change could have considerable practical importance.
Under previous arrangements, states and territories could count certain indirect expenditures—such as capital depreciation—towards part of their SRS contribution.
Under the new funding agreement, this 4 per cent provision is to be progressively reduced to zero and replaced with eligible recurrent expenditure.
That matters because a funding target is meaningful only if the money counted towards it genuinely supports schools and students.
It should therefore become easier to judge whether governments are actually delivering the promised resources.
Public Versus Private School Funding: What Is the Real Issue?
Debate about public versus private school funding in Australia often becomes unnecessarily polarised.
Parents who choose Catholic or independent schools are not the problem.
Nor does receiving government funding automatically mean a non-government school is “overfunded.”
The stronger social-justice principle is that public funding should be distributed according to educational need and the public interest.
Non-government schools form a substantial part of Australia’s education system and educate millions of children.
However, public schools have a special responsibility.
They are generally required to accept students regardless of family wealth and provide the universal education system available to every community.
That makes adequately resourced public education essential even in a mixed public-private system.
Public Schools Educate Most Australian Children
In 2025, Australia had approximately 4.16 million school students.
Government schools educated 62.8 per cent of them.
Catholic schools educated 20 per cent and independent schools 17.2 per cent.
Government schools therefore remain the foundation of Australian school education.
An effective public system is particularly important because educational needs are not distributed evenly across society.
Some students require substantially greater support than others.
For example, in 2025 approximately 1.13 million Australian school students—27 per cent of enrolments—received an educational adjustment because of disability.
Schools need sufficient numbers of teachers, specialist staff, facilities, and learning resources to meet these different needs.
Educational Disadvantage Remains Strong
Australia’s funding debate cannot be separated from educational inequality.
The 2025 NAPLAN results showed broadly stable national performance, with around two-thirds of students achieving the Strong or Exceeding proficiency levels across reading, numeracy and writing.
But national averages conceal substantial differences.
ACARA reported that achievement remained strongly associated with socio-educational background.
Students from the highest socio-educational backgrounds achieved substantially higher average results than students from the lowest backgrounds.
Location matters too.
In 2025, only 22.8 per cent of students in very remote schools were rated Strong or Exceeding in reading, compared with 71.9 per cent of students in major-city schools.
The results for Indigenous students also demonstrate persistent inequality. Across year groups, around 30.8 per cent of Indigenous students were assessed as needing additional support in reading, compared with 7.6 per cent of non-Indigenous students.
These figures should not be interpreted as measures of children’s inherent ability.
They demonstrate how educational outcomes intersect with disadvantage, geography, health, family resources, historical inequality and access to educational support.
Why Funding Matters—but Cannot Solve Everything
Adequate funding matters because schools require real resources.
Money can help provide:
- sufficient teachers;
- specialist disability support;
- psychologists and counsellors;
- teacher aides;
- modern classrooms;
- libraries and laboratories;
- digital technology;
- vocational education;
- arts and music programs;
- sporting facilities;
- professional development;
- support for students falling behind.
But simply reaching an accounting target will not automatically produce educational equality.
A school cannot employ a teacher who does not exist.
Additional funding, therefore, needs to be accompanied by workforce planning, teacher education, improved retention, housing in regional and remote communities, appropriate infrastructure, and effective, evidence-based teaching.
This is particularly important when discussing Australia’s monetary sovereignty.
Australia’s Dollar Sovereignty and Education Funding
The Commonwealth Government is the issuer of the Australian dollar.
That means it is not financially constrained in the same way as a household, a business, a state government, or a local council.
The Commonwealth does not need to “save up” Australian dollars before Parliament can authorise spending.
But that does not mean education has no economic limits.
The genuine constraints are real resources.
If Australia wants to employ thousands of additional teachers, psychologists, disability support specialists, and other education professionals, those workers must already exist or be trained.
Schools also require land, buildings, equipment, technology and materials.
If government spending increases faster than the economy’s ability to provide those resources, inflationary pressures can emerge.
The better question is therefore not simply:
Can Australia afford excellent public schools?
It is:
Does Australia have—or can it develop—the teachers, skills, infrastructure and resources required to provide them?
In a country as wealthy and institutionally capable as Australia, that becomes principally a question of political priorities and long-term planning.
Should Australia Stop Funding Private Schools?
Some critics argue that government funding should be removed entirely from private schools and redirected to public education.
The issue deserves more nuance.
Non-government schools educate more than one-third of Australian students. Abruptly withdrawing public funding could substantially increase fees and potentially shift large numbers of students into the government system, which would itself require additional resources and infrastructure.
A more practical principle is:
Every public school should first have the resources necessary to meet its students’ needs, while public funding for non-government schools should be transparent, needs-based and appropriately account for families’ capacity to contribute.
The existing SRS system already incorporates a Capacity to Contribute mechanism for most non-government schools, which reduces their base public funding according to estimates of the school community’s capacity to contribute privately.
Debate should therefore focus on whether those mechanisms are fair and whether scarce public resources are being directed where they produce the greatest educational and social benefit.
What About Wealthy Private Schools?
Public concern becomes particularly understandable when prestigious private schools display expensive sporting facilities, performing-arts centres or other infrastructure while nearby public schools struggle with ageing buildings or insufficient support staff.
However, facilities cannot automatically be attributed to government recurrent funding.
Non-government schools may obtain substantial income from fees, donations, investments and fundraising.
The appropriate policy response is therefore transparency rather than assumption.
Australians should be able to determine:
- how much public funding a school receives;
- why it receives that amount;
- how educational need is calculated;
- whether funding arrangements comply with the SRS;
- and whether public money is being used consistently with its intended purpose.
ACARA’s My School website provides school-level financial and educational information that can help citizens make these comparisons.
Teacher Quality: Avoiding a Misleading Comparison
One claim sometimes made in the public-versus-private debate is that private schools simply have “better teachers.”
There is no sound basis for treating teachers in one sector as inherently better than those in another.
Educational outcomes reflect many interacting factors, including student background, prior achievement, teacher experience, school leadership, resources, attendance and family circumstances.
ACARA itself has warned against simplistic school rankings that fail to account for socio-educational advantage.
The real workforce issue is whether schools can recruit and retain enough qualified teachers and give them the time, support and resources required to teach effectively.
A disadvantaged or remote school may require more resources per student, not because its teachers are inferior, but because the educational task is more demanding.
What Australia Should Do Next
The new funding agreements create an opportunity to move beyond decades of arguments about funding percentages.
Australia should now concentrate on whether additional resources actually improve educational opportunity.
1. Deliver the Full SRS Commitment
Governments should meet the agreed timetable and ensure that 100 per cent genuinely means 100 per cent of eligible school funding.
2. Direct Additional Resources Towards Need
Disability, socioeconomic disadvantage, remoteness, First Nations education and language needs should continue to attract additional support.
3. Build the Education Workforce
Australia needs long-term planning to recruit, train and retain teachers and specialist staff.
Regional workforce shortages require particular attention, including affordable staff housing where necessary.
4. Strengthen Public Education
Every Australian community should have access to a high-quality public school.
Parents should not feel compelled to purchase private education because their local public school lacks resources.
5. Require Funding Transparency
Public money should bring public accountability regardless of whether the recipient is a government, Catholic or independent school.
6. Measure Outcomes, Not Just Spending
Funding matters, but governments should also monitor whether additional resources improve attendance, literacy, numeracy, student wellbeing, retention and educational opportunity.
What Australia Can Learn From Other Countries
International comparisons can be useful, but Australia should avoid assuming that another country’s education system can simply be transplanted here.
Finland, for example, is frequently praised for strong public education, highly educated teachers and relatively equitable schooling.
But Finland and Australia differ in population, geography, demographics, institutions and education systems.
The broader lesson is more useful than copying individual policies:
successful education systems treat teaching as essential national infrastructure and seek to prevent family wealth from determining educational opportunity.
Australia can pursue that principle in ways appropriate to Australian circumstances.
Education Is More Than an Expense
Public education is sometimes discussed primarily as a cost to government.
That misses its wider economic and social value.
Education develops skills, productivity and technological capability. It improves people’s capacity to participate in democracy and adapt to economic change.
A well-educated population also expands Australia’s productive capacity.
That matters for monetary sovereignty because productive capacity is one of the real constraints on what governments can sustainably accomplish.
Training more nurses, engineers, builders, scientists and teachers does more than help individuals.
It increases what Australia is capable of producing in the future.
Public education should therefore be understood as social and productive investment, not merely annual expenditure.
Frequently Asked Questions
How is education funding in Australia divided?
Government schools receive most of their public funding from state and territory governments, with the Commonwealth contributing a smaller share. Non-government schools receive most of their public funding from the Commonwealth, with additional state and territory funding.
What is the Schooling Resource Standard?
The Schooling Resource Standard is an estimate of the public funding required for a school to meet its students’ educational needs. It includes a base amount plus additional loadings for disadvantage and other needs.
Are Australian public schools fully funded?
Not all public schools are yet receiving 100 per cent of the SRS. Under the Better and Fairer Schools Agreement, governments have committed to putting public schools on a pathway to full SRS funding over the agreement period.
Does the government fund private schools?
Yes. Catholic and independent schools receive Commonwealth and state or territory funding. Many also receive private income from fees and other sources.
Do public schools educate most Australian students?
Yes. In 2025, 62.8 per cent of Australian school students attended government schools.
Can Australia afford to fully fund public education?
The Commonwealth can authorise Australian-dollar spending. The meaningful limits are the availability of teachers, specialist staff, buildings, equipment and other real resources, together with the need to manage inflation.
A Fair Education System Is a National Choice
Australia is not starting from scratch.
It has an established public education system, thousands of schools, hundreds of thousands of educators and a needs-based funding framework.
Governments have now committed to moving public schools towards full SRS funding.
The challenge is ensuring that this promise becomes a practical improvement in classrooms.
A child’s educational opportunities should not be determined primarily by their parents’ income, whether they live in a wealthy suburb or remote community, or whether their school can attract private donations.
The goal should not be to wage a cultural battle between parents who choose public and private education.
It should be to guarantee something much more fundamental:
Every Australian child deserves access to an excellent education, and every school should have the real resources required to provide it.
That is not only an education policy.
It is a commitment to equality of opportunity and Australia’s future.
What Do You Think?
Should every Australian public school receive its full Schooling Resource Standard sooner than currently scheduled?
And what should governments do when additional funding cannot solve shortages of teachers and specialist staff?
Leave a comment below and share your experience.
Sources
- Australian Government Department of Education — Schooling Resource Standard.
- Australian Government Department of Education — Better and Fairer Schools Agreement 2025–2034.
- Australian Government Department of Education — Recurrent Funding for Schools.
- Australian Government Department of Education — Reports on School Funding.
- Australian Curriculum, Assessment and Reporting Authority — National Report on Schooling in Australia.
- Australian Curriculum, Assessment and Reporting Authority — 2025 NAPLAN National Results.
- Australian Bureau of Statistics — Schools, Australia.
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