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High-fee private schools Haileybury and Penleigh and Essendon Grammar School are among the biggest losers from a federal government wind-back of non-government school funding by 2029, each having their share cut by several million dollars.
New figures, released from Senate estimates, reveal the amounts more than 50 schools in Victoria will forgo as federal funding is stepped back to 80 per cent of their School Resource Standard.
This year, Haileybury will receive $3.11 million above the 80 per cent SRS threshold, Penleigh and Essendon Grammar School will receive $2.8 million above it, and Ivanhoe Grammar $1.64 million above it, under agreed plans that will taper to $0 above the threshold in the next three years.
The state’s Catholic schools, which are grouped together under the funding model, will receive $30.69 million above the threshold this year.
The SRS is an estimate of the amount of total public funds a school needs and is calculated based on factors including the socioeconomic background of its students, as well as the school’s size and location.
The federal government has agreements with the schools to gradually reverse its funding to its legislated 80 per cent share, with the state government providing the remaining 20 per cent, but critics say the timeline for the “overfunded” schools is too slow.
Haileybury CEO and principal Derek Scott said the school had factored the funding changes into long-term plans. Fees for year 12 have increased to $41,685 from $39,985 last year.
“Haileybury remains conscious of the financial pressures facing families and works every year to keep fee increases as measured as possible, with recent increases among the lowest across comparable independent schools,” he said.
Melbourne Grammar School has seen the federal government’s SRS funding fall from $1.18 million above the 80 per cent threshold to $944,340 this year. Year 12 fees at the school have risen to $46,589 from $44,240 in 2025.
“Annual tuition fees are carefully considered and managed against a variety of factors, including inflation and ongoing operational costs, taxes, and fees,” acting headmaster Ben Hanisch said.
Ecumenical Schools Australia, a network of 21 private schools including Bacchus Marsh Grammar and Ballarat Clarendon College, will receive $14.54 million above the agreed SRS threshold this year.
Some schools in the network receive above the federal SRS funding while others are already at the 80 per cent, its executive general manager, Louisa Warnock, said.
She said the step-down in SRS funding was only one cost schools were wrestling with, alongside changing Capacity to Contribute scores that measure median parental income and affect funding, teacher wage increases and the Victorian government’s payroll tax.
“There are a lot of rising costs; you’re seeing parents that are struggling with other cost-of-living concerns. It’s a challenging moment for independent schools,” Warnock said, highlighting many families were making sacrifices to send their children to the schools.
Greens senator Penny Allman-Payne, who acquired the list of SRS decreases in the Senate estimates process, said the step-down for “overfunded” private schools should not delay funding for public schools, which the federal government has committed to fully funding to 100 per cent of their SRS by 2034. For government schools, the Commonwealth will provide 25 per cent of SRS funding and the state 75 per cent.
“In many respects I think it was probably too generous and what needs to be focused on is shortening that time frame and bringing public schools up to 100 per cent much more quickly,” Allman-Payne said.
“When you see that most of the bilateral agreements for public schools are actually back-loaded, so the bulk of the money doesn’t actually flow until the 2029-to-2034 period, [it] probably reinforces the point then that if they had a shorter runway, there would be more money available for those underfunded schools.”
Allman-Payne said the party had surveyed parents nationally who were struggling to pay private school fees and found many would prefer a public school if they perceived it as better resourced.
“We’ve got this system that’s set up where the government say people have choice, but actually people feel like they don’t have a choice.”
Independent Schools Victoria chief executive Rachel Holthouse said private school students received about $12,000 less per student, on average, in government funding each year than those in the government sector. While schools were managing the SRS funding adjustments through careful budgeting, she said, the Victorian government’s payroll tax continued to put pressure on school finances.
“For many payroll tax-liable independent schools, the payroll tax bill is comparable to, or exceeds, the state funding they receive,” Holthouse said.
“This means Victorian independent schools are absorbing both state-imposed costs and Commonwealth funding adjustments, unlike their counterparts elsewhere.”
She said the tax had forced some schools to delay capital works, restructure staffing, review programs, and pass the cost on in fees.
A Victorian government spokesperson said there had been payroll tax relief for some non-government schools from July 1 this year.
“More than 90 per cent of non-government schools are exempt – every government school in Victoria pays payroll tax; it’s only fair that the highest-fee private schools now also contribute.”
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Jackson Graham is an education reporter at The Age. He was previously an explainer reporter.Connect via email.From our partners
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