• map the current processes at Commonwealth, state and territory and system levels for targeting funding towards disadvantaged students with the highest level of educational need. This mapping included describing how educational needs are defined, identified and measured.
• assess the effectiveness of the funding and other processes in use. Part of this assessment included an examination of the extent to which student selection and exclusion affects access for all students to quality schooling and contributes to the emergence of residualised and disadvantaged schools.
• identify alternative funding approaches that could better meet the needs of disadvantaged students.

A combination of three data collection methods was used: a questionnaire; face-to-face interviews; and a literature search and review. The groups of educationally disadvantaged students identified for this study were (i) students with disabilities, (ii) Indigenous students, (iii) students with limited English language proficiency, (iv) Low SES background students, and (v) students in regional, rural and remote areas. Existing programs seeking to address educational disadvantage worked with a minimum national aggregate funding of about $4.4 billion during 2009-10. Nearly $2.8 billion of this total was allocated for students with disabilities. Identified funding for Low SES students was next highest at about $585 million. The other three disadvantaged groups received considerably less identified targeted funding (Indigenous $436 million, English Language $333 million, Regional/Rural/Remote $337 million). There were insufficient data available to establish to what extent existing programs are effective in reducing the impact of disadvantage on educational outcomes because few have been evaluated, and fewer still have been evaluated with student outcomes as a focus. Despite this lack of information, anecdotal survey evidence for this report suggests that there appears to be a consensus among the jurisdictions that ESL programs, on the whole, are effective in delivering positive educational outcomes to students. Similarly, remote and rural programs were typically seen to be successful. There were also some positive comments about programs for students with disabilities, however, this was in contrast to the National Disability Strategy, which argued that educational systems were still largely failing these students, and more resourcing, support for teachers and further teacher education was required. The study was unable to discern the extent to which specific Indigenous and Low SES programs were effective. The study has identified alternative specific funding mechanisms to deal with the current weaknesses in funding for (i) students with disabilities, and (ii) students from Low SES backgrounds. For students with disabilities, the report has proposed the establishment of a standard disabilities entitlement to frame a minimum funding standard for students with disabilities. The entitlement could apply across the Catholic and independent sectors in all states and territories. Financing the standard disabilities entitlement needs to be considered from the angles of equity, effectiveness and efficiency. In terms of equity, the financing should not deplete existing funding for government schools to further subsidise the operations within non-government schools. The financing of a large pooled fund at the sectoral level is one mechanism that can meet the conditions of equity, effectiveness and efficiency in offering the standard entitlement. The report finds numerous ways of financing a pooled fund, including additional annual allocations from government or the re-allocation of a part of existing recurrent funds, or both. For students from Low SES backgrounds, the study has proposed a front-loaded alternative funding mechanism that can support a targeted investment strategy to schools experiencing residualisation effects on their enrolment base. By delivering significant investment funding for a period of up to ten years (above and beyond recurrent funding) schools will be given the latitude to invest as appropriate in areas such as quality teaching practices, materials, school leadership and facilities.