LYNDSAY CONNORS. The Tangled  Education Web  Part 1 of 2

May 22, 2017

Gonski 2.0 appeared to be a gift horse but over the space of little more than two week it is looking more like a Trojan horse.  

An offer of hope

A week prior to its 2017 Federal Budget, the Turnbull Government made an announcement about Commonwealth funding for schools that appeared to offer a basis for hope. Education Minister, Simon Birmingham, had previously shown some mettle and gained credence when he dared openly to refer to the existence of some ‘over-funded private schools’ and gave an undertaking to remove the over-funding.

The Turnbull/Birmingham announcement of Gonski 2.0 seemed to provide a basis for trust, with the Government forswearing past sins and promising to put an end to the tangled web of special deals that has long bedevilled schools funding policy in Australia.

Established by the Gillard Government and headed by David Gonski, the 2011 Review of Funding for Schooling attracted a degree of consensus rarely achieved in Australia on this vexed subject. After six years of failure by the Coalition to acknowledge its strengths, here were Minister Birmingham and the PM announcing that the Government would replace Gonski 1.0, the version of the Gonski Report finally implemented by the Gillard/Rudd Government, with its own Gonski 2.0.  And there with them for this announcement was David Gonski himself, now commissioned to head a further review on how the extra Commonwealth funding provided in the 2017 Budget should be invested to improve Australian schools’ performance, and grow student achievement.

A general public, tired of our schools being used by governments as pawns in a political game, seemed to see the Gonski 2.0 announcement as a form of modest ‘gift horse’, offering an opportunity for trust and hope.

The Coalition had accepted the principle of ‘needs-based’ funding against a Schooling Resource Standard (SRS) that provides a base amount per student and additional funding for disadvantage.  This recognises that the total workload of the school system, the work of teaching and learning, is not shared equally among schools and that some schools do a greater share than others of the ‘heavy lifting’.

There were downsides to the announcement.  The funding clearly fell short of what the Gonski Review had recommended and of Labor’s Gonski 1.0 package,  And the transition period for schools to reach the SRS had been stretched to a decade, so that many of those already in or about to enter high school, for example, might well have left school before their boat came in.  Certainly the amount of funding Labor was continuing to promise for the 5th and 6th year of its Gonski 1.0 scheme was inflated by Gillard’s pre-emptive proviso that there would be ‘no losers’.  It could, therefore, still be argued that the Coalition’s pre-Budget announcement left other political parties, Labor and the Greens, with scope for taking promises to expand the Coalition budget and reduce its timeline to the next election.

Gift or Trojan horse?

Now, barely two weeks after the initial announcement of Gonski 2.0, the gift horse is looking more like a Trojan horse.

In the atmosphere of hope in early May that some sanity may be returning to schools funding policy, it was tempting to brush aside the misgivings created by the Government’s commitment to funding 20 per cent only of the SRS for government schools and 80 per cent for non-government schools; and by the reference to its roles as minority and majority funder for each sector respectively.  On the face of it, the percentage shifts cited for both sectors were both positive:  from an average of 17.0 per cent of the SRS for government schools in 2017 to 20 per cent in 2027; and from an average of 76.8 per cent to 80 per cent.

But with the advent of the 2017 Budget and the subsequent tabling of the Government’s Australian Education Amendment Bill 2017, it has now become clear that the Turnbull Government intends to entrench a structural problem that lies at the heart of national schools funding arrangements in this country; and that the special deals which have bedevilled them for years are well and truly back with us.

Perhaps one of the most ‘wicked problems’ at the heart of schools funding in this country has been the irrational and lopsided split in responsibilities between  the Commonwealth and the states for the public funding of government and non-government schools.  Non-government schools get the lion’s share of their public funding from the Commonwealth, which holds the purse strings: government schools must compete for their funding from the states, which deliver most essential services.  When the Commonwealth became a partner in schools funding, it brought with it the VFI virus, the vertical fiscal imbalance that characterises our federal system.

The Gonski panel recognised in its 2011 report the need for negotiation of a more balanced alignment of schools funding responsibilities as part of the transition to a new funding model with greater certainty and stability for all schools. Short of reform of the federal system itself, this proved, predictably, to be a stumbling block for the Gillard/Rudd Governments.

With its Gonski 2.0 announcement, the Turnbull Government repudiated the co-operative federalism model entirely and reinforced the split in schools funding responsibilities.

With the dismissive statement that it would be up to states whether they wish to reach the full standard for their own schools, the Coalition confirmed its ongoing indifference, at the Commonwealth level, to the future of public schooling itself and to the majority of the students in this country which it serves.  Minister Birmingham has made clear that states can take their pick of whether they want to spend more money on police, roads, hospitals.

The Coalition’s Budget, notwithstanding the paring back of some over-funded private schools, will deliver funding increases for some high-fee, high resource independent schools, including those with income from fees alone that are more than double the SRS.

The increase for Catholic systemic schools involved an overdue ‘correction’ to neutralize the effects of the Howard Government’s politically-based ‘special deals’ for these schools. These had been embedded in Labor’s Gonski 1.0 scheme through its ‘no losers’ dictum.

The Budget also gave funding increases to government schools.  In what is a first for a Coalition Government, to the best of my knowledge, it gave an increase in Commonwealth funding to government schools at a higher rate than to non-government schools.  Over the Budget period from 2017-18 to 2020-21 Commonwealth funding of government schools is slated to increase by 15.4% and non- government schools by 8.8%.

But some of this increase is due to the higher rate of enrolment growth in government schools.  When the Budget figures are adjusted for enrolments and inflation, Commonwealth funding of government schools in real terms by 2020-21 will be around $276 per student more than 2017-18; while for non-government schools, each student will receive an extra $465.

But this translates to a very modest increase for the former in dollar terms, because of the fact that it affects only a minority share of the public funding of government schools.

The Gonski 2.0 decade would end with the private schools – Catholic and independent –certainly having achieved their SRS, unless their ever-escalating private fees go into reverse, or the states decide to accept the political odium of stetting or cutting their own funding to some or all of these schools.

But public schools will be reliant for 80 per cent of their funding standard on an increased investment by states.  If the maintenance of their current funding per student required by the Commonwealth is the best the states can manage, this will be insufficient to bring public schools up to the Gonski 2.0 standard.  And the prospect is dim of states having the capacity to go beyond maintenance of current effort to the full increases necessary to meet the 80 per cent of the SRS.

In these circumstances, it is misleading of Minister Birmingham to claim that ‘all schools will be funded on the same basis’.

Contrary to the inference in the Gonski 2.0 announcements, there is no ‘constitutional’ basis for the Commonwealth to differentiate between public and private schools in this way.

It is one thing for the Turnbull Government to use the 80-20 figures to describe the dollars it will provide respectively to private and public schools.  These figures simply reflect decades of political decisions and special deals. But it is another thing entirely, in my view, for the Government to seek to entrench in legislation the major structural inequality in schools funding.

While expunging the effects of some of the special deals with the non-government sector effected by his predecessors, Minister Birmingham is seeking to replace these with his own.

As well as generating inequality between the sectors, the split in Commonwealth-State responsibilities for schools funding creates a fog over the total schools funding picture that has been conducive to special deals.  With its big Budget and with no responsibility for managing any part of the school system, the Commonwealth has more temptation than states to indulge in political opportunism and special deals.

One way of channelling real annual increases in Commonwealth funding to private schools over the years has been to use the cover of indexation to adjust their grants at a rate far higher than the real inflation in their costs and irrespective of need. This has delivered more benefit to private than to public schools because Commonwealth indexation applies to a much greater proportion of the private school funding.

Prior to the announcement of Gonski 2.0, Minister Birmingham himself had presided over a special deal.  The Coalition’s 2016 Budget had increased Commonwealth indexation, raising it from the Abbott Government’s indexation rate based on movements in the CPI (around 2 per cent in 2016) to the amount of 3.56 per cent, consistent with a submission from the National Catholic Education Commission.

In its 2017 Budget, the Government finally adopted a principled and more conventional approach to indexation, announcing that it would adopt a conventional ‘floating’ rate based on movements in education wages and CPI.  Prepared to be virtuous but not quite yet, the Government announced that this proper indexation rate would not apply until 2020 and that the ‘deemed’ rate of 3.56 would be retained for 2018 and 2019.

But soon came the reality that the Turnbull Government was now prepared only to be slightly virtuous; and that special deals were back on the table.  Between the tabling of the Budget and the introduction of the Government’s proposed amendments to the current legislation, a change occurred that has all the hallmarks of yet another special deal. In the explanatory memorandum circulated by Minister Birmingham to the Amendment Bill, and with rising complaints from the Catholic schools sector in particular about its Budget indexation decision, there appears a set of words that back away from the Budget announcement.  They indicate that indexation will be based on either a genuine measure of price movements in education, or an artificially ‘deemed’, figure of 3 per cent, whichever is the higher.  And just for good measure, it is seeking also to set in legislation the power to set a different indexation rate entirely through regulation.  This seems to indicate that the Government is seeking a legal basis for its capacity to do special deals!

From the time of the Whitlam Government, there has been a steady reversal of the Commonwealth’s distribution of its schools funding between public and private schools, well beyond what might have been attributable to changing sector shares of the school population.  What was originally a roughly 70 – 30 split between government and non-government schools respectively has now become an 80-20 split but in the opposite direction.

Over these years, we have seen a growing socio-economic separation between public and private schools.  This form of segregation is one of a range of factors that work against equality of educational opportunity and, in that sense, against the overall quality of school systems.  The evidence is that the contribution of this form of segregation is high in Australia by world standards, and the second highest level of social segregation between public and private schools in the OECD.  Particularly alarming is the evidence that the inequity in the allocation of educational staff between disadvantaged and advantaged schools in Australia is the highest in the OECD and the third highest of the 70 countries and regions participating in PISA 2015.

The responsibility now rests with the Senate to avoid any action that would make this situation worse.  

In the space of several weeks, the Turnbull Government has squandered the fragile consensus around Gonski 2.00.  Simmering resentments between the Catholic and independent schools authorities and interest groups have now surfaced.  The states are united in opposition to the Commonwealth, with NSW, in particular, expressing ire at the fact that the Commonwealth is reneging on the funding agreements put in place under the Gillard Government.  Public schools are recognizing they have been short-changed generally and compared with private schools which, collectively, serve a relatively more privileged share of the school population.

Urgent action is needed

Urgent action is needed by the Senate to deal with the Coalition’s Amendment Bill to try to save what is constructive in Gonski 2.0 – especially the needs-based funding against the SRS.

It is to be hoped the Senate will insist that any provision in the legislation for indexation will be based on the indexation formula in the 2017 Budget version and not on the disreputable compromise the Turnbull has subsequently proposed.

That may buy time for this nation to apply its intellect and its conscience to examining the factors that have sent a nation that has traditionally valued its egalitarian ethos in such a perverse direction in the planning and funding of its schools.  This article examines several of these factors here, but it refers only in passing to one of the most potent factors in the schools funding imbroglio – and that is the relationship between governments and the Catholic church.  This demands a discussion of its own…The Tangled Web Part 2.

Lyndsay Connors AO is the co-author with Jim McMorrow of the 2015 report Imperatives in Schools Funding: Equity, sustainability and achievement, published by the Australian Council for Educational Research


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