The 2015–16 Budget marks a significant change in the
Government’s policy on school education, not only in financial terms as a
result of the proposed additional funding of $1.2 billion over four years, but
also because of a proposed new level of involvement in school education as a
result of the related conditions for funding.
The other major school education budget measure is increased
funding for students with disability, amounting to $118.2 million over two
years. This is in addition to the current loading for students with disability.
Increased funding and indexation
The budget papers show increased funding of $927.6 million
over three years—the remaining $272.4 million will likely be included in
funding for 2020–21, which is beyond the Budget’s forward estimates period.
This additional funding for school education is the result
of proposed changes to the indexation arrangements for school funding.
Currently three indexation rates for Australian Government
funding for schools apply, depending on their funding position relative to the
Schooling Resource Standard (SRS), which is the benchmark for school funding. The current indexation rate for those schools whose funding is below the SRS is
4.7%; for those schools at the SRS the rate is 3.6%; and for those schools
above the SRS the indexation rate is 3.0%.
The 2014–15 Budget proposed reducing these three indexation
rates to a uniform indexation rate linked to the Consumer Price Index (projected
at 2.5%) from the 2018 school year. The result of this
measure was estimated ‘savings’ of about $30.0 billion in school education
expenditure by 2024–25.
The 2016–17 Budget is now proposing a uniform indexation
rate for all schools of 3.56%, with allowances for changes in the number of
student enrolments. The Budget estimates that payments for non-government
schools, for instance, will decrease by $87.0 million in 2016–17 (and by $740.0
million over the five years to 2019–20) as the result of ‘a downward revision
to enrolment projections and changes to school structures (opening and closing
While the new indexation proposal is an increase on the CPI
indexation formula, it may be seen as creating some inequity for less resourced
schools compared to those schools that are currently funded above the SRS.
The Budget does not extend the National Partnerships for the
School Chaplaincy Programme and Universal Access to Early Childhood Education. Both of these are scheduled to expire at the end of the 2017–18 financial year.
Funding for the School Chaplaincy Programme was extended in
the Mid-year Economic and Fiscal Outlook 2014–15, with funding of $242.3 million
over four years from 2014–15 to 2017–18. The Early Childhood
Education National Partnership was only recently extended with funding of
$840 million provided for 2016 and 2017. However, given the significance
of these National Partnerships and the history of provision for them, funding
may continue in future budget measures.
Conditions for funding
The Government proposes that the additional funding for
schools be contingent upon state and territory governments maintaining their
funding effort and committing to specific education reforms. The Government’s proposal to tie school funding to a specific set of conditions
is contrary to previous policy positions. The Coalition went into the 2013
election with the commitment that it would remove the ‘command and control’
features of the Australian Education Act 2013 (the Act) that ‘dictate’
what state and territory governments (and non-government schools) do in their
schools. Although there was a
2014–15 budget commitment to give effect to this election promise, there have
been no associated changes to the Act or the Australian Education Regulation
2013. More recently, the Government’s proposal to
abrogate its role in providing for government school education as part of an
offer to the states and territories to levy income tax on their own behalf was
rejected by the Council of Australian Governments.
The proposed new conditions for funding relate broadly to
improving literacy and numeracy outcomes and the quality of teachers and
teaching, including a focus on disadvantaged schools and science, technology,
engineering and mathematics (STEM) subjects; providing more foreign language
teachers and access to languages education; and establishing a new Career
There has been a mixed response to these proposed conditions.
For example, Jennifer Buckingham from the Centre for Independent Studies has
welcomed testing of Year 1 students’ phonic skills, citing research by the
London School of Economics showing that children exposed to phonics instruction
achieved higher outcomes. And the Career Industry
Council of Australia has praised the reinstatement of a National Career
The proposal to link salary progression to demonstrated
competency and achievement against professional standards as one of the
conditions of funding is suggestive of performance pay. John Fischetti, Dean of
the School of Education at the University of Newcastle, and the Victorian
Minister for Education, James Merlino, are amongst many who are critical of
performance pay for teachers, pointing to overseas experience that has shown
that it does not improve student performance. This is also
corroborated by the finding of a 2012 Productivity Commission report on the
Initiatives relating to the proposed conditions have already
been endorsed by the Council of Australian Governments’ (COAG) Education
Council and are being implemented. At its December 2015 meeting, for example,
the Education Council endorsed a national school education STEM strategy and
revised accreditation standards, with an implementation schedule, for initial
teacher education programs. National literacy and
numeracy tests for teachers have also been agreed to by education ministers. Observations that the proposals do not appear to take account of developments
such as these and what is already occurring in schools have been made. For
example, the West Australian Education Minister, Peter Collier, has remarked
that his state is ‘leading reforms to improve teacher quality to ensure that
performance was rewarded in the public sector’ and, in response to the Year 1
testing proposal, it has been observed elsewhere that testing of students already
occurs when they commence school.
The future of school funding
While the proposed increased funding has been welcomed by
the non-government schools sector, calls by state and territory governments and
others involved with government school education for the ‘last two years of
Gonski’ to be funded have not abated. The Australian Labor Party
has committed to funding years five and six of the Gonski school funding plan,
which the Parliamentary Budget Office has estimated will cost $4.5 billion. This amount is significantly more than the $1.2 billion committed in this
There is a question about how state and territory
governments will react to the proposed conditions for funding. The West
Australian Education Minister, in an interview with the Australian,
commented that he was ‘philosophically’ opposed to tied grants and encouraged
the Government to consider doing so ‘only as a last resort’.
The major unresolved question, however, is how school funding
will be apportioned after 2017. The Minister has made reference to the many
funding agreements that exist and to continuing negotiations to reform the
school funding system.
All online articles accessed May 2016.
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