David Gonski must be feeling like the only grown up in the room.

The Prime Minister guarantees that Gonski funding will leave every independent school better off, knowing that many already get more than they should, and that Gonski calculated that even a “no worse off” policy could double the proportion of private school funding received from government.

The leader of the opposition says that non-government schools are, “if anything”, hard done by because they have 34% of the students but only 21% of government funding, knowing this is statistical scare-mongering, and then gets thrown out of parliamentary debate on the topic later in the day.

The Australian Education Union says that government schools need more money and predicts a dire future for the sector under a Tony Abbott-led government, but wants to spend more money on what hasn’t been working for the past 50 years.

Most disgraceful of all is opposition education spokesman Christopher Pyne who needles schools minister Peter Garrett for refusing to guarantee that no school will be worse off and talks about a government “hit list” — this from the man who insists we have to cut back on spending, and that it’s time to talk about funding trade-offs instead of funding increases.

The biggest — and by far the best intentioned — villains of this piece, however, are long gone from the political stage. It was Peter Karmel’s pivotal 1973 report Schools in Australia, and Whitlam’s implementation of it, that leaves us four decades later in the midst of yet another childish, futile, unwinnable and seriously distracting squabble.

It was Karmel who recommended and Whitlam who agreed that the three school sectors — government, Catholic systemic and independent — should all get funding from the federal government, which in practice has meant they all got funding from state governments as well.

It is an uncontrollable mess in which every school sector, interest group and government is in for its chop, permanently on the look-out not out of concern they won’t have the money to do the educational job, but to make sure someone else doesn’t get more than they do.

Whitlam boasted he had taken “state aid” off the political agenda. In fact he accomplished something like the reverse. Rarely has the contrast between the intentions of public policy and its actual consequences been more sharply drawn.

Twenty years after Karmel, one of its architects looked back in dismay at what had been wrought. “We created a situation unique in the democratic world,” wrote Jean Blackburn in 1991. “It is very important to realise this. There were no rules about student selection and exclusion, no fee limitations, no shared governance, no public education accountability, no common curriculum requirements below upper secondary … We have now become a kind of wonder at which people [in other countries] gape. The reaction is always, ‘What an extraordinary situation’.”

The upshot is the most marketised and socially-segregated school system in the OECD. It has allowed and encouraged the well-off to cluster in schools for the well-off, leaving the rest to their fate which, in the worst cases, is an educational ghetto. Unsurprisingly, patterns of educational performance have followed suit. This is the mighty flywheel of “residualisation” against which the Labor government is summoning up courage to throw itself.

There is a kind of rough justice to the fact it has fallen to a Labor government to try to clean up a mess created by one of its predecessors, and Gonski is a very good start — if it survives the system it is designed to change.

Gonski’s suggestion is simplicity and common-sense itself: fund each school, no matter which sector it belongs to, according to the size and difficulty of its educational job. And set up a new national body to work out what each school has on its plate, then hand out the money accordingly.

It is important to realise, however, that Gonski is a threshold reform, in two respects.

First, it does not guarantee better educational performance by systems, schools or students. But it does promise a bit of peace and quiet to get on with the educational rather than the political problem. That is not a small task. Although much more is known now about “what works”, switching to what does from what hasn’t — and particularly from the AUE’s idée fixe of yet-smaller classes — will run into the dead weight of ideas, regulations and industrial agreements laid down over a very long time.

A second limitation of Gonski is that it addresses some of the problems inherent in a system with three sectors each receiving funds from three different sources, but it doesn’t change the fact of that bizarrely dysfunctional arrangement.

There is a kind of truth at the bottom of Abbott’s claim that parents sending their kids to non-government schools are hard done-by, but he fails to chase it to its logical conclusion, which is this: why should some parents pay heaps when others who can afford to pay nothing at all? More troubling: why should many in low-fee Catholic schools pay fees they can’t really afford when their govvie-school neighbours do not?

The old answer is because the parents who put their kids in non-government schools have “opted out” of the (free) government system, and because (as Jean Blackburn pointed out 20 years ago) different schools are playing by different rules.

But that kind of talk doesn’t reflect the reality that since Karmel’s time the proportion “opting out” has risen from 22% to 37% and counting. People don’t opt out any more. For better or for worse, they choose. Nor does it reflect that fact that in the last 20 years several of the sins of omission listed by Jean Blackburn have been overcome, and the rest could be, for the great majority of schools anyway.

The problem isn’t in how much goes to this sector rather than that, or in how much of it should come from parents or state governments or the feds. It’s the system, stupid! Gonski is a holding operation, a glimpse of what a school system ought to look like: all parents on the same basis, all schools ditto.

Hard to imagine? No need to. Just get on a plane and go to just about any other country in the OECD.

*Dean Ashenden has been a consultant to state and national agencies and ministers of education, and was ministerial consultant to federal education minister Susan Ryan in the early 1980s. He has written widely on education issues in academic, professional and the mass media.