I was fortunate over the summer to spend three weeks visiting 24 schools in Australia and New Zealand, forging new connections and learning lessons about how the private sector is navigating the challenges it faces.
It certainly is a different world: more than 37 per cent of Australian children attend independent schools; an almost incredible figure when compared with around 6.5 per cent in the UK and just under 4 per cent in New Zealand.
This means, as a percentage of all primary and secondary school costs, Australian parents directly fund about 14.7 per cent of the total spend in addition to their taxes. Parents in the UK, though, fund about 13.7 per cent, so not far behind, but focused on far fewer children.
There is one big difference, though; about a quarter of federal and state expenditure goes to independent schools.
Education spending decisions
In Australia, federal and state governments contribute to the education of all children regardless of which sector their parents choose.
The amount of the contribution varies depending on the ability of parents to pay - the so-called “capacity to contribute” score.
A Direct Measure of Income analysis determines the median personal income of parents and guardians at each school. High-scoring schools receive less funding, lower-scoring schools more.
In practice, this means Australia benefits from a much more diverse range of independent schools, some charging higher fees, others much lower fees.
It gives parents choice, and they appear to like it. Numbers attending independent schools in Australia have been steadily rising despite global economic and financial pressures on families.
Historical context
Reasons for the durability of this model lie in the Goulburn School Strike of 1962. An independent Catholic school starved of funding from the state authorities marched its children to a local state school and attempted to enrol them en masse.
The resulting chaos made a point the politicians have not forgotten: don’t mess with angry schools and value the support that hard-working parents are already making to help educate their children.
In New Zealand, independent schools also receive state funds. The sums involved had been static since 2010 but increased by 11 per cent in 2025, when a commitment was also made to review the amount annually.
Perhaps 1975 loomed large in the government’s thinking. Economic pressures had led to the potential collapse of the sector.
Faced with the real prospect of having to find places for tens of thousands of additional children, the Private Schools Conditional Integration Act provided state funding for schools facing financial difficulties.
School proprietors continued to own these “state-integrated” schools and maintain their religious or philosophical character.
They could levy compulsory fees to cover building and estate costs, but the state would determine the curriculum and pay structure.
There are now 335 state-integrated schools educating nearly 93,000 pupils (roughly 10 per cent of the nationwide pupil population). It was a move similar to the academisation of some schools in the UK after the 2008 financial crisis.
Value of education
Two potential conclusions can be suggested. First, the overall level of investment in Australia and New Zealand is raised by the willingness of many parents across the income range to contribute to their children’s education on top of normal taxes.
And second, the value placed on education by these parents must be considerable.
It goes without saying that Australian governments, federal and state, don’t tax school fees. The only country besides the UK to do so is New Zealand, although at the slightly lower 15 per cent standard GST rate.
That doesn’t mean, of course, that schools in Australia aren’t vulnerable to the constant search for increased tax revenue.
Two years ago in Victoria, a payroll tax was introduced for independent schools, although not without the sector winning some major concessions.
High-fee schools especially would perhaps be naive to count on state funding in perpetuity or at least at the levels currently enjoyed.
The question of devolution
Another interesting aspect of Australia is the devolution of education to the state governments. The federal government in Canberra does contribute to school funding, but the lion’s share comes from the states.
This also means the states determine their own curricula and assessment systems while strong universities underpin an educational commonwealth that feels more stable.
Of course, state and territory governments can be more sensitive to their areas’ educational landscape and perhaps more responsive to a highly articulate and engaged electorate (voting is compulsory).
It also means education seems to play a more prominent role in public discourse both at secondary and tertiary level. Certainly, this is something for our new prime minister to ponder as he considers rewiring the UK system - including greater devolution.
Meanwhile, the School Choice Counts campaign recently mounted by Independent Schools Australia demonstrates a much more proactive and positive approach in terms of sector advocacy, demanding an AU$50 million innovation fund to help with teacher retention and pupil wellbeing, and capital grants to help independent schools handle growing numbers.
In the UK, the sector tends to be more apologetic and certainly more reticent - perhaps this could, and should, change?
Simon Hyde is chief executive officer of HMC
