Private for-profit schools?

Ideology and trade agreements threaten public service provision.

Sue Simpson
Research Officer

Private for-profit schools are not eligible to receive federal and state school funding. But for how long will Australian public and private schools be protected from competition from private, for-profit schools run by corporations?

Corporations, including ASX listed corporations, are increasing their reach in the pre-school and post-school years. What is so special about schools as opposed to the education of children in their earliest years — the most informative years for brain development or the training and education of workers — and post-school students so essential for economic development?

Affinity Education Group, ASX listed late last year, and G8 Education, currently valued at around $1.25 billion, are using the capital raised in their ASX listings to acquire single centre childcare operations across Australia. The business model relies on government subsidies, parent fees and low wages for childcare workers and pre-school teachers. Profit forecasts are premised on those wages remaining pathetically low. The model is similar to the acquisition and consolidation model employed by the vocational education private providers.

The 2015 election plans of UK Education Secretary Michael Gove to allow free schools and academies to be run by profit-making businesses has been rejected by British teachers. According to National Union of Teachers President Beth Davies free schools and academies currently comprise 65 per cent of all English schools. Such schools are an on-steroids version of Australia’s Federal Education Minister Christopher Pyne’s “independent public schools” with unqualified teachers being able to be employed, for instance. Gove is committed to having 100 per cent of UK schools taken out of local government control and run as free schools and academies. For the private sector to be more involved, the opportunity for profits is evidently required.

The former National Party member for the NSW mid-north coast seat of Lyne and Deputy Prime Minister Mark Vaile is a consultant for Gems Education, whose promotional video makes the boast of being the largest private provider of schools in the world. In an interview in the Sydney Morning Herald on January 20, 2013, he foreshadowed the presence of for-profit schools for Australian students: “There are schools for profit in the UK and in the US, so in an economy like Australia’s there will be that level of competition, they will eventually appear.’’

Public services, including education, are under threat from free trade agreements. Public services are seen as state-run monopolies that threaten competition and the operation of the market. As trade minister, Mark Vaile negotiated free trade agreements that included easier access for Australian for-profit education providers to markets in Asia and the US. The reverse is also the case where overseas corporations can gain greater access to Australian markets. The Australian Government is currently negotiating a trans-Pacific free trade agreement and the terms are secret. The government is also involved in negotiations on for a Trade in Services Agreement with some members of the World Trade Organisation. The agreements are designed to create a level playing field for foreign and domestic investors and ensure governments do not discriminate between public and private service providers.

Federal and state governments have already embraced notions of a level playing field between public and private providers in the provision of vocational education and training and disability services. The NSW Government’s Smart and Skilled policy means TAFE NSW will lose its protected status as a public institution and provider. Under the National Disability Insurance Scheme there is no longer a role for the state government as a provider of services. Thousands of disability workers are facing redeployment, transition to a private provider or the loss of their job.

The terms of reference for the Abbott Government’s Commission of Audit include the principle “government should do for people what they cannot do, or cannot do efficiently, for themselves, but no more”. The Commission of Audit is to address ways to privatise federal government assets, increase competition between providers and “encourage self-provision of services by individuals over time”. The continued existence of public schools fully funded by government runs counter to the Abbott Government’s ideology, even if at the moment government policy does not go to for-profit schools receiving government funding.