School education

Budget Review 2016–17 Index

Marilyn Harrington

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.[1]

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.[2] 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%.[3]

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.[4] The result of this measure was estimated ‘savings’ of about $30.0 billion in school education expenditure by 2024–25.[5]

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 of schools)’.[6]

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.[7]

National Partnerships

The Budget does not extend the National Partnerships for the School Chaplaincy Programme and Universal Access to Early Childhood Education.[8] Both of these are scheduled to expire at the end of the 2017–18 financial year.[9]

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.[10] The Early Childhood Education National Partnership was only recently extended with funding of $840 million provided for 2016 and 2017.[11] 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.[12] 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.[13] 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.[14] 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.[15]

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 Education Strategy.[16]

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.[17] And the Career Industry Council of Australia has praised the reinstatement of a National Career Education Strategy.[18]

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.[19] This is also corroborated by the finding of a 2012 Productivity Commission report on the schools workforce.[20]

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.[21] National literacy and numeracy tests for teachers have also been agreed to by education ministers.[22] 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.[23]

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.[24] 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.[25] This amount is significantly more than the $1.2 billion committed in this budget.

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’.[26]

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.[27]

[1].          The budget information in this article has been taken from the following document unless otherwise sourced: Australian Government, Budget measures: budget paper no. 2: 2016–17, p. 80.

[2].          For further information about the current funding system, see: M Harrington, Funding the National Plan for School Improvement: an explanation, Background note, Parliamentary Library, Canberra, 26 June 2013.

[3].          Australian Government, ‘Transitional recurrent funding for participating schools’, Guide to the Australian Education Act 2013.

[4].          For further information, see: M Harrington, ‘School education’, Budget review 2014–15, Research paper series, 2013–14, Parliamentary Library, Canberra, 2014.

[5].          Ibid.

[6].          Australian Government, Budget strategy and outlook: budget paper no. 1: 2016–17, p. 3-30.

[7].          G Chan, ‘Coalition announces $1.2bn for schools but Labor says funding “inadequate”’, The Guardian (Australia), (online edition), 1 May 2016.

[8].          Australian Government, Budget strategy and outlook: budget paper no. 1: 2016–17, p. 5-20.

[9].          Australian Government, Federal financial relations: budget paper no. 3: 2016–17, pp. 32 and 34.

[10].       JB Hockey (Treasurer) and M Cormann (Minister for Finance), Mid-year Economic and Fiscal Outlook 2014–15, p. 153.

[11].       Department of Education and Training, ‘Universal access to early childhood education will continue’, News, 25 February 2016.

[12].       M Turnbull (Prime Minister) and S Birmingham (Minister for Education and Training), The quality reforms needed to get all Australian students ahead, media release, 1 May 2016. See also: Australian Government, Quality schools, quality outcomes, May 2016.

[13].       Liberal Party of Australia and the Nationals, The Coalition’s policy for schools: Students First, Coalition policy document, Election 2013, p. 6.

[15].       M Kenny, ‘States roll PM’s tax plan’, The Sydney Morning Herald, 2 April 2016, pp. 1 and 8.

[16].       Ibid.

[17].       J Buckingham, ‘Not before time, a phonics test in year 1’, The Australian Financial Review, 2 May 2016, p. 11.

[18].       Career Industry Council of Australia, CICA welcomes the announcement of a new National Career Education Strategy, media release, 2 May 2016.

[19].       J Fischetti, ‘Federal budget 2016: education experts react: new changes for teachers include linking pay to performance’, The Conversation, 3 May 2016; G Chan, op. cit.

[20].       Productivity Commission (PC), Schools workforce, Research report, PC, Canberra, 2012, p. 31.

[21].       Council of Australian Governments Education Council, Communique, Education Council Meeting, 11 December 2015.

[22].       Council of Australian Governments Education Council. Communique, Education Council Meeting, 18 September 2015.

[23].       S Martin, ‘PM’s cash for “best” teachers, basic skills’, The Australian, 2 May 2016; M Adoniou, ‘What will schools get out of the budget? Just some more unwanted gift cards’, The Conversation, 2 May 2016.

[24].       Australian Education Union, op. cit.; R Ballantyne, ‘Govt pledges $1.2bn for schools…but there’s a catch’, The Educator, 2 May 2016; and T Dodd, ‘Strings attached to school coffers boost’, The Australian Financial Review, 2 May 2016, p. 5.

[25].       Australian Labor Party, Your child our future: Labor’s positive plan for schools, Australian Labor Party policy document, 2016, [p. 14].

[26].       S Martin, op. cit.

[27].       S Birmingham (Minister for Education and Training), Interview David Speers, Sky News, Turnbull Government’s plan for student achievement; higher education reform, transcript, 2 May 2016.


All online articles accessed May 2016. 

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