The Productivity Commission’s Report on Government Services (ROGS) 2025 exposes again a deeply unfair school funding system, with government funding growth continuing to favour private schools over public schools despite rising student need.

The report shows that private schools are now publicly subsided to a greater extent than ever before. In 2013-14 private schools received 67.7 per cent of the combined government funding per student. In 2023-24 this had increased to 70.8 per cent.

Private schools have received significantly stronger growth in real government funding than public schools over the past decade, both in total funding and on a per-student basis. Combined Commonwealth and state government funding to private schools has grown 30.6 per cent faster than funding to public schools over the last 10 years

“This is yet another year where the data shows that private schools continue to receive the lion’s share of government funding growth while public schools are being short-changed,” said AEU Federal President Correna Haythorpe.

“Despite educating the vast majority of students with the highest needs, public schools are falling further behind because governments continue to prioritise funding growth for private schools.”

Alarmingly, the report also shows that per-student government funding for public schools went backwards in the last year, driven by a decline in primary school funding.

Funding per primary student fell from $18,942 in 2022–23 to $18,853 in 2023–24, while overall recurrent funding per public school student declined for the first time in a decade.

“When funding per student goes backwards, schools feel it immediately in larger classes, fewer teachers and support staff and less capacity to meet student needs,” Ms Haythorpe said.

“This is happening at a time when public schools are educating more than twice the proportion of students from low socio-educational backgrounds, and when the number of students requiring disability adjustments has increased by more than a third in just four years.”

The report confirms that public schools now educate 31.5 per cent of students from low socio-educational backgrounds, compared to just 13.7 per cent in private schools, and that 27.2 per cent of public school students required an adjustment for disability in 2024

“Public schools are doing the heaviest lifting in education and it is the teaching profession whose expertise and commitment are the primary reason an underfunded public education system works as effectively as it does,” Ms Haythorpe said.

“The latest data from ROGS shows the inequality between sectors clearly and is a wakeup call to all governments that funding for public education must be urgently prioritised.

“The lack of funding is putting the teaching profession in crisis with unmanageable workloads, leading to high levels of stress, burnout and teacher shortages. These issues can all be addressed with proper resourcing.

“With seven state and territory governments having signed new funding agreements with the Albanese government, we have a unique opportunity to invest in recruitment and retention of teachers, specialists and education support staff and help schools better meet the needs of every child.”

In a positive development, ROGS shows that government investment in vocational education and training has increased since 2020, with around 75 per cent of funding directed to TAFE. However, several states have increased the share of funding flowing to non-TAFE providers and total funding paid to non-TAFE providers rose to $1.6 billion in 2024

“TAFE has rightly regained a central role in VET, but governments must resist shifting public funding back towards private providers and ensure TAFE is properly funded as the public provider,” Ms Haythorpe said.

In early childhood education and care (ECEC), total government expenditure reached $20.3 billion in 2024–25, with per-child spending increasing nationally but unevenly across states. Workforce pressures remain acute, with nearly one in five paid contact staff lacking a relevant ECEC qualification and higher reliance on staffing waivers in remote areas.

“ECEC funding growth is welcome, but it won’t deliver quality outcomes unless it is matched by workforce investment and a stronger public role,” Ms Haythorpe said.

“Across schools, TAFE and early childhood, the message from this report is clear that equity, workforce capacity and public provision must be at the centre of government policy.”

Key Facts:

Total recurrent funding

• Commonwealth funding to private schools in 2023-24 is now $6.23 billion per year higher in real terms than a decade ago in 2014-15.
• Total combined government funding to public schools is $11.1 billion in 2023-24. This is a nominal increase of only 0.2 per cent from 2022-23.
• Total combined government funding to private schools is now $22.78 billion in 2023-24 and has increased by 44.4 per cent in real terms over the last decade.
• Governments provided 60.1 per cent of nongovernment school funding in 2024.

Recurrent funding per FTE student

• Private schools have received 1.306 times the growth in total recurrent government funding per student that government schools received over the last decade.
• Each private school student received $15,262 in combined government funding on average in 2023-24.
• Total recurrent income per student to public schools has declined from last year, total recurrent funding per FTE student in government schools was $21,550 in 2023-24 – this is less than received in 2022-23.
• Per student funding for primary school students has declined from $18,942 per student in 2022-23 to $18,853 in 2023-24.
• Private schools are now publicly subsided to a greater extent than ever before. In 2013-14 private schools received 67.7 per cent of the combined government funding per student than public schools did. By 2023-24 this had increased to 70.8 per cent.
• Over the last decade from 2014-15, total per student funding to public schools has increased by 18.6 per cent, from $17,540 to $21,550 at an average of 1.9 per cent per year.
• Commonwealth funding to private schools has increased by 43.2 per cent in real terms on a per student basis over the decade from 2014-15 to 2023-24.
• Private school per student combined government funding has increased by 24.3 per cent over the last decade at an average of 2.4 per cent per year – a rate 1.3 times the rate of the public school increase.
• This means that combined State/Territory and Commonwealth government funding to private schools has grown 30.6 per cent faster than it has for public schools.

Public schools educate students with greater need in 2023

• Public schools educate more than twice the proportion of students from low socio-educational background households – 31.5 per cent of students compared to 13.7 per cent in private schools. The percentage of students from low SEA in public schools has steadily increased from 30.1 per cent a decade ago in 2015.
• The highest level of disadvantage is in the NT (49.1 per cent of public school enrolments) followed by Tasmania (43.3 per cent) then by QLD (34.3 per cent) and NSW (31.6 per cent).
• 27.2 per cent of public school students required an adjustment due to disability in 2024 (an increase more than a third (34 per cent) from 20.3 per cent in 2020), compared to 23.0 per cent of Catholic school students and 23.4 per cent of independent school students.
• Among all public school students Year 12 retention is at 74.3 per cent nationally. It lowest in the NT at 61.6 per cent and New South Wales at 67.3 per cent.
• Year 12 certification for students from low SES backgrounds has declined to 69.7 per cent, down from a peak of 76 per cent in 2016.
• Teacher/student ratios continue to be higher at public schools – 13.1 at public schools compared to 12.5 at private schools.
• In secondary schools the gap in student/teacher ratio is highest, at 12.2 in public schools compared to 11.2 in private schools.

Total government real recurrent expenditure on VET

• Total government real recurrent expenditure (excluding the user cost of capital) in 2024 was $8.85 billion, reflecting a 12 per cent increase from the 2020 figure of $7.74 billion.
• Total government expenditure per annual hour of VET delivery, when weighting for the cost of course delivery, has increased 18 per cent since 2020.

Government VET Delivery funding paid to non-TAFE providers

• Total VET delivery funding paid to non-TAFE providers has increased somewhat to $1.6 billion.
• The Commonwealth proportion of total government VET delivery funding paid to non-TAFE providers was at 19.4 per cent in 2024. This is consistent with previous figures since the Albanese government was elected. In the previous Coalition government, the proportion paid to Non-TAFE providers sat at 32.4 per cent.
• At the state level, Queensland (33 per cent) and South Australia (33.5 per cent) delivered the highest proportion of total VET funding to non-TAFE providers.
• Four states have increased their real VET delivery funding paid to non-TAFE providers in 2024: New South Wales (+1 per cent), Victoria (+5.9 per cent), Queensland (+4.8 per cent), and Western Australia (+21.7 per cent).

ECEC

• Total government real recurrent expenditure on ECEC was $20.3 billion in 2024-25, a 79 per cent increase since 2015. The commonwealth accounted for 79.6 per cent of funding, with 20.4 per cent coming from state and territory governments.
• Nearly one in five paid contact staff across ECEC lacked an ECEC related qualification in 2024, with 9.2 per cent of NQF (National Quality Framework) services utilising staffing waivers. Remote and very remote providers are significantly more likely to be utilising staffing waivers.