60 Minutes Transcript: Education incorporated

As shareholders, parents have great expectations, yet our school system seems to be failing them. Its properties are run-down, its employees are disillusioned and for all the billions that are pumped into it, it's underachieving.

And that's opened the market to a new player - big business. There's a new type of school appearing - results-driven and run along strict corporate lines.

Dud teachers are sacked, the best teachers are head-hunted and, as Charles Wooley reports, the bottom line is simple - turn out kids who are smarter, better, brighter.

STORY:

CHARLES WOOLEY: It's a long haul, the getting of wisdom. It's 6.30am, barely daylight, and 13-year-old Aaron Whiting is already on the road to school. It's an epic journey from Sydney's western suburbs across the city to Bondi in the east. Two trains and a bus, over two hours of travel every day.

MARK WHITING: It upsets me that we have to do it but we have to do it. I mean, he's our child, he's our property, so he's our only asset. How do you look after it? I mean, the government's not helping us.

CHARLES WOOLEY: Aaron's parents don't strike you as the types to send their kid to a private school. His dad Mark is a forklift driver. His mum Lorraine works in airline cargo.

MARK WHITING: We don't drive Rolls Royces, just old Fords.

CHARLES WOOLEY: They're part of a growing number of working families who have lost faith in state schools.

LORRAINE WHITING: The local school we have here, it is rough. There's bashings, there's no way we would have sent Aaron to these schools around here.

CHARLES WOOLEY: But you're making a big financial sacrifice.

LORRAINE WHITING: And it's worth it.

CHARLES WOOLEY: $12,000 a year for the fees alone, isn't it?

MARK AND LORRAINE WHITING: Yes, yes.

CHARLES WOOLEY: How much more on top of that?

LORRAINE WHITING: For uniforms and any extras, excursions - it's worth it.

CHARLES WOOLEY: Aaron is enrolled at Reddam House. It's a brand-new school that looks more like a 5-star resort. With granite bathrooms, a gourmet cafe, even scuba lessons on Bondi Beach. I wonder if it puts the wood on you a bit that you know your parents are spending so much money and making such a sacrifice to send you here?

AARON WHITING: Yeah, I know...

CHARLES WOOLEY: You can't muck up, can you?

AARON WHITING: No, I cannot muck up. And they always let me know we're spending lots of money to send you here and so, yeah, I'm trying to achieve those results that they want me to. But I also want to achieve the results as well.

STUDENT: We decided to sell our house and my parents even did more of a sacrifice than just, like, sending me to this expensive school. They actually moved to Bondi so I didn't have to travel as much every day.

CHARLES WOOLEY: No wonder you can't afford to fail.

STUDENT: Yeah, I know. That's the thing, just a weight on my shoulders.

CHARLES WOOLEY: Behind all the cappuccino froth and bubble, the real story is, Australia-wide, a tale of parental anxiety and dashed expectations, a belief that the school system is failing our kids. This discontent is about to severely shake the often conservative and hidebound world of education.

GRAEME CRAWFORD: They can feel there's a momentum and a hunger for our kind of education in Australia.

CHARLES WOOLEY: Graeme Crawford is the director of Reddam House. This former science teacher built an empire of 26 schools in South Africa. Now he's brought his formula to Australia. Mr Chips has gone into business. If there's a public appetite out there, as a businessman, you can't help but satisfy it, can you?

GRAEME CRAWFORD: As an educator and a businessman, that's my passion in life.

CHARLES WOOLEY: They tell me this place is known as "Cappuccino College".

GRAEME CRAWFORD: I think our education is a lot deeper and a lot broader than the kind of coffee we serve. But if it's symbolic of what we offer, yes, that's a good example.

CHARLES WOOLEY: Graeme Crawford markets his school as the new face of education, one run along slick corporate lines. When will we see you on commercial television? It's results-driven. There's constant testing of students and teachers - performance is everything.

GRAEME CRAWFORD: We've tried to analyse every part of the traditional and we see education being very antiquated, very old-fashioned, very out-of-date and we've tried to modernise and freshen up and revamp and make it relevant for today's society. Now, stand up.

CHARLES WOOLEY: There's not a straw hat in sight. It's coeducational, non-denominational. This trendy upstart is challenging not just the state system but existing private schools as well.

GRAEME CRAWFORD: They wear the same uniforms as they used to wear 100 years ago. They wear the same straw bashers; the approach in the classroom. And it is there to promote that religious ideology. As far as I'm concerned, it's time for a new education for a new world that reflects modern-day society.

CHARLES WOOLEY: New York City, and just a stone's throw from Wall Street, we find the headquarters of Edison School.

"Good afternoon, the Edison School. Theodore speaking."

Here, too, business is moving into the classroom. With America spending $300 billion a year on state education, it's little wonder the corporate world sees potential profit where so many parents see failure.

BENNO SCHMIDT: The estimates in the US are that over a third of the total spending that supports public education never reaches the schools.

CHARLES WOOLEY: Edison's chairman Benno Schmidt is a former president of America's prestigious Yale University.

BENNO SCHMIDT: The reason that we're the fastest-growing system of schools ever in the history of the country is, our kids are getting better results.

CHARLES WOOLEY: Edison has built its fortunes on America's struggling public schools like this one in northern California. Edison was asked by local authorities to take over the school. They would be given the same budget and any profit they made, they could keep. There have been revolutionary changes here for the better; better teaching, better results, better equipment and, all around, a better attitude. Most amazingly, the new corporate managers have achieved this using the same taxpayer-funded budget that the old state system used to run the place into the ground. I think what surprises us is that you're saying you can produce superior schools with the same money.

BENNO SCHMIDT: When an enterprise has been operated as a public bureaucracy, efficiency is not going to be one of the hallmarks of such a system.

CHARLES WOOLEY: I still can't help asking myself, what is it you're cutting back on in order to be able to do this? Is it school lunches, remedial teaching? It must be something?

BENNO SCHMIDT: It's administrators in the central office.

"Right hand over your heart. Ready. Begin. I pledge allegiance to the flag..."

CHARLES WOOLEY: Edison gets to keep any profit it makes but it has to get results. So, it pays more for better teachers. Every pupil gets a personal computer. There's a longer school day and five weeks less holidays a year. This works out to about four extra years of education in an Edison student's life. I think it's the worst thing you could say to school kids, isn't it? You're going to be in school longer during the day and your holidays are going to be shorter. That's a nightmare come true.

CHARLES WOOLEY: Here, children are getting the equivalent of the best private education, free of charge, at a government school. Parents like Laurie and Mike Harding couldn't be happier.

MIKE HARDING: Like anything else, you want the biggest bang for your buck. You want as much knowledge shoved into the kids' brains as they can get in the period of time that they've got.

CHARLES WOOLEY: So you get a big bang and you get an iMac as well?

MIKE AND LAURIE HARDING: Right. Yeah. If you take it apart really carefully you'll see ... you saw it.

CHARLES WOOLEY: It is the same principle at Reddam House, but here, parents are paying a lot more bucks for their bang. So, although it might sometimes look like a holiday resort, in reality, it's no holiday for the kids.

STUDENT: Well, my first term here, I don't think I've ever done as much homework [as I did] in that first term than I've done throughout my whole life.

STUDENT: We have tests every week, Mondays and Fridays, so we have to go home and work so we can keep up, to make sure that our test results are as high as they can be.

STUDENT: Homework, assessments, assignments, they just don't stop. You're not going to be home sitting there saying, "Gee, I have no homework to do." It just doesn't happen here.

CHARLES WOOLEY: So far, what changes are you seeing?

LORRAINE WHITING: He's improved. He's increased his results by 30 percent. I mean, maths, English is a really big thing for me.

CHARLES WOOLEY: That's what you want to see for your dollar as a parent?

LORRAINE WHITING: I do. Most definitely.

CHARLES WOOLEY: It's smart business practice. If the kids get good scores, it adds value to the school and means more paying customers. And so it makes sense to pick the best teachers, like those here in the Reddam staffroom. Graeme Crawford hires what he calls the legends of teaching and pays them accordingly. It's an old corporate trick.

CHARLES WOOLEY: Unashamedly, you headhunt.

GRAEME CRAWFORD: We handpick.

CHARLES WOOLEY: This is headhunting.

GRAEME CRAWFORD: Yes, and I don't see why teaching shouldn't be regarded as a valued profession. Why shouldn't teachers be paid according to their value? Why shouldn't they be recognised for their ability and why shouldn't there be some kind of open market for top teachers and looking after top teachers?

CHARLES WOOLEY: Stuart Dalgleish is a legend at teaching history. I thought this was a wonderful quote: 'What you risk reveals what you value.' Deborah Kelleher is a star when it comes to English. They were both achieving outstanding results in the HSC exams for other schools when Graeme poached them. What's it like to be headhunted? It is not something you would expect as a teacher.

DEBORAH KELLEHER: No, it's not something you would expect as a teacher. Actually, it was very unexpected and quite flattering, I suppose.

CHARLES WOOLEY: And you were headhunted, too, Stewart?

STUART DALGLEISH: Yeah.

CHARLES WOOLEY: How did it happen for you?

STUART DALGLEISH: The same with Deborah, I got a phone call one Friday afternoon.

CHARLES WOOLEY: What won your heart?

STUART DALGLEISH: I was impressed by Graeme, the surroundings. I was impressed, as well, by the money.

GRAEME CRAWFORD: For me, we need to value teachers, we need to have some kind of merit system and the top teachers, the brilliant teachers, we have to keep in teaching and look after them.

CHARLES WOOLEY: The union hates that.

GRAEME CRAWFORD: I'm sorry about that. Our goal today is to go over our tech plan for specialists next year.

CHARLES WOOLEY: America's Edison school employs the same strategy.

CHARLES WOOLEY: Teachers like Shona Gadell are not only paid more, they're given share options in the company. The more successful the school, the greater the rewards.

SHONA GADELL: Well, in any other corporation, any other environment, you are rewarded for your work and if you don't perform, you're not raised in your position. You're not raised in your position and you're not compensated, and I feel like, why should teaching be any different? If you are doing what you need to be doing in the classroom to raise those students' scores to improve their learning, then you should be rewarded.

CHARLES WOOLEY: Motivated teachers mean motivated students. Well, that's the theory, and so far, the customers seem to be buying it.
You kids are very serious about your education, aren't you?

STUDENT: Just the atmosphere here, they make you feel serious. I feel motivated here. I feel I want to do my work.

AARON WHITING: I know I have to prepare for Year 11 and Year 12 for the HSC, so you have to start in the younger years to achieve all the goals you want to in life.

CHARLES WOOLEY: A lot of your parents make huge sacrifices to send their kids here, don't they?

GRAEME CRAWFORD: Yes, they do, yes they do, and we're aware of that. There's a morality to education. It's a community business, if you want to call it that, and you need to look after the quality, and what you're offering the children is paramount, not the bottom line.

CHARLES WOOLEY: For Aaron Whiting, the long education journey continues, an expensive investment for his parents and a rigorous routine for him. There are sacrifices all round, but the Whitings feel the failings of the old system leave them no choice but to embrace the new one, whatever the cost.

LORRAINE WHITING: The thing that was most important to both of us was that he had a good start in life. It doesn't matter at the end of the day what he becomes. Whether he becomes a taxi driver or, you know, an office worker, but we've given him a good start.