Labor’s amendments to the Education Act fail to ensure full funding of Public Schools
Oct 26, 2024
The Labor Government‘s proposed amendments to the Australian Education Act fail in their goal to provide “a pathway to full and fair funding for all schools”.
Obstacles remain in the pathway for public schools. The amendment Bill makes a minimalist change to the limit placed on Commonwealth funding of public schools by the Turnbull Government. It fails to remove the blockage erected by the Morrison era funding agreements that allow the states to use “accounting tricks” to defraud public schools of billions in funding.
The Bill replaces Turnbull’s cap on the Commonwealth share of funding of public schools of 20% of their Schooling Resource Standard (SRS) with a floor of 20% for all jurisdictions except the Northern Territory where the floor is 40%. While the floor makes it possible for the Commonwealth to increase its share of funding public schools, the Labor Government is limiting the share to 22.5% except for the Northern Territory. This is incommensurate with the Commonwealth’s national responsibilities for educational, social and economic policies.
The Commonwealth signed up to the national goals for schooling. National goals imply an important role for the national government. A key national goal is to increase equity in school outcomes. The achievement gaps between rich and poor are far too large as the Minister acknowledges.
The Commonwealth also has special responsibilities relating to Indigenous Australians and migrants, which involve a key role in funding public education because the large majority of these students attend public schools. The Commonwealth has long had a national goal to improve education outcomes for Indigenous students and close the gap between Indigenous and non-Indigenous students.
The Commonwealth has exclusive constitutional powers over immigration. It has responsibility for assisting migrants on a range of social issues to support their integration in Australian society. Successful education outcomes are critical to this task.
The Commonwealth must play a stronger role in funding public schools to ensure greater equity in education in all states and territories. Over 80% of all low income, Indigenous, remote area and migrant students attend public schools and 90% of all schools with a high concentration of disadvantaged students are public schools.
The Commonwealth has the primary role in economic policy. Education is an important driver of productivity growth through improving the knowledge and skills of the workforce. The Minister wants to lift Year 12 and tertiary education completion rates to increase workforce skills and participation. This requires a greater role for the Commonwealth in funding public schools as only 70% of low income students complete Year 12.
The Education Act should provide for the Commonwealth to fund public schools at a minimum of 25% of their SRS. It would make a significant contribution to progressing national educational, social and economic goals.
The Bill also conspicuously fails to end the “accounting tricks” funding agreements conjured up between the Morrison Government and the states that defraud public schools of billions in funding. They block the path to full funding of public schools. The fraud consisted of allowing the states and the Northern Territory to claim, as part of their share of funding the SRS of public schools, funding for items specifically excluded from how the SRS is measured. They could claim funding for capital depreciation and school transport up to 4% of the SRS of public schools. In addition, many states could claim funding for regulatory agencies such as curriculum and teacher registration authorities.
This allowed the states and Northern Territory governments to artificially boost their SRS share with non-SRS funding items. For example, the target SRS share in the Victorian agreement for public schools in 2024 is 70.43%. However, its actual share after adjusting for the “accounting tricks” is 65.82%. The funding loss is estimated at $661.4 million for the year. Overall, public schools across Australia were defrauded by about $13.1 billion over the course of the Morrison agreements from 2019-2024 inclusive.
These “accounting tricks” remain in the new funding agreements between the Commonwealth and Western Australian, Tasmanian and Northern Territory governments. No doubt they will be included in any new agreements with the other states.
Labor has gone from promising in Opposition to end the swindle to denying it exists in government.
The Minister falsely claims the 4% funding items are “part of the SRS”. The SRS is based on financial data collected by the Australian Curriculum and Reporting Authority (ACARA) for the My School website. The measure of income is Net Recurrent Income Per Student (NRIPS). ACARA’s My School: Key Principles and Methodology clearly defines what is excluded from this measure. The exclusions include school transport, depreciation and umbrella costs associated with curriculum standards, national testing and teacher registration. It says: “These funds have been deemed to be outside schools’ recurrent operations” [p.13].
It is notable that neither the Morrison era agreements nor the new agreements allow the states and territories to claim non-SRS funding items as part of their share of funding private schools. This is another way in which the school funding arrangements are biased against public schools. The states and the Northern Territory are allowed to defraud public schools but not private schools.
For as long as the accounting tricks remain, public schools will continue to be underfunded. It is imperative this fraud and the bias against public schools ends. Section 22A of the Education Act should be amended as follows to prohibit the inclusion of non-SRS funding items as part of the state/territory shares of funding public schools.:
State and Territory funding contributions to government and non-government schools is measured according to the Australian Curriculum, Assessment and Reporting Authority (ACARA) financial data reporting methodology for state/territory Net Recurrent Income Per Student (NRIPS) and does not include any funding types excluded from NRIPS.
Labor’s amendments do not guarantee full funding of public schools. Other amendments to the Education Act are necessary if public schools are to be genuinely fully funded. The Commonwealth share of funding public schools should be at least 25% of their SRS to support national educational, social and economic goals. The states and territories must be stopped from defrauding public schools by their accounting tricks.