Funding arrangements following the 2013 federal
The Abbott Government's Students First policy on school funding was
originally outlined in the Coalition policy document The Coalition's Policy
for Schools: Students First, published in August 2013. The policy is
focussed on four keys areas:
Engaging parents in education; and
Strengthening the curriculum.
The Students First policy document, while it argues that 'more money is
not necessarily the only solution for better education outcomes'
also asserts that 'there will be no cut to school funding under a Coalition
The Coalition went into the 2013 election with the commitment that it would
honour the agreements that the Rudd/Gillard Governments had entered into, match
its funding offers, ensure that no school would be worse off; and to remove
some of the conditions that the Rudd/Gillard Governments had attached to its
funding for school education under the NERA.
The then Leader of the Opposition stated in a press conference on
2 August 2013 that:
The essential difference between Labor and the Coalition
going into the coming election is not over funding, it's over the amount of
control that the Commonwealth Government should have. Under the Coalition,
you'll get the funding but you won't get the strings attached so what I want to
say today is that as far as school funding is concerned, Kevin Rudd and I are
on a unity ticket. There is no difference between Kevin Rudd and myself when it
comes to school funding.
At the same press conference the then Shadow Minister for Education
...we will adopt exactly the same funding envelope as Labor
over the forward estimates so that school principals and parents, that school
systems, states and territories can plan from 2014 and onwards knowing that
they will attract exactly the same funds whether they are in the new model or
out of the new model that Labor would have given them if the school system had
gone ahead as planned.
This chapter outlines the Abbott Government's school funding policy so
as to provide matching information to that contained in the previous chapter
for the Rudd/Gillard Governments. Chapters 7 and 8 then discuss the effect of
the changes between the Students First policy and the NPSI. The information
presented in this chapter is current at the time of writing.
Implementing the Abbott Government's school funding arrangements
It is clear from public statements made following the 2013 election that
the new Abbott Government has shifted its position on the school funding model:
At first, on 17 November 2013 the Abbott Government committed to
the previous government's new school funding model from 2014 to 2017;
On 26 November 2013, the Minister for Education then announced
that the new school funding model would only be implemented for 2014 and a new
school funding model would be developed for implementation from 2015.
The following day on 27 November 2013, the Abbott Government
announced that an additional $230 million would be provided to the Northern
Territory, Queensland and Western Australia for 2014. This funding equated to
the amount that these jurisdictions would have received had certain National
Partnerships (NPs) for schools continued. The 2013-14 Budget 'redirected' $2.1
billion from five NPs that were previously provided for in the forward
estimates to defray the costs of implementing the new school funding model
Finally on 2 December 2013, the Abbott Government reverted
to its original post‑election commitment to maintain previous
government's school funding model over the next four years.
Level of funding
In relation to the level of Commonwealth funding for schools, as noted
above the Abbott Government has committed to 'maintaining the same funding
envelope as Labor over the forward estimates'.
The Minister for Education, the Hon Christopher Pyne MP, has stated numerous
times that 'matching' funding allocated by the Rudd/Gillard Governments means
that school funding be guaranteed until 2017; the Abbott Government will not
match the Rudd/Gillard Governments' school funding for years five and six of
The issue of uncertainty resulting from the change in funding from a six year
to a four year model is discussed further in Chapter 8.
As mentioned earlier, the Abbott Government has also committed to
provide the non‑participating jurisdictions—Queensland, Western Australia
and the Northern Territory—with $1.2 billion in addition school funding
over four years.
According to advice provided by the Department of Education, Tasmania is also
considered a non-participating state as the previous Tasmanian Government did
not complete the requirements necessary under the Australian Education Act
The status of the agreement signed by the Victorian Government, which also
failed to progress to a bilateral agreement stage, is uncertain, based on
evidence available to the committee.
New Commonwealth funding model
Loadings for disadvantage
The Abbott Government has indicated that the disadvantage loadings for
students with disabilities, indigenous students and small and remote schools,
(and also, presumably, the loading for students from non-English speaking
backgrounds) will be delivered over the next four years.
As discussed in Chapter 5, at present the reviews of loadings and indexation
specified under the NERA are being progressed. Discussion of the effect of
uncertainty of funding, particularly as it relates to students who would
benefit from the disability loading, is in Chapter 8.
'Command and control features'
As noted above, the Abbott Government has indicated any new funding
model would '[get] rid of the prescriptive command and control features [from
the Australian Education Act 2013] that removed authority for schools
from States, Territories and the non-government sector'.
The foreshadowed amendments to the Act will affect all jurisdictions
regardless of whether or not they had signed the NERA. However, the Abbott Government's
stance on this matter appears to be ambivalent.
On the one hand, the Prime Minister has stated that he suspected that
'NSW and Victoria will be happy to lose the Canberra command and control
elements of those deals' and, on the other, the Minister for Education has
"There was conditionality attached to that of course,
that won't apply to Western Australia, the Northern Territory and Queensland
and we would expect the signatory states to keep the promises that they've
made, but at the end of the day, that is a matter for those sovereign
A bill seeking to amend the Act will be introduced during 2014.
The Department of Education advised the committee that the government has
written to states and territories, non-government sector groups, principal
associations, and parent associations in regards to the proposed changes to the
A copy of the letter regarding the proposed amendments was provided in answer
to a question on notice.
Mr Cook of the Department of Education outlined the next steps to be taken:
I would anticipate we would be asking the states and
territories and other non-government sectors and interested bodies to provide
us with effectively submissions—some of that is already available to us; the
states and territories have written back to us in relation to some of those
things. There is also information that was available last year where some
particular states had concerns around aspects of the act and provided that
information to us, and so when that information is collated we will obviously provide
advice to government in relation to that.
Further discussion of the proposed amendments, particularly as they
relate to the removal of the "command and control" mechanisms, is in
No requirement for States and
Territories to maintain or increase funding
Apart from removing some of the accountability provisions in the Australian
Education Act 2013, there is another significant difference from the
previous government's model: there is now no mechanism to ensure
co-contribution from the Northern Territory, Queensland or Western Australia.
The AEU expressed its concern in the following manner:
The failure of negotiations between the Commonwealth and the
jurisdictions of Queensland, Western Australia and the Northern Territory to
reach six year Gonski funding agreements prior to the election of the Abbott
Government in 2013 has been exploited by the new government. It has made
separate short-term accommodations with those governments for additional
funding, although at much lower levels than was previously on offer. and
without any conditions - co-contribution, maintenance and indexation of funding
effort, and distribution according to school and student need – attached, which
is tantamount to writing a blank cheque.
Media reports confirm this position, with the Sydney Morning Herald
”Mr Abbott promised on Monday that he would stick to the
exact terms of the deals already struck with NSW, Victoria and Tasmania, but
suggested the new deals struck with Western Australia, Queensland and the
Northern Territory would come with no requirements that the states and
territory guarantee funding.
“We would certainly regard it as very poor form for the
states to reduce their funding because they're getting extra funding from the
Commonwealth,” Mr Abbott said. “[But] we don't want to micromanage the states.
We don't want to try to run public schools out of Canberra, and that was the
problem with the original deal that the former government did.”
The Abbott Government has qualified its original pre-election commitment
that no school would be worse off under the new arrangements. What has now
entered its parlance is that no school will be worse off 'from anything that
the Commonwealth does'.
Chapter 3 notes that in writing to non-participating states in December
2013, the Minister for Education advised of the Abbott Government's intention
to amend the command and control aspects of the Australian Education Act
2013. The minister also advised that it was his 'expectation that
your [state/territory] Government would continue its funding effort across
schools [in the relevant state or territory] through the forward estimates
Discussion of the problems regarding transparency of state funding and
accountability of states for implementing needs-based funding is in Chapter 8.
Review of funding model
As noted in Chapter 5, the Department of Education has advised that the
reviews of indexation and loadings specified in the NERA for participating
states will progress in accordance with that agreement.
Status of reforms proposed under
the National Plan for School Improvement
As noted above, there is considerable confusion regarding the status and
the implementation of funding under the agreements reached between the Rudd/Gillard
Governments and the States and Territories. Participating states reacted
angrily to Minister Pyne's announcements in regards to changes to school
funding policy. For example New South Wales Education Minister Adrian Piccoli
argued that the Abbott Government had 'plunged education across the country
into unnecessary uncertainty'.
Minister Piccoli's view was that in the 'war' between states and the Australian
Government, the Gonski reforms and the NPSI had been a 'peace treaty':
Mr Piccoli added the Gonski plan had ended the war between
government and non-government schools over funding.
"For six months we've had peace in terms of that
argument but unfortunately the actions by the Commonwealth have now reignited
That there had been consensus around the implementation of the NPSI was
made abundantly clear by the reaction of the State and Territory Governments
post‑September 2013. Former Tasmanian Minister Nick McKim described it
"Here's a unity ticket for you right here - a Labor
minister, a Greens minister, National ministers, Liberal Party ministers,
sticking up and unified behind Australian schools and behind funding certainty
for Australian schools,"
During Budget Estimates on 4 June 2014, the Australian Department of
Education advised that the lifetime of the agreements signed with participating
states is six years. However, although the Abbott Government has agreed only to
provide funding for four years, there has been no approach to the participating
states to change or amend the agreements.
Mr Cook made clear during Budget Estimates that the Abbott Government's
intention to fund only the first four years of the agreement meant that 'in
relation to the CPI [indexation post-2017]...[t]hose figures will not match what
is in the heads of agreement in relation to years 5 and 6 in 2017 and 2018.'
The 2014-15 Federal Budget noted in relation to years five and six
...final State allocations for the 2018 school year are subject
to formal negotiations between the Commonwealth and the States and Territories
and the non‑government sector.
According to the Department of Education 'the bilateral agreements made
between the Commonwealth and each of New South Wales, South Australia and the
Australian Capital Territory remain in place.'
At Budget Estimates, Mr Cook anticipated that 'the formal negotiation [between
states and the Australian Government] would include discussions in relation to
Mr Cook explained that, as part of the department's consultation process on the
proposed amendments to the Australian Education Act 2013, states and
territories had discussed the agreements:
...there are certain things that certainly the parties are now
saying they want to change in relation to requirements around the NERA, the
heads of agreement in relation to the act and the regulatory burden it places
on them. They do not necessarily want to keep the agreements.
When asked to provide further information in summary of the concerns
regarding the NERA, the department submitted:
Following the receipt of all submissions, the department will
prepare issues papers to inform more detailed discussions at consultation
sessions with peak stakeholders in August 2014. Initial drafting of possible
legislative amendments will occur later in 2014 for discussion with peak stakeholders
as part of a third and final phase of consultations. This timeframe enables
considered consultation by stakeholders and sufficient time to draft amendments
with a view to tabling legislation in 2015.
Further comment regarding the consultation on the proposed amendments to
the Australian Education Act 2013 is included in Chapter 8.
The budgets of participating states and territories have revealed some
new information about the effect of the Abbott Government's new funding
arrangements on contributions at the state and territory level. As noted in
Chapters 3 and 5, South Australia has outlined the problems that it will face
from the Abbott Government's decision not to fund years five and six. Another
clear example of the detrimental effect of the new funding arrangements is from
New South Wales. In its 2014-15 budget, the New South Wales State Government
Under the NERA, Commonwealth, state and territory governments
agreed to significantly reform and increase funding to education from 2014 to
2019. However, in its 2014-15 Budget the Commonwealth stated its intention to
cease additional NERA funding after 2017, and to only index the payments for
the last two years at the rate of the CPI, with an allowance for changes in
enrolments. This unilateral decision by the Commonwealth Government represents
a reduction to New South Wales of $1.3
billion over the two years 2018 and 2019.
6.29 Finally, it is not clear if all of the reforms proposed as part of the
NPSI ('quality teaching', 'quality learning', 'empowering school leadership',
'meeting student need', and 'greater transparency and accountability') will be
progressed as planned.
Arrangements in non-participating jurisdictions
On 2 December 2013, it was announced that the level of Commonwealth
funding for non-participating jurisdictions would be calculated using the same
arrangements as for participating jurisdictions—therefore, the per student
funding component of the Schooling Resource Standard would be nationally
consistent. However, as noted above, non-participating States and Territories
are not required to guarantee that there will be 'no cuts' to their own funding
as they were required to do under the agreements signed with the previous
Non‑participating states and territories are Queensland, Western
Australia and the Northern Territory. Tasmania too is a non‑participating
state for the purposes of the Australian Education Act 2013. As
discussed below, the status of the agreement signed by Victoria is uncertain,
at least on the evidence available to the committee at this time.
On 28 January 2014, the Queensland Government announced that it would
use the additional funds offered by the Abbott Government to implement its
'Great Results Guarantee' initiative. Under the initiative a funding boost of
$131 million would be provided to all Queensland state schools in 2014.
The Commonwealth Minister for Education has announced that the additional
funding would be provided 'with no strings attached because we recognise
Queensland's education authorities know how to invest in their students'
Under the 'Great Results Guarantee' initiative all Queensland state
schools will receive a share of the funding and enter into an agreement that
commits them to guarantee that every student will either:
achieve the National Minimum Standard for literacy and numeracy
for their year level; or
have an evidence-based plan, developed by the school, in place to
address their specific learning difficulties.
State schools will enter into an agreement with the Queensland
Department of Education, Training and Employment, while Independent Public
Schools will establish an agreement with the School Council. The agreement will
be published on each school's website and schools will have the flexibility and
autonomy to decide how the funding should be spent. Student performance will be
measured throughout the year and schools will be required to demonstrate how
the extra funding is helping to maximise learning outcomes for all students.
It was announced that all schools will receive their current level of
funding plus a share of the $131 million. Under the guarantee, state primary
schools will receive an additional $99 million with a focus on the early years.
On average, primary schools will receive an extra $508 per student in Prep to
Year 2. State high schools will share in an additional $30 million to be
distributed across all year levels, with a particular emphasis on the early
years of high school. Special schools will receive an additional $2 million.
The Queensland Government has published a summary of the additional funding to
be provided to each school under the initiative.
However, under its agreement with the Abbott Government, Queensland is
not required to guarantee that there will be 'no cuts' to their state funding
as they would have been required to do if an agreement had been signed with the
In its 2014-15 Budget, the Queensland Government explained how the
Australian Government funding would be allocated to schools:
Funding of $131.3 million from the Australian Government
Students First - A fairer funding agreement for schools initiative will
continue to be allocated to Queensland state schools to 2014-15 through the
Great Results Guarantee. All Queensland State schools, including Independent
Public schools, will receive a share of the Great Results Guarantee funding and
enter into an agreement that commits them to guarantee that every student will
either achieve the National Minimum Standard for literacy and numeracy for
their year level or have an evidence-based plan in place to address their
specific learning needs.
The Western Australian Minister for Education indicated that Western
Australia will use the additional funds offered by the Abbott Government for
its own needs‑based, student-centred school funding model which 'aligns
with the Gonski recommendations' and includes base funding plus loadings
centred around special needs.
In evidence, Mr Lincoln Rose, Vice President of the State School
Teachers' Union of Western Australian, disputed the State Government's
categorisation of its new funding model as 'needs-based':
The WA government's new student-centred funding model is
supposed to be based on the Teese report. The recent cuts, combined with the
refusal to accept the original federal funding offer, ensures the state
government's changes are meaningless. By cutting school budgets before
implementing the student-centred funding model, the WA government is
effectively engaging in sleight of hand. The model was never intended to be
implemented with cuts. It will only work properly if there is additional
funding, not simply a rearranging of existing, or fewer, funds.
Mr Rose cited the example of State Government cuts to School Support
Program Resource Allocation (SSPRA) funding, which he described as 'money
specific for the most vulnerable or disadvantaged students'.
His colleague, Miss Samantha Schofield, provided an example of SSPRA funding
being used for specific programs:
An example of SSPRA funding is that you might have a reading
program that is put in place. SSPRA funding could be about $30,000 for a very
small school. That could equate to about 0.4 of a teacher's workload. That
means that you have about three to four hours a week where you have specialised
individual attention given to a small group of students. If you have disengaged
students, for example, you are able to have, again, a specialist teacher
working with those students one on one, perhaps re-engaging them before they go
back to a mainstream classroom.
SSPRA also accounts for programs like Getting it Right
Literacy and Numeracy. They have been very successful programs in our schools
before. Having that funding taken out of our schools denies those kids the
ability to reach any further achievement levels, especially in a high school
setting—getting beyond year 9, for example.
Mr Rose listed a number of examples of schools which had had cuts to
...Kimberley schools in particular, which is obviously a big
issue for needs-based school funding to get the most disadvantaged students the
money that they need to at least overcome, potentially, some of the disadvantage
that they are born into, which SSPRA funding is there for. For Kununurra
District High School, the 30 per cent reduction in SSPRA funding is worth
$196,648 this financial year, which is 2.27 per cent of the school budget. For
Halls Creek District High School, the cut to SSPRA funding is $159,918; that is
a 3.07 per cent reduction in their overall school budget. So there is a
considerable loss of funding that you can use for staffing and other programs
that you could do to overcome the disadvantage. It might be as simple as a
breakfast program or staffing for a literacy program—things of that nature.
Mr Rose contended that the cuts to funding, which form part of the
Western Australia Government's implementation of its needs-based,
student-centred funding model, meant that the model would fail: '[i]t will not
work. There will be no needs based funding in Western Australia any time soon
while this system is operating'.
However, under its agreement with the Abbott Government, Western
Australia is not required to guarantee that there will be 'no cuts' to their
state funding as they would have been required to do if an agreement had been
signed with the previous government.
In its 2014-15 budget, the Western Australian Government described the Abbott
Government's Students First funding as 'NERA-equivalent'. Interestingly, the
Western Australian Government noted in its budget that: '[d]etails of the new
arrangements [with non-participating states] remain to be clarified.'
In December 2013, the Northern Territory Education Minister stated that
the additional funds offered by the Abbott Government would not necessarily be
used to restore teaching levels or go into the recurrent funding budget.
Instead, the additional funding would be used for capital projects and to fund
We are certainly intending to use some of the funding which
has come to us via the Australian government for additional capital
infrastructure costs as well in the Northern Territory. So those decisions are
yet to be made by the Northern Territory government.
In this regard the Department of Education advised that there is a
requirement that Commonwealth funding is be to used 'on school education
Urquhart: But what does that mean? What is the definition of
'school education costs'?
Cook: I think that would be like any government has done in the
past. They may use some of that money on buildings, as I understand, but they
also may use it directly in funding schools. It is a matter for the state. That
is correct. That has not changed.
Urquhart: Okay. So there is no requirement that any of that money
would be used directly on education. One would suspect that—
Cook: No, the requirement is that it has to be used directly on
Senator Urquhart: But, in terms of providing teaching
or whatever to students, it actually could be used for other purposes within a
Cook: My understanding is that it could be used for maintenance
in the government sector. That is entirely a matter for the government sector,
and that has not changed over the course of history in terms of Commonwealth
funding to the states.
Further, under its agreement with the Abbott Government, the Northern
Territory is not required to guarantee that there will be 'no cuts' to their
own funding as they would have been required to do if an agreement had been
signed with the previous government.
The Northern Territory's 2014-15 Budget concurs:
Unlike the NERA, the bilateral agreements [signed with
Western Australia, Queensland and the Northern Territory by the Abbott
Government] do not require states to provide any additional funding as a
prerequisite for additional Commonwealth funding, nor do they include the
reporting requirements of the NERA.
As noted in Chapter 5, due to the beginning of caretaker arrangements
during the 2013 federal election campaign, the Heads of Agreement signed by
Tasmania was not progressed to the bilateral agreement stage. Subsequently, the
Abbott Government deemed Tasmania to be a non-participating state under the Australian
Education Act 2013. The Minister for Education advised the Tasmanian
Government of this in a letter dated 10 December 2013.
Abbott Government funding for Tasmania as a non-participating state is:
Table 7—Australian Government school funding provided to
The Department of Education provided the committee with a chart
showing which states and territories had completed the requirements for
participation under the Australian Education Act 2013. This table shows
that along with the three non‑participating states whose position had
been known prior to August 2013 (Queensland, Western Australia and the Northern
Territory), Tasmania and Victoria had not completed bilateral agreements and
therefore were not classed as participating states.
At the Victorian State Budget Estimates on 13 May 2014, the Victorian
Minister for Education, the Hon Mr Martin Dixon MP, spoke only of the Heads of
Agreement signed in August 2013 and funding relating to that agreement. The
minister made no mention of whether the funding received from the Australian
Government by Victoria was as per the Heads of Agreement or whether Victoria
had been classified by the Abbott Government as a non-participating state:
...The national funding agreement was signed in, I think, early
August last year, 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.
At the committee's public hearing on 16 May 2014, Mr Cook tabled letters
pertaining to funding for non-participating states, including Tasmania.
However, Mr Cook was unable to provide information regarding Victoria:
What I have done is written to all states and territories and
indicated to them what we intended to provide to the committee, and I have
asked them if there are any issues we need to be aware of. Four states have
come back to us saying that everything is fine. I have those letters to table,
including the Tasmanian heads of agreement, but I am still waiting on final
responses from a number of states: New South Wales and Victoria—I have the list
somewhere. I have four of the eight to date and I am happy to table them.
Navigation: Previous Page | Contents | Next Page