“When our eldest started at his local high school it didn’t have a great reputation – whatever that means – and people audibly gasped when I said we were sending our child there,” says Lisa Barbagallo, a mother of three in Sydney’s inner west.

But her family scratched the surface and found the reality did not match the rumour mill.

“We spent a bit of time at the school prior to him starting there and found the principal and teaching staff lovely, exceptional even, and the kids great. We trusted our gut and not the gossip and we really love the school.

“It’s a little bit about finding the right fit for your kid and also a lot about feeling confident enough in yourself as a parent, and your kid, that they are able to navigate a variety of social issues.”

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Australia has more school choice than most countries in the world. The idea goes like this: if you don’t confine enrolments to the local public school, and parents are free to move their child into any school they like across the public, private and Catholic sectors, all schools will have to work harder to compete for students by lifting their results.

It’s an individualistic, free market approach that was sold as a means of improving the whole system; ideology that captured the policy direction of the Howard government in the 1990s. But instead of competition lifting all boats, parents with the agency to compare schools based on their academic results or other status markers move their kids to “better” schools, effectively leaving concentrations of disadvantage behind them. This had the inadvertent effect of demonising schools like the one Barbagallo’s child attends.

Public schools advocate Trevor Cobbold argues that the policy of prioritising school choice “has proved to be a comprehensive failure.”

“What we’ve got is stagnant or declining school results, increased social segregation between schools and a huge waste of taxpayer funds. Because what it led to was a huge increase in government funding of private schools that hasn’t actually delivered better student outcomes or better quality education ... all it’s done in Australia is buttress privilege in education and create a social hierarchy of schools.”

Dr Jennifer Buckingham from the Centre for Independent Studies says that if you ask parents, most of them very much like having a range of school options.

“I don’t think that’s something Australians would give up easily. So while we can rail against what we can see as inequities or whatever … a lot of parents value choice,” she says.

A casual vox pop of half a dozen parents by this reporter suggests parents share similar hopes and fears, even if that leads them to very different school choices. Everyone hopes their school will help their child find their strengths and thrive; everyone is terrified their peer groups will be a disaster, one way or another.

A mother whose primary age children will go to a high-fee private girls’ high school in Sydney for the academic and extracurricular opportunities says she worries “that private school will be full of snobs and bullies, that a single-sex school will mean they can’t talk to boys. That in 20 years I will think I made the wrong choice and it has somehow fucked up their lives.”

Another who is sending her two children to the “very good” local public high school says she wanted them to attend school in their own neighbourhood. “So much of a child’s wellbeing has to do with family and I don’t want to rely on a school to provide that wellbeing. And I don’t want them having a long commute on trains every day, smoking cigarettes and buying crap food.”

It’s true that Australian parents have increasingly chosen to educate their kids in private schools in recent decades. Nationally about 65% of Australian students are in the public system, but that drops to about 60% in high school, and in cities such as Melbourne and Sydney, close to half of secondary students go to private schools. Forty years ago, 79% of students were in the public system.

As an international comparison, in Canada – a country known for its robust public school system – about 6% of children attend private schools.

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Australia has significantly above the OECD average share of students enrolled in private education. At the same time Australia’s results overall have steadily slipped in international comparison tests, leading some researchers to suggest a causal linkage, in some part due to concentrations of disadvantage pulling down the national average results.

NSW Labor’s education spokesman and former public high school principal Jihad Dib believes there is a social cost to taking kids who are better academic performers out of comprehensive high schools and putting them in selective schools; or in concentrating wealthier children in private schools.

“I think what you lose is the reality of what society is,” he says. “I think there’s a lot to be gained from all people experiencing life with people who are different.”

Dib says the “ideal school is one that provides an inclusive education: it caters for the gifted and talented kids, but is inclusive for kids with disabilities too. That’s the classic comprehensive model.”

He thinks the high share of private enrolments in Australia “tells us that maybe for too long public schools haven’t been funded adequately.”

“In communities where there’s a lot of complexity and other social challenges, the school has to be the lighthouse, the place where you know that regardless of how wealthy you are you’ve got a chance to succeed in life. If we don’t do that we’re furthering that negative cycle of disadvantage.”

And there could be a cost to your child, too, suggests a NSW public school principal. What does a well-rounded education look like? Does it mean doing debating and rowing and hockey, insulated from anyone but the children of people just like you? Or could it be something else?

The principal, who requested anonymity because of the Department of Education’s restrictions on talking to the media, gently suggests that a child might learn a lot more at a local state school that reflects the whole community. There she will encounter people from a diversity of backgrounds, talents and viewpoints, and learn how to get along with all walks of life.

Behavioural economist Sean Leaver’s research on school choice suggests that even parents of private school children support egalitarian schooling for the nation. But when it comes to their own child, anxiety takes over. As one inner-Sydney parent put it, “sticking to your public education principles” gets a bit harder when your child turns 11 and you keep seeing the kids from the local high school smoking pot in the council car park.

“It comes back to that anxiety,” says Leaver. “Sometimes parents think the grass is greener on the other side of the fence. They’re not content with their default choice, which is the local school, they feel an obligation to look for something different, and are willing to pay to do that.”

The Independent Schools Council of Australia points out that the high-fee elite institutions, where one child’s education costs up to half a million dollars for 12 years, are just 15% of independent schools. The median fee for the nation’s 1,100 non-government schools is $5,100 a year, largely due to the proliferation of low-fee, faith-based schools in the past two decades.

So even acknowledging that not everyone can afford a high-fee private school, Australian parents still have a lot more choice than they would in most comparable nations, says Buckingham.

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“I tend to believe that it’s not fair to restrict the choice of every parent for the sake of protecting the few,” she says. “If you end up with schools that have a large concentration of struggling students then you help those students and you target support there.”

She says the introduction of UK or US-style charter schools – publicly funded schools run autonomously outside the state system within contractual limits – would be beneficial in Australia. “I think the answer is more choice, not less.”

Their success is not my failure

Parents choose just for their own child. As a country, Australia has to make a choice about how to run its whole school system, which is an entirely scrambled omelette of historical quirks and legacy funding arrangements.

The first schools in Australia were religious schools, before the other states followed Victoria in introducing secular public education in the 1870s. Almost a century later the federal government started funding independent schools, later extending that funding to state school students. Coupled with the 90s decision to promote school choice by funding small independent schools, it means the Australian taxpayer spends significantly more on subsidising private education than the OECD average.

The fact that some of the wealthiest independent schools are funded well above the national School Resourcing Standard has obscured the fact that students at wealthy independent schools individually cost the government much less than those at public schools. This is something that irks those who believe students at private schools are equally entitled to public funding.

“A school like ours, we save the government money,” says Faye Berryman, the co-founder and former principal of Fitzroy community school, a private primary school in inner-city Melbourne. “This is something so hypocritical about the funding debate. For every child who leaves the public system and comes to our school like ours, they are saving the government money. If we all decided to close shop, the education bill would be enormous.”

“All parents in Australia have the right to be supported in educating their kids,” says Dr Mark Merry, principal of Yarra Valley Grammar in Victoria, a well-appointed private co-ed school in Melbourne. “Our parents are taxpayers, in fact in some ways they’re subsidising the system they don’t use … But I do recognise that funding should be based on need.”

There are some statistical signs of a small shift back towards state schools in the past two years, suggesting that a fraction more parents are questioning the true value and cost of going private. Gonski funding may have boosted public enrolments.

Cobbold says the true cost of private education to the taxpayer is understated, given tax deductible donations by private school parents, subsidised public transport and the cost of regulating the independent sector are not included in the calculations. But in his view, the biggest cost of a tiered school system is social cohesion.

“Historically, public education has played an absolutely crucial role in absorbing new waves of immigrants. It’s been a melting pot,” he says. “Whereas schools segregated by class, religion or race make it difficult for children to develop a practical understanding of children of different backgrounds, and make it difficult to break down social prejudice and intolerance.”

Phillip Heath, the principal of Barker in Sydney’s northwest, an Anglican school that’s well over 100 years old, says Australia must live with historical realities.

“Whilst it makes good text to sharpen those divides, I yearn for a time when we can say let’s set aside politics, move toward a fair resourcing standard and do what’s great for all Australian kids,” Heath says. “I’m a huge fan of the government sector, the nation depends on the prosperity of the government sector. Their success is not my failure. But I ask for the same right to exist, respectfully.”

The landmark 2012 Gonski model of sector-blind, needs-based funding is supposed to break with the school choice model, by ensuring that funding is targeted to individual need, wherever it is, and that perceptions of unfair advantage in the private sector are a thing of the past.

But according to Dib, the government’s implementation still falls well short of this goal.

“The difference good education will make is immeasurable,” he says. “That means providing the circumstances for everyone to get the best possible education. If it is left to the state of play there are a lot of kids who will not get those same opportunities.”