It's been five years since the Gonski Report was filleted and the flesh thrown away.

Australia now has two almost entirely publicly funded but very different school sectors.

The public school sector receives all its recurrent funding (apart from voluntary contributions) from governments, and is required to take all students who wish to attend.

It serves students from all socio-economic backgrounds, distributed 52 per cent below and 48 per cent above the benchmark average set by the Index of Community Socio-Educational Advantage (ICSEA), a measure of students' social and educational backgrounds.

The non-government sector — covering the Catholic and other faith-based systems, and independent schools — also receives recurrent funding from governments.

They charge fees at levels not subject to any cap by government, and they can borrow money for capital works and service the loans from their total recurrent income.

These schools serve a much narrower range of students than public schools: Catholic schools now take only 11 per cent of their students from below the ICSEA mean; for independent schools the figure is just 5 per cent.

Separate but not equal

As can be verified by anyone with the patience to spend sufficient time on the My School website, the amount of government funding to non-government schools is now extraordinary.

More than 91 per cent of Catholic schools receive 90 to 99 per cent of the funding for public schools at the same ICSEA level; and 79 per cent of independent schools receive 80 to 95 per cent of the funding for public schools at the same ICSEA level.

Since the Gonski Report, government expenditure on non-government schools has increased by 6 per cent per annum, compared to 3 per cent for public schools.

Despite guaranteed levels of government funding, most non-government schools have nevertheless continued to increase their fees.

Many do not require all or even part of the government funding to provide a high quality education.

Further, the public school system has specific obligations and accountabilities to government.

Despite accepting public funds, non-government schools have a selective enrolment process, can legally refuse admission, have a statutory exemption from a range of anti-discrimination provisions (not always exercised), and are not subject to freedom of information legislation.

Public schools do the heavy lifting

The OECD socio-educational gradient, which relates educational performance to socio-economic status, is much steeper for Australia than other Western countries, reflecting the stark impact of disadvantage on educational achievement in this country.

While Australia's public schools embrace the full range of achievement, they are the major provider of education for disadvantaged students.

Non-government schools accept public funds but have a selective enrolment process. ( ABC News: Rhiana Whitson )

The non-government sector, weighted overwhelmingly to the upper end of the ICSEA scale, is required to do much less of the educational heavy lifting.

The situation is steadily worsening. Commonwealth and state governments have never spent more on education than at present, yet our national performance in education continues to decline.

Is this really where Australia wants to be?

It is not in our national interest to foster an educational underclass.

The children in our seriously disadvantaged schools are not characterised solely by low socio-economic status, as measured by parental income, education and employment, but by multiple disadvantages.

A typical suburban public school serving a migrant community might have 80 per cent of children with a language background other than English, from 10 or more different language groups, less than three years in the country and likely not to stay long in the school (because parents are looking for work).

The Government has never spent more on education, yet national performance is declining. ( ABC News )

In a regional centre, the intake will commonly include many children of the long-term unemployed, some of whom have never been read to, or even held a book, or know that the pages are turned from right to left.

Such schools are the emergency wards of Australian education. Yet they are deprived of the specialist support normal in such circumstances in a hospital.

Children from backgrounds of aggregated social disadvantage require immediate diagnosis of learning needs, and immediate and intensive personalised teaching.

They need one-to-one and small group teaching, speech therapists, counsellors, school/family liaison officers including interpreters, and a range of other support.

And that requires money.

Gonski about much more than a fair go

Education should be a public good for the nation, not a positional good for some: it requires strategically differentiated funding directed at the areas of greatest need. That's what Gonski sought to achieve.

Gonski was about much more than equity and a fair go for all children. Fundamentally, it was about building our national stock of human capital.

Parts of the Gonski report were adopted by the Gillard government. ( Getty Images: Luis Ascui )

Up to age 8, a child learns to read. Beyond that, the objective is to read to learn.

If children are still sounding the majority of words phonetically at age 12, their comprehension will be weak, their learning will be restricted, and the chances are they will not fully recover.

Applying whatever resources are necessary to teach a child to read is not only in the child's interest, but in the national interest, in order that the future adult is employable, skilled, creative and self-supporting.

Every child — whether they're from a fourth generation family with an income three times the national average or from a family that has been unemployed for three generations, or from a newly arrived refugee family speaking no English — should be given the kind and amount of individual support necessary to realise their potential.

What needs to be done?

1. The individual school, not the system, must become the unit for measuring need, according to a common template across the entire country.

Existing data sources make this possible. The total need requirements of each sector should be built from the bottom up, as the sum of the educational needs of the schools in the sector.

Sector funding should no longer be determined top-down by political negotiation with system leaders such as the state authorities, independent school interests, church authorities and the Australian Education Union.

2. Commonwealth and state funding should be pooled and the combined priorities for funding be determined through the COAG Education Council.

The Gonski proposal for a schooling resource standard would have achieved this: the current standard does not. Both levels of government have responsibilities with respect to both government and non-government schools.

3. COAG should determine the proportion of total need requirements that governments can afford to meet within the funding period.

4. The available funding should be distributed according to need, following a far more realistic assessment than at present of the capacity of non-government schools to meet their schooling resource standard from fees and investments. Sufficient transition time should be given to schools whose public funding will be reduced.

5. As a condition of the receipt of public funding, a cap (calculated on a graduated scale) should be placed on the level of fees able to be charged by non-government schools.

Australia at a crossroads

In the absence of a proposal for rethinking the current process for school funding, state ministers have no alternative but to call for the inappropriately named "last two years of Gonski funding".

While this would provide some temporary relief for disadvantaged schools, additional funding is strategically irrelevant for the longer term. Under current arrangements, a proportion of the funding disadvantaged schools need will continue to flow to other schools. The total cost of education will continue to spiral, with no likelihood of a change in our socio-educational gradient.

Nor would anything of lasting substance be achieved by removing the funding to the wealthiest non-government schools, which take less than 5 per cent of the school population.

It would be a handsome saving of $900 million per annum, but it would not get to the real cause of the problem. What is needed is root-and-branch reform anchored in a needs-based, sector-blind strategic redistribution of the available funds.

Australia is at the crossroads.

Will high quality education continue be a mark of social position, or will our political masters have the courage to act in the long-term national interest and ensure that it becomes a public good for all?

Ken Boston AO is the former director general of the NSW Department of Education and sat on the Gonski review panel.