Private Schools and State-Integration

 
Media Release: Tuesday 17 February 2009

Private Schools and State-Integration

Some private schools will consider integration into the state school sector as the economic downturn has a direct effect on school roll numbers.

The crippling capped funding regime of the last nine years under the Labour Government, coupled with the current economic climate, has put real pressure on the financial sustainability of independent schools.

Independent Schools of New Zealand, the umbrella organisation for 44 private schools (educating 80% of children educated in the private sector) has long argued that if proportionate government subsidies had more closely reflected the cost of educating a child in the state sector, and at the very least kept up with inflation, then in the event of an economic downturn, private schools would be in a better position to weather the financial storms of today.

Over the past eight years independent schools have seen a 42% real decrease in government funding levels. The decrease has resulted from both inflation and the increase in student numbers.

At a time when the state school sector is crying out for more government funding, it should be remembered that for every child withdrawn from a private school and placed into the state sector, it costs the government more to educate that child. Independent schools save the government approximately $180 million per annum. The presence of independent schools provides a net fiscal benefit to the Crown in terms of potential expenditure required on students currently at independent schools if they were to attend state schools.

On top of this, parents sending children to independent schools pay GST on the tuition fees paid to independent schools. It is estimated that the Crown receives 42% of the funding it provides to students at independent schools back in the form of GST paid on school fees. This means that the true cost to the Crown of students at independent schools is just over half of the actual funding.

If private schools were forced to apply for integration into the state sector the government would face enormous costs, over and above the increased costs it is already facing as more students choose to stay at school longer.

ISNZ considers that a more equitable government subsidy rate for students at independent schools would benefit private schools in enabling them to maintain their independence, and would save the government incurring huge costs in absorbing these same students into the state sector.

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