Chapter 3
States and territories and school funding
Division of funding between states and the Commonwealth
3.1
The Productivity Commission Report on Government Services 2014
summarises the division of school funding across states and territories and the
Australian Government:
Under constitutional arrangements, the State and Territory
governments have responsibility to ensure the delivery of schooling to all
children of school age. They determine curricula, regulate school activities
and provide most of the funding. State and Territory governments are directly
responsible for the administration of government schools, for which they
provide the majority of government funding. Non-government schools operate
under conditions determined by State and Territory government registration
authorities and also receive State and Territory government funding.[1]
3.2
The Gonski Review found the fact that both states and territories and
the Australian Government provided funding for schools leads to duplication and
confusion:
It is not always clear which level of government is providing
funding, nor what role the Australian Government and state and territory
governments should play in funding particular educational priorities.[2]
3.3
Further, the Gonski Review found because states and territories
allocated different resources to school funding, it could appear that some
publicly funded schools struggled both financially and academically in
comparison to others.[3]
The duplication of funding could also fuel public perception of a lack of
equality between schools:
Historically, the states and territories are the primary
funders of government schools and the Australian Government is the primary
funder of non‑government schools. These roles are divisive within
significant parts of the Australian community because they can give the false
and misleading impression of a preference by the Australian Government for non‑government
schools over government schools, and a corresponding false and misleading view
of neglect by state and territory governments of the funding needs of
non-government schools.[4]
3.4
Analysing the data around school funding in Australia, even for the last
decade, is a difficult task. It is an undertaking which involves attempting to
draw on state, territory and federal budgets; and datasets collected by
organisations such as Australian Curriculum, Assessment and Reporting Authority
(ACARA) and the Australian Bureau of Statistics (ABS). These collections of
data are not directly comparable as they each use different measures of time
(financial years versus calendar years) and their reporting timeframes can vary
considerably.
3.5
The Gonski Review Report, published in December 2011, represents one of
the most comprehensive analysis of school funding arrangements ever undertaken.
It collected comprehensive data from states, territories and the Commonwealth
along with datasets from other organisations such as ACARA and the ABS. The
report itself, despite the often heated public debate about its implementation,
is largely well regarded, as explained by the former President of NSW Secondary
Principals' Council Mr Chris Bonnor:
It was one of the most exhaustive reviews of schooling that
we have had for decades, going back to the mid-1970s. It was huge. The
consultation process was enormous, as was the research and the number of
schools visited. The process and the recommendations were welcomed by all
sectors and the media. We went through a moment when that report was delivered
of enormous agreement.[5]
3.6
This chapter provides an outline of the school funding arrangements by
the Commonwealth and by State and Territory Governments, with the purpose of
demonstrating the complexities of the system and the problems identified by
both the Gonski Report and other researchers and experts. Funding amounts and
other data are identified by source and year throughout the chapter.
School and student numbers by state
and territory
3.7
The ABS divides its data regarding schools into three groups: Government
Schools, Non‑Government Schools (Catholic); and Non-Government Schools
(Independent). In 2013, the ABS records 9393 schools in total and notes a net
fall of 34 schools from 2012.[6]
The number of schools in each group by state is represented in Table 1 below.
Table 2—Australian schools by state and sector, 2013[7]
|
Jurisdiction
|
Government
Schools
|
Non-Government
Schools (Catholic)
|
Non-Government
Schools (Independent)
|
Total
|
|
NSW
|
2164
|
586
|
331
|
3081
|
|
VIC
|
1526
|
487
|
206
|
2219
|
|
QLD
|
1238
|
297
|
184
|
1719
|
|
WA
|
768
|
160
|
139
|
1067
|
|
SA
|
527
|
103
|
92
|
722
|
|
TAS
|
198
|
37
|
28
|
263
|
|
NT
|
154
|
17
|
21
|
192
|
|
ACT
|
86
|
30
|
14
|
130
|
|
Total
|
6661
|
1717
|
1015
|
9393
|
3.8
The ABS records a total of 3 645 519 students attending school in
Australia in 2013. Within this total, approximately twice as many students
attend government schools (2 375 024 or 65 per cent) as attend non-government
schools (1 270 495 or 35 per cent).[8]
Overall school funding
Overall school expenditure –
Commonwealth, states and territories[9]
3.9
In 2011-12, total Commonwealth, State and Territory government recurrent
expenditure on school education was $47.1 billion.[10]
3.10
During the same period, total Commonwealth, State and Territory Government
recurrent expenditure on government schools was $36.5 billion, or 77.6 per cent
of total government recurrent expenditure on school education.[11]
State and Territory governments provided 87.5 per cent of total government
recurrent expenditure to government schools, with the Australian Government
providing 12.5 per cent.
3.11
In contrast, government recurrent expenditure on non‑government
schools was mainly provided by the Australian Government (73.4 per cent),
with State and Territory Governments providing 26.6 per cent.[12]
3.12
Figure 3 below, taken from the Gonski Report, demonstrates the funding
inputs which comprise funding per school type. Although the data is for 2009,
the figure is included here to show clearly the average proportion of funding
for each school type from each source.[13]
Figure 3—Average net recurrent income per student by source
of income and sector, 2009[14]
Expenditure trend in overall total government funding
3.13
In 2011-12, total government nominal recurrent expenditure per full-time
equivalent (FTE) student in all schools (government and non-government) was
$13 255. It increased by 25 per cent from $10 601 in 2007-08.[15]
3.14
Mr David Gillespie, author of the book 'Free Schools', advised caution
in making a dollar for dollar comparison of the government funding for
government and non-government schools:
A lot of people run with the headline, which is that it costs
$15,000 to educate a government school student and it costs $9,000 to educate a
non‑government school student, and they say, 'Well, there you go; we're
saving $6,000 per student.' But there is a lot of stuff factored into that
government school student that is not factored into the non-government school
student—the utilisation costs of the assets, for example, which comes in at
close to $3,000 per student, are factored into the government‑school
student funding, not the non-government school student funding, despite the
fact that the government pays for the non-government school student's assets.
The capital contribution by the government into the non-government school is
not factored in, and neither is the depreciation on that capital, but the
contribution to the government school is factored in. When you take all those
things out, when you boil it down to what actually matters in a school—which is
the people doing the teaching and administering—then the costs get very, very
close. On the current numbers I think it is almost $9,000 for a non-government
school student, and for a government school student it is just a smidge over
$10,000...[16]
Increases
in Commonwealth spending on school education
3.15
While overall government expenditure per FTE student increased over the
five-year period from 2007-08 to 2011-12, there are significant differences in
the level of recurrent funding provided in recent years by the Commonwealth,
compared with the States and Territories.
3.16
As indicated in Table 3 below, recurrent expenditure by the Australian
Government increased each year from 2007-08 to 2011-12.
3.17
In 2007-08, the Australian Government's expenditure was $2333 per FTE
student. This increased steadily to $3470 in 2011-12.[17]
Therefore, over this five-year period Commonwealth recurrent spending on school
education increased by 49 per cent.[18]
State and
Territory spending on school education
3.18
By comparison, Table 3 below shows that in 2007-08 the average of all
State and Territory Governments' recurrent expenditure was $8268 per FTE
student. This expenditure increased to $9785 in 2011-12. Over this five-year
period, overall State and Territory recurrent spending on school education
increased by 18.3 per cent in nominal terms (compared to a 49 per cent
increase for Commonwealth spending on school education).
3.19
Recurrent expenditure per FTE student by individual State and Territory
Governments over the same five-year period has generally increased, as set out
in Table 3 below. The table shows that the rate of increase in Commonwealth
expenditure has been more than double that of any of the states or territories
and more than 2½ times the state average.
Table 3—Funding and percentage increase by jurisdiction
|
Jurisdiction
|
Funding year
2007-08
|
Funding year
2011-12
|
Percentage
increase
|
|
NSW
|
$8154
|
$9805
|
20.2
|
|
QLD
|
$8400
|
$9938
|
18.3
|
|
VIC
|
$7137
|
$8177
|
14.6
|
|
SA
|
$7908
|
$9745
|
23.2
|
|
WA
|
$10553
|
$12131
|
15.0
|
|
TAS
|
$8642
|
$10372
|
20.0
|
|
NT
|
$12841
|
$15712
|
22.4
|
|
ACT
|
$9426
|
$11603
|
23.1
|
|
State average
|
$8268
|
$9785
|
18.3
|
|
Commonwealth average
|
$2333
|
$3470
|
49.0
|
Spending on
schools as a proportion of all State/Territory expenditure
3.20
While in 2011-12 State and Territory Governments spent $42 billion on
school education services (including all recurrent and capital expenditure), 20
per cent of total State/Territory expenses, there was in fact a decrease in
real terms of school funding by State and Territory Governments as a proportion
of overall expenditure.
3.21
Figure 3 below shows that the proportion of State/Territory spending devoted
to school education has decreased as a proportion of total state expenditure
over recent years from 21.6 per cent in 2006-07 to 20.0 per cent in
2011-12.[19]
3.22
In comparison, as discussed above, over this time Commonwealth funding
for schools has increased. Further discussion of individual state funding
arrangements under the NPSI is detailed in Chapter 5, with information on the
recent state and territory budgets in Chapter 6.
Figure 4—State/Territory spending on school education,
2006-07 to 2011-12[20]
Examples of State Government
decreases in school funding since 2011
3.23
Before considering specific examples of State Government decreases in
school funding it is important to note that the structure of state and
territory budgets can vary considerably in their presentation of government
spending. Further, the variance in timing between the handing down of state and
territory budgets and the Australian Government budget also poses problems in
ascertaining how states have allocated, or in some cases combined, Australian
Government funds with state funds.
New South Wales
3.24
In September 2012, the New South Wales Government announced that it
would be making savings to the education budget amounting to $1.7 billion over
the next four years. These cuts entailed reductions in administrative staff, an
increase in TAFE fees and capping of funding for non-government schools.[21]
3.25
In April 2013, as part of signing the National Education Reform
Agreement (NERA), the New South Wales Government committed 'about' $1.7 billion
in additional funding over the term of the agreement. The Premier of New South
Wales described this amount as a coincidence that this was the same amount as
the cuts announced in 2012.[22]
3.26
In October 2013, as a result of the New South Wales Government
introducing its new needs-based funding system, the Resource Allocation Model,[23]
it was revealed that 'more than 200 schools in New South Wales, many in low
socio-economic areas' would receive less funding. However, other schools would
receive more funding.[24]
3.27
Recently, NSW Premier Mike Baird has stated his commitment to NERA and
called on the Abbott Government to maintain the agreement for the full six year
period.[25]
The committee invited the NSW Department of Education and Communities to appear
at three different hearings, but the department declined each invitation. NSW
has however, been the only state to publish a breakdown across forward
estimates (out to 2019) of the allocation of funds from the NERA and the
matching state funding.[26]
Victoria
3.28
The 2012-13 Victorian budget reduced funding for Support Services
Delivery from $337.8 million in 2011-12 to $303.6 million in 2012-13. This
involved removing the school component of the Education Maintenance Allowance
for schools with a high percentage of disadvantaged students. The budget papers
explain the reduced funding as reflecting 'the completion of fixed-term budget
initiatives, redirection of Education Maintenance Allowance funding to the
School Education output group, and the achievement of government savings'.[27]
3.29
The Victorian Government was the only state government which had handed
down its 2014-15 budget prior to the Abbott Government's 2014-15 budget, and
the Victorian Premier joined the other state and territory heads of government
in arguing against the measures announced for school funding in the Abbott
Government's budget.[28]
3.30
At the Victorian Parliament's 2014-15 Budget Estimates on 13 May, the
Minister for Education Mr Martin Dixon MP, advised that this budget was the
first since Victoria had signed the NERA in August 2013. The minister explained
the allocation of funding as it appeared in the 2014-15 budget:
The national funding agreement was signed in, I think, early
August [2013], and that committed the Victorian and the Australian governments
to $12.2 billion of new funding over six years. The Victorian government’s
share of that is $5.4 billion over those six years, and we are beginning to deliver
that money into our schools this year. This is the first budget since that
agreement was signed. There is $1.2 billion already out there, and there is
[$1.6 billion] of initiatives in this year’s budget towards that six-year goal.
We know that that is backloaded. Most of the funding comes on stream in the
second half, in fact in the last two years, of that six-year agreement. We will
certainly do our bit, with guarantees that we will provide the $5.4 billion
over six years that we said we would put on the table, and obviously we will
hold the federal government accountable to do its bit in terms of the balance
of the money.[29]
3.31
However, the minister also advised that as the Victorian budget pooled
the Australian Government school funding money and the State Government
contribution. He could not provide a detailed split of the allocation of the
funding over each of the forward years:
In Victoria there is no such thing as Gonski money. It is the
money that the state government puts into education, it is the money that the
federal government puts into education and that is the school funding. We do
not treat them as two separate buckets of money. It is school funding, and we
do not divide them up like that, especially in Victoria where we have a very
devolved education system, where we do not have line item budgets, where we
allow schools to spend the funding that they receive on the programs and
services that are going to best meet the needs of their community.
In terms of why everything is not there year by year, broken
down, it is the same. You mentioned capital. It is the same. There is $500
million of capital that has gone into the forward estimates in this year’s
budget, but that does not mean that is the only money we are going to spend
over the next four years on capital works. It is the same with output funding
as well. It is exactly the same. Money is held in contingency, and then it is
fed into budgets over the ensuing years.
As I said, there is a total now in the school education
budget of $2.8 billion in this year’s budget—[$1.2 billion] existing and an
extra [$1.6 billion]—and the rest of that money will roll out over the next
five budgets.[30]
South Australia
3.32
In December 2013, the Prime Minister and Commonwealth Minister for
Education stated that South Australia had cut its education budget despite
signing up to the NERA. The South Australian Education Minister responded by
stating that efficiency dividends of $223 million were made before the NERA had
been signed and that after signing the agreement the South Australian
Government had agreed to increase funding.[31]
3.33
At the committee's public hearing on 30 April, Mr Tony Harrison, Chief
Executive of the Department for Education and Child Development South Australia
told the committee that South Australia had welcomed the six year NERA as it
provided an opportunity for long term planning.[32]
Mr Harrison outlined for the committee the difference between the four year
funding approach (under Students First) and the six year approach (under NERA):
Mr Harrison: I will highlight the difference between
a four-year approach and a six-year approach in the South Australian context.
If you look at the total funding from South Australian and Commonwealth
perspectives in years 1, 2, 3 and 4, we are talking about $2.986 billion in
year 1—2014—increasing to $3.103 billion in 2015. In year 3 it goes to $3.24
billion and in year 4 it goes to $3.379 billion. That is a total of $12.7
billion over that four-year period. If you look at years 5 and 6—
CHAIR: To clarify those figures: this is both
Commonwealth and state contribution?
Mr Harrison: That is right. So the total over the
four-year period is $12.710 billion. Year 5 combined was to be a contribution
of $3.628 billion and year 6 was to be $3.990 billion. Those two years are
$7.619 billion. You can obviously see that years 5 and 6 were an important part
of the model for us in the sense of how it was ramped and how the formulas were
worked out over that six-year period. [33]
3.34
The additionality funding from the South Australian Government had,
Mr Harrison explained, been matched to the original six year funding
agreement:
Table 4—Additonality funding – South Australia
|
|
2014
(Year 1)
|
2015
(Year 2)
|
2016
(Year 3)
|
2017
(Year 4)
|
2018
(Year 5)
|
2019
(Year 6)
|
|
SA additionality funding
|
$25m
|
$33m
|
$43m
|
$51m
|
$160m
|
$342m
|
3.35
Mr Harrison stressed that without the funding originally allocated for
years five and six, South Australian schools faced a funding shortfall:
Looking at those amounts of money, you can see that
potentially, if [funding for years 5 and 6 is] not realised, there is a
significant shortfall if we work on a four-year model versus a six-year model. [34]
3.36
Mr Harrison also provided for the committee an example of the
difficulties which could arise if funding was not certain:
The fact that when we operate in three- and four-year
cycles—and often it is around election cycles and government terms of three and
four years—it provides a great difficulty to try to have that long-term
planning for long-term teaching and learning improvements. It is hard to turn
on these programs on then and turn them off. We seem to spend a lot of money in
seed funding establishing programs and we seem to spend considerable time
actually getting programs off the ground. We can often lose six months, 12
months or sometimes even two years before programs really start to get some
traction. Before you know it, without the certainty of funding, you are having
to work out whether you start winding back those programs.[35]
Senator the Hon Jacinta Collins (Chair) and Senator Deborah O'Neill
with Ms Emily Sayer (Deputy Principal) during the committee's site visit at the
Immaculate Heart of Mary School, Adelaide, 30 April 2014.
Tasmania
3.37
As part of the 2011-12 Tasmanian Budget, it was announced that, in
accordance with the Tasmanian Government's objective to return the Budget to a
sustainable position, the Department of Education would implement a number of
strategies to achieve the following savings:
Table 5—Tasmanian Government, 2011-12 projected savings,
education
|
Year
|
Projected saving
|
|
2011-12
|
$45.9 million
|
|
2012-13
|
$56.0 million
|
|
2013-14
|
$49.0 million
|
|
2014-15
|
$38.9 million
|
3.38
Savings strategies would include:
-
implementing the Renewing our Education System process;
-
extending the Voluntary Workforce Renewal programme;
-
establishing a single corporate services model;
-
ceasing targeted funding allocated to reduce class sizes;
-
reducing the level of non-government general educational grant
funding;
-
gaining efficiencies through revised organisational and
operational structures; and
-
deferring some capital investment projects.[36]
3.39
At the committee's public hearing on 16 May, the Department of Education
Tasmania officials confirmed that despite the recent change of State
Government, Tasmania would proceed with the allocations of funding and
initiatives under the previously announced program.[37]
Allocation of funds to
non-participating states – MYEFO 2013
3.40
The December 2013 MYEFO included the allocation of $1.2 billion to
Queensland, Western Australia and the Northern Territory under the Students
First policy.[38]
The funding followed negotiations conducted by the Abbott Government; the two
states and one territory had not previously signed the NERA with the
Rudd/Gillard Governments.
3.41
Overall, Queensland received $794.4 million; Western Australia
received $120.3 million; and the Northern Territory received $272.5 million,
allocated as follows, with updates annually for current enrolment data:[39]
3.42
The Minister for Education, the Hon Christopher Pyne MP, wrote to the
Queensland, Western Australia and the Northern Territory regarding the
allocation of funding and outlining the Abbott Government's belief in states'
autonomy:
The Government recognises that states and territories remain
responsible for their schools and that all non-government schools should
maintain their independence and autonomy. In 2014 it is the Government's
intention, following consultation, to amend the command and control aspects of
the Australian Education Act 2013 to ensure jurisdictions maintain
authority for their schools.
Given our joint commitment to addressing student need and
improving educational outcomes for all students, it is my expectation that your
Government would continue its funding effort across schools [in the relevant
state or territory] through the forward estimates period.[40]
3.43
Discussion regarding the accountability of states for this funding is
discussed in more detail in Chapter 8.
Queensland
3.44
The 2012-13 Queensland Budget listed 'fiscal repair savings measures' of
about $758 million over four years for the Department of Education, Training
and Employment.[41]
It also announced that in line with the Queensland Government's 'commitment to
reduce waste and improve efficiency' savings of $9.9 million were achieved as a
result of lower than budgeted program costs, unfilled vacancies and reduced
business costs.'[42]
3.45
The Budget attracted media criticism which suggests that funding for
school education had been cut in real terms and that the Queensland Minister
for Education was quoted as having to make 'some difficult decisions' in the
budget.[43]
3.46
The Queensland Teachers Union analysis of the Budget concluded that
there were 'real cuts' to staffing allocations:
Only 270 additional teachers, teacher-aides and support staff
were funded in the budget, yet the Department of Education, Training and
Employment's own estimate is that 837 are needed to cater for growth...
The shortfall is being funded by redirecting existing
staffing allocations that have been used by schools to limit class sizes,
provide early literacy support and allow schools to offer a broader curriculum,
particularly in high schools...
The overall education budget is up by a tiny 0.3 per cent,
which is far short of projected inflation of 2.75 per cent...[44]
Western Australia
3.47
In August 2013, the Western Australian Government announced a new
student-centred funding model to be implemented from 2015. Under the model,
schools will have a one-line budget comprising a salaries component and a cash
component, with capacity for resources to be moved between these two
components.[45]
3.48
In his announcement, the Western Australian Minister for Education
stated that the new model would be accompanied by 'reforms to improve the
efficiency of WA's public education system, which include staff reductions
where positions could no longer be justified'. While overall teacher numbers
would be maintained in 2014, there would be reductions in central and regional
office positions and education assistants.[46]
3.49
There have also been reports and claims that the new funding model will
result in class size increases, school closures and amalgamations and that
School Support Program resource allocations which provide support for students
with additional literacy and numeracy needs and with behavioural problems will
be cut by a third. It has also been reported that the Education Department has
put a new levy on schools to cover the cost of long service leave liability.[47]
3.50
The Department of Education Western Australia had, via letter on 26
March, confirmed that senior officials including the department's Director
General, Ms Sharyn O'Neill, would be attending the committee's public
hearing in Perth on 29 April. However, in a letter to the committee on 24
April, Ms O'Neill advised that departmental officials would not attend the
public hearing 'due to a change in circumstances'.[48]
Northern Territory
3.51
In May 2013, the Northern Territory Education Minister stated in a
newspaper interview that student-teacher ratios would be increased in middle
and high schools as part of a plan to reduce the ratios in the early year of
schooling.[49]
3.52
The 2013-14 Northern Territory budget reduced funding for government
school education (comprising primary, middle years and senior years education)
by $18 million. The budget papers explain the reduction as largely due to
reductions in Commonwealth-funded programmes and efficiency measures.[50]
Navigation: Previous Page | Contents | Next Page