Bills Digest No. 116, 2016–17
PDF version [682KB]
Marilyn Harrington
Social Policy Section
20
June 2017
Contents
Purpose of the Bill
Structure of the Bill
Background
A new school funding plan
Key features of the new funding
system
Other changes
Committee consideration
Senate Education and Employment
Legislation Committee
Senate Standing Committee for the
Scrutiny of Bills
Previous Senate committee
consideration of the Australian Education Act 2013
Policy position of non-government
parties
Australian Labor Party
Australian Greens
The crossbench
Position of major interest groups
State and territory governments
Non-government education sector
Other interest groups
Financial implications
Statement of Compatibility with Human
Rights
Key issues and provisions
Schedule 1, Part 1—Funding for
schools
Indexation
Base per student amounts,
Commonwealth funding share, transitioning schools and transition adjustment
funding
Base per student amounts
Commonwealth funding share
Transitioning schools
Transition adjustment funding
SES scores and capacity to contribute
percentages
System-weighted average SES scores
Capacity to contribute percentages
Student with disability loading
Schedule 1, Part 2—Other policy
changes
Concluding comments
Date introduced: 11
May 2017
House: House of
Representatives
Portfolio: Education
and Training
Commencement: Schedule
1, items 1 to 108 and items 110 to 176, commence on
1 January 2018. All other provisions commence on Royal Assent.
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent,
they become Acts, which can be found at the Federal Register of Legislation
website.
All hyperlinks in this Bills Digest are correct as
at June 2017.
Purpose of
the Bill
The purpose of the Australian Education Amendment Bill 2017
(the Bill) is to amend the Australian
Education Act 2013 (the Act) to implement the Government’s new school
funding arrangements as announced
on 2 May 2017 and as provided
for in the 2017–18 Budget.[1]
The Bill also proposes to amend the Act and the Australian
Education (Consequential and Transitional Provisions) Act 2013 to make policy
changes and technical amendments to the Act.
Structure
of the Bill
The Bill contains one schedule divided into three parts:
- Part
1 provides for the proposed new school funding arrangements
- Part
2 makes policy changes, including updating the Preamble and Objects of the Act,
stipulating conditions of financial assistance and setting out state and
territory government funding requirements and
- Part
3 makes miscellaneous technical amendments, including some definition changes
and amendments to the current requirement for the Minister to consult with
state and territory governments about changes to the Regulations.
An explanation of the operation of each part is outlined
at pages 1 to 4 of the Explanatory Memorandum to the Bill.[2]
Background
In 2013, the Abbott Government committed only to the current
school funding arrangements and their associated quantum of funding for the
then forward estimates period, 2014 to 2017.[3]
The 2014–15 Budget signalled that Australian Government school funding arrangements
would change from 2018 by announcing a new rate of indexation linked to the
Consumer Price Index, which was projected at 2.5 per cent and thus lower than
the indexation rates prescribed by the Act.[4]
The Turnbull Government subsequently increased the proposed rate of indexation by
announcing a uniform indexation rate of 3.56 per cent in the 2016–17 Budget.[5]
In neither case was there any announcement about how Australian Government
recurrent funding for schools would be allocated from 2018 nor was there any
attempt to implement the proposed indexation rates by introducing amendments to
the Act.
A new school
funding plan
On 2 May 2017 the Government announced its proposed plan
for school funding from 2018.[6]
The Government has explained that its proposed funding model will deliver the
‘real “Gonski” needs-based funding model’, by ending the 27 different funding
arrangements that currently exist, thereby correcting the ‘inequities and
inconsistencies in the current schools funding model’ and providing ‘fair,
needs-based and transparent funding’.[7]
Key elements of the current funding system will remain,
but they will be affected by the Bill’s proposed changes (as explained
elsewhere in this Bills Digest). They include:
- the
Schooling Resource Standard (SRS), which comprises a base per student amount
(with different amounts for primary and secondary school students) and loadings
to address student and school disadvantage
- socioeconomic
status (SES) scores for non-government schools, which are a measure of a school’s
community capacity to support its schools (and therefore their ‘need’ for
Australian Government funding) and are calculated by linking student
residential addresses to Australian Bureau of Statistics Census data and
- ‘capacity
to contribute’ percentages, which are linked to a non-government school’s SES
score, and which discount the Government’s per student SRS funding amount for a
school by that percentage—there are different percentages for primary and
secondary non-government schools at the same SES score level.[8]
Key features
of the new funding system
The main changes to school funding proposed by the
Government include:[9]
- the
Australian Government will fund government schools at 20 per cent of their
Schooling Resource Standard (SRS) amount (comprising a base per student amount
and loadings for students and schools that need extra support). Non-government
schools will be funded at 80 per cent of their SRS amount. Currently,
government schools are funded on average at 17.0 per cent of their SRS and
non-government schools at 76.8 per cent. These proportions reflect the
Australian Government’s funding role—it is the majority public funder of non‑government
schools and, conversely, state and territory governments are the main providers
of public funds for government schools
- all
schools will transition to the new Commonwealth share of their SRS by 2027 by means
of annual adjustments over a ten-year period
- transition
assistance, amounting to $39.8 million over ten years, will be provided for ‘disadvantaged
and vulnerable’ schools adversely affected by the move to the new system
- the
base per student amount will be indexed annually by 3.56 per cent from 2018 to
2020. Thereafter a floating indexation rate, which will be a
composite of the Wage Price Index (75 per cent) and the All Groups Consumer
Price Index number (25 per cent), or a minimum indexation rate of three per
cent if the floating indexation rate is lower, will apply
- the
Minister’s power to determine a single socioeconomic status (SES) score for a
group of schools, known as ‘system weighted’ SES scores for groups of
non-government schools, will be removed and all non‑government schools
will be funded according to their individual SES scores. Under the current
arrangements, for example, Catholic schools in each state and
territory Catholic education system, except the Australian Capital Territory
(ACT), are funded according to the average SES score of all schools in their
system. The SES score for ACT Catholic systemic schools is the average SES
score for all Catholic systemic schools across Australia
- the
capacity to contribute percentages for non-government primary schools will be changed
because of an anomaly which has resulted in the base per primary student amount
for non-government schools within the 108 to 122 SES score bands exceeding that
for secondary students at the same SES score level (note, the cost of
delivering education is higher in secondary schools)[10]
- the
loading for students with disability (SWD) will be transitioned to a new model
based on a nationally consistent SWD definition and scaled rates according to
the level of classroom adjustment needed, in accordance with the Nationally
Consistent Collection of Data on School Students with Disability. Currently, a
flat rate of 186 per cent of the base per student amount for SWD attending
mainstream schools and 223 per cent for SWD attending special schools
apply, and eligibility is based upon varying state and territory definitions of
disability
- Northern Territory government schools will receive additional
assistance of $35.6 million to improve student outcomes.
Notably, the Government has dispensed with
the ‘no school will lose funding' principle that has been a feature of
Australian Government recurrent funding for non-government schools since the
introduction of the Howard Government’s socioeconomic status (SES) system in
2001.[11]
Other changes
Other proposed amendments to the Act include:
- simplifying
and updating the Preamble and Objects of the Act to ‘better align with long
term national goals for schooling, and the principles of needs-based and
sustainable funding linked to nationally agreed evidenced-based reforms’[12]
- amending
the conditions of financial assistance for the states and territories,
including the requirement for them to maintain their 2017 levels of funding for
government and non-government schools and
- reducing
the ‘command and control’ features of the Act, including removing the requirements
for approved authorities for more than one school to have an implementation
plan, and for all approved authorities to have school improvement frameworks
and school improvement plans for their schools.
More detail and background about the proposed changes to
school funding is provided in the Explanatory Memorandum for the Bill and the Department
of Education and Training’s submission to the Senate Education and Employment
Legislation Committee inquiry into the Bill.[13]
The focus of this Bills Digest is on some of the main changes to the recurrent school
funding arrangements.
Committee
consideration
Senate
Education and Employment Legislation Committee
The Bill was referred to the Senate Education and
Employment Legislation Committee (the Committee) for inquiry and the report was
tabled on 14 June 2017. Details of the inquiry, including the Committee’s
report, are at the Committee’s webpage.
The Committee’s majority report recommended that the
Senate pass the Bill without amendment.[14]
Labor senators and the Australian Greens presented dissenting reports. Labor
recommended that the Bill not be supported in its current form.[15]
The Australian Greens also reported that it could not support the Bill in its
current form and made a number of recommendations.[16]
These are discussed below in the ‘Policy position of non-government
parties/independents’ section of the Bills Digest.
Senate
Standing Committee for the Scrutiny of Bills
The Senate Standing Committee for the Scrutiny of Bills
reported on the Bill in its Scrutiny Digest of 14 June 2017.[17]
The Committee raised concerns with a number of provisions in the Bill
including:
- a
broad delegation of power in proposed section 35A of the Act (at item 16
of Schedule 1 to the Bill), which would allow amendment by regulation of the
Commonwealth share of funding for government and non-government schools
- proposed
section 69B (at item 40), which provides for transition adjustment
funding to be determined by the Minister and for this determination to not be
subject to parliamentary disallowance. The Committee considered this to involve
the delegation of significant matters from the Parliament to the Executive
- proposed
sections 22 and 22A (at items 59 and 60), which seek to impose
new policy and funding requirements on states and territories, as conditions of
financial assistance provided to them. The Committee is concerned that the
delegation of parliamentary power to the Executive in this instance should be
subject to at least some level of parliamentary scrutiny and
- the
proposal to allow the Secretary to delegate powers and functions under the Act
to any employee in the Department, rather than this being restricted to SES
employees as is currently the case (item 173).
The Committee has sought advice from the Minister on each
of these matters. At the time of writing, no response from the Minister had
been published.
Previous Senate
committee consideration of the Australian Education Act 2013
Aspects of the Act and Australian Government funding for
schools have been the subject of previous inquiries by Senate committees,
including the Senate Select Committee on School Funding and the Senate Select
Committee into the Scrutiny of Government Budget Measures, as reported in its
First Interim report.[18]
The Senate Education and Employment References Committee
has also examined Australian Government funding for school students with
disability.[19]
Policy
position of non-government parties
Australian
Labor Party
The Australian Labor Party’s primary criticism of the
Bill’s measures is that they will result, ‘based on the Government’s figures’,
in $22.3 billion less recurrent funding for schools from 2018 to 2027 (and
$6.3 billion less over four years from 2018 to 2021), compared to the
school funding arrangements implemented by the Labor Government.[20]
As the Labor Senators’ dissenting report explains, combining
Commonwealth and state and territory funding, the original goal was for all
schools to be funded at 95 per cent of their SRS by 2019. However, in setting
Commonwealth funding shares at 20 per cent of SRS for government schools and 80
per cent for non‑government schools, Labor considers that the proposed
school funding arrangements will not result in ‘a fair, sector-blind nor a
needs-based model’.[21]
Instead, based on analysis by the Australian Education Union and as argued
similarly in other submissions, the new arrangements will result in the
majority of government schools not reaching their SRS by 2027 while nearly all
non-government schools will be at or above their SRS by that time.[22]
By requiring states and territories to only maintain their
2017 funding levels, Labor argues that the Government is abandoning the
Commonwealth-state funding model and the requirement that all jurisdictions
work together to bring schools up to their full SRS entitlement as recommended
by the Review of Funding for Schooling (the Gonski review).[23]
Other views expressed by Labor include:
- the
timeframe for transitioning to the full Commonwealth share of SRS should be
shorter given that under the existing arrangements participating jurisdictions
would have reached their SRS targets by 2019 or 2022
- the
SES score methodology should be reviewed as was the original intention under
the National Education Reform Agreement
- the
move to reduce the funding of ‘elite overfunded schools’ is supported and Labor
would support separate legislation to achieve this
- an
exposure draft of the regulations should be released before the Bill is
considered by the Senate and
- the
increase in funding for students with disability is insufficient and Labor
notes the reservations expressed about the NCCD.[24]
Australian
Greens
The Australian Greens in their dissenting report on the
Bill stated that they could not support the Bill in its current form and made
the following recommendations:[25]
- a
shorter implementation period
- state
and territory governments be required to ‘collectively bring public schools to
their resourcing standard’
- establishment
of an independent National Schools Resourcing Body to oversee and review all
aspects of school funding, and review the SES and capacity to contribute
mechanisms and
- matters
being reviewed by the Review to Achieve Educational Excellence in
Australian Schools (discussed elsewhere in this Bills Digest) be kept
independent of changes to school funding arrangements.[26]
The
crossbench
Without Greens’ support, the Government needs 10 of the
12-member crossbench to pass the Bill.[27]
In brief, according to recent media reports, the positions of the crossbench
senators are as follows:
- the
Nick Xenophon Team (NXT) voted for the Bill in the House of Representatives.[28]
NXT member Rebekha Sharkie reportedly commented that the Bill goes a ‘long way’
to creating a needs-based funding model as envisaged by the Gonski review and
that ‘Labor was misleading parents by claiming $22 billion was being cut from schools
and that it was hard to understand why the Catholic sector was complaining when
its funding was rising’.[29]
Senator Nick Xenophon supports the Greens’ call for states and territories to
contribute their share of the funding and a shorter implementation period[30]
- Senator
Jacqui Lambie has been reported as saying that she cannot support the Gonski
2.0 reforms unless rural and regional Catholic schools have better transition
arrangements, but also reportedly said that ‘Labor’s Gonski had resulted in
negligible improvement in student outcomes in Tasmania’[31]
- it
has been reported that Liberal Democrat Senator David Leyonhjelm said that costings
he has received from the Parliamentary Budget Office have ‘led’ him to ‘open
himself up to serious negotiations on the legislation’.[32]
Before he received the costings his position had been that he would not support
the changes on the assumption that more money was being spent[33]
- media
reports suggest that Australian Conservatives Senator Cory Bernardi is opposed
to the legislation, but senators Derryn Hinch and Lucy Gichuhi are ‘proving
amenable’ and a spokesperson for One Nation has said that the party had ‘few
concerns’ with the legislation and has indicated its support.[34]
Position of
major interest groups
There were 49 submissions to the Senate committee inquiry
and a number of other stakeholders also presented evidence at the Committee’s
hearings—following is a selection of their views.[35]
State and
territory governments
There is a diversity of views about the Bill’s provisions
among state and territory governments. The New South Wales, South Australian
and Victorian governments have all called upon the Australian Government to
continue to honour the terms of the current agreement (the National Education
Reform Agreement) and all have committed to their share of the final two years
of the original agreement (although Victoria is not a participating state for
the purposes of the Act).[36]
Proposed amendments that are of particular concern to the
Queensland Government include: shifting powers from the Act to
regulations (although the current regulations are already quite extensive); ‘highly
prescriptive requirements’ for states and territories to implement unknown
national policy initiatives as a condition of funding; requiring states to
maintain funding in accordance with unknown regulations; and legislating the
relationship between states and territories and the non-government sectors.[37] Contrary to the
Government’s stated objective to remove the ‘command and control features’ of
the Act, the Queensland Government considers the Bill’s measures are a ‘further
impost on states and territories’.
While the Tasmanian Government is disappointed
about the amount of funding that is proposed for Tasmania, it is ‘broadly
supportive’ of the Government’s school funding plans.[38] However, the Tasmanian
Government does have some concerns. These include: the use of the Nationally
Consistent Collection of Data (NCCD) to allocate the students with disability
loading (see ‘Key issues and provisions’ section of this Bills Digest for
further information); the lack of information about the proposed regulations;
and ongoing funding for preschool education, which is not a matter for the
Bill.
The Northern Territory in its submission
to the Committee’s inquiry into the Bill, has called for a review of funding
after 2021 to ensure it is adequate.[39]
It is also concerned about the requirement to retain state and territory funding
effort and the pace of the implementation of national reforms.
The Western Australian Government has
generally welcomed the new funding model and the additional funding for Western
Australia.[40]
However, it is concerned about the lengthy transition period, which it claims
will financially disadvantage the state, as well as the reporting requirements.
Non-government
education sector
The Catholic education sector in general opposes the Bill.
The National Catholic Education Commission’s (NCEC) criticisms
of the removal of system-weighted average SES scores and its concerns about the
proposed changes to the capacity to contribute percentages and the student with
disability loading are raised in the ‘Key issues and provisions’ section of
this Bills Digest.
The NCEC has raised a number of other issues, most notably
the continued use of the SES methodology which it recommends be reviewed [41]
The NCEC cites the report of the Gonski review which considered that the SES
methodology was potentially inaccurate because students attending a particular
school were not necessarily ‘representative of the socioeconomic averages of
the areas in which they live’. The NCEC argues:
By underestimating how much higher-income families can
contribute, while overestimating how much lower-income families can contribute
... SES scores likely disadvantage schools serving lower- and middle-income families,
many of which are Catholic.[42]
A recent analysis of the SES methodology by the Catholic
Education Commission of Victoria, Capacity to Contribute
and School SES Scores, concluded that
measures included in the SES methodology (education and occupation) ‘lack
validity as proxy indicators of capacity to contribute’.[43]
However, evidence and submissions presented to the
Committee inquiry into the Bill by, amongst others Stephen Farish, the
architect of the SES methodology, concur that a better alternative is not
available and highlighted difficulties with other methods of assessment.[44]
However, the Catholic education sector continues to
highlight the disparities in specific schools’ SES scores, comparing, for
example, a small parish school in Melbourne which has a higher SES score than
Geelong Grammar.[45]
It also disputes the Government’s funding projections. The NCEC Executive
Director, Christian Zahra, cites Parliamentary Budget Office figures which show
that Catholic schools would lose $3.1 billion over the next ten years.[46]
He has called upon the Minister to continue the current funding arrangements
into 2018 and thereby provide time for ‘a genuinely collaborative process that
would deliver true needs-based funding for students in all schools across all
sectors’.[47]
Other non-government education sector representatives, such
as the Independent Schools Council of Australia, Christian Schools Australia
and Adventist Schools Australia, broadly support the Bill.[48]
Other
interest groups
Elements of the Grattan Institute’s recommendations to the
Committee have been echoed by others, including the Australian Greens, the NCEC
and some state and territory governments (as discussed above). Its
recommendations in relation to the funding aspects of the Bill’s provisions
include:
- a
shorter transition period—six years instead of ten—which could be funded by
applying the floating indexation rate from 2018 rather than 2021
- state
and territory governments commit their share of funding so that all schools
receive at least 90 per cent or 95 per cent of SRS by 2027—the Bill’s
requirement that they maintain funding at 2017 levels is not enough
- a
National Schools Resourcing Body be established
- the
formula for determining the SRS be reviewed and
- more
information about key aspects of the Bill’s provisions, particularly
comparative funding information under the existing and proposed funding
systems, be provided.[49]
Financial
implications
The Explanatory Memorandum states that the Bill’s proposed
changes to school funding will result in:
- an
increase of $1.5 billion in recurrent funding from 2017–18 to 2020–21—an
increase of $1.1 billion for government schools and an increase of $366 million
for non-government schools and
- an
increase of $16.4 billion in recurrent funding from 2017–18 to 2026–27—$10.6
billion for government schools and $5.8 billion for non-government schools.[50]
These figures show that only 9.0 per cent of the total
projected increase in funding will be provided in the first four years of the
ten-year transition period.
Government figures also show that from 2017 to 2027, the
average annual per student funding growth will be 5.1 per cent for
government schools, 4.1 per cent per student for independent schools and 3.5
per cent for Catholic systemic schools.[51]
The Bill’s transition adjustment assistance measure will
have a financial impact of $13.4 million over the Budget and forward estimates
and, in total, will cost $39.7 million over ten years from 2017–18 to 2026–27.[52]
The additional assistance of $35.6 million for Northern
Territory (NT) government schools, which is described in the Committee’s report
on the Bill as ‘over and above’ the NT’s direct funding allocation, is not
accounted for separately in the Explanatory Memorandum’s ‘financial
implications’.[53]
Neither the Committee report, which states that the funding is ‘earmarked’ in
the Bill, nor the Explanatory Memorandum explain the relevant provision in the
Bill.[54]
Statement of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the
Bill’s compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible.[55]
The Parliamentary Joint Committee on Human Rights
considered the Bill and reported that it did not raise human rights concerns.[56]
Key issues
and provisions
Following is a selection of the major provisions of the
Bill—see the Explanatory Memorandum for an explanation of all the Bill’s
provisions.
Schedule 1,
Part 1—Funding for schools
Indexation
Item 8 proposes to insert new section 11A into
the Act, which defines how indexation of the base per student SRS amounts is to
be calculated; namely, the indexation factor will be a composite
of the Wage Price Index (75 per cent) and the All Groups Consumer Price Index
number (25 per cent) or three per cent, whichever is higher.
Proposed subsection 11A(5) provides that the SRS indexation factor for a year may be prescribed
by regulation. It is by this means that the per student SRS amounts will be
indexed by 3.56 per cent from 2018 to 2020. This indexation factor was
originally a 2016–17 budget measure and is only slightly lower than the current
indexation rate of 3.6 per cent.[57]
The effect of this measure will be to set a uniform indexation rate for all
schools. Currently, in addition to the indexation rate for the base per student
amount, three indexation rates for Australian Government funding for schools
apply, depending on a school’s funding position relative to their total SRS. For
those schools which are funded below their SRS, the indexation rate is 4.7 per
cent; for those schools funded at their SRS, the rate is 3.6 per cent; and, for
those schools funded above their SRS, the indexation rate is 3.0 per cent.[58]
Base per
student amounts, Commonwealth funding share, transitioning schools and
transition adjustment funding
Base per
student amounts
Items 12 and 13 propose to amend section 34 of
the Act and set new re-based per student amounts for 2018. These will be
$10,953 for primary school students and $13,764 for secondary school students.
Commonwealth
funding share
Item 16 proposes to insert new section 35A
which prescribes the Commonwealth’s funding contribution for a school that is
not transitioning to its SRS entitlement; that is, the Commonwealth will
contribute 20 per cent of a government school’s total SRS and 80 per cent
of a non-government school’s total SRS.
Transitioning
schools
Item 16 also proposes to insert new section 35B
which provides the funding formula for transitioning schools; that is, those
schools that are funded above or below the proposed Commonwealth share of their
SRS entitlement (that is, 20 per cent of their SRS for government schools or
80 per cent of their SRS for non‑government schools). Schools
will be transitioned from their starting Commonwealth share to their final
Commonwealth share of their total SRS entitlement at a rate of
10 percentage points each year over a ten-year period.
The proposed funding formula for transitioning schools is:
Example 1: a non-government school which is currently
funded below its final Commonwealth share
- a
non-government school receiving Commonwealth funding at 70 per cent of its
total SRS in 2017, will be funded at 71 per cent of its total SRS in 2018,
calculated as follows: 70 + ((80-70) x 10%) = 71%
- in
2019, the school’s transition rate will increase to 20 per cent and the school
will be funded at 72 per cent of its total SRS
Example 2: a non-government school which is
currently funded above its final Commonwealth share
- a
non-government school receiving Commonwealth funding at 90 per cent of its
total SRS in 2017, will be funded at 89 per cent of its total SRS in 2018,
calculated as follows: 90 + ((80-90) x 10%) = 89%
- in
2019, the school’s transition rate will increase to 20 per cent and the school
will be funded at 88 per cent of its total SRS.
The same calculations apply to government schools with their final Commonwealth share being 20 per
cent of SRS.
Of the over 9,000 schools in Australia, 347 schools are
expected to start the transition above the new Commonwealth share of 80 per
cent of the SRS for non-government schools and 20 per cent for government
schools.[59]
Most of these schools will still experience funding growth but it will be less
than the indexation rate; and the Government expects that less than one per
cent of schools will see funding reductions in the next four years.[60]
Transition
adjustment funding
Item 40 proposes to insert new section 69B
into the Act to provide financial assistance (amounting to $39.8 million
over ten years) for ‘disadvantaged and vulnerable (transitioning) schools that
may find it unreasonably hard to adjust to a reduction of funding’ and for the
ACT Catholic education system.[61]
The detail of this assistance will be as prescribed by the regulations, but it
will be ‘temporary, targeted and provided on a case by case basis’.[62]
More information about the proposed transition assistance
is provided in a government discussion paper provided in an answer to a Senate
estimates question.[63]
SES scores
and capacity to contribute percentages
The Bill does not propose to change SES scores as the
basis for determining the need of a non-government school for Commonwealth
funding, nor the methodology for calculating individual schools’ SES scores.
System-weighted
average SES scores
However, items 29 to 35 propose to amend sections
52 and 53 of the Act, removing the Minister’s ability to determine an SES
score for a group of schools and, thus, all schools will be funded according to
their individual SES score. As a result of this provision, systemic
non-government schools with a higher SES score than the current system-weighted
average SES score for their system will have their capacity to contribute
percentage increased and thus their Australian Government funding reduced. The
requirement for the Minister to determine an SES score for an individual school
will be retained.
This amendment has been strongly criticised by the
Catholic education sector.[64]
Currently Catholic schools in each state and territory Catholic
education system, except the Australian Capital Territory (ACT), are funded
according to the average of all schools in their system—this arrangement is
known as the ‘system-weighted system-wide average’ SES score.[65] The SES score for ACT
Catholic systemic schools is the average SES score for all Catholic systemic
schools across Australia.[66] The National Catholic Education Commission (NCEC) considers
that the system-weighted approach was part of the original Gonski model and
that it helps to ‘ameliorate the deficiencies and potential bias in the SES
methodology’.[67]
The Government acknowledges that ACT Catholic systemic
schools will be most affected by the removal of system-weighted average SES
scores—their average annual growth per student will be -0.2 per cent from 2017
to 2021 and -0.8 per cent from 2017 to 2027.[68]
As a result, additional adjustment funding will be provided to the ACT Catholic
school system to freeze their 2017 funding entitlement from 2018 to 2021.[69]
In contrast, while the Independent Schools Council of
Australia (ISCA) acknowledges that some of their schools will lose funding as a
result of this provision, the removal of the system-weighted average SES will
be ‘a positive step toward creating a level playing field for all
non-government schools’.[70]
ISCA estimates that the provision will affect 17 independent school systems,
involving 196 schools.[71]
Capacity to
contribute percentages
Item 36 proposes to amend the capacity to
contribute percentages for non-government primary schools by replacing the
table in subsection 54(3) of the Act. This will correct an anomaly in
the Act whereby non‑government primary schools within the 108 to 122 SES
score band receive more funding than their counterparts in the secondary sector
in spite of the fact that the cost of delivering education is much higher at
the secondary level of schooling.[72]
The NCEC considers that these changes, combined with the
removal of system-weighted average SES scores, will result in increased fees
for Catholic primary schools.[73]
However, a number of dioceses within NSW, except for the Broken Bay diocese,
are reassuring parents that fees will not rise.[74]
The Independent Schools Council of Australia concurs with the proposed change
to the capacity to contribute percentages, considering that there is ‘no
rationale’ for primary school students to receive more funding than secondary
students in the same SES band.[75]
Student
with disability loading
Item 17 proposes to provide a new student with
disability (SWD) loading by replacing section 36 of the Act. Currently,
a flat rate of 186 per cent of the base per student amount for SWD attending
mainstream schools and 223 per cent for SWD attending special schools
apply, and eligibility is based upon varying state and territory definitions of
disability.[76]
These loadings were only ever intended to be interim
loadings pending the finalisation of the Nationally Consistent Collection of
Data on School students with Disability (NCCD). The NCCD was implemented in
response to the recommendation of the Review of Funding for Schooling (the
Gonski review) that an SWD loading be based on a national definition and
‘scaled for different levels of adjustment to better reflect need’.[77]
From 2018, it is proposed that there be differentiated
loadings according to the top three levels of adjustment needed for students to
access and participate in education as identified in the 2017 NCCD guidelines.[78]
The loadings will be, as a percentage of the base per student amounts, 42 per
cent, 146 per cent and 312 per cent for primary school students and 33 per
cent, 116 per cent and 248 per cent for secondary school students.[79]
The NCEC is concerned about the proposed change to the SWD
loading, regarding the change as ‘premature’ and that it should not happen
until the NCCD is ‘robust’.[80]
On its modelling, the NCEC believes that the proposed new loadings will have a
‘significant negative impact’ on Catholic school funding.[81]
Disability advocates also have reservations about the Bill’s
provisions in relation to SWD and the use of the NCCD to set the SWD loading. For
example, Children and Young People with Disability Australia (CYDA), in its
submission to the Committee inquiry on the Bill, considers that the Bill has a
limited focus on students with disability and provides ‘little certainty’ about
future reform.[82]
The CYDA also believes the NCCD data is not reliable enough and recommends that
a date for a review of the disability loading be inserted into the Bill.[83]
Schedule 1,
Part 2—Other policy changes
Key provisions in Part 2 of the Bill include:
- items
45 and 46 which replace and update the Preamble and objects of the Act and
- items
59 and 60 which substitute a new section 22 and insert new section
22A that set out the conditions of financial assistance. These include:
- per item 59, the requirement that the states and territories be party to a
national agreement relating to school education reform. This agreement will be
informed by the Review to Achieve Educational Excellence in
Australian Schools, chaired by David Gonski, which has been established to ‘build
the evidence base needed to ensure the additional funding provided by the
Australian Government is spent on proven initiatives that make a difference to
student outcomes’.[84]
The Review will report by the end of the year and negotiation of the new school
reform agreements with the states and territories will be held in the first
half of 2018[85]
and
- per item 60, which inserts new section 22A, the requirement that
states and territories maintain funding levels for school education in
accordance with the regulations. As explained in the Minister’s second reading
speech on the Bill and the Department of Education and Training’s submission to
the inquiry into the Bill, states and territories will be required to maintain
their 2017 funding in real terms to ‘prevent cost-shifting to the Commonwealth’—this
requirement will also be subject to consultations with the states and
territories.[86]
Concluding comments
If the Bill is not passed, the Act’s current funding
arrangements will remain. This means that only the ACT, New South Wales and
South Australia, which are participating states under the Act because they
concluded bilateral agreements with the Labor Government, and non-government
schools, will be funded according to the current SRS formula. Funding for the
other state and territory government education systems would have to ‘fit
within the remaining funding envelope’.[87]
The Department of Education and Training has estimated
that if the current arrangements were to continue, by 2019:
- only
116 schools would reach 100 per cent of the SRS, with 9,018 schools still
funded below
- 5,524
schools (which includes 5,050 government schools) would be below the original funding
target of 95 per cent of SRS, underfunded by an average of almost
$458,000 for every school and
- about
256 schools would receive more than the full SRS by an average of $1.2 million.[88]
Further, by 2027, 6,966 schools would still be below their
full SRS entitlement by an average of approximately $690,000.[89]
(The impact of state and territory government funding is not apparent from
these figures.)
The proposed school funding arrangements may change. There
is now a report that the Government is prepared to make concessions to secure
the Greens’ support by adopting recommendations made in their dissenting report
on the Bill.[90]
According to the media report, these concessions include:
- reducing
the transition period from ten to six years, which would increase funding by
$1.5 billion over the Budget’s forward estimates period and ‘as much’ as $5
billion over ten years
- the
establishment of a national schools resourcing body to act as an independent
watchdog (this was recommended by the Gonski review)
- additional
assistance to the Northern Territory whereby the Commonwealth would contribute
25 per cent of the SRS for government schools and
- the
requirement that states and territories increase their share of funding to 75
per cent of the SRS.[91]
[1]. M
Turnbull (Prime Minister), S Birmingham (Minister for Education and Training)
and D Gonski, Press
conference with the Minister for Education and Training, Senator the Hon. Simon
Birmingham and Mr David Gonski AC: Sydney, transcript, 2 May 2017; and
M Harrington, ‘A new
plan for school funding’, Budget review 2017–18, Research paper
series, 2016–17, Parliamentary Library, Canberra, 19 May 2017.
[2]. Explanatory
Memorandum, Australian Education Amendment Bill 2017, pp. 1–4.
[3]. T
Abbott (Prime Minister) and C Pyne (Minister for Education), Joint
press conference with the Hon. Christopher Pyne MP, Minister for Education,
Parliament House, Canberra, transcript, 2 December 2013.
[4]. M
Harrington, ‘School
education’, Budget review 2014–15, Research paper series, 2013–14,
Parliamentary Library, Canberra, 30 May 2014.
[5]. M
Harrington, ‘School
education’, Budget review 2016–17, Research paper series, 2015–16,
Parliamentary Library, Canberra, 4 May 2016.
[6]. M Turnbull (Prime Minister) and S Birmingham (Minister for Education
and Training), True needs-based funding for Australia’s schools, media release, 2 May 2017.
[7]. Ibid.
For a list of the 27 funding models, see: Senate Education and
Employment Legislation Committee, Answers to Questions on Notice, Education
Portfolio, Supplementary Budget Estimates 2016–17, Question SQ16-000854.
[8]. For
further information, see: ‘Capacity
to contribute’, Guide to the Australian Education Act 2013.
[9]. Unless
otherwise indicated, information about these changes is from the Explanatory
Memorandum to the Bill and from the Department of Education and Training’s Quality Schools website.
See also: M Harrington, ‘A
new plan for school funding’, Budget review 2017–18, Research paper
series, 2016–17, Parliamentary Library, Canberra, 19 May 2017.
[10]. Senate
Education and Employment Legislation Committee, Australian
Education Amendment Bill 2017 [Provisions], The Senate, June 2017,
pp. 11–13.
[11]. M Harrington, Australian
Government funding for schools explained: 2013 update,
Background note, Parliamentary Library, Canberra, 8 March 2013, pp. 9
and 35.
[12]. Explanatory
Memorandum, op. cit., p. 25.
[13]. Department
of Education and Training, Submission
to the Senate Education and Employment Legislation Committee, Inquiry into
the Australian Education Amendment Bill 2013, May 2017.
[14]. Senate
Education and Employment Legislation Committee, Australian
Education Amendment Bill 2017 [Provisions], op. cit., p. vii.
[15]. Ibid.,
p. 56.
[16]. Ibid.,
pp. 60–61.
[17]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 6, 2017, The Senate, 14 June 2017, pp. 13–18.
[18]. Senate
Select Committee on School Funding, Equity
and excellence in Australian schools, The Senate, Canberra, July 2014;
Senate Select Committee into the Scrutiny of Government Budget Measures, First
interim report, The Senate, Canberra, February 2015; Senate Standing
Committee for Selection of Bills Committee, Report,
5, 2017, Senate, Debates, 11 May 2017, p. 30.
[19]. Senate
Education and Employment References Committee, Access
to real learning: the impact of policy, funding and culture on students with
disability, The Senate, Canberra, January 2016.
[20]. Information
in this section is from: Labor Senators, Dissenting report, Senate
Education and Employment Legislation Committee, Australian
Education Amendment Bill 2017 [Provisions], The Senate, June 2017.
[21]. Ibid.,
p. 50.
[22]. Ibid.
[23]. Ibid.,
p. 49.
[24]. Ibid.,
pp. 51–55.
[25]. Information
in this section is from Australian Greens, Dissenting
report, Senate Education and Employment Legislation Committee, Australian
Education Amendment Bill 2017 [Provisions], The Senate, June 2017.
[26]. Ibid.,
pp. 60–61.
[27]. P
Coorey, ‘Senate
crossbench tilts towards Gonski 2.0’, The Australian Financial Review,
14 June 2017, p. 6.
[28]. Australia,
House of Representatives, ‘Australian Education Amendment Bill 2017’, Votes
and proceedings, 54, 29 May 2017.
[29]. M
Knott, ‘Gonski
2.0 headed for Senate showdown’, Sun Herald, 11 June 2017, p. 9.
[30]. P
Coorey, op. cit.
[31]. N
Clark, ‘Lambie
goes into bat for Catholic kids’, Hobart Mercury, 27 May 2017, p.
16.
[32]. S
Balogh, ‘Gonski
2.0 a gift for government schools’, Weekend Australian, 17 June
2017, p. 2.
[33]. S
Balough, ‘Leyonhjelm
backs off on Gonski reforms’, The Australian, 16 June 2017, p. 6.
[34]. P
Coorey, op. cit.; S Balogh, R Lewis and S Benson, ‘One
Nation to back Libs’ school fight’, The Australian, 19 June 2017,
pp. 1, 6.
[35]. Lists
of all submissions and those who presented evidence at the Committee’s hearings
is provided in: Senate Education and Employment Legislation Committee, Australian
Education Amendment Bill 2017 [Provisions], op. cit., Appendices 1 and
2.
[36]. Labor
Senators, Dissenting report, op. cit., pp. 46–47.
[37]. Information
in this paragraph is from: Queensland Government, Submission
to Senate Education and Employment Legislation Committee, Inquiry into the
Australian Education Amendment Bill 2013, May 2017, p. 2.
[38]. Information
in this paragraph is from: Tasmanian Government, Submission
to Senate Education and Employment Legislation Committee, Inquiry into the
Australian Education Amendment Bill 2013, May 2017.
[39]. Information
in this paragraph is from: Northern Territory Government, Submission
to Senate Education and Employment Legislation Committee, Inquiry into the
Australian Education Amendment Bill 2013, May 2017, p. 3.
[40]. Information
in this paragraph is from: Western Australian Government, Submission
to Senate Education and Employment Legislation Committee, Inquiry into the Australian
Education Amendment Bill 2013, May 2017.
[41]. Unless
otherwise indicated, information in this section is from: National Catholic
Education Commission, Submission
to Senate Education and Employment Legislation Committee, Inquiry into the
Australian Education Amendment Bill 2013, May 2017.
[42]. Ibid.,
p. 9.
[43]. Ibid.
[44]. Senate
Education and Employment Legislation Committee, Australian
Education Amendment Bill 2017 [Provisions], op. cit., pp. 26–7.
[45]. Catholic
Education Commission of Victoria, How
can you have fair needs-based funding without fixing school SES scores?,
media release, 15 June 2017.
[46]. National
Catholic Education Commission, Minister’s
department exposes his massive cuts to Catholic schools, media release,
18 June 2017.
[47]. Ibid.
[48]. Independent
Schools Council of Australia, Submission
to Senate Education and Employment Legislation Committee, Inquiry into the
Australian Education Amendment Bill 2013, May 2017; Adventist Schools
Australia and Christian Schools Australia, Submission
to Senate Education and Employment Legislation Committee, Inquiry into the
Australian Education Amendment Bill 2013, May 2017.
[49]. P
Goss and J Sonnemann, Submission
to Senate Education and Employment Legislation Committee, Inquiry into the
Australian Education Amendment Bill 2013, Grattan Institute, May 2017.
[50]. Explanatory
Memorandum, op. cit., p.4.
[51]. Department
of Education and Training, op. cit., p. 17.
[52]. Explanatory
Memorandum, op. cit., p. 4.
[53]. Senate
Education and Employment Legislation Committee, Australian
Education Amendment Bill 2017 [Provisions], op. cit., p 41.
[54]. Ibid.
Further information about the additional funding for the Northern Territory is
provided in Australian Government, Additional
funding for the Northern Territory, Quality Schools fact
sheet, Australian Government, Canberra.
[55]. The
Statement of Compatibility with Human Rights can be found at page 5 of the
Explanatory Memorandum to the Bill.
[56]. Parliamentary
Joint Committee on Human Rights, Scrutiny
report, 5, 2017, The Senate, Canberra, 14 June 2017, p. 49.
[57]. M
Harrington, ‘School
education’, Budget review 2016–17, Research paper series, 2015–16,
Parliamentary Library, Canberra, 4 May 2016. Subsection 36(3) of the Australian Education Act 2013
(the Act).
[58]. Ibid.
Subsections 60(2) and 61(3) of the Act.
[59]. Department
of Education and Training, op. cit., p. 19.
[60]. Ibid.
Apart from the ACT Catholic systemic schools, a list of 24 independent schools
that will have funding reductions was published in various newspaper articles.
See, for example, P Karp, ‘Schools
hit list revealed: online tool shows Gonski 2.0 winners and losers’, Guardian
Australia, online edition, 9 May 2017.
[61]. Department
of Education and Training, op. cit., p. 19.
[62]. Ibid.
[63]. Senate
Education and Employment Legislation Committee, Answers to Questions on Notice,
Education and Training Portfolio, Budget Estimates 2017–18, Question
SQ17-SY052, in ‘Additional documents: Answers to Questions on Notice’, 8, Senate
Education and Employment Legislation Committee, Inquiry into the Australian
Education Amendment Bill 2013.
[64]. For
example, National Catholic Education Commission, Submission
to Senate Education and Employment Legislation Committee, Inquiry into the
Australian Education Amendment Bill 2013, May 2017, pp. 10–11.
[65]. Explanatory Statement, Australian Education (SES Scores) Determination 2013.
[66]. Ibid.
The Australian
Education (SES Scores) Determination 2013 provides and lists the
system-weighted average SES scores for all non‑government school systems
in Australia.
[67]. National
Catholic Education Commission, op. cit., p. 10.
[68]. Senate
Education and Employment Legislation Committee, Answers to Questions on Notice,
Education and Training Portfolio, Budget Estimates 2017–18, Question
SQ17-SY026, ‘Additional documents: Answers to Questions on Notice’, 5,
Senate Education and Employment Legislation Committee, Inquiry into the
Australian Education Amendment Bill 2013.
[69]. Department
of Education and Training, op. cit., p. 19.
[70]. Independent
Schools Council of Australia, Submission
to Senate Education and Employment Legislation Committee, Inquiry into the
Australian Education Amendment Bill 2013, May 2017, p. 20.
[71]. Ibid.
[72]. Senate
Education and Employment Legislation Committee, Australian
Education Amendment Bill 2017 [Provisions], op. cit., p. 11.
[73]. National
Catholic Education Commission, op. cit., p. 11.
[74]. P
Singhal, ‘Catholic
schools back away from fee rise talk’, The Sydney Morning Herald, 1
June 2017, p. 11.
[75]. Independent
Schools Council of Australia, op. cit., p. 18.
[76]. Section
17 of the Australian
Education Regulation 2013.
[77]. Department
of Education and Training, op. cit., p. 14.
[78]. Education
Council, Nationally
Consistent Collection of Data: school students with disability: 2017 guidelines,
pp. 28–31.
[79]. Department
of Education and Training, op. cit.
[80]. National
Catholic Education Commission, op. cit., pp. 14–15.
[81]. Ibid.,
p. 15.
[82]. Children
and Young People with Disability Australia (CYDA), Submission
to Senate Education and Employment Legislation Committee, Inquiry into the
Australian Education Amendment Bill 2013, May 2017, p. 4.
[83]. Ibid.,
p. 5.
[84]. Australian
Government, Review
to achieve educational excellence in Australian schools, Quality
Schools fact sheet, Australian Government, Canberra. See also the Review’s terms
of reference.
[85]. Ibid.
[86]. K
Andrews, ‘Second
reading speech: Australian Education Amendment Bill 2017’, House of
Representatives, Debates, 11 May 2017, p. 6; and Department of Education
and Training, op. cit., pp. 19–20.
[87]. Department
of Education and Training, op. cit., p. 21.
[88]. Ibid.,
p. 10.
[89]. Ibid.
[90]. M
Kenny and M Knott, ‘Government
bids for Gonski deal’, The Canberra Times, 17 June 2017, p. 3.
[91]. Ibid.
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