Since its introduction in 2001, the Australian (Commonwealth) Government's socio-economic status (SES)-based funding scheme for private schools has been criticised as inequitable. The author argues that the inequities of the scheme are the result of government policy rather than the SES-based model itself. Compared with the former education resources index (ERI)-based funding scheme, the SES model is a more reliable and transparent method of ranking private schools according to their relative need for resources. This paper presents the case for a reformed SES-based funding scheme based on the retention of the SES index with two minor modifications. It also argues that four government policy decisions which have produced inequities in the scheme should be overturned if the scheme is to fulfil its promise of being a viable, transparent and equitable basis for distributing Commonwealth funding to private schools. (Contains 11 notes.)