The current debate about government funding to private schools is misdirected. The issue is (or should be) not at what level should private schools be funded, but whether they are entitled to any funding at all.

Australia is almost alone in the OECD as we have transferred responsibility for education from the public to the private sector.

In the USA private schools receive no funding from governments. In other places like Canada, New Zealand and much of Europe Catholic schools are part of the public education system.

The success of public schools in Western democracies may well be part of the reason that, at least in Australia, they are faced with so many difficulties.

Public schools, designed to create a stable educated and prosperous economy and society have been portrayed as the height of democracy but as Ralston-Saul asks, can we remain a functioning democracy without a strong public education system?

The former Director of Education for the OECD, Professor Barry McGaw concluded that the school system in Australia does little to address inequality.

Instead our system reproduces existing social arrangements, adding to privilege where it already exists and denying it where it does not.

According to the OECD, students in Australia can be up to three years behind their contemporaries in more equitable education systems.

In Australia students’ social backgrounds are more strongly related to achievement than in countries such as Canada, Finland and Korea.

It is not just that this inequity is socially unjust but in a globally competitive world it is both stupid and disastrous.

Yet the OECD results indicate that the top performing countries (Finland, Ireland and Canada) have inclusive and comprehensive education systems where public, private and faith based schools are complementary and not competitive.

Professor Teese of University of Melbourne has demonstrated that social divisions between schools split resources, distributing these unevenly.

Poor students in urban schools are poor in many ways—as a result of the groups they come from—minorities, disabled, poor, migrant, refugees, broken homes, itinerant workers, or rejected from other schools.

The recent major economic reforms of recent governments in Australia has pushed for a reduction in government responsibility for school education.

This continues today with the calls for increased public private partnerships and corporate support of public schooling. The effects on education are profound.

Marketisation led to the reorganisation of schools around market principles of user pays. Privatisation has seen increasing levels of public funding shift to private providers. Rationalisation has led to school closures or amalgamations, particularly of smaller schools on grounds of so-called efficiency of curriculum provision and depth.

This has led to the redundancy of thousands of experienced teachers. During this time, comprehensive public schooling was increasingly blamed for an alleged fall in teaching and learning standards.

The result has seen an increase in economic and social divisions between schools in Australia. This has created a deregulated and heavily subsidised market of private schools, designed to effectively shift enrolments away from the public sector.

Responding to alleged deficiencies and so-called choice and competition “reforms” like MySchool were introduced. The notion of “failing public schools” as promoted by the new documentary Waiting for Superman has a lot in common with the war on terror: get the media to parrot these phrases often enough so that you can’t hear terrorism without thinking there’s a need for a war, and you can’t hear public schools without thinking they are failing and need to be fixed.

This language seems to work. As Susan Ohanion and Kathy Emery write in Why Is Corporate America Bashing Our Public Schools? ordinary people without an axe to grind, who have not set foot in a school for thirty years or more, will now testify to failing public schools.

Many schools have started to lose their middle-class families. This leads to social and cultural deficits created by this loss further making it difficult to cater for all students.

The result is that schools in poorer areas have become residualised. Professor Teese calls these “sink schools”, stripped of numbers and resources and repositories of failure.

As The Australian commentator Christopher Pearson wrote:

The question everyone in the political class is tiptoeing around is this. At what point do most public schools simply become sinks of disadvantage, places where the residue of kids with average or below average IQs and more than their fair share of other problems confound everyone’s efforts to teach them life’s basic skills? You could reformulate the question by asking: at what stage does the abandonment of public-sector education by what used to be called the lower middle-classes reach its tipping point?

If competition drove school reform then the winners were schools serving wealthy suburbs. Reforms have led to low SES schools being drained of the most capable students and higher concentrations of students from the most disadvantaged communities.

Marketisation encouraged competition between private and higher status public schools. This causes social and academic segregation both between public and private and between high and low status Catholic schools.

Funding policies and the free market further reinforce the effects of social geography resulting in a “flight of social and cultural capital” from public schools.

The funding of private schools through the public purse only serves to further advantage society’s elites and provide an important bridge into the most prestigious and lucrative tracks in higher education.

Such performance is closely related to socio-economic status. The term “parental choice” is used by so many people to be almost devoid of meaning. Choice has become a justification and a weapon to be hurled at public schools, rather than a sensible goal around which public policy is designed.

In fact the term choice is “a con” as choice is only an option for those that can afford the high fees to access private schooling. At the same time all taxpayers in Australia generously subsidise the most privileged in society.

It is not a mystery that schools that have students from “below average income populations” are reluctant to advertise “below average” academic results. However, as these same policies work to concentrate disadvantage and advantage, schools in disadvantaged areas have to deal with an increase in social problems above those in middle class neighbourhoods.

At the same time taxpayer-supported private schools can also choose to rid themselves of so-called problem students. This segregation is delivering a serious and growing social division between schools and between communities. The drift away from public schools has been termed white flight.

The flight of social capital may have devastating negative effects on education outcomes, destroying social capital and social cohesion. In some disadvantaged communities we can witness the daily exodus of busloads of students who bypass the local public school for a more prestigious and distant private college.

It has been argued that choice and competition provide for higher levels of parent satisfaction with schooling or that increased academic achievement will lead to the re-invigoration of government schools.

But the reality is that past and present policies are creating one school system for the rich and another for the poor.

This leaves those who are unable to scramble for what they see as the best remaining schools in an under-funded public system moving from comprehensiveness to segregation.

As a result, some schools accumulate young people who are heirs to a generous legacy of cultural capital.

Others accumulate the children of the poor and poorly educated. These schools are residualised, teaching the students that no-one else wants to teach.

Teese calls them the “exposed” schools, contrasting them with the “fortified” schools that actually have the power to exclude students they do not want to teach for whatever reason.

Families with economic power use education to advantage their children. Families without such power must rely on governments.

The Labor government refused initially to alter the Howard Government’s flawed socioeconomic status (SES) funding model, which funds private schools according to the income, occupation and education of parents within the school’s census district. This model has unfairly delivered significant gains to some of the nation’s wealthiest private schools.

The Gonski Review is a once in a generation opportunity to address these issues. Otherwise the real risk is that Australia will continue to have an entrenched and discriminatory system that works very well for some families, but another part of the system that continues to fail many others and that will ultimately affect young people’s lives and their future opportunities.