The Education Acts passed in the colonies before Federation in 1901 which removed funding from denominational schools and ensured government funding for secular education only, was a keen topic for debate right up until the First World War. It continued to have strong support with politicians and the community well into the 20th century. The Catholic Church however, remained bitter about it and many Catholics may have seen it as religious discrimination.

By the end of 19th century, The Catholic Church had its own system of primary and secondary education, through its various religious orders. Rome had made it clear that Catholics should not accept an education system that was not connected to the Catholic Church. All Catholic children were expected to attend Catholic schools - parents were warned against the dire consequences of exposing their children’s souls to sin by sending them to state schools. In its public condemation for state-aid for secular schools, the Catholic hierarchy isolated the church from the mainstream community.

One of the reasons the Catholic Church was able to keep its schools open was its access to a cheap labour force within its religious orders to staff its schools. When Protestant schools lost state funding they introduced high fees to keep the doors open. However this had the effect of restricting entry to children of the wealthy and Protestant schools emerged as elite private schools.

Until the Second World War the Federal Government provided no specific funds for education, leaving the states to make funding decisions using general revenue received from the Commonwealth or revenue raised from their own taxes.

Towards the end of the War, the Federal Government began to take an interest in education and by 1945 it had established the Commonwealth Education Office (CEO). The CEO began in a small way by funding training schemes for returned servicemen, and scholarships for schools and universities.

By the 1950s, the nature of schooling had changed. Post-war immigration, the rising birth rate and the tendency for children to stay at school longer meant that state governments were unable to cope with the demand for new schools, better facilities and more teachers. The Federal Government was coming under increased pressure from parent, teacher and other community groups to provide funding for government schools and it became a national issue.

The education crisis also existed in non-government schools. Catholic schools in particular struggled to cope with the increased cost of schooling and a diminishing pool of teachers. Catholics staged desperate, often quite militant, political campaigns for the re-introduction of state assistance. They also softened the religious aspect of their campaign and broadened it to cover state-aid for all non-government schools.

A breakthrough came in 1964 when the Menzies Liberal Government introduced federal science grants for all secondary schools, providing direct federal aid to government secondary schools for the first time and re-introducing some state aid for non-government schools.

The Australian Labor Party (ALP) was a thorn in the side of the Catholic Church. Many Catholics were Labor supporters but the ALP was opposed to funding denominational schools. In their desire to gain the Catholic vote, the conservative Liberal and National Country parties assisted by the newly-formed Democratic Labor Party (a minority party with strong Catholic support) moderated their opposition to government assistance for church schools in the 1960s. The primary reason for this was to gain government assistance for the elite private schools.

When Labor lost the 1963 elections, one of the reasons for its defeat was its disunity on the state aid issue which had split the Catholic vote. By 1972, the ALP had been in opposition for 23 years. Realising the importance of gaining the Catholic vote, the ALP dropped its opposition to government aid for church schools. It went to the 1972 federal election with a policy of funding all schools on a “needs” basis. Because the Catholic schools were by far the “neediest” of the church schools, the plan was to direct all the funding to Catholic schools and give no assistance to the wealthy private schools.

It won the election but the Liberal and National Country parties (who controlled the Upper House) threatened to block the education funding legislation unless all private schools received some funding. As a result, all schools became eligible for assistance based on a formula that assessed their needs and resources. The most disadvantaged schools, predominately Catholic, received about 80 per cent of their running costs from state and federal governments while the wealthier schools received about 33 per cent. A capital grants system was also established.

Without government assistance many non-government schools would no longer exist. Prior to funding being restored, the Catholic system in particular was in crisis. Catholic parents could not afford to pay the sort of fees needed to keep the schools open and could no longer rely on fetes and fairs to raise funds to pay the increasing number of lay teachers it needed to employ due to a diminishing number of available teachers within the religious orders. Today, the majority of teachers in Catholic schools are lay teachers and rates of pay are comparable with those in government schools.

Federal funding formulas have gone through various stages over the years, depending on whichever government was in power. The Whitlam Labor Government drew up the School Recurrent Resources Index (SRRI) which based school subsidies on the recurrent resources available to the school. The Fraser Liberal Coalition government gradually increased the funds to private schools. Under the Hawke Labor Government, the Educational Resources Index (ERI) assessed the relative “need” of non-government schools.

When the Liberal Coalition was elected in 1996 it drew up a new funding arrangement. Called the Socio-Economic System (SES), it measures the capacity of school communities (i.e parents) to provide income and introduced a concept of individual entitlement. The SES does not take into account the school’s income or private resources. This has continued to be contentious with the government schools lobby which says it is not equitable because it has increased funding to the wealthy private schools and comparatively reduced funds for government schools.

The Liberal Government also abolished the usual waiting period before a new school could be established, making it easier for the creation of schools catering for a particular religious belief or philosophy. Not only has this “deregulation” of the private school market made it easier for parents to make a private school choice, it has given them a range of competing choices. Private school enrolments over the past decade are at the highest level in Australia’s education history.

Another probable factor in the enormous growth of private schools and the associated decline in government school enrolments is an increasing number of migrants wishing to maintain their cultural and religious heritage through school choice. Other factors in the popularity of “elite” schools may include the rising aspirations of the middle class and the slow decline of Australian egalitarianism as more parents search for higher academic standards leading to university and high status occupations. It may be perceived that an increasing number of parents see a private education as an investment in their child’s future.