Labor has proposed a public school funding boost – states, crossbenchers and the Greens want more. What happens now?
A coalition of cross-benchers have joined Australia’s largest states to push the commonwealth to invest more in public schools, escalating a standoff that risks derailing the next funding agreement.
Independent senators David Pocock, Fatima Payman and Jacqui Lambie teamed with the Greens on Monday to back calls from five states for the commonwealth share towards public schools to rise by 5% to 25%, a figure they say is necessary to finally reach 100% public funding.
The education minister, Jason Clare, has maintained increasing commonwealth funding by 2.5% is fair and state governments must “chip in money too” to close the remaining gap.
Here’s how we got here.
What is the school funding agreement?
The school funding agreement lays out the next decade of primary and secondary education, including how much the federal and state governments will provide towards the Schooling Resource Standard (SRS).
The SRS, agreed to by governments as part of Gonski reforms more than a decade ago, is the minimum dollar amount required to provide a baseline education to students.
Right now, only the ACT has reached it. Ninety-eight per cent of public schools are underfunded and the majority of private schools are overfunded.
What’s currently on offer?
The commonwealth has proposed a 2.5% increase to public schools, to bring its total funding contribution to 22.5%, with state governments to contribute the rest.
That’s excluding the Northern Territory, which will have its contribution doubled to 40% due to additional need, with the target of all public schools reaching 100% funding by 2029.
Under changes enacted by the Turnbull government in 2017, the commonwealth contributed 20% to public schools, while requiring states to fund public schools at 75% – leaving a 5% gap. The reverse is in place for private schools, which receive 80% of their funds from the federal government.
So far, just Western Australia and the NT have signed on to the new deal.
The Albanese government has indicated it will also introduce legislation to parliament allowing the commonwealth to provide extra funding to public schools in excess of 20%– making that contribution a floor, not a ceiling.
Clare estimated his offer totals $16bn – which would be “the biggest increase in commonwealth funding to public schools that has ever been delivered”.
“This funding will be tied to reforms to help kids catch up, keep up and finish school,” he said.
What are the crossbenchers saying?
The Greens went to the last election calling for the federal government to lift its share of public school funding to at least 25% – which would close the 5% funding gap.
The party’s spokesperson for schools, Senator Penny Allman-Payne, said it was “perverse” that despite the federal government having the most resources, it left “the heavy lifting to the states on something so vital”.
Pocock this week said he couldn’t in “good conscience back legislation that will bake in underfunding for a decade to come”, highlighting the fact that even with the ACT hitting 100% of the SRS, it had “kids without enough chairs in class, teachers burning out, classes collapsing”.
Payman said the federal government’s “glaring failure” to fully fund public schools was not just a matter of budgetary allocation. “It’s a question of values and priorities,” she said.
Why are the states holding out?
New South Wales, Queensland, Tasmania, Victoria, and South Australia have argued they should be receiving significantly greater support from the commonwealth because it has a comparatively larger pool to draw from.
NSW’s deputy premier and minister for education, Prue Car, said she would not accept an offer that “short-changes students”.
She said her government had already increased its contribution from 72% to 75% of the total amount, and needed the commonwealth’s deeper pockets to get to 100% funding.
“The commonwealth has recorded its second consecutive budget surplus – NSW, along with our counterparts … continue to urge it to use these funds to invest in our children’s futures,” Car said.
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The Victorian government said it had done the “heavy lifting” since 2015, citing $16.9bn to capital infrastructure provided on top of $35bn to school funding.
A spokesperson said based on 2022 figures, public schools would be underfunded by more than $600m under the commonwealth’s proposal, while private schools would remain overfunded by nearly $3bn.
The states have the backing of the Australian Education Union (AEU). But with the latest Naplan results indicating continued advantage gaps between the public and private sectors, the convener of Save our Schools, Trevor Cobbold, said the stakes were too high to argue over who paid for what.
“This disgraceful squabbling over cost-shifting by governments threatens the future education and lives of millions of students,” he said.
Cobbold has also questioned the validity of the commonwealth’s proposal as it stands – citing “accounting tricks” in states’ current provisions that could short-change schools by up to 4%.
The provision, introduced by the former Morrison government in 2018, allows states and territories to spend up to 4% of the total funding allocated to public schools on areas not directly related to them, such as public transport, capital depreciation, regulatory bodies and preschool.
What if the standoff continues?
States have until the end of the month to decide if they will sign up to the proposed agreement. If they don’t, they have to fall back on the past one, which capped commonwealth funding to public schools at 20%.
The legislation providing for extra funding, to be introduced after the agreement was reached, would also risk failing to pass if it was opposed by the Greens and independents.
Clare has indicated little willingness to budge.
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“We have reached agreements with WA and the NT. I want to do the same with the other states and territories,” he said.
He also warned if legislation to remove the federal contribution cap didn’t pass, WA and the NT would not receive the increases they signed up to, keeping them underfunded into the future.
But the Greens have said they don’t need to pass a bill to lift the cap, citing parliamentary library advice provided this week that indicates there does not appear to be a “legal or constitutional barrier” to increasing the SRS.
The advice suggests Labor could instead amend regulations to prescribe a different funding share, rather than through the act. This could theoretically be blocked by the Senate, but unlink legislation, wouldn’t need to go through parliament – meaning the commonwealth wouldn’t need a bill to increase funding.
