States Grants (Independent Schools) Act 1969

The Commonwealth pays the State, and the State must pass that money on to the school — describing it clearly as a Commonwealth-sourced payment. The Minister decides the timing and instalments of payments. Advances can also be made to States ahead of time if needed.

Strings attached (conditions)

The funding comes with strict conditions at every level:

• School authorities must agree (before or when accepting money) to:

  • Spend the money on day-to-day (recurrent) school expenses — not buildings or capital works — either in the same year or within 3 months of year's end
  • Have a qualified accountant (a registered auditor or member of a recognised accounting body) sign off that the money was spent correctly, within 6 months of year end
  • Repay any overpayment back to the State

• States must agree to:

  • Pass the money on promptly to schools
  • Repay the Commonwealth if a school refuses the conditions or if the State itself doesn't follow the rules
  • Pass back to the Commonwealth any money refunded by a school

• If a school breaks the rules, the Minister can:

  • Deduct equivalent amounts from future payments to the State for that school
  • Freeze all further payments to the State for that school until satisfied things are back on track

• Any money owed by a State back to the Commonwealth is treated as a formal debt (legally recoverable).

Transparency

After each year, the Minister must table a report in both Houses of Parliament listing every school that received money, how much was paid for primary students and how much for secondary students, with State-by-State totals.

Why it matters

This Act was a landmark piece of federal involvement in school funding, extending Commonwealth financial support beyond government schools to the independent (non-government, non-profit) school sector for the first time in a structured, recurring way. It established the principle that the federal government would fund independent schools on a per-student basis — a model that underpins Australian school funding policy to this day.