About 81% of children are enrolled in early childhood education in the year before school (Australian Bureau of Statistics, 2012), and government subsidies are available (as fee reimbursements). Australia is one of several high-performing OECD countries, including the Nordic countries and Canada, that does not have student tracking until the age of 16. It also limits its use of vertical and horizontal differentiation within schools. In addition, Australia’s grade repetition rate is 8.4%, below the OECD average of 13%. Around 96% of students attend a school that competes for enrolments with at least one other school, Evidence shows that school choice, along with other factors, may undermine equity in the education system by segregating students into schools based on their socio-economic background. It is important to ensure that there are mechanisms to mitigate this negative effect.