Bills Digest 42 1996-97 States Grants (Primary and Secondary Education Assistance) Bill 1996


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WARNING:
This Digest is prepared for debate. It reflects the legislation as introduced and does not canvass subsequent amendments.

This Digest was available from 16 October 1996.

CONTENTS

Passage History

States Grants (Primary and Secondary Education Assistance) Bill 1996

Date Introduced: 19 September 1996
House: House of Representatives
Portfolio: Schools, Vocational Education and Training
Commencement: 1 January 1997

Purpose

To provide Commonwealth assistance to the States and Territories for government and non-government schooling for the 1997-2000 quadrennium.

Background

History

Whilst primary and secondary education is essentially the responsibility of the States and Territories, the Commonwealth Government has nevertheless become more involved in schooling in Australia. Uncertainty over the legality of the Commonwealth being directly involved in education led the Government in 1946 to propose amendments to the Constitution. Acceptance of the Government's proposals in a national referendum allowed Section 51 (xxiiiA) of the Constitution to be amended to give the Commonwealth power to make laws 'with respect to the provision of...benefits to students' in all States of Australia. Notwithstanding the absence of the word 'education' in the amendment, the wording of the amendment has allowed the Commonwealth Government considerable scope for involvement in education. The Commonwealth has also used Section 96 of the Constitution, which allows for the Federal Parliament to 'grant financial assistance to any State on such terms and conditions as the Parliament thinks fit', to extend its involvement in education.

It is only in relatively recent times that direct funding has gone to both government and non-government schools. In the 1870s and 1880s most of the colonies passed legislation that effectively excluded the non-government sector from public funding. This legislation established the tradition that government funding should only go to 'free and secular' government schools. The tradition maintained that non-government schools should be fully funded from private sources only. However, by the 1960s various pressures were building up that led to the Commonwealth and then the States to become directly involved with the funding and support of non-government schools.

The 1950s and 1960s saw a rapid expansion in school enrolments, an expansion that State governments found increasingly difficult to resource adequately. The predominant non-government sector was the Catholic sector and these schools were particularly suffering from overcrowding, inadequate buildings and shortages of properly trained teachers. As the Commonwealth was the jurisdiction with the best revenue base it was to this level that parents, educators and others forcefully put the case that the Commonwealth should make up the shortfall in school funding, not only to government but also to non-government schooling. The problem however, with 'state aid' to private schools, was that many associated this with aid to Catholic schools - they were the sector that would get the most 'state aid'. Further, opponents of 'state aid' believed that the Church and the State should be completely separate and thus general taxpayer support for church schools was totally inappropriate. The pressures on the schooling sectors and the fact that education had become a significant electoral issue led to a changing political atmosphere.

The two major political groupings at the federal level both of whom opposed 'state aid' in the late 1950s and early 1960s, had changed their policy positions by the mid to late 1960s. R.G. Menzies, Prime Minister and leader of the Liberal/Country Party Government from 1949 to 1966, had initially opposed general funding of government (and non-government) schooling on the grounds that schooling was a State responsibility. However, it was his government in 1964 that began the process of direct Commonwealth aid to schools. The ALP had been consistently opposed to 'state aid' since the 1957 split when much of its Catholic support went to the Democratic Labor Party (DLP). However, by 1966, after much infighting, the ALP changed its party platform to include the provision for federal aid to non-government schools. E.G. Whitlam, then deputy leader of the federal ALP, was firmly of the view that schools needed support from the Commonwealth and that this support had to go to both sectors or neither sector.

Prior to 1964, the States funded government schools directly and the Commonwealth provided general revenue grants to the States, a portion of which was used by the States to supplement their funding for government schools. There was some minor support given by the Commonwealth to non-government schools in the 1950s - allowance of tax deductibility of school fees and gifts to school building funds - but it was not until the 1960s that direct support was provided. In 1964 direct Commonwealth funding for government and non-government schools began - the passage through the Commonwealth Parliament of the States Grants (Science Laboratories and Technical Training) Act 1964 enabled funding for science laboratories and equipment for secondary schools. Since that time, Commonwealth funding for schools has increased markedly with in excess of $3 billion being allocated in 1996 to both government and non-government schools.

The Current Situation

This Bill succeeds the States Grants (Primary and Secondary Education Assistance) Act 1992 which provided Commonwealth funding for schools for the period 1993 to 1996. It authorises continuing Commonwealth funding for both government and non-government schooling for the 1997-2000 quadrennium. The financial assistance (totalling $13.7 billion in constant prices over the quadrennium) is provided in three forms - general recurrent grants, capital grants and grants for targeted programs. The vast bulk of Commonwealth funding for schools comes under the ambit of this Bill. For example, out of the total expenditure of in excess of $3 billion for the 1996-97 financial year, only $35.7m is appropriated under other legislation. (1) The Commonwealth presently funds approximately 13% of the total spending on government schools, the balance of the funding coming from the State/Territory jurisdictions. Approximately 38% of total spending on non-government schooling is provided by the Commonwealth, with 18% being provided by other governments and 44% coming from private sources. (2)

Key Issue

The major changes contained in the Bill relate to the establishment and funding of non-government schools and the implications these changes have for the government sector. The Bill abolishes the previous government's New Schools Policy from the beginning of 1997. This means that, from that time, those wishing to establish new schools will only have to satisfy minimum State/Territory registration requirements. As well, the current policy that restricts new non-systemic schools to Category 6 recurrent funding is to be removed. Under the new arrangements non-systemic schools will be able, if eligible, to access funding from the full range of categories. To help offset the additional cost to the Commonwealth that an increase in non-government school enrolments will cause, an enrolment benchmark adjustment for schools has been introduced. This will enable the Commonwealth to preserve 50% of the net recurrent savings to a State or Territory resulting when students shift from the government to the non-government sector.

There has already been a significant shift of students from the government to the non-government sector in recent years. Enrolments at non-government schools have increased from 24.4% of total enrolments in 1983 to 29% in 1995. The abolition of the New Schools Policy will, in all likelihood, exacerbate this enrolment drift and is likely to reignite the divisive 'state aid' debate that characterised much of the 1960s and early 1970s. Already there have been calls from supporters of the government school sector for the Government to reassess the impact and consequences of recent policy decisions affecting the schooling sector. (3)

According to Louise Watson the Government should address the following issues before it ...'subsidises the further expansion of non-government schools at the expense of the government school system'...- 'managing competition between government and non-government schools; the optimum level of subvention in non-government schools' running costs; the incentives for cost-shifting by State and Territory governments and the appropriate balance of enrolments between the two school sectors.' (4)

Other Main Changes

Apart from streamlining the number of targeted programs, the Bill also allows for more flexibility (via broadbanding) with respect to how money is expended on some of these targeted programs. The number of targeted programs is reduced to five (Literacy, Languages, Special Learning Needs, School To Work and Quality Outcomes) with funding for the first three included in this Bill and the funding for the last two to be provided under other legislation. The effect of the broadbanding provision will be to give schools systems and school authorities added choice and flexibility in determining some of their priorities for targeted funding.

The Bill also aims to strengthen the reporting obligations (via the annual National Report on Schooling In Australia) of the States and the Territories with respect to schooling in their jurisdictions by establishing a process to develop a range of core data related to student learning.

Main Provisions

Dictionary/Definitions (clause 3): This Bill follows the innovative practice introduced by the then Minister for Science, Customs and Small Business, the Hon. B. Jones M.P. in 1989 of having a dictionary in a Schedule to the Bill as the principal definitions section.(5)Note: The majority of the definitions in the Bill are identical in effect to those contained in the States Grants (Primary and Secondary Education Assistance) Act 1992. The dictionary to this Bill does however contain a number of new definitions, these include:

The definition of capital project proposes a new paragraph (e) the effect of which is to include the erection, alteration, extension, demolition or refurbishment of a building or other facilities as a capital project.

A new definition of eligible new arrival is proposed by the Bill. The principal difference between the proposed definition and that under the States Grants (Primary and Secondary Education Assistance) Act 1992 lies in the qualifying criteria. Under the proposed definition the Minister is accorded a discretion to determine qualifying criteria.

Part 2 of the Bill (clauses 9-22)

General provisions relating to grants for government schools (clauses 9-14): Major provisions include:

  • The Minister is not allowed to authorise grants to a State or Territory for government schools unless there is a Commonwealth and State/Territory agreement in place which sets out conditions on which payments are granted. Where conditions attach to grants they must include a condition that payments are to be spent for purposes determined by the Minister and that a report in respect of the grants be provided. In addition, the Minister may set such conditions as he/she thinks appropriate (clause 9).
  • States and Territories which receive grants must provide the Commonwealth annually with a certificate stating whether the money was spent for the purpose for which it was given. Where the full amount/s given are not used, they must be repaid if the Minister directs (clause 11).
  • Where a State or Territory does not fulfil a condition of a grant, they must, if the Minister determines, repay the Commonwealth such amount (not greater than the total provided) as the Minister determines. Where a State or Territory does not do this, the Minister may reduce any other amount/s provided for government schools by the amount the State/Territory should have repaid. In addition, the Minister may delay making any further payments for government schools to the State/Territory until compliance has occurred (clause 13).

General provisions relating to grants for non-government bodies (clauses 15-18): Major provisions include:

  • The Minister is not allowed to authorise grants to a State or Territory for non-government schools unless the relevant authority (eg. a body determined by the Minister to be a non-government school) has entered into an agreement with the Commonwealth. An agreement must comply with certain conditions including that amounts received be spent for purposes determined by the Minister and that an authorised person is to have full and free access to the accounts, records and documents of the relevant authority relating to information the authority is required to give the Minister (clauses 15 and 16).
  • The agreement must contain a provision that if the authority does not comply with a requirement within the specified period required, it must, where the Minister determines, pay the Commonwealth such amount (not greater than the amount received) as the Minister determines. Where an authority does not do this, the Minister may reduce any other amounts/s provided for the non-government body by an amount not exceeding that which would have been payed. The Minister may also delay making any further payments for non-government schools to the State/Territory until compliance has occurred and that where an amount of more than $50 000 is provided for a capital project and the asset in respect of which the payment/s were made is sold, ceases to be used or ceases to be used principally for the purposes determined by the Minister, the relevant authority is to repay the amount provided (clause 16).

In addition to conditions attaching to non-government authorities, certain conditions also attach to the grants at the first grant distribution level, that is, payment of grants to a State or Territory for a non-government body (a body not managed or controlled by the Government of a State or Territory). The conditions include that the State/Territory pay as soon as practicable the relevant authority the amount paid by the Commonwealth for the body. Where a State or Territory does not fulfil this condition the Minister may delay making any future payments for government schools (clauses 17 and 18).

Parts 3 and 4 of the Bill (clauses 23-43)

Lists of non-government schools and approved schools systems

Parts 3 and 4 of the Bill deal with lists of non-government schools and approved school systems. The lists are important for a number of reasons, including because grants for non-government schools are conditional on the school being included in the appropriate list, and determine the level of funding a non-government school will get.

Part 5 of the Bill (clauses 44-46)

Grants for general recurrent and capital expenditure for government schools

Clause 44 contains the formula by which the level of recurrent grants to the States and Territories for government schools is calculated. Under the formula, the amount which may be authorised by the Minister in respect of a State or Territory is:

  • the amounts set out in the column of Part 1 of Schedule 1 that relates to the relevant program year (ie. 1997, 1998, 1999 or 2000) multiplied by the number of a State or Territories primary school students; plus
  • the amount set out in the column of Part 2 of Schedule 1 that relates to the relevant program year multiplied by the number of a State or Territories secondary school students.

Clauses 45 and 46 deal with capital grants to the States and Territories for government schools or government rural student hostels. The total amount which the Minister may authorise as capital grants to the States and Territories in a program year is set out in column 2 of Schedule 2 of the Bill ($211.138 million for 1997 and each subsequent calendar year till 2000). The Minister is accorded a discretion under clause 45 to determine the amount which may be approved in respect of a State or Territory for a capital project/s.

Part 6 of the Bill (clauses 47-50)

Grants for general recurrent and capital expenditure and short-term emergency assistance for non-government schools and non-government rural hostels

Clauses 47 contains the formula by which the level of recurrent grants to the States and Territories for non-government schools (approved school system and non-systemic schools) is calculated. Under the formula, the amount which may be authorised by the Minister for a State or Territory is basically:

  • the amount set out in the column of Part 1 of Schedule 3 that relates to the relevant program year opposite the funding level of the school system, or school, multiplied by the number of a State or Territories non-government primary school students; plus
  • the amount set out in the column of Part 2 of Schedule 3 that relates to the relevant program year opposite the funding level of the school system , or school, multiplied by the number of a State or Territories non-government secondary school students.

Clauses 48 and 49 deal with capital grants to the States and Territories for non-government schools, block grant authorities and non-government rural student hostels. The total amount which the Minister may authorise as capital grants to the States and Territories in a program year is set out in column 2 of Schedule 4 of the Bill. The Minister is accorded a discretion under clause 48 to determine the amount which may be approved in respect of a particular capital project/s.

Clause 50 provides for grants to the States and Territories for non-government schools which are in need of short-term emergency assistance must not exceed the amount set out in the column of Schedule 5 that relates to the relevant program year (ie. $547 000 for 1997 and each subsequent year).

Part 7 of the Bill (clauses 51-54)

Grants to foster literacy

Part 7 of the Bill provides for grants to the States and Territories for the development of literacy, numeracy and related skills in government and non-government schools and for national projects. Payments are at the Ministers discretion. The total amounts which may be paid to the States and Territories for a program year are listed in columns 2-4 of Schedule 6.

Part 8 of the Bill (clauses 55-66)

Grants to expand opportunities to learn certain languages

Part 8 of the Bill provides for grants to the States and Territories for:

  • fostering the learning of Asian languages and studies in government and non-government schools and national projects;
  • teaching of community languages in government and non-government schools; and
  • teaching of priority languages in government and non-government schools (these are determined by the Minister) (clauses 56-63). The total amounts which may be paid to the States and Territories for a program year are listed in Schedule 6 (clause 66).

The effect of clauses 64 and 65 is to allow States and Territories which receive grants under a broadbanded section to use some or all of the funds under another broadbanded section. The proposed broadbanded sections are clauses 59 (ie. grants for non-government schools in respect of the teaching of community languages) and 62 (ie. grants for non-government schools in respect of the teaching of priority languages).

Part 9 of the Bill (clauses 67-76)

Grants to meet special learning needs

Part 9 of the Bill provides for grants to the States and Territories for special education, education in English as a second language for eligible new arrivals and education provided in country areas.

Special education at government and non-government schools or government centres (special education is defined in the dictionary to the Bill to mean education under special programs designed specifically for children with disabilities or students with disabilities, or both) (clauses 68 and 69). Clauses 70 and 71 contain the formula by which the level of grants to States and Territories for students with disabilities attending government and non-government schools is calculated. Under the formula for students with disabilities attending government schools, the amount which may be authorised by the Minister for a program year is $72 multiplied by the number of primary schools students with disabilities plus $105 multiplied by the number of secondary students with disabilities. Under the formula for students with disabilities attending non-government schools, the amount which may be authorised by the Minister for a program year is:

  • in respect to primary school students, the number of primary school students multiplied by funding level 12 minus the amount payable to a State or Territory for non-government primary school students under clause 47; or
  • in respect to secondary school students, the number of primary students multiplied by funding level 12 minus the amount payable to a State or Territory for non-government secondary school students under clause 47.

Education in English as a second language for eligible new arrivals in government and non-government schools. The amount which may be authorised by the Minister for a program year is $2 992 multiplied by the number of eligible new arrivals in government or non-government schools (clauses 73 and 74).

Education provided in government and non-government schools in country areas. The amount which may be authorised by the Minister for a program year must not exceed the amount set out in column 6 of Schedule 8. For example, the amount for 1997 is $13.799 million for government schools and $2.005 million for non-government schools (clauses 75 and 76).

Part 10 of the Bill (clause 77)

Grants for national projects

Clause 77 provides for grants to the States and Territories in respect of national projects connected with: literacy, numeracy and related skills; community languages; priority languages; special education; and education in country areas. The amounts which may be authorised by the Minister to be paid to a State or Territory must not exceed 10% of the amount available for the relevant program.

Parts 11 and 12 of the Bill (clauses 78-103)

The Minister is required to table annually a report in Parliament on:

  • approvals given for grants for capital projects;
  • financial assistance granted (other than for capital projects); and
  • the application of financial assistance (clause 90).

Endnotes

  1. Explanatory Memorandum p. 3.
  2. Commonwealth Budget Paper No. 1 1996-97, pp. 3-90.
  3. See for example, Watson, L (1996) The Federal Budget and Schools, paper prepared for Public Policy Seminar at the Australian National University, Canberra, 8 October 1996
  4. ibid, p. 2
  5. See the Patents Act 1990.

Contact Officer and Copyright Details

Greg McIntosh Ph. 06 2772414
Ian Ireland Ph. 06 277 2438
11 October 1996
Bills Digest Service
Parliamentary Research Service

This Digest does not have any official legal status. Other sources should be consulted to determine whether the Bill has been enacted and, if so, whether the subsequent Act reflects further amendments.

PRS staff are available to discuss the paper's contents with Senators and Members and their staff but not with members of the public.

ISSN 1323-9032
© Commonwealth of Australia 1996

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Published by the Department of the Parliamentary Library, 1996.

This page was prepared by the Parliamentary Library, Commonwealth of Australia
Last updated: 18 October 1996

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