This week a draft chapter on education for the Abbott government’s green paper on federation reform was leaked to Fairfax papers. Among its more newsworthy aspects was a proposal to means test public education, wherein wealthy families would be required to pay fees to attend public schools.

The call to means test public education is one of those lines that appears progressive, but is actually a Trojan horse. It would result in Australia becoming much less equal.

Since last year’s budget, and with the Abbott government walking away from the Gonski funding model, schools funding has become a hot-button issue.

But noting the specific change in schools funding is much less obvious than in other areas such as higher education:

At first glance it almost appears that the trajectory of funding is unchanged. But when we look at the projected growth of spending the differences become clearer:

After 2017-18, the federal government is severely cutting back growth of education funding to 4% in line with its dumping of the Gonski funding model – essentially, to be just in line with inflation and natural growth of student numbers.

The Queensland Teachers Union estimates that had the Gonski funding remained in place in 2018-19, the government expenditure would have been 4.8% higher at $19.662bn instead of the proposed $18.76bn.

But the issue of charging families a fee to attend school is rather a bigger step than just cutting funding.

The way the announcement was leaked has the usual whiff of the Abbott government: sending up a test balloon to see how it flies, then disowning it, then continuing to push it because it is now “part of the debate”.

We should firstly note that parents already do pay to send their children to public schools.

In South Australia for example there is a materials and services charge, which is “intended to cover the costs of those essential items and services used or consumed by individual students during the course of their study”.

As of 2014 the standard amount was $219 for primary students and $290 for secondary students – and that doesn’t include uniforms, camps, excursions and extra-curricular activities.

So while it’s not free by any means, charging wealthier families for tuition would fundamentally alter the nature of public education.

I am strong supporter of means testing direct government benefits – payments such as Newstart and aged pensions do much to reduce inequality, and should not, in my view, go to those who do not need them.

But when it comes to services such as education and health I am not such a supporter of means testing.

Why is it a bad idea? One warning is the politics of those who invariably propose it. While perhaps we shouldn’t dismiss an idea just because it is proposed by a libertarian, doing so does often save time.

The line used when discussing why wealthy families should pay for public education is that it’s just “middle-class welfare”. This is a bit like the “nanny state” line also beloved of libertarians – a phrase that suggests something bad, which needs to be fixed. In reality, it over-cooks the issue.

The ABS measures welfare by including not just the monetary benefits such as pensions, Newstart and Family Tax Benefits, but also “social transfers in kind”.

In effect, education at a public school involves receiving a service that is worth money – that amount is the social transfer. It’s clear such transfers are already targeted.

In 2011-12, the ABS estimates, the poorest 20% of households received around 24% of the value of education social transfers in kind. The wealthiest 20%, by contrast, received just 13%.

That amount includes spending on universities, which accounts for around 33% of the social transfers for the wealthiest 20% of households.

These social transfers also greatly reduce inequality.

The transfers for education were worth around 15% of the disposable income of the poorest 20% of households. By contrast they amounted to just 3% of the disposable income of the wealthiest 20%:

The ABS estimates that in 2011-12 the wealthiest 20% of households held 46% of total private income. After income tax and direct social benefits like pensions, this fell to 39%. After social transfers in kind for health, education and other areas like child care were considered, the richest 20% held 34% of Australia’s disposable income.

In effect, our progressive income tax and welfare payments system does half the job of reducing inequality and social transfers in kind do the rest.

It’s also worth noting that the richest 20% paid 51% of all income tax. The poorest paid just 4.4%. This is important, and goes to why means testing public education should be avoided.

As soon as a service is means tested the pressure to reduce other sources of funding occurs. With that pressure comes the move to increase the level of means testing. We see this occurs with all manner of payments – even those as vital as disability support pension.

Soon those earning around the average income but not paying for their child’s public education will be labelled as living on the high hog of middle-class welfare

But education, like health, is not welfare. Public education is not about providing a safety net – a low bar on which people will get a minimum level of education. It is about, as economist Joseph Stiglitz noted, allowing “people to have the same opportunities”.

That includes not just the same opportunity to learn to read but also the same opportunity to excel. Our current public system would seem to be doing that well.

Those who in all other cases prefer government services to be privatised favour means testing for education. It is a nice way to begin down the road towards privatisation. It does it by stealth – with luck even progressives will champion it in the belief that it is about directing money to those most in need.

Of course, more government money does not ever end up going to those most in need – just that less money overall is channelled into the service. Those who pay the most amount of tax, and who pay the most in fees (because they will also rise) will continue to demand their share all the same.

And the line that private education saves taxpayers will be spouted, and the suggestion that public education has drifted from its core provisions will also be argued – perhaps by first suggesting what is being taught is “too ‘kumbaya’ with progressive, new-age fads”.

And soon the basics will be what is provided, and anything extra – such as that which would give you a chance of attending university – will be considered an extra that deserves to be paid for.

With less spending on education, so too will come the call for lowering income tax, and with a reduction in revenue comes a reduction in services. And thus both the tax system and the social transfers will do less to improve inequality.

After all, those arguing for such things will argue, so long as you’re not in poverty, inequality doesn’t really matter.

Means test welfare payments? Sure. But when you start hearing people call for means testing government services, what they’re really calling for is reduced government services. When that applies to education, you can bet the ones seeing a reduction will not be the ones with the ability to pay.